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The Economic Impact Brought from the Railroad Boom and the Industrial Revolution.

Autor:   •  January 26, 2016  •  Essay  •  798 Words (4 Pages)  •  592 Views

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The Economic Impact Brought from the Railroad Boom and the Industrial Revolution.

While chapter 3 of Alfred Chandler’s The Visible Hand illustrates just how much the railroads affected American business and forever changed the traditional economy the nation lived in, Peter Drucker’s Beyond the Information Revolution compares the impact the railroads and other new technologies brought upon by the Industrial Revolution had with the impact we are experiencing today with the Information Revolution. According to Chandler, the Industrial Revolution, and especially the railways, brought about huge organizational overhauls within the American economy. Organizational hierarchies and the notion of widespread management that business structures followed today can be traced back to the railroads.

The traditional economy the nation was used to before the industrial revolution took off was unequipped for the huge business opportunities presented by the different technologies created off the James Watt steam engine, as well as Samuel Morse’s telegraph. This development of much faster communication and transportation of goods and passengers truly revolutionized American business. However, the organizational structure and finances needed to build and maintain a railroad greatly exceeded that of plantations and textile mills. A large project covering many costly miles, as a railway did, demanded a separation of duties and skilled management held accountable by supervision; as Chandler asserts, “Technology made possible fast, all-weather transportation; but safe, regular, reliable movement of goods and passengers, as well as the continuing maintenance and repair of locomotives, rolling stock, and track, roadbed, stations, roundhouses, and other equipment, required the creation of a sizable administrative organization. It meant the employment of a set of managers to supervise these functional activities over an extensive geographical area; and the appointment of an administrative command of middle and top executives to monitor, evaluate, and coordinate the work of managers responsible for the day-to-day operations.” (Chandler, Visible Hand, p. 87). The complications created by enormous revenues and costs also made bookkeeping and cost accounting absolutely necessary for the first time in the U.S. Officials and managers were required to record statistics during this time in an effort for more efficiency and to describe the true financial states of their companies; something not practiced in the traditional economy.

The Industrial Revolution not only made commerce faster and more efficient through high speed communication and transformation, it also

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