MGEC40H3 Lecture Notes - Transact, Takeover, Horizontal Integration
24 Jun 2014
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Document Summary
This chapter analyses the business environment in three different time periods: 1840, 1910 and the present. It looks at the business infrastructure, market conditions, the size and scope of a firm"s activities and a firm"s response to changes. This historical perspective shows that all successful businesses have used similar principles to adapt to widely varying business conditions in order to succeed. Businesses in the period before 1840 were small and operated in localized markets. The size of a business was restricted by the lack of production technology, professional managers, capital and large-scale distribution networks. The limited transportation and communication infrastructures made it risky for businesses to expand and restricted them to small local markets. Owners ran their own businesses and depended on market specialists to match the products with the needs of the buyers. There were forces in place, however, that would enable businesses to expand their economic activity over a larger geographic area.
