Prior to the arrival of the Europeans from the 1490s, little is known about businesses operating in North America, although it is clear that there must have been some system of barter trade between different tribes. The origins of the businesses and firms that operate in North America lie, as with so many other parts of the world, in chartered companies that established settlements on the east coast of North America.
Although some of the early explorers of North America such as John and Sebastian Cabot were financed by wealthy businessmen, and also to a minor extent by King Henry VII and King Henry VIII, most trade with North America was conducted by individual ship captains and their crews. The first major company to be established with the aim of settling in the Americas was put together by English adventurer Sir Walter Raleigh (c.1552–1618) who was keen to settle Roanoke Island off the coast of North Carolina from 1585 until 1587. This failed, and it was not really until 1606 that two chartered companies, known as the Virginia Companies, were established and given Royal Charters: the Virginia Company of London and the Virginia Company of Plymouth, which had identical charters for different areas of the east coast of North America. The Plymouth Company, as the latter became known, failed after a few years, although it was revived in 1620 as the Plymouth Council for New England. The former, the London Company, which had been established by Royal Charter on April 10, 1606, also failed, but did have one early success when it took over the Somers Isles (modern-day Bermuda) that were settled from 1609.
The establishment of these companies encouraged other European countries, particularly the Netherlands, which saw the founding of the Geoctroyeerde Westindische Compagnie (Dutch West India Company); established by charter in 1621, it was involved heavily in the West Indies but also in the supply of slaves to North America. Eight years later, the Providence Island Company was established in 1629 by some English Puritans who were keen to establish a settlement on Providence Island, off the Mosquito Coast of Nicaragua in Central America. In the same year, the Massachusetts Bay Company was also founded; it was involved in the establishment of the Massachusetts Bay Colony, now the Commonwealth of Massachusetts.
In terms of longevity, the most important chartered company of this period is the Hudson’s Bay Company (Compagnie de la Baie d’Hudson), which was founded on May 2, 1670, and is still operating, making it one of the oldest companies in the world still in existence and the oldest commercial corporation in North America. It was started by two French traders, Pierre Esprit Radisson and Médard des Groseilliers, to establish a monopoly over the fur trade in Canada and was, for a time, one of the largest land owners in the world. It currently has 70,000 employees and still owns stores throughout Canada.
French traders had also established the Mississippi Company, which was not successful; a controlling interest in it was bought by Scottish businessman John Law in 1717, establishing a 25-year monopoly. His exaggerated stories of the Louisiana area led to frenzied speculation in the company’s shares that rose from 500 livres each in 1719 to a peak of 15,000 livres, falling back to 500 livres in 1721. In many ways it operated in a manner similar to the South Sea Company in England, which also sought to use its shares to take over the debts of, in the case of the Mississippi Company, France.
Gradually during the 18th century, the joint stock company started to become more and more common in North America, with a number of companies able to take advantage of the inventions of the Industrial Revolution in England and Scotland. However, after the American War of Independence, there were restrictions on what could be taken to the United States. This meant that when U.S. industrialist Samuel Slater (1768–1835) decided to leave England for the United States, he had to memorize the information about machinery for cotton because it was illegal to take charts and plans with him. On his arrival in the United States, Slater set up a cotton plant and was later acknowledged as the “founder of the American cotton industry,” or even the “founder of the American Industrial Revolution.” Soon afterward Francis Cabot Lowell (1775–1817) and Paul Moody (1779–1831) transformed the textile industry in Massachusetts.
The large numbers of migrants who headed to the United States during the 19th century (and indeed since then) brought with them a great amount of entrepreneurial skill that led to the American “can do” attitude shown in the building of the Transcontinental Railroad completed in 1869, and, from 1974 to 1977, the Trans-Alaska Pipeline System. The great inventions of Thomas Alva Edison (1847–1931), and his patenting of so many of them such as the gramophone and the electric light bulb, encouraged many other inventors.
The American Civil War led to major advancements in the use of steel, and the design of weaponry, although it also led to the destruction of many parts of the Southern states. Prohibition in the 1920s and the Great Depression in the 1930s caused major damage to the U.S. economy, but the prosperity from the 1940s and especially in the 1950s led to a number of important U.S. business techniques outlined by people such as Vance Packard in The Hidden Persuaders (1957) writing about the mass persuasion of the public, and in his The Waste Makers (1961) about the problems of wastefulness and obsolescence in industry. The Hawthorne experiments from the late 1920s saw studies of the Western Electric factory at Hawthorne, and William H. Whyte, Jr., in The Organization Man (1956) described the life of Americans who spent much of their life working for an “organization.”
Primary producers dominated the U.S. economy, with large farms in many parts of the country, but also small farms that varied from those in the South that were often able to keep families for generations, and the new soldier-settler blocks in Kansas where the Dust Bowl destroyed the livelihoods of hundreds of thousands of people. In Canada, the large wheat farms and also the breeding of cattle has been important for the global economy. There are also a number of important tobacco companies such as British American Tobacco (founded in 1902) and Philip Morris (renamed Altria Group in 2003).
For processed food, there are many U.S. companies including General Foods (founded from a merger in 1929, now owned by Altria), Heinz (founded in 1869 by Henry J. Heinz), Kellogg Company (founded in 1906 by William K. Kellogg), Kraft Foods (founded in 1903 by James L. Kraft, now owned by Altria), Mars Confectionary (a firm still privately owned by the Mars family), and Nabisco (founded in 1898 as the National Biscuit Company). Frozen foods were produced by Birds Eye, developed by patents of Clarence Birdseye (1886–1956), and founded as General Foods; and by the McCain Foods Limited (founded in 1957). There is increasingly more wine grown in California, and U.S. soft-drink manufacturers include Coca-Cola Company (founded in 1892) and PepsiCo (founded in 1898). For fast food venues, KFC (formerly Kentucky Fried Chicken), McDonald’s (founded in 1940), Pizza Hut (founded in 1958), Domino’s Pizzas (founded in 1960), and Starbucks (founded in 1971).
Of the many companies connected with heavy industry, some such as Pittsburgh Steel (now the Wheeling-Pittsburgh Steel Corporation) became well known, as did the Bethlehem Steel Corporation that operated from 1857 until 2003, also in Pennsylvania, and the steel mills of Andrew Carnegie’s United States Steel Corporation (founded in 1901). Mention should also be made of the Minnesota Mining and Manufacturing Company (founded in 1902), which has diversified to produce stationary and many other products.
Oil Changes Everything
The discovery of oil in Texas led to the United States and U.S. companies dominating the petroleum business around the world. The fortunes of John D. Rockefeller (1839–1937), John Paul Getty (1892–1976), and Howard Hughes (1905–76) came from oil, as did that of the Texan Glenn McCarthy (1907–88), who was nicknamed “King of the Wildcatters.” ExxonMobil (founded in 1882 as Standard Oil Company and Trust); Chevron (founded in 1926); and Texaco (founded 1902 as the Texas Company) still have a dominant role in the petroleum industry worldwide, and U.S. engineering expertise was crucial to its development in the Middle East.
The largest automakers in the world operated from the United States: Ford Motor Company (founded in 1903), Chrysler (founded in 1913), General Motors (founded in 1931), and also Dodge (founded in 1900; now run by DaimlerChrysler) for trucks and Caterpillar (founded by Benjamin Holt as the Holt Manufacturing Company in 1892) for agricultural and road-building equipment. Detroit, the headquarters of Ford, had, from the early 1900s until the 1960s, one of the largest concentrations of heavy industry in the world. In the field of aerospace and aircraft manufacture, Bell Aircraft Corporation (founded by Larry Bell in 1935), Boeing (founded in 1916 as the Aero Products Company), McDonnell Douglas (founded in 1967 from a merger between the McDonnell Aircraft Corporation and the Douglas Aircraft Company), and Sikorsky (founded by Igor Sikorsky in 1923) provide aircraft and helicopters—both civilian and military—for use in the United States and around the world. U.S.-based airlines Pan American World Airways (founded in 1927; ceased operations in 1991), Trans World Airlines (founded in 1930 from a merger of Transcontinental Air Transport and Western Air Express), and United Airlines (founded in 1929 as the United Aircraft Transport Corporation) have all been important in world aviation.
There have also been many construction and engineering companies that have had a major role in the United States, and are also well known overseas. Bechtel (founded in 1898), now the largest engineering company in the United States, and Halliburton (reorganized in 1920) have been heavily associated with the Ronald Reagan and the George W. Bush presidencies, respectively. Amtrak (formerly the National
Railroad Passenger Corporation, established in 1970), the U.S. railroad company, controls nearly all intercity passenger trains in the United States; and from the 1920s to the 1970s, Greyhound buses (founded in 1913) were used by tens of thousands of U.S. travelers on a regular basis.
The large defense expenditure by the United States has resulted in the creation of what President Dwight D. Eisenhower called the Military Industrial Complex, and Father Charles Coughlin in the 1930s denounced the large profits made from World War I. Many of the early designs of guns owe much to U.S. inventors, with Samuel Colt (1814–1862), Dr. Richard Gatling (1818–1903), and Hiram Maxim (1840–1916), being household names. Smith & Wesson has produced handguns since 1852; and Raytheon, founded in 1922 at Cambridge, Massachusetts, is one of the major producers of guided missiles and related technology.
In terms of electrical appliances and white goods, General Electric (founded in 1892) and Westinghouse Electric Corporation (founded in 1886) have been important. Indeed the proliferation of household electrical items in the United States ahead of many other countries in the world owed much to the energy generation from American Light and Traction (founded 1900; merged with DTE in 2001) and Texas Utilities (formed in 1945); and also from schemes such as the Tennessee Valley Authority. Westinghouse was also involved in the design of nuclear power stations. There was increased worry about nuclear power after the accident at Three Mile Island in 1979. Mention also need be made of the energy company Enron that spectacularly went bankrupt in 2001. Kodak (founded in 1888) emerged as one of the largest manufacturers of photographic equipment in the world.
Retail, Media, And Services
With such a large market in the United States, chains of retail stores are very important, with Wal-Mart (founded in 1962) being the most famous. There are also Macy’s (founded in 1858), Piggly Wiggly (founded in 1916), and Woolworth’s (founded in 1878); and in terms of fashion and more expensive items, in New York, there are Tiffany’s (founded in 1837) and Bloomingdale’s (founded in 1860), and in Chicago, Marshall Field (founded in 1865).
Although the U.S. postal system is still government-controlled, there are many private courier companies such as UPS (founded in 1907 in Seattle, Washington). Western Union (founded in 1851) was responsible for laying out many of the telegraph lines in the United States, but lost out to Bell—named after Alexander Graham Bell (1847–1922)—which established the first major telephone network in the United States, following George Coy (1836–1915) establishing a telephone exchange in New Haven, Connecticut. Overseas, ITT, whose founders Hernan and Sosthenes Behn were from the Danish West Indies (now the U.S. Virgin Islands), operated since 1920 as a major conglomerate until it was broken up in 1995.
There are many U.S. publishers whose books are sold around the world, including Bantam Books (founded 1945); Doubleday (founded 1897, now a part of Random House); Little, Brown (founded 1837); Random House (founded 1925); and St. Martin’s Press (founded 1952 by Macmillan). There is also Reader’s Digest, and international newspapers the International Herald Tribune and USA Today. Australian newspaper owner Rupert Murdoch (b.1931) took up U.S. citizenship in 1985, moving the headquarters of News International to Delaware in 2004. Canadian Conrad Black (b.1944) during the 1980s and 1990s owned many of the world’s major newspapers through Hollinger International.
The U.S. higher education sector sees tens of thousands of foreign students coming to study in the United States; the University of California, Columbia, Harvard, Johns Hopkins, MIT, Princeton, Stanford, University of Texas, and Yale, as well as many other universities, attract applications from all over the world. In Canada, the University of British Columbia, McGill University, Montreal University, and other institutions also attract many foreign students. Law schools and medical schools in both countries have also been in the forefront of training lawyers and doctors—the latter resulting in many of the medical companies operating from the United States or with bases or subsidiaries there.
In the entertainment industry, Hollywood has dominated the motion picture industry since the 1920s, the Walt Disney Company (founded in 1923) employing 137,000. U.S. jazz and pop musicians still dominate, with popular singers such as Frank Sinatra, Sammy Davis, Jr., Michael Jackson, and others being responsible for sales of millions of recordings each year. U.S. television documentaries are also sold around the world, and through CNN and CNBC, it has been possible for people around the world to keep up with U.S. and world news. U.S. televangelists have also utilized this technology to reach viewers around the world. Of the major world hotel chains, many have their headquarters in the United States, including Hilton, Intercontinental, Marriott, and Sheraton.
In terms of sports, many of the major players and athletes in the world are from the United States— some of them having their own companies to handle commercial sponsorships and the like. The Summer Olympics have been held in the United States on four occasions, and in Montreal, Canada, in 1976. The Winter Olympics has been held in the United States on four occasions, in Canada once, and are scheduled to be held at Vancouver in 2010. This has meant that there are many manufacturers of sports equipment throughout the United States, the most well known internationally being Nike (founded in 1972).
For financial services, the U.S. Stock Exchange on Wall Street is the largest stock market in the world. NASDAQ (National Association of Securities Dealers Automated Quotations), founded in 1971, allow automated trading and was important in the “tech boom” in the 1990s and early 2000s, and the Chicago Mercantile Exchange has developed large numbers of new financial instruments. There are many large U.S. banking institutions: Chase Manhattan (founded in 1799), Citibank (founded in 1812), CS First Boston (founded in 1932 as First Boston; bought by Credit Suisse in 1988), and Wachovia (founded in 1781) being probably the most well-known. U.S. merchant bankers Andrew Mellon and J.P. Morgan in the 1920s and 1930s both presided over important companies.
The Information Age
Companies have defined and ridden the waves of the Information Age. IBM, DEC, and Dell became prominent through providing quality and powerful computers. Apple rose with its focus on user friendly interfaces for its microcomputers. Microsoft became prominent as the provider of the software that ran most personal computers.
The World Wide Web came to prominence in the mid-1990s and soon, companies providing software that helped access it were prominent including Netscape Communications. Companies providing email services such as American Online (AOL) and Yahoo thrived. Improved search engines provided by Microsoft, Google, and Mozilla (Firefox) were important. Social networking sites run by companies such as News Corporation (My Space), Facebook (valued at more $15 billion in 2008), LinkedIn, and Google (YouTube) appear to provide the means for establishing the collaborations that will be key to business in coming years. Virtual worlds such as Linden Labs’ Second Life provide three-dimensional augmented reality interfaces that will allow virtual gatherings, enabling rapid and less costly meetings that may be used by the preponderance of large firms by 2012.
Sustainability has come to be increasingly important and it is clear that companies that develop new technologies, products, and services that are more “green” than those of their competitors are likely to be the leaders of coming years. American firms recognized at the 2008 Davos World Economic Forum as among the most sustainable in the world included Alcoa, Eastman Kodak Company, Hewlett-Packard Company, Intel Corp., Nike Inc., and Walt Disney Company.
- William Aspray and Paul E. Ceruzzi, eds., The Internet and American Business (MIT Press, 2008);
- Mansel G. Blackford, A History of Small Business in America (University of North Carolina Press, 2003);
- Europa Yearbook 2008 (Europa Publications, 2007);
- Louis Galambos with Barbara Barrow Spence, The Public Image of Big Business in America, 1880–1940: A Quantitative Study in Social Change (Johns Hopkins University Press,1975);
- Kenneth E. Hendrickson and Glenn Sanford, eds., The Encyclopedia of the Industrial Revolution 1750–2007 (Facts on File, 2009);
- William H. Whyte, The Organization Man (Doubleday & Anchor, 1956).
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