The first major characteristic of big business was the need for such a large amount of capital, which was never before necessary for a single company. This was a result of the cost in maintaining and operating several factories, distribution, and the numerous machines possessed by these enterprises. Andrew Carnegie’s U.S. steel was capitalized at more than one billion dollars. Antebellum capital requirements for a business rarely reached even a million dollars. With the advancement of new technology and the ability to build multiply locations manufacturing companies now had the capability to distribute goods in a much broader horizon. Businesses such as General Electric had several locations all around the world.
New giant firms had complex technology and several manufacturing plants that made it possible to produce large quantities of goods at a lower cost. These factors also made it more costly to stop manufacturing during bad times, which previous businesses were often able to do. Industries depended on high-volume consistent output to maintain low costs. This constant production led to a continual decline in prices. Mass production gave giant firms the power to have huge effects on the market and prices.
Before large-scale business the common type of ownership was either a simply partnership or sole proprietors. Due to the scale of the capital necessary for big firms corporations were the dominant form of ownership. Along with the arrival of corporations came administrative requirements. These corporations began to be run by professionals and a new managerial class was created. This complex administrative network increased the impersonality of business. Businesses were now faceless and the importance of character lessened dramatically.
Unlike previous businesses, which usually specialized in a specific area, new enterprises had a wide range of production and distribution. This included engaging in different kinds of business. By 1900 firms like Swift and...