Before the civil war, corporations existed but reserved for any gov. use like public projetcs, banks, canals,etc.

After the civil war, new state laws allowed businesses to incorperate. A corporation became a legal business structure that allowed companies to:

raise huge amounts of money from investors expand quickly build factories and railroads “Limiting the liability of shareholders”

This is the key idea.

Shareholders = investors who own stock in a company.

Limited liability means:

if the corporation failed or went into debt, investors usually only lost the money they invested, but their personal property and savings were protected.

Example: If a railroad corporation collapsed:

shareholders might lose their stock investment, but they would not personally owe all the company’s debts.

This made investing much less risky.

This means that as companies became much larger during industrialization, they created corporate bureaucracies to help organize and manage everything.

A bureaucracy is a system with:

many levels of managers departments rules paperwork specialized jobs

Large corporations could no longer be run by just one owner making every decision.

So companies created:

supervisors managers accounting departments human resources sales divisions executive offices

Before:

One mechanic might build an entire machine from start to finish.

After:

Work was divided into many small tasks. Instead of 30 mechanics each building a whole machine, 30 workers would each do only ONE specific step.

Example:

One worker tightens bolts all day Another paints parts Another attaches wheels

What was Taylorism?

Taylor believed work should be studied scientifically to find:

the fastest way to do a task the most efficient movements the best way to organize workers

Managers would:

time workers with stopwatches break jobs into small repetitive tasks set strict rules for productivity