vertical integration

The AI-First Company
by Ash Fontana
Published 4 May 2021

Otherwise, AI-First companies might aggregate government-granted advantages such as exclusive licenses to work with government data, patents on their models, or subsidies for providing predictions that allow society to plan well and function better. VERTICAL INTEGRATION The best products in the world are made by vertically integrated businesses: Apple’s hardware to software; Amazon’s warehouses to websites; and, back in the nineteenth century, industrialist Andrew Carnegie’s mines to mills. Famous economists such as Ronald Coase and entrepreneurs like Michael Dell, founder of Dell Technologies, espoused the benefits of vertical integration. Providing everything a customer needs in one package allows for quality control, deep relationships, and better pricing.

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Scale isn’t enough. Combining scale of data, processing capabilities, and network effects to build a DLE is the way forward, and building all three may involve vertical integration. What You Do Vertical integration entails taking on and solving the business problem for a customer rather than just the technical problem—delivering not just a product but a complete solution; doing the whole job to be done. Here are some examples of what a vertically integrated company might provide: answer emails from customers instead of offering up suggested responses to agents tasked with responding to emails (We’ll use this example throughout this section); serve up text in multiple languages on websites and marketing platforms instead of giving tools to language translators; and run an insurance company instead of helping an insurance company process claims more efficiently.

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Keep prices the same: take the difference as profits; reinvest the profits in the technology behind DLEs, automating more and further reducing costs; and reinvest the profits in the business to vertically integrate or re-position it to get more data. Lower prices, leveraging the gains from automation to pursue the following and thus be in a favorable position to beat competitors in existing markets or enter new markets: price discrimination; disruption; and aggregation. AGGREGATING ADVANTAGES This chapter walks through the five strategies at the top of the diagram above—vertical integration, positioning through standardization, data aggregation, disruptive market entry, or price discrimination based on data contribution—that generate more data to feed models, grow the DLE, and attract more customers.

The Meat Racket: The Secret Takeover of America's Food Business
by Christopher Leonard
Published 18 Feb 2014

It also spelled an end to the notion that states could fight the rise of vertical integration. Rather than argue against Iowa’s ban on packer ownership, Smithfield sued Tom Miller in federal court, arguing that Iowa had no right to ban vertical integration. Smithfield sued Iowa under Article 1, Section 8 of the U.S. Constitution, commonly known as the Commerce Clause. The Commerce Clause basically prohibits states from setting up their own trade barriers. It says that only Congress can pass laws that affect interstate commerce. Smithfield argued that Iowa’s packer ban was hindering interstate commerce. Vertical integration was embedded in the agricultural economies of the southern states.

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The company helped redraw the new system that emerged. By doing so, it wrote the blueprint for modern meat production. At the core of Tyson’s strategy is an economic principle called vertical integration. In a nutshell, this refers to the way companies buy up the outside firms that supply them (picture what would happen if Apple Inc. bought the company that sold it microchips). When a company becomes vertically integrated, it takes under its control and ownership all the independent businesses that once supported it. In Tyson’s case, the company has swallowed up all the businesses that used to make up a small-town economy.

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Tyson first pioneered this model in the poultry business. Then the company expanded into raising hogs. Within two short decades America’s independent hog industry was wiped out and replaced with a vertically integrated, corporate-controlled model. Ninety percent of all hog farms disappeared. The amount of money spent at grocery stores went up, but the amount of money farmers received went down. Companies like Tyson keep much of the difference. The cattle industry is the last holdout against vertical integration, but even the cowboys are starting to buckle under the pressure to surrender their independence. Tyson and three other companies so dominate the beef industry that they have been able to short-circuit the once vibrant cash market for buying cattle in the United States, giving them power to control the nation’s ranches and feedlots even if they can’t own them outright.

Shorting the Grid: The Hidden Fragility of Our Electric Grid
by Meredith. Angwin
Published 18 Oct 2020

Wheeling power has been facilitated by several later decisions. Most of this book will be highly critical of RTO governance, but I wanted to write a little about Otter Tail. I needed to show that vertically integrated utilities were not a perfect situation. No, everyone did not just get along wonderfully back in the old days. However, vertically integrated utilities did have some important advantages over the RTO system. The main advantage of the vertically integrated systems is that those systems had clear lines of responsibility. Now that we are talking about transmission … In general, transmission systems follow the power plants, and so the closing of power plants and the building of “distributed generation” (smaller power plants, such as solar arrays) increases the cost of transmission.

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In this book, we will refer to all such organizations as RTOs, though, of course, when a specific name contains “ISO,” we will use that name. Before the RTOs LET’S START BACK IN THE days before there were any RTO areas. Before 1999, all utilities were “vertically integrated.” In much of the country, this is still the case, as we can see by the non-shaded sections in the map above. Before 1999, there were only vertically integrated, utility-owned power plants and distribution equipment (local wires and substations). The utility usually either owned or had cooperative agreements about transmission lines. The utility had requirements to keep the lights on: it reported to a local board of some kind, and it would be judged and possibly fined if there were too many outages.

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It all went into the “rate base,” and the “rate of return” percentage calculation was based on the rate base. Someone noticed (many people noticed) that this was basically a perverse system. The way for a vertically integrated utility to make more money was … to spend more money. Unlike Joe’s deli down the street, which was always trying to be more efficient with money, in order to have larger profits, a vertically integrated utility wanted to be less efficient with money, so they could have a bigger rate base and larger profits. One of the ways that utilities made more money was to overbuild power plants, that is, build too many power plants.

The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism
by Jeremy Rifkin
Published 31 Mar 2014

The solution was to bring production and distribution all together, in house, under centralized management. The vertically integrated business enterprise took off in the last quarter of the nineteenth century and became the dominant business model during the whole of the twentieth century. The great value of vertically integrated companies is that by eliminating many of the middle men across the value chain, these new mega-enterprises were able to significantly reduce their transaction costs while dramatically increasing productivity. In a nutshell, vertically integrated companies introduced vast new efficiencies whose economies of scale lowered their marginal costs, enabling them to sell ever larger volumes of cheap mass-produced goods to an eager public.

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Spencer viewed competition among firms in the marketplace as the expression of society’s natural evolutionary development and believed that competition should be allowed to play out without government interference—assuring that only the most complex and vertically integrated companies would survive and flourish. Spencer’s views helped legitimize the business interests of the day. By finding a rationale in nature for companies’ pursuing ever larger, vertically integrated enterprises, controlled by even more rationalized, centralized management, Spencer and the free-market economists who followed him successfully tempered any serious public opposition to the existing economic arrangements. Where Spencer and his compatriots erred was in believing that the increasing complexity of society invariably required vertically integrated businesses and more centralized command and control in the hands of fewer institutions and individuals.

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That’s because fossil fuels are only found in certain places and require centralized management to move them from underground to the final end users. The centralized energies, in turn, require centralized, vertically integrated forms of communication in order to manage the momentous speed-up in commercial transactions made possible by the new sources of power. The enormous capital cost in establishing centralized communication/energy matrices meant that the new industrial and commercial enterprises embedded in and dependent on these technology platforms had to create their own giant, vertically integrated operations across the value chain. This was the only way to ensure sufficient economies of scale to guarantee a return on the investment.

The Price Is Wrong: Why Capitalism Won't Save the Planet
by Brett Christophers
Published 12 Mar 2024

Meanwhile, the consolidation and integration of generation and transmission would be equally comprehensive in the UK, where the Electricity Act of 1947 established the Central Electricity Generating Board (CEGB), with monopoly rights over both activities across all of England and Wales.15 Where England and Wales differed materially from France was with regard to local distribution, which in England and Wales was exempted from vertical integration (but not from nationalization). The 1947 Act created twelve new publicly owned regional electricity boards, which purchased electricity from the CEGB and distributed and sold it to local customers. In the US, vertical integration typically encompassed the entire supply chain (as in France), but it was very much a sub-national phenomenon. There were many hundreds of vertically integrated operators, mostly referred to as ‘utilities’, each of which enjoyed a monopoly on generation, transmission and distribution assets within a designated geographic service area.

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‘In most countries’, Michael Davidson and colleagues have observed, the electricity sector was dominated by ‘large-scale electricity companies’ that were ‘vertically integrated’, meaning that they ‘owned and controlled all [industry activities] under a single roof ’.5 Generation was not separated, in other words. Nor, generally, were these companies private. ‘Governments’, Davidson and his co-authors continued, ‘typically opted for public ownership and operation.’ Furthermore, these vertically integrated companies did not have to compete: they usually enjoyed what scholars (including Davidson) call ‘natural monopolies’, either at the national scale or sub-nationally.6 Last but not least, markets played a limited role, if any.

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What was needed, in short, was one or more larger, standardized and more efficient undertakings. In the event, the ensuing consolidation and vertical integration of the electricity industry occurred at varying geographical scales, and to varying degrees, in different territories. Consider, by way of example, the three countries whose emergent electricity sectors we have touched upon in the preceding paragraphs: France, the UK and the US. In France and the UK, vertical integration occurred at the national level, and specifically under public ownership. In the former territory, such integration would prove to be more or less total.

Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs
by Andy Kessler
Published 1 Feb 2011

One of the uncles had been working the mining business for a bunch of years when he realized that if the family owned both the company that drilled the stuff out of the mines as well as the company that transported the coal or ore or whatever out of the mines, then maybe they could make more money. One of the young Pritzkers put it quite simply: they made a fortune. All I could think about for the next few weeks was how could I find things to vertically integrate, because, heck, if the Pritzkers could make a fortune, or yet another fortune, maybe I had a shot at it. It took another few weeks to realize that the only reason their vertical integration deal worked is that mining is a no-innovation, no-excitement, no-Scale, not-much-growth kind of business. No one is writing code to improve mining. There is nothing to scale by a factor of ten, let alone thousands.

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INDEX Abundance and scarcity abundance, recognizing cheap versus expensive and cost cutting economic principles main scarcities tech examples of waste, benefits of and wealth creation Activision Advertising Google sales and scarcity Airports, global comparisons Ajax Alinsky, Saul Amazon, recommendations to customers America Online (AOL), instant messaging virtual pipe Anderson, Chris Apache Apple and cloud computing Stores and vertical integration virtual pipe of See also specific products Application, versus features, businesses Applied Semantics Arkwright, Richard Artificial intelligence AT&T Bell Labs vertical integration Wireless Baby boomers Bach, David Back to basics Banking FDIC Federal Reserve, roles of fractional reserve banking money supply as Thieves Behavioral economics Bell Labs Bennett Mechanical Comprehension Test Bernanke, Ben Bessemer, Henry Bezos, Jeff Bionetworks Biotech industry, personalized medicine Birdseye, Clarence BitTorrent Blink (Gladwell) Books, digital Boulton, Matthew Brain and original thought Stroud number Brenner, Reuven Brin, Sergey Broadcasters, as Thieves Brotherhood Brown, Charles Buffett, Warren Burger, Warren Businesses FAB (Feature, Application, Business) with highest returns profitability.

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I had an old college roommate named Franz who, after taking business classes, would come back to our house, pound a few beers, and proclaim, “Dude, when in doubt, get horizontal!” Then he’d pass out in front of the TV. Sometimes life lessons come from the strangest places. Franz had revealed the secret of how to really Scale. Getting horizontal is how a Free Radical takes those entrenched, vertically integrated giants out at the knees. Horizontal really means doing something better than anyone else and inserting yourself into a product or process by having someone else do everything else. SINCE, I DON’T know, Caesar, Alexander, Nebuchadnezzar, we have lived in a world of command and control.

The Content Trap: A Strategist's Guide to Digital Change
by Bharat Anand
Published 17 Oct 2016

Control the price of content by fiat once the distributor purchases the content producer, and the distributor’s gains come directly at the expense of the producer’s profits, which suffer. It’s another zero-sum transfer. The flaw in the logic of vertical integration is simple: Transferring money from one pocket to another doesn’t increase your cash. Yet it’s an argument that most proponents of vertical integration repeatedly miss. The logic of zero-sum transfers implies that the value of content in a vertically integrated entity should be no different than that in a nonintegrated one. However the relationship is structured—whether producer and distributor are merged into a single entity or contract at arm’s length—the content decisions should be the same: Hit programs should always be kept on the air, duds always taken off.

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April 2, 1993). A recent study of vertical integration Gregory Crawford et al., “The Welfare Effects of Vertical Integration in Multichannel Television Markets,” National Bureau of Economic Research, Working Paper No. w21832, December 2015. They examine not just the benefits that come from avoiding the double markup but also the foreclosure effects that come from limiting content access to rival distributors, and find that “program access rules” allow markets to reap the benefits of integration without its associated cost. See also Tasneem Chipty, “Vertical Integration, Market Foreclosure, and Consumer Welfare in the Cable Television Industry,” American Economic Review 91, no. 3 (June 2001): 428–53.

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Book sales went from several thousand e-copies to ninety million print copies in a year—making it the bestselling paperback of all time, and dramatically increasing e-sales too. The content hadn’t changed. The format had. And in this case, spillovers ran from print to digital rather than the other way round. THE PUZZLE OF VERTICAL INTEGRATION Vertical integration refers to the combination of content and distribution. The idea has long been a lightning rod in the entertainment industry. The recent rush was triggered by vertical combinations between TV studios and broadcast networks—20th Century Fox and Fox Broadcasting Corporation in 1986, ABC and Disney in 1996—and continued with megamergers since: AOL–Time Warner in 2000, Comcast–NBC Universal in 2009.

The Four: How Amazon, Apple, Facebook, and Google Divided and Conquered the World
by Scott Galloway
Published 2 Oct 2017

Most recently, Facebook has attempted to skirt responsibility for fake news, claiming it’s “not a media company, but a platform.” Hiding behind freedom of speech and a word, Facebook may have committed involuntary manslaughter of the truth on an unprecedented scale. It’s good to be prom queen. 5. Vertical Integration The fifth factor in the T Algorithm is the ability to control the consumer experience, at purchase, through vertical integration. All of the Four control their distribution. If they don’t produce the product, they source it, they merchandise it, they retail it, and they support it. Levi’s went from $7 billion to $4 billion from 1995 to 2005 because it didn’t have control of its distribution.

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The iPhone is the clearest signal that you are closer to perfection and have more opportunities to mate. More writers have written more good articles on Apple than any other company, yet most fail to see it as a luxury brand. I’ve been advising luxury brands for twenty-five years and believe these firms, from Porsche to Prada, share five key attributes: an iconic founder, artisanship, vertical integration, global reach, and a premium price. Let’s dig into each of these more deeply. 1. An Iconic Founder Nothing builds a self-expressive benefit brand more effectively than the constant personification of the brand in the form of one person, especially the founder. CEOs come and go, but founders are forever.

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As an old iMac ad put it, Apple technology is “Simply amazing, and amazingly simple.”21 It’s how Apple makes products that repeatedly become icons—“objects that appear effortless . . . so simple, coherent and inevitable that there could be no rational alternative.”22 Cognitive psychology shows that attractive objects make us feel good, which in turn makes us more resilient in creative challenges.23 “Attractive things work better,” says Don Norman, vice president of advanced technology at Apple from 1993 to 1998. “When you wash and wax a car, it drives better, doesn’t it? Or at least it feels like it does.”24 3. Vertical Integration In the early 1980s, The Gap was a chain of pedestrian clothing stores stocked with records, as well as Levi’s and other casual clothes, some mixed in with The Gap’s own brand. Then, in 1983, the new CEO, Mickey Drexler, remade the company. He softened the lights, bleached the wood, piped in music, expanded the dressing rooms, and decorated the walls with large black-and-white photographs by famous photographers.

On the Wrong Line: How Ideology and Incompetence Wrecked Britain's Railways
by Christian Wolmar
Published 29 May 2005

Although Major’s Cabinet agreed the principles of the report, the secretary of state for transport, Malcolm Rifkind (the transport portfolio is a revolving door for politicians on the way up or down), began to have doubts about the model that had been suggested. He started to think that InterCity should also be a vertically integrated railway, which effectively meant that the track authority would be a hodgepodge of little-used lines that would be difficult to manage. According to one of the Treasury’s privatisation team, ‘Rifkind made heavy weather of whether InterCity should be vertically integrated. He was sulking in his tent and his officials hadn’t been able to develop the idea [of how to privatise the railways].’¹⁴. Downing Street then further muddied the waters by flying the kite of the regional model, which Major seemed to favour, once again.

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For a time during the review process, it seemed the government was genuinely interested in looking at the possible alternatives for a new structure and was even considering a complete overhaul of the shape of the industry leading, in particular, to the vertical integration - bringing track and services back together - that many experienced railway managers see as the only effective and efficient way of running a railway. However, such a major change was quickly consigned to the ‘too hard’ box despite the fact that Graham Eccles, a leading Stagecoach rail executive, had gone on a road tour with ministers promoting the idea of vertical integration. Instead, the results of the review published in July 2004 were an all-too-familiar fudge with little real change.

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The logic, therefore, seemed to be to merge these two entities, to recreate the vertically integrated railway that is the best way to run a railway. However, this was ruled out on the basis that there was a considerable amount of track-sharing which could cause ‘conflicts of interest between the dominant company in a region and the other passenger and freight users’.²⁷ Moreover competition ‘for the right to operate services can be advantageous in terms of delivering improved value for money’ and having a vertically integrated railway would mean that no such competition was possible. Given the increase in franchise costs and the success at the time of the one franchise during its temporary stay in public hands, South Eastern, this was hardly a convincing argument (see Chapter 13).

Chokepoint Capitalism
by Rebecca Giblin and Cory Doctorow
Published 26 Sep 2022

, but that doesn’t mean we shouldn’t intervene against other pathologies that lead to concentration. After all, the law should further the public interest—not be used to subvert it. And, critically, even when the chokepoint’s origin looks like something that falls squarely in antitrust’s realm—like the kind of horizontal and vertical integration that has allowed corporations like Google, Facebook, and Live Nation to take so much power—there’s still scope for remedies outside of antitrust’s limited toolkit to address it. Chokepoints are by no means unique to the culture industries. Everywhere you look, corporations are trying to create the conditions that will secure them a disproportionate share of the value of other people’s labor—Uber, Facebook, Monsanto, Google, Perdue Farms, and John Deere among them.

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We focus on the most successful value extractors—Amazon for books, Google and Facebook for news, YouTube for online video, iHeartMedia for radio, Live Nation for ticketing and live events, the Big Three record labels and Spotify for streaming, the Big Three Hollywood talent agencies for screenwriting and Apple and Google for everything mobile. Each of these corporations has its own anticompetitive flywheel, designed to create chokepoints enabling them to capture an undue share of value. Their tools differ—with a reliance on combinations of network effects, licensing mazes, regulatory capture, horizontal and vertical integration, high switching costs, self-preferencing, and the industrial aggregation of copyrights—but they all seek to achieve the same things: to lock in users, lock in suppliers, make markets hostile to new entrants, and, ultimately, use the resulting lack of choice to force workers and suppliers to accept unsustainably low prices.

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Right from the beginning it planned to use books we searched for and bought to gather data on us in order to sell us more stuff and, ideally, take over the world.48 Ebooks were a perfect fit for Amazon’s extractive mindset, because they cost us more in terms of privacy than physical titles ever could. Amazon knows what we search for, what we read, and what we listen to—when and for how long. This “actionable market intelligence” allows it to poach authors, market its own titles to readers, and cross-sell non-book items to readers. The combination of surveillance and vertical integration means that Amazon vastly outpowers both publishers and other retailers, cementing its dominance, and giving it more opportunities to spy on readers. This is the true heart of “surveillance capitalism”—not the idea that Big Tech uses data-mining and machine learning to create mind-control systems that bypass our critical faculties and trick us into buying whatever they want to sell us.

Chicken: The Dangerous Transformation of America's Favorite Food
by Steve Striffler
Published 24 Jul 2007

Later that year, Holly bought its first hatchery, and in  the company added two processing plants.8 Fred Lovette was, in short, helping his company become vertically integrated. By incorporating previously independent facets of the industry (such as hatching, feed delivery, and processing) into a single business enterprise, Holly Farms was able to standardize and guarantee that chicks, feed, medicine, and advice were received by Holly Farms growers in time to ensure that full-grown broilers were consistently delivered to Holly Farms processing plants. A certain amount of horizontal integration—“getting bigger”—not only was an inherent part of this vertical integration, but also was necessary to survive the periodic price fluctuations that characterized the industry.

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John Tyson was not a farmer; he was a middleman, and hauling birds gave him an intimate understanding of all segments of the emerging industry. When he lacked chicks to deliver to his growers, Tyson bought a small hatchery. When he had problems accessing feed, he became a feed dealer for Ralston Purina and eventually built his own commercial mill. In this sense, the process of vertical integration, whereby previously independent facets of the emerging industry were brought under the control of a single entity, initially occurred as a response to problems encountered along the chain of production. In fact, most chicken industry pioneers owe their early success to roles in transportation.

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In , to capture economies of scale in chick hatching, he built a hatchery that turned out , . . . chicks per week. Jewell was constructing an integrated broiler system, and the northern Georgia hill-country An American Industry 41 bounded by Gainesville, Cumming, and Canton was coming to be known as the ‘Chicken Triangle.’”13 By World War II, then, Jewell had one of the first vertically integrated poultry companies in the country. He controlled the grow-out phase through contracts with farmers, and was establishing control or ownership over baby chicks, processing, transportation, and marketing. A decade later, in , the company could boast that “with the completion of their new feed mill, J.

Commodore: A Company on the Edge
by Brian Bagnall
Published 13 Sep 2005

“Over the years, there’s been a lot of people who say, ‘That was my first computer and I really learned a lot.’ I meet people that are presidents of high-tech companies and they say, ‘The reason I got into computers was because I got a Commodore 64.’ I find that very satisfying.” Michael Tomczyk puts much of the success of Commodore on vertical integration. “Number one, Commodore vertically integrated the company almost by accident,” he says. “They needed to vertically integrate to stay in the digital calculator business. As part of this strategy, Jack bought MOS Technology. And when he bought MOS Technology, he accidently inherited the first self-contained desktop computer developed by Chuck Peddle, which set the company on a course to become a home computer pioneer.”

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“So here we are dependent on one of our major competitors for a critical component.” Commodore regained control over their chip supply by using MOS Technology to clone their competitor’s chip. Commodore could now manufacture a computer better than Apple or Atari at a cheaper price. “The reason we could is because of vertical integration,” says Winterble. “We put so much in just a couple of chips.” Without vertical integration, the custom SID and VIC-II chips would account for a much more significant portion of the costs. Atari and Apple lacked the in-house expertise to manufacture their own custom chips, which meant they had to hire costly outside companies (often MOS Technology) to come up with designs.

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Jack Tramiel knew that to eliminate the competition, he would have to take Commodore places others could not survive. With his lean company and vertical integration, Commodore could decrease the price of their computers to a point where others would not be able to follow. On Friday, October 28, 1983, Texas Instruments publicly announced it was pulling out of the computer market and selling off its remaining inventory at bargain prices. Tramiel had defeated his former nemesis from the calculator wars. Within two days of announcing its withdrawal, Texas Instruments stock surged 30 percent. Atari had no vertical integration to compete with Commodore and even bought its ROM components and microprocessors from Commodore.

The Master Switch: The Rise and Fall of Information Empires
by Tim Wu
Published 2 Nov 2010

Having started as a member of the Trust, Hodkinson, with an ornery streak, came to believe strongly that every “layer” of the film industry should remain separate—in other words, that producers should focus exclusively on making films, exhibitors on running theaters, and distributors on bringing the two together. Otherwise, he concluded, the quality of film would suffer: “The history of the business has shown that the most successful pictures have been developed by individual efforts rather than by mass production.”6 What Hodkinson opposed is what economists call vertical integration—the stacking, as it were, of the parts of an industry that perform different functions (here, production, distribution, and exhibition) to create a consolidated single entity. (The phenomenon is distinguished from horizontal integration, the more common effort to dominate a single function, in the way that Bell progressively took over nearly every telephone company, different firms that were doing the same thing but in different markets.)

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.…”38 Again we must confront the reality that cultural and information industries pose special problems for standard industrial analysis, complicating the rules of supply and demand by virtue of the product’s less tangible forms of value. We might understand perfectly well how block booking and vertical integration reduced the costs of industrial production, while understanding nothing of what these innovations meant for film as a form of expression. Interestingly, when it comes to products like film, such inefficiencies as “higher search costs” might be a good thing, if the result is greater variety in what gets seen and heard.

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Radio’s business model, as we’ve seen, was essentially “entertainment that sells”—shows produced by advertisers, with revenues dependent on maximizing one’s share of the listenership. Hence, the fewer options the better. Even the preeminent radio manufacturer RCA was not immune to this logic. More stations might mean more radios sold, but as owner of NBC, RCA now viewed the network’s interests as synonymous with its own. And so we see another instance of how vertical integration of an industry creates a vested interest in limiting free expression. Profit is tied not to the proliferation of many voices but to the propagation of a few—to the mass production of speech, as it were. The campaign against FM radio in the 1930s and 1940s is a study in rhetoric as a weapon of industrial warfare.

The Long Twentieth Century: Money, Power, and the Origins of Our Times
by Giovanni Arrighi
Published 15 Mar 2010

The notion of an internalization of transaction costs as the distinguishing feature 0F the F0urth (US) systemic cycle 0F accumulation is derived from Richard Coase’s (1937) pioneering theoretical study 0F the competitive advantages of vertically integrated business organizations, from Oliver Williamson’s (1970) expansion 0F C0ase’s analysis, and from Alfred Chandler’s historical study 0F the emergence and swift expansion 0F modern US corporations in the late nineteenth and early twentieth centuries. As Chandler (1977; 1978) has shown, the internalization within a single organizational domain 0F activities and transactions previously carried out by separate business units enabled vertically integrated, multiunit enterprises to reduce and make more calculable transaction costs — costs, that is, associated with the transfer of intermediate inputs through a long chain of separate organizational domains connecting primary production to final consumption.

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Then, in the 1880s and 1890s, the changing structures of German and US business began to diverge radically. In both countries the centralization of capital gained momentum. In Germany opportunities to pursue vertical integration — integration, that is, of a firm’s operations with those of its suppliers and customers — were rapidly exhausted and the main thrust of the centralization of capital became horizontal integration (Landes 1966: 109-10) — integration, that is, of competing firms. In the United States, in contrast, the main thrust of the centralization of capital became vertical integration. As underscored by Chandler (1977; 1978; 1990), ineffectual, unpopular, and eventually illegal horizontal 296 THE LONG TWENTIETH CENTURY combinations were abandoned, and in branch after branch of the US domestic economy, ranging from cigarettes and canned meat to office and agricultural machinery, select business enterprises moved towards integrating within their organizational domains the sequential subprocesses of production and exchange that linked the procurement of primary inputs to the disposal of final outputs.

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As underscored by Alfred Chandler in the passages quoted at the beginning of this chapter, this internalization within a single organizational domain ofthe sequential sub-processes of production that linked specific primary inputs to specific final outputs generated considerable “economies of speed,” which in turn endowed the pioneering vertically integrated, multiunit enterprises with abundant and steady cash flows. As these cash flows were plowed back in the formation of specialized hierarchies of top and middle managers, imposing organizational barriers to the entry of new competitors were erected in branch after branch of the US domestic economy. As a result, the enterprises that had pioneered the supersession of the market through vertical integration also acquired the power to control or suspend competition in the procurement of primary inputs and in the disposal of final outputs, that is, in markets that were unprofitable or altogether impossible to internalize.

Why Startups Fail: A New Roadmap for Entrepreneurial Success
by Tom Eisenmann
Published 29 Mar 2021

And if a startup team tries incorporating too much innovation into their next-generation product, they will need to invest heavily in engineering and run the risk of development delays. Vertical Integration. Once a startup gains scale, it can consider bringing in-house some activities that previously were outsourced to third parties. An early-stage startup typically lacks the capital, know-how, and sales volume to do this. For example, Quincy, having only raised seed capital, could never have afforded its own apparel factory. But if the company had eventually reached, say, $50 million in annual sales, it might have built one. By its nature, vertical integration doesn’t directly expand a startup’s market. Rather, the motivations for vertical integration usually include 1) increasing profit margins by capturing the markup otherwise charged by third parties, and/or 2) ensuring higher and more consistent quality in “mission critical” functions, when the startup’s partners might have reliability and commitment issues.

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Some startups make bold business model innovations; that’s what Stitch Fix did when it offered a new subscription styling service. Others innovate by exploiting new technology, as Solidia Technologies did with advances in chemical engineering that enabled the venture to cut the carbon footprint of cement production by 70 percent. Vertical integration. Vertical integration enlarges the scope of activities that a company performs by bringing functions in-house that formerly were outsourced to third parties. “Upstream” (or “backward”) integration involves product development and manufacturing activities, while “downstream” (or “forward”) integration encompasses marketing, sales, and the physical distribution of products.

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Rather, the motivations for vertical integration usually include 1) increasing profit margins by capturing the markup otherwise charged by third parties, and/or 2) ensuring higher and more consistent quality in “mission critical” functions, when the startup’s partners might have reliability and commitment issues. Vertical integration can be risky because it typically requires significant investment and the development of new skills and capabilities, both of which increase a startup’s fixed costs—a problem if revenue growth ever reverses. That said, vertical integration is normally less perilous than other ways to expand scope. The exception occurs when the founder of a “big bang” venture, who has grand ambitions and exacting demands, wants to do everything in-house, right from the start.

Thieves of State: Why Corruption Threatens Global Security
by Sarah Chayes
Published 19 Jan 2015

NORTON & COMPANY New York • London For my Sainted Mother Antonia Handler Chayes CONTENTS CHAPTER ONE “If I See Somebody Planting an IED . . .” Afghanistan, 2009 CHAPTER TWO “Lord King, How I Wish That You Were Wise” Mirrors for Princes, ca. 700–1516 CHAPTER THREE Hearing the People’s Complaints Kandahar to Kabul, 2001–2009 CHAPTER FOUR Nonkinetic Targeting Kabul, 2009 CHAPTER FIVE Vertically Integrated Criminal Syndicates Kabul, Garmisch, 2009–2010 CHAPTER SIX Revolt Against Kleptocracy The Arab Spring: Morocco, Algeria, Tunisia, 2011 CHAPTER SEVEN Variation 1: The (Overlooked) Military-Kleptocratic Complex Egypt, ca. 2010 CHAPTER EIGHT Variation 2: The Bureaucratic Kleptocracy Tunisia, ca. 201091 CHAPTER NINE Variation 3: The Post-Soviet Kleptocratic Autocracy Uzbekistan, ca. 2013 CHAPTER TEN Variation 4: The Resource Kleptocracy Nigeria, ca. 2014 CHAPTER ELEVEN Up a Level Afghanistan and Washington, June 2010–January 2011 CHAPTER TWELVE Forging an Appeal on Earth The Netherlands, England, America, ca. 1560–1787 CHAPTER THIRTEEN Violent Extremists CHAPTER FOURTEEN Remedies EPILOGUE Self-Reflection Appendix Acknowledgments Notes Index THIEVES OF STATE CHAPTER ONE “If I See Somebody Planting an IED . . .”

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Why would Interior Minister Hanif Atmar, a man who basked in considerable international credibility, risk his luster by throwing himself across the tracks for some two-bit border police boffo like Sayfullah? Why not sacrifice a Sayfullah and retrench around people who mattered? It did not add up. CHAPTER FIVE Vertically Integrated Criminal Syndicates Kabul, Garmisch, 2009–2010 “Sarah, do you have a minute?” It was Colonel Chris Kolenda aiming toward me on a gravel path that simmered in the reflected heat from the prefab metal buildings around it. A former reconstruction team commander tangentially interested in corruption, Kolenda was one of McChrystal’s phalanx of colonels.

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But what if the Afghan government wasn’t really trying to govern? What if it was focused on another objective altogether? What if corruption was central to that objective and therefore to the government’s mode of operation? Perhaps GIRoA could best be understood not as a government at all but as a vertically integrated criminal organization—or a few such loosely structured organizations, allies but rivals, coexisting uneasily—whose core activity was not in fact exercising the functions of a state but rather extracting resources for personal gain. If GIRoA’s main objective was siphoning riches, then why should it waste manpower on the impoverished east?

Six Degrees: The Science of a Connected Age
by Duncan J. Watts
Published 1 Feb 2003

Markets, meanwhile, continue to operate between firms, where the boundary between firm and market is a trade-off between the coordination cost of conducting a particular function within the firm and the transaction cost of striking an external contract. If the relationship between two firms ever becomes so specialized that one is effectively in a position to manipulate the other, the problem is assumed to be resolved by a merger or an acquisition. Hence, firms grow by the process of vertical integration: one hierarchy effectively gets absorbed into another, generating a larger, vertically integrated hierarchy. Conversely, when a firm decides that some internal function is too expensive, it either spins off that branch of the hierarchy to form a specialized subsidiary, or eliminates it altogether, outsourcing the function to another firm.

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INDUSTRIAL DIVIDES FROM AN ECONOMIST’S PERSPECTIVE, PERHAPS THE MOST polemical (if not the most significant) point that Chuck and his coauthor, Michael Piore, made is that the theory of the firm came about essentially after the fact. Only after large-scale industrialization had effectively settled on the model of vertical integration and its associated economies of scale did economists start to develop a theory of the firm. And as a consequence, it was only a particular type of firm—the large, vertically integrated hierarchy—that they tried to explain, as if no other theory of industrial organization could even make sense. But looking back at the late nineteenth century, when the modern image of the industrial firm first emerged, Piore and Sabel showed that the hierarchy was not the only successful form of industrial organization, nor was its eventual preeminence necessarily based on universal economic principles.

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Industry after industry was swept by Japanese-inspired trends, with reengineering, total quality management, and just-in-time inventory systems all taking their turn as flavor of the month. The end result of this upheaval was that American companies in the late 1990s looked very little like the vertically integrated hierarchies that had built cars for the likes of Henry Ford and Alfred Sloan in the 1920s and that had been the paradigmatic form of corporate order ever since. As hard as they have tried to change, however, the American auto giants have never quite been able to match the performance of their Japanese counterparts.

Culture works: the political economy of culture
by Richard Maxwell
Published 15 Jan 2001

Indeed, such is its vigorous good health that one commentator referred to the “8,000-pound gorilla that Fox Sports Net has become.”66 Television coverage rights and networks are but two aspects of Murdoch’s broader vision of creating a vertically integrated and globally encompassing sport-media delivery system. Countering the broader trend toward corporate outsourcing and institutional disaggregation (horizontal integration), News Corporation has sought to secure central ownership and control over the various revenue-generating nodes of the sport entertainment industry (vertical integration).67 For this reason, the late 1990s saw News Corporation engage in a global quest focused on the acquisition of entire sport leagues, individual teams, and even stadia.

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Economic Interests1 Anheuser-Busch Companies is not simply a brewer. It is a parent company that presides over thirteen subsidiaries that handle everything from agriculture, brewing, and packaging to marketing, investing, and entertainment (the technical term for such a structure of holdings is vertical integration). Anheuser-Busch, Inc., the company’s largest division as well as the world’s largest brewer, owns and operates a dozen breweries inside the United States. It produces approximately thirty beers, including the Natural, Busch, Budweiser, and Michelob families, which span the product line from subpremium to superpremium.

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Additionally, it sells malt liquors, nonalcoholic brews, and a number of specialty beers that vary by season and region, including an equity investment with Redhook Ale Brewery in Seattle. Business is booming. In the first quarter of 1999, Anheuser-Busch experienced a record 22 percent increase in earnings per share, even as its domestic market share rose to 48.1 percent.2 The company’s success results in no small part from the degree of vertical integration it enjoys in the brewing process, allowing it to self-monitor operations from start to finish. A typical 62 Beer brew actually starts with raw materials produced through Busch Agricultural Resources. It is then canned, bottled, packaged, and labeled by AnheuserBusch divisions that handle metal containers, packaging, printing, and labeling.

Trust: The Social Virtue and the Creation of Prosperity
by Francis Fukuyama
Published 1 Jan 1995

The economic historian Alexander Gerschenkron, for example, noted that late modernizers like Germany and Japan did things rather differently from early modernizers like England and the United States, with the government playing a much more active role in promoting development.12 In terms of the evolution of corporate organization, the large, vertically integrated firm described by Chandler is not the only way to deal with problems of scale. The Japanese keiretsu system constitutes an alternative form of corporate organization based on networks rather than hierarchy and in effect achieves the scale economies of vertical integration with a much more flexible form of organization. An advanced industrialized country’s economy can, moreover, remain dominated by modern family businesses, as we will see in the cases of Taiwan and Italy.

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It is understandable that the keiretsu relationship emerged in a Japanese cultural setting: because of the relative ease with which two parties can enter into a durable relationship of mutual obligation, transaction costs are lower across the board in Japan.18 Transactions that would be expensive to conduct across firm boundaries in a low-trust society like Hong Kong or southern Italy (in effect, between firms without kinship ties) cost much less in Japan, because the contracting parties have a higher level of confidence that the contract will be fulfilled. At the same time, members of a Japanese keiretsu do not incur the extra costs of centralized administration that exist within vertically integrated firms. The transaction cost approach is useful for understanding the economic efficiencies of vertical keiretsu like that of Toyota, which are the functional equivalents of vertically integrated Western companies. But what about the horizontal or intermarket keiretsu, whose different members have no necessary economic connection with one another? What economic motives, for example, made it important that each of the major intermarket keiretsu include a brewery in its group, such that members of the Sumitomo group drink Asahi beer, while those of Mitsubishi prefer Kirin?

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The Korean version of the network organization is known as the chaebol, among which are such wellknown names as Samsung and Hyundai. These network organizations achieve economies of scale and scope on the level of leading Western firms but within a looser organizational form that permits a greater degree of flexibility than the equivalent vertically integrated American firm. Taiwan also has network organizations, but of a very different nature. In the first place, they are much smaller than their Japanese or Korean counterparts: the six largest Japanese keiretsu average thirty-one firms per group,17 the Korean chaebol have eleven, and the Taiwanese network organizations average only seven firms each.

The Future of Ideas: The Fate of the Commons in a Connected World
by Lawrence Lessig
Published 14 Jul 2001

The question is what shape that building will take. THE DANGER IS what economists would call the problems of vertical integration—where one provider controls the full range of services across the layers I described—content, logical, and physical.39 Outside the Internet, the danger of vertical integration is less. 40 But within a network, the danger grows. Such integration, a report by the National Research Council has concluded, “could, if successful, cause a change in the Internet market, with innovation and creativity becoming more the province of vertically integrated corporations.”41 It would, Web founder Tim Berners-Lee worries, be dangerous for innovation generally.

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As noted above, these carriers have the ability to exercise market power by controlling access to bottleneck facilities required by other service providers. It would appear, therefore, that if these services were deregulated at this time, it would likely impair the development of competition in this market as well as in upstream markets for which such services are essential inputs.36 Vertically integrated cable and telephone facility owners, AT&T had argued, possessed market power and had to be prevented from engaging in anticompetitive practices.37 But when AT&T bought its own cable lines, its story changed. No longer did it believe that cable should be regulated. Instead, AT&T began to argue that the market should regulate cable, and the government should stand aside.

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When I turn on the television, I don't expect it to deliberately jump to a particular channel, or to give a better picture when I choose a channel that has the 'right' commercials. I expect my television to be an impartial box. I also expect the same neutrality of software.” 42 The danger with the AOL-Time Warner merger is the danger that this vertical integration will induce AOL/TW to engage in discrimination—both discrimination in conduits (favoring their own lines over others) and discrimination in content (favoring their own content over others). This danger is real. As economists Daniel Rubinfeld and Hal Singer have concluded, given the existing concentration in cable broadband, AOL/TW will have a significant incentive to engage in both forms of discrimination.43 And by mid-2001, AOL Time Warner had begun to prohibit advertisements on their sites for competing Internet access providers.44 Discrimination was threatened; discrimination is being realized.

How Capitalism Saved America: The Untold History of Our Country, From the Pilgrims to the Present
by Thomas J. Dilorenzo
Published 9 Aug 2004

In addition, the Rockefeller firm put out the cleanest burning kerosene and managed to profitably dispose of most of the residues, in the form of lubricating oil, paraffin wax, and Vaseline.24 Rockefeller pioneered the practice known as “vertical integration,” or in-house provision of various inputs into the production process; that is, he made his own barrels, wagons, and so on. This is not always advantageous—sometimes it pays to purchase certain items from specialists who can produce those items at very low cost. But vertical integration has the advantage of allowing one to monitor the quality of one’s own inputs. It has the further advantage of avoiding what modern economists call the “hold-up problem.”

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In such instances the power plant has the choice of paying up, engaging in costly litigation, or going without the coal and closing down. None of these options is attractive. But if the power plant simply buys the coal mine, all of these problems disappear. That is what Rockefeller, the compulsive micromanager, did with many aspects of the oil-refining business. He reduced his costs and avoided hold-up problems through vertical integration. Rockefeller also devised means of eliminating much of the incredible waste that had plagued the oil industry. His chemists figured out how to produce such oil byproducts as lubricating oil, gasoline, paraffin wax, Vaseline, paint, varnish, and about three hundred other substances. In each instance he profited by eliminating waste.

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She published a series of hypercritical articles in McClure’s magazine in 1902 and 1903, which were turned into a book entitled The History of the Standard Oil Company, a classic of antibusiness propaganda.25 Tarbell’s writings are emotional, often illogical, and lacking in any serious attempt at economic analysis. But even she was compelled to praise what she called the “marvelous” economy of the entire Standard Oil operation. In a passage describing one aspect of Standard Oil’s vertical integration she wrote: Not far away from the canning works, on Newtown Creek, is an oil refinery. This oil runs to the canning works, and, as the newmade cans come down by a chute from the works above, where they have just been finished, they are filled, twelve at a time, with the oil made a few miles away.

The Fair Trade Scandal: Marketing Poverty to Benefit the Rich
by Ndongo Sylla
Published 21 Jan 2014

 139 Conclusion146 Annexes153 Notes155 Bibliography164 Index172 viii Sylla T02779 00 pre 8 28/11/2013 13:04 List of Illustrations Figures 1.1 Evolution of world merchandise trade 1.2 Evolution of world merchandise exports according to development status 1.3 Evolution of the share of developing regions in world merchandise exports 1.4 Evolution of the share of selected groupings in world merchandise exports 1.5 Evolution of the share of developing countries in world GDP 1.6 Evolution of the trade/GDP ratio 1.7 Ecological footprint and biocapacity in 2006 1.8 Changes in ecological footprint and biocapacity 1961–2006 12 13 13 14 14 15 24 24 Tables 1.1 Developing countries 4.1 Type of costs entering into the calculation of the FT minimum price 4.2 Distribution of FT groups in 2009 5.1 Gross FT revenue received in the South in 2008 5.2 Budget of selected labelling initiatives 5.3 Number of FT certifications according to the degree of commodity dependency 5.4 Distribution of LDCs according to their trade structure A1 Productivity statistics according to development level A2 Transfair USA’s revenue compared to additional FT income transferred from USA (in thousand $) A3 Transfair USA’s revenues compared to additional FT income transferred from USA (in %) A4 International merchandise trade – structure by region in 2008 9 92 109 124 127 134 135 153 153 153 154 ix Sylla T02779 00 pre 9 28/11/2013 13:04 the fair trade scandal Boxes 1.1 Developing countries 10 1.2 Vertical integration and horizontal concentration in the cocoa value chain 20 1.3 ‘The hamburger connection’ 23 1.4 Definition of the Producer Support Estimate (PSE) 29 2.1 Neoliberalism 42 2.2 The cost of initial certification 48 2.3 The standards for small producers 51 3.1 Arguments in favour of free trade and their limits in the context of developing countries 66 3.2 Paradoxes of neoliberal orthodoxy 74 3.3 Wal-Mart: a controversial giant in the small world of Fair Trade 79 4.1 Method for calculating the cost of sustainable production and the FT minimum price 92 4.2 Major approaches in terms of impact studies 114 5.1 The dilemma of a Rwandan cooperative: excluding the poorest of the poor or leaving the FT system 138 5.2 Millennium Development Goal 8: a global partnership for development144 x Sylla T02779 00 pre 10 28/11/2013 13:04 Acknowledgements I would like to express my gratitude to three of my former professors who instilled in me the passion for research, supervised much of my work, and always encouraged me to explore unusual perspectives.

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This is what is called ‘horizontal concentration’. Second, actors that have specialised in specific steps of the chain tend to broaden their activities in other steps of the chain. Firms, for instance, tend to work more and more with producers in the framework of long-term relationships. This is what is called ‘vertical integration’. With the help of trade liberalisation, oligopolies and oligopsonies therefore tend to become standard elements in value chains (see Box 1.2). For these intermediaries, more particularly distribution channels and large agrifood multinationals, the strategy is twofold: on the one hand reducing costs upstream as much as possible and on the other creating value added downstream.

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In 19 Sylla T02779 01 text 19 28/11/2013 13:04 the fair trade scandal contrast, ‘customised’ attributes refer to the interpersonal component (consumption in a café, in a restaurant, etc.) which occurs during the sale of the product (Daviron and Ponte, 2005). This strategy thus makes it possible for a price decline in the South to occur simultaneously with a boost in sales in the North. Box 1.2 Vertical integration and horizontal concentration in the cocoa value chain In 2008, world cocoa imports were estimated at $13 billion against $15 billion for exports (according to UN Comtrade). Côte d’Ivoire (20.3 per cent), the Netherlands (18.5 per cent) and Indonesia (9.6 per cent) are the world’s three largest exporters.

Exponential: How Accelerating Technology Is Leaving Us Behind and What to Do About It
by Azeem Azhar
Published 6 Sep 2021

However, by the late twentieth century, vertical expansion had gone out of fashion. Instead, management orthodoxy was that companies should stick to their ‘core competencies’.36 But not any more. As we marched into the Exponential Age, the spirit of vertical integration returned. Google’s advertising business, responsible for virtually all the firm’s revenue and profits, is a vertically integrated system. Several different mechanisms make online advertising possible: targeting, auctioning the ad space, placing the ad, tracking the engagement. Once upon a time, different companies looked after each of these processes. By 2020, an advertiser wanting to buy an ad to show to a particular group of users can do so entirely with Google’s products.

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Google’s acquisition of YouTube in 2006 helped, vastly increasing its dominance in the advertising ecosystem; so too did the launch of Maps, which helped advertisers understand even more about where their consumers were going about their business. And this vertical integration shows no signs of slowing down. In 2010, Google acquired 40 companies – a diverse portfolio of firms that specialised in social gaming, photo editing, computer processors, touch typing, voice recognition, travel and music streaming. All of these acquisitions allowed Google ever-greater control of its own supply chain. Such vertical integration can even involve expanding from the massless, digital world into creating physical hardware. Take chip making. For most of the history of the personal computer, chips were made by one specialist firm, the computer by another and its operating system by yet another.

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It has a logistics wing, the world’s largest cloud computing business, and – like Apple – a media business. But nor does exponential logic lead solely to horizontal expansion into new markets. The second form of superstar growth is vertical expansion. This is where a firm looks at the activities of part of their own supply chain and decides to bring them in-house. Vertical integration is not unique to the Exponential Age, of course. Andrew Carnegie became the second-wealthiest man in the United States in the 1800s when he expanded his steel company so it took over every stage of the supply chain – taking control of iron mines, coal mines, railroads and steel mills, all to achieve enormous efficiency in the steel industry.

The Fissured Workplace
by David Weil
Published 17 Feb 2014

I am grateful to Doug Parker for conversations sharing material on subcontracting from this period as well as to Marric Buessing for discussions of the incentives for vertical integration between different stages of mining production. 5. Although I focus here on underground coal mining, which is concentrated primarily in the eastern half of the United States, a large percentage of coal is mined through open mining operations (strip mining) in parts of the East Coast as well as predominantly in the western half of the country. 6. See Buessing (2013) for a detailed empirical analysis of the recent trend to vertical integration. 7. This is the same company that in a later incarnation as Massey Energy Company was responsible for the death of twenty-nine miners in April 2010.

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Budd, John, and Brian McCall. 1997. “The Effect of Unions on the Receipt of Unemployment Insurance Benefits.” Industrial and Labor Relations Review 50, no. 3: 478–492. Buessing, Marric. 2013. “Vertical Integration in the Mining Industry: An Incomplete Contracts Approach.” Working paper, Boston University Department of Economics. Buessing, Marric, and David Weil. 2013. “Health and Safety Consequences of Mine-Level Contracting and Vertical Integration.” Working paper, Boston University School of Management / Department of Economics. Butler, Richard, and John Worrall. 1983. “Workers’ Compensation: Benefit and Injury Claims Rates in the Seventies.”

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Born out of core strategies focusing on building brands, franchising represents a distinctive form of fissuring that allows the franchisor to focus on core competency while ensuring that the businesses that provide the products and services keep up with standards. Franchising has now spread far beyond the fast-food industry commonly associated with it. Chapter 7 looks at supply chains in the context of fissuring. Whereas companies like Ford and IBM once built internal empires of suppliers through expansion and vertical integration, modern supply chains achieve even more complicated coordination of hundreds and often thousands of suppliers. But they do so by carefully steering that network from the center, establishing detailed, demanding, and high-stakes requirements and thereby satisfying the core requirements of the lead businesses at their center. 5 The Subcontracted Workplace There is nothing new about subcontracting as a form of organizing business, production, and the workplace.

Zucked: Waking Up to the Facebook Catastrophe
by Roger McNamee
Published 1 Jan 2019

Spreadsheets on Apple IIs transformed the productivity of bankers, accountants, and financial analysts. Unlike the vertical integration of mainframes and minicomputers, which limited product improvement to the rate of change of the slowest evolving part in the system, the horizontal integration of PCs allowed innovation at the pace of the most rapidly improving parts in the system. Because there were multiple, competing vendors for each component, systems could evolve far more rapidly than equivalent products subject to vertical integration. The downside was that PCs assembled this way lacked the tight integration of mainframes and minicomputers.

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From its original base in retail for nonperishable goods, Amazon has expanded horizontally into perishables, with Whole Foods, and into cloud services, with Amazon Web Services. Amazon’s vertical integration has included Marketplace, which incorporates third-party sellers; Basics, where Amazon private-labels bestselling commodity products; and hardware, such as Alexa voice-controlled devices and the Fire home video server. In a traditional antitrust regime, Amazon’s vertical-integration strategy would not be allowed. The use of proprietary consumer data to identify, develop, and sell products in direct competition with bestsellers on the site represents an abuse of power that would have appalled regulators prior to 1981.

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Any customer who wanted to use a computer in that era had to accept a product designed to meet the needs of government, which invested billions to solve complex problems like moon trajectories for NASA and missile targeting for the Department of Defense. IBM was the dominant player in the mainframe era and made all the components for the machines it sold, as well as most of the software. That business model was called vertical integration. The era of government lasted about thirty years. Data networks as we think of them today did not yet exist. Even so, brilliant people imagined a world where small computers optimized for productivity would be connected on powerful networks. In the sixties, J. C. R. Licklider conceived the network that would become the internet, and he persuaded the government to finance its development.

The Wisdom of Finance: Discovering Humanity in the World of Risk and Return
by Mihir Desai
Published 22 May 2017

The account of the relationship between GM and Fisher Body draws on Klein, Benjamin, Robert Crawford, and Armen Alchian. “Vertical Integration, Appropriable Rents, and the Competitive Contracting Process.” Journal of Law and Economics 21, no. 2 (1978): 297–326; Klein, Benjamin. “Vertical Integration as Organizational Ownership: The Fisher Body–General Motors Relationship Revisited.” Journal of Law, Economics and Organization 4, no. 1 (March/April 1998): 199–213; Klein, Benjamin. “Fisher–General Motors and the Nature of the Firm.” Journal of Law and Economics 43, no. 1 (2000): 105–42; Freeland, Robert F. “Creating Holdup Through Vertical Integration: Fisher Body Revisited.” Journal of Law and Economics 43, no. 1 (2000): 33–66; Coase, R.

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When asked about the merger, he said: We need to marry up with all of that kind of content that exists in the Time Warner space and then we need to create a unified platform and we need to sort of drive convergence. It’s not like convergence is anything more than the ultimate expression of vertical integration. It’s just that instead now we have this big stack, we smoosh it all into one thing. The merger is about these larger notions of creating a truly vertically integrated company that is built offensively and defensively powerful in terms of protecting itself not only today in terms of the way the business is prosecuted and the way content is delivered, but going forward in the converging world.

The Wide Lens: What Successful Innovators See That Others Miss
by Ron Adner
Published 1 Mar 2012

The shift toward innovation ecosystems follows a historical trend toward greater complexity and interaction that has characterized the rise of the modern economy. In the beginning, the dominant approach was to house all this complexity within a single firm—the vertically integrated organization. In the early days of the twentieth century, vertically integrated companies like Ford, GE, BASF, and IBM showed that large size, reduced variable cost, and dedicated research could produce outstanding change. But while vertical integration offered control, it required massive investments and led to huge, unwieldy organizations. At the close of the twentieth century, firms like Toyota, Dell, and Nestlé led their industries by learning how to leverage external supply chains to outsource activities, reduce fixed costs, and increase operational flexibility, setting a new benchmark for competitiveness that their rivals struggled to meet.

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The Five Levers of Ecosystem Reconfiguration Solving ecosystem problems requires an ecosystem approach: taking the existing pieces and finding a way to reconfigure the puzzle. We saw this approach used in chapter 3, as the Hollywood studios reconfigured the digital cinema blueprint, and again in chapter 4, as Amazon reconfigured the e-book blueprint. In both cases, success did not come from discrete technology improvements. And it did not come from vertical integration—bringing external activities inside the firm. Neither better technologies nor increased control were sufficient to unblock the bottlenecks to value creation. Instead, success came from accepting the limitations of the existing elements and then finding a new way to bring them together. Reconfiguring an ecosystem entails changing the pattern of interaction among the elements in the system.

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Food and Drug Administration (FDA), Exubera approval, 103–4, 108–9 V Value blueprints, 84–114 for Amazon Kindle, 96–99 basic requirements, 84–85 communication aspects, 113 constructing, steps in, 85–87 for electric vehicles (EVs), 168, 181 for Exubera inhalable insulin, 105–8 functions of, 85, 87, 112–13 for inhalable insulin, 101–12 for iPad, 220 for iPhone, 217 for iPod, 210 map, example of, 87 for M-PESA, 197, 198, 200 necessity of, 84–85, 100, 112–14, 226–27 for Sony Reader, 91–95 as team-based effort, 113–14 updating, 87 Value chains, focus of, 84 Value proposition defined, 85 elements needed for. See Value blueprints for leadership prism, 118 and minimum viable ecosystem (MVE) approach, 203–4 Vertical integration, pros/cons of, 8, 177 Veterans Health Administration (VHA), electronic health records (EHRs), 131 Virtual print fee (VPF), 72–73, 76 Vision and co-innovation, 50–51 value proposition as, 85 VISTA electronic record system, 131 Vodafone, mobile banking joint venture. See M-PESA W Wachter, Dr.

Digital Wars: Apple, Google, Microsoft and the Battle for the Internet
by Charles Arthur
Published 3 Mar 2012

The desktop market has entered the dark ages, and it’s going to be in the dark ages for the next 10 years, or certainly for the rest of this decade.’12 Why had Apple lost? Serried ranks of economists and management theorists were sure why: its model of ‘vertical integration’ – designing both the machines and the software – couldn’t work in the computer industry. ‘Vertically integrated companies can’t compete! The oxymoron of “internal customers” is poison to a competitive culture. That is the lesson of the computer industry,’ wrote Tom Evslin, an experienced tech entrepreneur.13 Management and economic theory said that horizontal integration – PC makers building PCs, Microsoft writing the software – meant that the market optimum, of the maximum possible production volume and the lowest possible prices for consumers, would be reached much more quickly.14 While that’s true, it overlooks other elements that are harder to quantify: user experience and collateral costs.

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‘And to be able to say that there’s some challenge for us in the phone market when it’s becoming software intensive – I don’t see that.’ In other words, Microsoft was fine: Windows Mobile was going to be able to cope with whatever came along. Yet even then there were huge debates, Knook says, about whether Microsoft should pursue a vertical integration strategy, as it had with the Zune and Xbox, and try to own (in Jobs’s words) the whole widget. ‘Robbie [Bach], J Allard [who had pushed the Zune through to fruition] and Steve [Ballmer] really favoured that route. Bill did not, but by that stage Bill really was already checking out.’ There was also a growing problem with Windows Mobile: if a handset maker wanted to add an extra button or an extra feature, Knook was happy to get the Windows Mobile team to comply and customize their baby.

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Richard Windsor, then the sector analyst at Nomura Research, saw the MMI deal as the outbreak of peace: ‘The patent situation is clear. The have-nots in the world of [Android] handset intellectual property will now enjoy the benefit of Motorola’s portfolio of 17,000 patents.’ He saw no chance that Google would become vertically integrated like Apple or RIM; it was much better to help Samsung and HTC, far bigger in the Android business, to compete against the predations of Apple and Microsoft. ‘Now that everyone is fairly well armed when it comes to patents, we expect amicable arrangements to be reached with less recourse being made to contentious litigation.’51 That analysis, though, overlooked the fact that many Motorola patents were ‘standards-essential’ – that is, they underpinned standards such as the wireless broadband Wi-Fi or the video encoding system H.264.

Prediction Machines: The Simple Economics of Artificial Intelligence
by Ajay Agrawal , Joshua Gans and Avi Goldfarb
Published 16 Apr 2018

Adopting too early could be costly, but adopting too late could be fatal.9 Our point is not that Amazon will or should do this, although skeptical readers may be surprised to learn that Amazon obtained a US patent for “anticipatory shipping” in 2013.10 Instead, the salient insight is that turning the prediction dial has a significant impact on strategy. In this example, it shifts Amazon’s business model from shopping-then-shipping to shipping-then-shopping, generates the incentive to vertically integrate into operating a service for product returns (including a fleet of trucks), and accelerates the timing of investment. All this is due simply to turning up the dial on the prediction machine. What does this mean for strategy? First, you must invest in gathering intelligence on how fast and how far the dial on the prediction machines will turn for your sector and applications.

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These would include, for example, investments to reduce the cost of securing packages left for pickup and transportation services to handle returns. Although the customer-friendly delivery market is competitive, product return services are a much less-well-developed market. Amazon itself might establish an infrastructure of trucks that visit neighborhoods daily for deliveries and returns, thus vertically integrating into the daily product return business. Effectively, Amazon could move the boundary of its business right up to your front porch. This boundary shifting is already occurring. One example is the German e-commerce venture, Otto.1 A major barrier to consumer purchases over the internet rather than in a store is uncertain delivery times.

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AI can lead to strategic change if three factors are present: (1) there is a core trade-off in the business model (e.g., shop-then-ship versus ship-then-shop); (2) the trade-off is influenced by uncertainty (e.g., higher sales from ship-then-shop are outweighed by higher costs from returned items due to uncertainty about what customers will buy); and (3) an AI tool that reduces uncertainty tips the scales of the trade-off so that the optimal strategy changes from one side of the trade to the other (e.g., an AI that reduces uncertainty by predicting what a customer will buy tips the scale such that the returns from a ship-then-shop model outweigh those from the traditional model). Another reason C-suite leadership is required for AI strategy is that the implementation of AI tools in one part of the business may also affect other parts. In the Amazon thought experiment, a side effect of transitioning to a ship-then-shop model was vertical integration into the returned items collection business, perhaps with a fleet of trucks that did weekly pickups throughout the neighborhood. In other words, powerful AI tools may result in significant redesign of work flows and the boundary of the firm. Prediction machines will increase the value of complements, including judgment, actions, and data.

The Myth of Capitalism: Monopolies and the Death of Competition
by Jonathan Tepper
Published 20 Nov 2018

Not content to own all the cigarette companies, American Tobacco started vertically integrating, owning every step of the cigarette production, even managing its own tobacco leaf growing. It was not an easy job to return to the premerger days, as these brands had already been fully integrated into one vast machine. Yet in the end American Tobacco was split off into an oligopoly of American Tobacco Company, R. J. Reynolds, Liggett & Myers, and Lorillard. Standard Oil was a different beast. It, too, had grown through many mergers, but a large part of its size came from vertical integration. There is a vast chain of production between when oil comes out of the ground and when it is burned as gasoline in cars.

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Not every theory or fad in economics has been correct, and we cannot entrust our economy to professors for hire who bear no consequences for their decisions. Antimonopoly is more than antitrust. While competition policy and antitrust laws are the main way to fight monopolies, they are not the only ways. Law and regulation must be geared toward preventing dominant companies from preventing new entrants. Vertical integration should face significant hurdles. Vertical integration by dominant firms should be prevented in any moderately to highly concentrated industry. Local monopolies should be broken up. Large companies should not be allowed to carve markets up like the mob, dividing the turf. For example, the McCarran Ferguson Act exempted insurance companies from antitrust and subjected them to state regulation where they enjoy local monopolies.

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Google, Facebook, and Amazon have great technology, but much of their current status and financial success comes from regulatory and antitrust mistakes. Amazon was allowed to buy dozens of e-commerce rivals and online booksellers to give it a monopsony position in the book industry. Google was able to buy its main competitor Doubeclick and vertically integrate online ad markets by buying advertising exchanges. Facebook was able to buy Instagram and Whatsapp with no regulatory challenges.12 In no small degree, nonexistent antitrust has allowed them to achieve their dominance. The scale of digital platforms puts them in a completely different category to the companies they compete against.

The Future of Technology
by Tom Standage
Published 31 Aug 2005

But bmw also makes cars in the old-fashioned, vertically integrated way. Another parallel between the two industries is the use of “platforms” – underlying common designs that allow components to be shared between outwardly different products. This has the benefit of reducing costs, but it can be taken too far if it results in a bland product line-up. Nokia seems to have run into this problem, as Volkswagen did in the car business. If the car industry is any guide, then, the likely outcome is that the handset business will shift from vertical integration to a series of horizontal layers: chips, software, manufacturing, design and branding.

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Furthermore, a company could not just make handsets: to be taken seriously by the mobile-network operators, and ensure everything worked properly, it also had to manufacture the much larger and more complex base-stations that are used to provide mobile-phone coverage. All these requirements meant that the industry came to be dominated by large, vertically integrated firms such as Nokia, Motorola and Ericsson. “For many firms good at low-cost electronics, the barrier to entry was simply too high,” says Tony Milbourn of ttpCom, a British firm that designs and licenses hardware and software components for mobile phones. But the situation has changed. Radio chips can now be bought off the shelf, as can the software required to make a mobile phone work.

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So far, there is no sign of a Microsoft or Intel-like monopoly in any of the new horizontal layers of the handset industry; the most important standards are open, and exist at the network layer. The power of the mobile-network operators has no parallel in the pc industry; internet-service providers have very little clout. Instead, a better analogy for the mobile-phone industry’s new structure would seem to be carmaking. Like handset-makers, carmakers used to be entirely vertically integrated. But now there is a complex mix of different approaches. Some carmakers outsource the manufacturing of particular components (engines, for example, or lighting systems); Motorola does the same for the lids of its flip-phones. “For big sub-assemblies, it’s very similar to the automotive industry,” says Tom Lynch, president of Motorola’s mobile-phone business.

Cable Cowboy
by Mark Robichaux
Published 19 Oct 2002

A big operator like TCI could give a new network a big head start, and as valuable as its laid wires were, if the cable industry kept growing, the new networks now launching could be even more valuable. By buying into networks, Malone thought, TCI could own both the pipe and the water f lowing through it. The cable wire and the cable programming, if owned under one roof, could be leveraged off of each other to create innumerable efficiencies. Vertical integration of companies would become an awesomely powerful and controversial tool for Malone to use in building TCI. Malone arrived at a simple conclusion: He wanted to own as much of the programming as he did of the wire. TCI, which would eventually reach 20 percent of the households, would seek to own 20 percent of every programmer that came calling.

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When a reporter asked Turner a decade later about the intervention and how he viewed Malone, the volatile entrepreneur paused serenely in the middle of a signature rant, and said with rare sincerity: “I’d gladly give my life to save his.” 16 Not only had Malone saved Turner Broadcasting through the deal, he had accomplished something far greater. Ultimately drawing in 31 separate cable operators, Malone had strengthened the fragile bonds of a rogue bunch. Now, as in few other industries, they were joined at the hip and even more vertically integrated. They were a brotherhood and a family, and to each, Malone was the godfather. Malone hadn’t acted out of loyalty—he had acted out of selfinterest, which turned out to be good for his shareholders, too. TCI would be handsomely rewarded for the Turner investment: nearly $6 billion in value at its peak 13 years later for an original investment of about $125 million.17 By keeping Ted Turner in control, Malone 91 9486_Robichaux_01.f.qxd 8/28/02 9:53 AM Page 92 92 C A B L E C O W B OY ensured continuation of the long-term, on-the-cheap programming deals he had struck with Turner’s company.

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Chairman, is that some people say, ‘Well, that’s just the marketplace at work; if they want to raise their rates 117 percent, that’s just market economics,’ ” Gore said with a sanctimony that would become familiar to all of America a few years later. “Well, it’s a monopoly! And the federal government has come in and told the local governments which grant the monopoly franchise, ‘Hands off! Let them fleece the consumers as much as they possibly can.’ ” 3 Then, in ominous tones, Gore touched on the cable industry’s vertical integration, its ownership of both cable systems and programming, and how it had reached staggering proportions. He stared at Malone, whose TCI owned stakes in 33 different cable channels, and declared war. “TCI for one—we’ll hear from its CEO today—is obviously hell-bent toward total domination of the market as it buys up not only more and more cable systems, but more and more major programming services, and even movie studios.”

Behemoth: A History of the Factory and the Making of the Modern World
by Joshua B. Freeman
Published 27 Feb 2018

Almost as soon as the New Shop was completed, Ford began planning a much larger complex in nearby Dearborn, buying massive tracts of land. Some was used for Ford endeavors besides the car company, including a separate firm that produced Fordson tractors. But most of it was devoted to making the Model T. Ford decided to advance to the extreme his effort at vertical integration, seeking to make not only parts but also basic materials like steel, glass, and rubber for his cars, eliminating the possibility of suppliers raising prices or not fulfilling orders when inventories were tight. The Dearborn property, along the Rouge River, allowed the direct delivery of bulk goods, including iron ore, coal, and sand, from Great Lakes ships and had plenty of water for industrial processes.

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Single-purpose, specialized machinery, which made it inexpensive to produce particular parts, made it expensive to switch over to new products (a problem that went all the way back to the high-speed but inflexible machinery used in the early Lowell mills). The changeover from the Model T to the Model A cost the Ford Motor Company $250 million ($3.5 billion in 2017 currency) and first place in sales to General Motors. Vertical integration had its downside, too, evident when the economy and auto sales tanked just a few years after the introduction of the Model A; Ford had a harder time cutting costs than the other major automakers, which bought most of their parts from outside suppliers. Over the course of the decade starting in 1927, Ford had a cumulative net loss, while General Motors made nearly $2 billion in after-tax profits.

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The Soviets located the plant in Togliatti, a small city on the Volga River that had recently been renamed for the deceased Italian communist leader. Though the site was not selected primarily because of the link to Italy, both sides made the most of the connection, portraying the new plant as an exemplar of Italian-Soviet friendship. The vertically integrated plant, which included its own smelter, eventually covered more than a thousand acres. When it began operation in 1970, it had over 42,000 employees, including nearly 35,000 production workers, with a majority under the age of thirty. The workforce kept growing, reaching an astounding 112,231 (46 percent female) in 1981.

Social Capital and Civil Society
by Francis Fukuyama
Published 1 Mar 2000

Stewart and Victoria Brown, “The Invisible Key to Success,” For tu ne ( A u g . 5, 1996): 173-74. 452 Tanner Lectures on Human Values sible in large, vertically integrated firms. Much has been written about the cooperative character of Japanese firms and the way in which technology is shared among members of a keiretsu network. In a certain sense, the whole of Silicon Valley can be seen as a single large network organization that can tap expertise and specialized skills unavailable to even the largest vertically integrated Japanese electronics firms and their keiretsu networks. 22 The importance of social capital to technology development has some paradoxical results.

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In an industry characterized by rapid technological change and intense competition, such informal communication was often of more value than more conventional but less timely forums such as industry journals.19 She argues that the proprietary attitudes of a Route 128 firm like Digital Equipment proved to be a liability; unable ultimately to be a self-sufficient, vertically integrated producer of technology, it 19 Saxenian, Regional Advantage, pp. 32-33. [FUKUYAMA] Social Capital 451 lacked the informal links and trust necessary to share technology with rivals. That these technology networks had an ethical and social dimension critical to their economic function is clear from the following comment: “Local engineers recognize that the quality of the feedback and information obtained through their networks depends upon the credibility and trustworthiness of the information provider.

Platform Capitalism
by Nick Srnicek
Published 22 Dec 2016

Given the reduction in labour costs provided by such an approach, it is no wonder that Marx wrote that the ‘piece-wage is the form of wages most in harmony with the capitalist mode of production’.60 Yet, as we have seen, this outsourcing of labour is part of a broader and longer outsourcing trend, which took hold in the 1970s. Jobs involving tradable goods were the first to be outsourced, while impersonal services were the next to go. In the 1990s Nike became a corporate ideal for contracting out, in that it contracted much of its labour to others. Rather than adopting vertical integration, Nike was premised upon the existence of a small core of designers and branders, who then outsourced the manufacturing of their goods to other companies. As a result, by 1996 people were already voicing concerns that we were transitioning to ‘a “just-in-time” age of “disposable” workers’.61 But the issue involves more than lean platforms.

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These evade traditional distinctions: they are neither horizontal mergers (combining companies that directly compete), nor vertical mergers (combining companies within the same supply chain), nor conglomerate mergers (combining suppliers of similar and complementary products).22 These mergers consist not so much in the vertical integration of classic Fordist firms or in the lean competencies of the post-Fordist era; they are more like rhizomatic connections driven by a permanent effort to place themselves in key platform positions. Let us take a first example. As access to the internet shifted away from desktop computing and towards handheld smartphones, control over the operating system (OS) platforms became essential.

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Perhaps surprisingly, network providers (i.e. those that provide the basic telecommunications infrastructure) are in a low margin position in the ecosystem around platforms – a position that has compelled them to push for discriminatory pricing in moving data around (the end of ‘net neutrality’) as a way to generate more revenues.25 The strategic importance of a position has much more to do with controlling data from businesses and customers than with just being lower in the stack. These first two expansionary tendencies give platform monopolies a distinct path of expansion by comparison to traditional business models premised on vertical integration, horizontal integration, or conglomeration.26 Instead, platform expansion is driven by the need for more data, which leads to what we might call the convergence thesis: the tendency for different platform companies to become increasingly similar as they encroach upon the same market and data areas.

Matchmakers: The New Economics of Multisided Platforms
by David S. Evans and Richard Schmalensee
Published 23 May 2016

By 2014, more than 40 percent of the items sold on Amazon came from the third-party sellers.12 Windows is an example of a vertically integrated platform, depicted in figure 7-1. There are two groups of customers, A and B, just as there were in our basic description of a two-sided platform shown in figure 1-1. But in the case of this platform, the Customer B’s are complementary products, such as QuickBooks, that Customer A’s can use with the platform. The platform operator supplies some of these complementary products, just as Microsoft does with Office. Some vertically integrated multisided platforms, like Microsoft, operate significant businesses in competition with other participants on the platform.

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Some vertically integrated multisided platforms, like Microsoft, operate significant businesses in competition with other participants on the platform. FIGURE 7-1 A vertically integrated platform The platform facilitates interactions between two types of participants, A and B. B indicates products or services provided by the platform owner, and B indicates products or services provided by third parties that are unaffiliated with the platform owner. Amazon is an example of a hybrid reseller platform. In this case, as depicted in figure 7-2, one company operates a platform that helps connect consumers and sellers (like Amazon Marketplace), and a traditional store that buys from third-party sellers and resells their merchandise directly to consumers (like Amazon’s direct to consumer business).

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See credit/payment cards fleet cards, 86–92, 98–99 mobile, 58, 149–150, 156–164 M-PESA, 164, 167–181 PayPal, 80–81 PayPal, 80–82 personal computers, 19, 35 microchips, 40–41 operating systems, 43–44 pioneering platforms, 37 checklist for, 150–155 retail creative destruction and, 181–196 “Platform Competition in Two-Sided Markets” (Rochet & Tirole), 15 platforms, 16–17 foundational, 40 multi-homing with, 28 reseller, 107–108 sizing, 124–126 vertically integrated, 106–107 PriceGrabber, 186 price levels, 91–93 Priceline, 12 price structures, 91–93 pricing, 19, 30–35, 36, 85–100 access charges/usage fees, 94–95 assessment for, 151, 153–154 in B2B exchanges, 66 balancing interests in, 31–32, 35, 87–89 at Diners Club, 13 free, 93–94 ignition and, 82 maintaining optimal, 98–100 money side, 33–34, 93–94 new rules for, 96–98 at OpenTable, 10, 13–14 price level vs. price structure in, 91–93 sensitivity to, 96 single-sided vs. multisided, 89–91 subsidy side, 33–34, 93–94 traditional economics on, 15 printing press, 200–201 procurement, 67–68 profit, 57–58, 76.

The Green New Deal: Why the Fossil Fuel Civilization Will Collapse by 2028, and the Bold Economic Plan to Save Life on Earth
by Jeremy Rifkin
Published 9 Sep 2019

As mentioned, the federal government’s National Interstate and Defense Highways Act of 1956 connected the country with a single road system, spawning the development of suburban America.24 The federal government’s GI Bill offered free higher education for nearly 8 million veterans after World War II and the Korean War, providing the knowledge needed to promote a high-quality workforce to both complete the build-out of the Second Industrial Revolution infrastructure and manage the new business opportunities that plugged into it.25 The Federal Housing Administration (FHA)—created in 1934—helped millions of Americans afford home ownership after the war in the burgeoning suburbs just off the interstate highway exits (although it should be noted that minorities were often discriminated against by the FHA in securing mortgages). The Green New Deal, in turn, will require a similar effort if it is to succeed. The First and Second Industrial Revolution infrastructures were engineered to be centralized, top-down, and proprietary, and they needed to be vertically integrated to create economies of scale and return profits to investors. The result is that at the end of the Second Industrial Revolution, the global Fortune 500 companies, most of them US-based, account for $30 trillion in revenue, or around 37 percent of global GDP, with only 67.7 million employees out of a global workforce of nearly 3.5 billion people.26 This statistic tells us everything we need to know about how the benefits of the industrial era have been shared.

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In 2018, all renewables claimed a 35.2 percent share of energy sources in gross German power production; nearly 25 percent of all the power was solar and wind, and much of it was being produced by small electricity cooperatives.38 Germany’s once-powerful electric utilities—E.ON, RWE, EnBW, and Vattenfall—are producing only 5 percent of the new green electricity of the twenty-first century, taking them out of the game of “generating” green electricity.39 To their credit, these companies were ideally suited to generate electricity from centralized sources of energy—coal, oil, and natural gas—which require large amounts of capital to extract, transport, and transform into electric power on the grid. The enormous capital requirements inevitably led to the erection of giant, vertically integrated business operations to create economies of scale and return profits to investors. The new green energies, however, are distributed rather than centralized. The sun shines everywhere, and the wind blows everywhere, which means that they can be harnessed everywhere—on rooftops and along terrains—favoring literally millions of micro power-generating sites.

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Thus, the $112 billion of gas-fired power plants currently proposed or under construction, along with $32 billion of proposed gas pipelines to serve these power plants, are already at risk of becoming stranded assets. This has significant implications for investors in gas projects (both utilities and independent power producers) as well as regulators responsible for approving investment in vertically integrated territories.35 The United States’ northern neighbor, Canada, is also investing heavily in natural gas exploration, extraction, and sale. While Canada is regarded as a country fiercely dedicated to the environment and protection of its natural resources, there is another, darker Canadian persona deeply tied to fossil fuel energies.

The End of Power: From Boardrooms to Battlefields and Churches to States, Why Being in Charge Isn’t What It Used to Be
by Moises Naim
Published 5 Mar 2013

He observed that modern firms faced numerous costs that were lower when the firm brought the functions in-house than they would have been when dealing at arms’ length with another enterprise. Included among such costs are those for drafting and enforcing sales contracts—expenses that Coase initially called “marketing costs” and later redubbed “transaction costs.” Specifically, transaction costs helped explain why some firms grew by vertically integrating—that is, by buying their suppliers or distributors—while others didn’t. Large oil producers, for example, prefer to own the refineries where their oil is processed, as this tends to be less risky and more efficient than relying on a commercial relationship with independent refiners whose actions the oil companies can’t control.

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In contrast, a large garment retailer like Zara and computer companies like Apple or Dell are less compelled to own the manufacturing facilities that make their products. They subcontract (“outsource”) the manufacturing to another firm and concentrate on the technology, design, and marketing and retailing of their products. The propensity to operate through a vertically integrated firm is driven by the structure of the market of buyers and sellers active in the different stages of the industry and by the kinds of investments needed to enter the business. In short, transaction costs determine the contours, growth patterns, and, ultimately, the very nature of firms.21 Although Coase’s insight became an important underpinning of economics in general, its main initial impact was in the field of industrial organization, which focuses on factors that stimulate or hinder competition among firms.

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The same applies to situations in which one army has exclusive control over the procurement of its weapons and technology and a second army is forced to depend on another nation’s arms industry. Thus, the transaction costs that some organizations are able to minimize by “internalizing” or controlling the provider or the distributors constitute one more barrier to potential new rivals and a barrier to gaining power more generally—and scale boosted by vertical integration provides a high protective barrier for incumbents inasmuch as newer, smaller players have a lesser chance to compete and succeed. It is worth noting that until the 1980s many governments were tempted to “integrate” vertically and own and operate airlines, smelters, cement factories, and banks.

Digital Bank: Strategies for Launching or Becoming a Digital Bank
by Chris Skinner
Published 27 Aug 2013

It is deconstituted and needs to be reconstituted; it is modular and plug and play and no longer integrated and end-to-end; it is remote and human rather than local and face-to-face; and most of all it has digital at the core and the flow of logic flows from that core. This then leads us to a very different but clear challenge for the future Digital Bank. This bank has the challenge to turn a vertically integrated business – that owns the customer process end-to-end and organises itself around products and channels – into a horizontally-structured business. The new business is designed to provide functionality to the customer at their point of need, and organizes themselves around the customer’s data.

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However, the underlying data was still held in product silos and the Internet was not responsive to customer’s views of the world. Broadband had yet to appear and customers were reluctant to lose their branch connection. So, the banks left the Internet as another layer on top of the branch-based systems, alongside the call centre spaghetti. Banks had become locked into vertically-integrated processes, structured around product silos that were ill-suited to the multichannel world they now served. But it was ok. Using middleware, fudge, smoke and mirrors, it did the job. Then this perfect storm of mobile, cloud and big data appeared, augmented by customers tweeting and socialising 24/7 and most bankers went, “what the hell?”

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Like a smorgasbord of utilities, the trick will be to make your plate of edibles the most attractive to the target audience you are trying to reach and, by this time, we will all think of technology, software and infrastructure like electricity and the internet – just something you plug into and don’t care how it works. This then leads on to the component-based bank. The component-based bank Banks have traditionally been vertically integrated businesses, where the end-to-end process is offered to the customer as a complete package. Deposit accounts, trade finance, payments processing, loans, credit, mortgages, savings, investment and more are wrapped together as pieces of business. Within each separate product stream, banks also integrate the end-to-end, so corporates run their payables and receivables, electronic and paper, domestic and foreign exchange all through the one bank.

Democracy and Prosperity: Reinventing Capitalism Through a Turbulent Century
by Torben Iversen and David Soskice
Published 5 Feb 2019

The “assembly-line logic” of unionization also applied to the organization of business. Because Fordism created extensive economies of scale in all phases of the production chain, plants became highly specialized and dependent on their suppliers and buyers. One way to manage this vulnerability through the corporate governance system was vertical integration, and the Fordist economy produced very large hierarchically controlled, multidivisional companies—most notably in the United States and the UK, where large-scale mass production was most pervasive. Alternatively, high trans-action costs were managed via strong employers’ associations with the power and incentives to induce cooperation among their members.

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The logic is captured in overlapping generations models where leaders have room to govern, but only with the tacit consent of future generations concerned about their own electability (Aldrich 1995; Soskice, Bates, and Epstein 1992). We thus see the key aspect of parties to be concern with reputation and clear party labels, as opposed to large mass organizations. Just as strong brand names do not require huge vertically integrated companies, mass membership is not a prerequisite for, and may sometimes be a hindrance to, reputation-based parties. The party label is the key bond between current and future politicians, and between current and future voters. The capacity to build up reliable party labels was undoubtedly aided by overall party-system stability.

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Highly routinized production processes were mentally and physically exhausting, especially when combined with piece-rate pay systems that paced and wore down workers. Many industrial workers aged prematurely or developed disabilities, and welfare state services, while increasingly encompassing, were themselves standardized and impersonal (Kitschelt 1994). The centralized top-down command structures that characterized all aspects of the system—from vertically integrated companies and centralized union confederations to a limited-access corporatist state—also shut down rank-and-file participation, and they were at least partly to blame for the widespread outbreak of wildcat strikes and protests in the “hot summer” of 1968. Educated youth with lofty ideals of participation and individual autonomy found little to like in this standardized and conformist society.

Platform Revolution: How Networked Markets Are Transforming the Economy--And How to Make Them Work for You
by Sangeet Paul Choudary , Marshall W. van Alstyne and Geoffrey G. Parker
Published 27 Mar 2016

The management of human resources shifts from employees to crowds.18 Innovation shifts from in-house R & D to open innovation.19 The primary venue for activities in which value is created for participants shifts from an internal production department to a collection of external producers and consumers—which means that management of externalities becomes a key leadership skill. Growth comes not from horizontal integration and vertical integration but from functional integration and network orchestration. The focus on processes such as finance and accounting shifts from cash flows and assets you can own to communities and assets you can influence. And while platform businesses themselves are often extraordinarily profitable, the chief locus of wealth creation is now outside rather than inside the organization.

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Some of the competitive steps they’ve taken may seem obvious. They aren’t. Pipeline businesses like Nike have traditionally scaled in one of two ways. Some expand by owning and integrating a greater length of the value-creation-and-delivery pipeline—for example, by buying upstream suppliers or downstream distributors. This is referred to as vertical integration. Others expand by widening the pipeline to push more value through it. This is horizontal integration. When consumer goods companies grow by creating new products and brands, it’s an example of horizontal integration. In January 2012, Nike brought out a wearable technology device, the FuelBand, to track user fitness activities, including steps walked and calories burned.

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For decades, companies have studied the five forces model and used it to guide their decisions about which markets to enter and exit, what mergers or acquisitions to consider, what sorts of product innovation to pursue, and what supply chain strategies to employ. Approaches like horizontal integration (in which a firm controls most or all of a specific product or service marketplace) and vertical integration (in which a firm controls an entire value chain, from raw materials to manufacturing to marketing) have been analyzed and implemented based on the strategic implications of the five forces model. Under this model, Houghton Mifflin Harcourt competes with McGraw-Hill by striving to control the best authors and content and by using copyright to construct a moat around its fortress of value.

Capitalism in America: A History
by Adrian Wooldridge and Alan Greenspan
Published 15 Oct 2018

THE URGE TO MERGE The corporations that spread across the American business world, from transport to production to retailing, all had one thing in common, the quest for size. As the market became more mature, the quest for size inevitably led to mergers. The years between 1895 and 1904 saw a merger mania. Before the mania, consolidation had tended to take the form of vertical integration, as companies purchased their suppliers and distributors. The merger boom added horizontal integration to the mixture. Horizontal and vertical integration reinforced each other: as soon as it was born, U.S. Steel acquired massive iron ore deposits in the Lake Superior region, and by 1950, it owned 50 percent of all the country’s iron ore deposits.21 Two people were at the heart of the age of consolidation: Rockefeller and Morgan.

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Swift realized that he could save a lot of money if he slaughtered the cattle in the Midwest and transported them in refrigerated railway cars to the East. Transporting the steaks rather than the steers, as it were, not only did away with the need for long cattle drives (and the ensuing weight loss), but also reduced the weight of what you were transporting by half. Even by the standards of the time Swift was an enthusiastic practitioner of vertical integration: he even owned the rights to harvest ice in the Great Lakes and the icehouses along the railway tracks that replenished the ice. He quickly built a huge empire—by 1881, he owned nearly two hundred refrigerated cars and shipped something on the order of three thousand carcasses a week—and a highly fragmented industry consolidated into a handful of companies (Swift as well as Armour, Morris, and Hammond).

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“The generation between 1865 and 1895 was already mortgaged to the railways,” Henry Adams noted laconically, “and no one knew it better than the generation itself.” Despite these irrationalities, the corporation went on to conquer America’s industrial heartland. Having been more or less confined to the railways in the 1860s, vertically integrated companies dominated most of the country’s big industries by 1900: not only steel and oil but also technology and consumer goods. AT&T was founded in 1885, Eastman Kodak in 1888, and General Electric in 1892. The men who created these corporations typically followed the same sequence of moves that we have seen with Carnegie and Rockefeller.

Frugal Innovation: How to Do Better With Less
by Jaideep Prabhu Navi Radjou
Published 15 Feb 2015

Social networks and co-creation platforms are bringing together millions of disparate prosumers in creative communities, allowing them to collaborate in producing their own goods and services. In doing so, they are paving the way for what is being called the horizontal economy. The rise of the horizontal economy Vertically integrated value chains, controlled by companies that exclude customers, are being challenged by new value ecosystems orchestrated by customers themselves. The new ecosystems allow consumers to design, build, market, distribute and trade goods and services by and among themselves, without the need for intermediaries.

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Indeed, organisations are dying earlier: the average lifespan of a company in Standard & Poor’s 500 Index (the 500 leading publicly-traded firms in the US) shrank from 61 years in 1958 to 18 years in 2011, and will shrink further in the foreseeable future. Second, when companies claim to be building partner ecosystems, they are doing little more than finding new ways to lock customers into their brands. They are replacing vertical integration with a vertical ecosystem. But a brand-specific approach is becoming irrelevant, even counterproductive, as customers are themselves able to create the products they want, independent of established brands. Instead, companies need to build horizontal ecosystems that integrate their brands with those of other firms – including their rivals – to provide customers with the rich choice and highly personalised experiences that they expect.

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The company, which is over 160 years old, is radically transforming its bricks-and-mortar health-insurance business into a digital enabler of value-based care. Bertolini notes: To survive, most health insurers have only two options: either move up the health-care value chain, by exclusively serving the premium market, or move down the value chain by buying out hospitals and become vertically integrated. We chose neither, and instead decided to move deeper into the value chain by becoming the “Intel Inside” of the entire health-care system. As part of this strategy, Aetna offers a comprehensive portfolio of technology solutions and value-added services to hospitals and other health-care providers so that they can shift to a value-based care model.

No Shortcuts: Organizing for Power in the New Gilded Age
by Jane F. McAlevey
Published 14 Apr 2016

The resulting deeply conservative judiciary has relentlessly chipped away at the major laws sustaining the victories of labor and civil rights, overturning hard-fought, key provisions of affirmative action and voting-rights protections. Moreover, along with austerity and privatization, conservative courts have facilitated a vertically integrated for-profit prison system, resulting in the mass incarceration of African Americans, detention centers overflowing with Latinos, and massive profits for the putrid penal system’s corporate shareholders.9 The corporate class also created their version of a popular front, seizing the cultural apparatus through such rulings as the Federal Communications Commission’s Clinton-era decision to allow multinationals to outright own the means of communication.

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In this chapter I highlight the decisive moments in the campaign when the decisions of the key individuals made the difference between winning and losing. I identify these decisions as embodying the organizing strategy that differs from New Labor’s mobilizing approach. The Global South Within the Global North Smithfield Foods is the largest pork producer in the world. It is a vertically integrated company that owns tens of thousands of acres of land where Smithfield farmers and contractors raise hogs that are taken to company-owned plants for slaughter, production, and packing, and then shipped to all 50 states as well as exported to China, Japan, and Europe. In the U.S. alone, the company markets twelve distinct brands, including Healthy Ones, Margherita, Farmland, and Armour.

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Meanwhile, over the decade that followed, there was an explosion of Mexican immigration into the region, the direct result of NAFTA as Smithfield scooped up hog farms in Mexico. The company displaced Mexican workers on previously Mexican-owned lands, then helped persuade them to cross the border to work in the big new plant in North Carolina. This was a perverse and extreme extension of the concept of Smithfield’s vertical integration.16 What began as a legal battle over the 100 labor law violations that had taken place during the 1994 election became a case study in how the laws are stacked against workers. At every turn, the National Labor Relations Board would rule in favor of the workers and against the company. And every time this happened, the company dragged out and stalled resolution by an appeal to the next level.

Taming the Sun: Innovations to Harness Solar Energy and Power the Planet
by Varun Sivaram
Published 2 Mar 2018

The solar industry comprises a diverse set of firms. One important category is upstream producers (or, interchangeably, manufacturers) of solar equipment, components, and panels. Another category is downstream developers that shepherd a solar project through its various stages of design, financing, construction, and operation. Some vertically integrated firms perform multiple upstream steps and even have divisions that deploy solar panels into downstream markets as well. The cost of solar power has fallen substantially in recent years and looks set to continue doing so. The simplest way to measure cost is to divide the up-front cost of a solar installation by its rated capacity in watts.

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But right now, large electric power companies looking to diversify from fossil fuels are the best-positioned entities to transform their business models and don the mantle of solar supermajors. Actually, this view applies only to some firms in the electric power sector. Electric power companies come in two major flavors, a result of a push for deregulation around the world. For much of the twentieth century, there was largely only one type: the vertically integrated utility. These utilities owned both power plants and the transmission lines and distribution infrastructure to deliver power to their customers, and they enjoyed a monopoly over a limited service territory to sell their power. Then, around the turn of the century, markets across North America and Europe started to deregulate—that is, they no longer awarded a monopoly to a single utility over all power-related activities.

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A whole host of solar providers offering SHS sizes between those of M-KOPA and Mobisol, such as Off-Grid Electric, has sprung up in East Africa. As competition saturates the initial markets, firms are expanding to new places, such as Nigeria and Ethiopia, to serve the massive untapped demand for electricity there. In addition to offering differently sized systems, PAYG firms vary in their level of vertical integration. At one extreme, Off-Grid Electric designs and provides its own SHSs, complete with appliance offerings. It also operates its own distribution, sales, and service channels. This approach enables it to learn about its customer preferences and quickly update its system offerings in response.

Masters of Management: How the Business Gurus and Their Ideas Have Changed the World—for Better and for Worse
by Adrian Wooldridge
Published 29 Nov 2011

Thus, Alfred Sloan’s General Motors is a more awesome creation than the combustion engine, and the hospital is a more important medical breakthrough than any newfangled medicine. Drucker had no illusions about how difficult management is. In Managing in a Time of Great Change, a collection of essays published in 1995, he focused on three problems that are making the modern manager’s life hell. The first is the sheer scale of contemporary managerial change, as vertically integrated companies give way to networked organizations. The second is the frequency of managerial failure. Most managers, he points out, have failed to understand what it means to manage in revolutionary times, and they spend their time tinkering with their business when they should really be rethinking the whole theory on which it is based.

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The End of Certainty Companies have arguably been the world’s most important organizations since the midnineteenth century, the engines of global prosperity and the building blocks of most people’s social lives. But they are remarkably fluid organizations. Over the past couple of decades they have been forced to rethink almost every tenet of managerial wisdom. Once companies prided themselves on “vertical integration” and were run like self-contained empires, with as little recourse to outsiders as possible. Now they are “sticking to their knitting,” focusing on their core businesses and contracting everything else out to independent specialists. Once companies had a clear line of command and control, starting with the chairman at the top and stretching to the lowliest menial.

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In Remix: Making Art and Commerce Thrive in the Hybrid Economy, Lawrence Lessig, of Stanford University, argues that a host of new companies such as Flickr, Twitter, and Linux specialize in taking the shared efforts of thousands or even millions of people and then using them to create communities. If the Sloanist company’s core competency lay in vertical integration, the “hybrid” company’s core competency lies in organizing “communities of meaning,” tapping into the enthusiasm of thousands of people and then converting their ideas into a coherent product or service. Even those managers who are unfashionable enough to try to defend the old Sloanist fortress find that they are fighting a losing battle.

The Rise of the Network Society
by Manuel Castells
Published 31 Aug 1996

How different is this from the structure of divisions and departments in a vertically integrated corporation? Most of the key suppliers are in fact controlled or influenced by financial, commercial or technological undertakings, belonging either to the parent firm or to the overarching keiretsu. Under such conditions, are we not observing a system of planned production under the premise of relative market control by the large corporation? Thus, what is important in this model is the vertical disintegration of production along a network of firms, a process that substitutes for the vertical integration of departments within the same corporate structure.

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In a parallel analysis to the notion of technological trajectories,10 I propose to consider the development of different organizational trajectories, namely specific arrangements of systems of means oriented toward increasing productivity and competitiveness in the new technological paradigm and in the new global economy. In most cases, these trajectories evolved from industrial organizational forms, such as the vertically integrated corporation and the independent small business firm, which had become unable to perform their tasks under the new structural conditions of production and markets, a trend that became fully apparent in the crisis of the 1970s. In other cultural contexts, new organizational forms emerged from pre-existing ones that had been pushed aside by the classical model of industrial organization, to find new life in the requirements of the new economy and in the possibilities offered by new technologies.

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The massproduction model was based on productivity gains obtained by economies of scale in an assembly-line-based, mechanized process of production of a standardized product, under the conditions of control of a large market by a specific organizational form: the large corporation structured on the principles of vertical integration, and institutionalized social and technical division of labor. These principles were embedded in the management methods known as “Taylorism” and “scientific organization of work,” methods adopted as guidelines by both Henry Ford and Lenin. When demand became unpredictable in quantity and quality, when markets were diversified worldwide and thereby difficult to control, and when the pace of technological change made obsolete single-purpose production equipment, the mass-production system became too rigid and too costly for the characteristics of the new economy.

24/7: Late Capitalism and the Ends of Sleep
by Jonathan Crary
Published 3 Jun 2013

On one hand I am affirming, along with some other writers, that the shape of contemporary technological culture still corresponds to the logic of modernization as it unfolded in the later nineteenth century—that is to say, that some key features of early-twenty-first-century capitalism can still be linked with aspects of the industrial projects associated with Werner Siemens, Thomas Edison, and George Eastman. Their names can stand emblematically for the development of vertically integrated corporate empires that reshaped crucial aspects of social behavior. Their prescient ambitions were realized through (1) an understanding of human needs as always mutable and expandable, (2) an embryonic conception of the commodity as potentially convertible into abstract flows, whether of images, sounds, or energy, (3) effective measures to decrease circulation time, and (4) in the case of Eastman and Edison, an early but clear vision of the economic reciprocities between “hardware” and “software.”

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The consequences of these nineteenth-century models, especially the facilitation and maximization of content distribution, would impose themselves onto human life much more comprehensively throughout the twentieth century. On the other hand, sometime in the late twentieth century it is possible to identify a constellation of forces and entities distinct from those of the nineteenth century and its sequential phases of modernization. By the 1990s, a thoroughgoing transformation of vertical integration had taken place, exemplified most familiarly by the innovations of Microsoft, Google, and others, even though some remnants of older hierarchical structures persisted alongside newer, more flexible and capillary models of implementation and control. Within this emerging context, technological consumption coincides with and becomes indistinguishable from strategies and effects of power.

Rewriting the Rules of the European Economy: An Agenda for Growth and Shared Prosperity
by Joseph E. Stiglitz
Published 28 Jan 2020

When such a company imposes a high charge for the provision of a service (say, carrying a program over its cables) on its own subsidiary, it is simply transferring money from one pocket to another. The high charges may put its competitors at such a large disadvantage that it drives them out of business. The vertical integration of US cable and telecom companies with producers of media bodes ill for competition in that country in this vital sector.‡ There are similar forces at play for horizontal and vertical integration in Europe, and hopefully Europe will do a better job at circumscribing these ways of increasing market power. Some Europeans have suggested that it would do better if Europe were less attentive to competition and focused more on creating European or national champions—the big, multinational behemoths that are supposed to lead the charge against American or Chinese competitors.

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Regulators need to be on the lookout for these preemptive mergers and be ready to ask whether a merger or acquisition has the potential to undermine future competition (not just whether it would undermine current competition). Traditionally, antitrust authorities have focused attention on mergers and acquisitions within an industry and paid little attention to those between firms in different industries. But when competition is limited, such mergers, known as vertical integration, can weaken competition further. A cable or telecom company that buys a provider of entertainment services can limit further competition among providers of such services. This is true even if there is an obligation of the cable or telecom company to be neutral, so that it does not give preferences to its own subsidiary.

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See also Rewriting the Rules of the American Economy American model limitations, 12 bank resolution approach of, 181 CEO pay comparisons, 138 climate change role of, 328–29 Community Reinvestment Act, 235, 277–78 competition policy and, 130–31, 327 earned income tax credit in, 267 economy, compared to China, 298 formulaic system of, 198 free-trade agreement with Jordan, 316 GDP growth of, 4, 4–5 GMO disagreement with EU, 299 intellectual property protection in, 145 mission-driven corporations in, 143 NAFTA role with, 316 negative income tax, 253 Permanent Fund, 252–53 political mobilization in, 301 private schools regulation, 229 pro-Wall Street agenda, 159 rule of law defiance, 311–12 Shareholder Capitalism Doctrine, 21 taxation in, 188–89 Trump presidency (see Trump, Donald; Trump administration) universal basic income (UBI), 251–54 Universal Declaration of Human Rights (1948), 237 urban economies, 229–30, 231, 232, 236 values, European, 2, 299 vertical integration, 134–35 Vietnam, 321, 322 Volcker, Paul, 86 Volcker rule, 167 wage compression, 257 wage reduction Germany and, 44–45 as internal devaluation, 39–40 trade integration resulting in, 289 wages, minimum, 265–68 wage subsidies, 267–68, 279 wealth allocation and distribution of, 14 creation and distribution of, ECB and, 75 inequality and, 211–12 net wealth tax, 190–91, 200 taxing (see property taxes) Weber, Max, 9 welfare state conclusions about, 237–38 misguided blame for, 214–15 new approach to, 212 overview of, 211, 215 shared abundance, 212–13 social insurance central to, 239–40 strong, combating insecurity, 213–14 welfare state solutions affordable housing, 229–37 investing in education, 224–29 overview of, 223–24 wholesale funding, 169, 171 Wiedeking, Wendelin, 136 worker confidence, improving, 268–73 worker-owned businesses, 142–43 working conditions, adverse, 257–58 World Health Organization, 242 World Intellectual Property Organization, 324 World Trade Organization (WTO) committing to, 296 global rules-based systems of, 290, 310–12 Wu, Tim, 326–27 Xi Jinping, 297–98 Youth Guarantee program, 229, 276, 278–79, 279 zoning, 231 Also by Joseph E.

The Man Behind the Microchip: Robert Noyce and the Invention of Silicon Valley
by Leslie Berlin
Published 9 Jun 2005

The prototypical Silicon Valley semiconductor firm in the 1980s was the independent, “merchant” producer, which manufactured chips for end users other than itself (although Texas Instruments, IBM, and Motorola were vertically integrated companies). Merchant companies often got their start as entrepreneurial ventures; depended on continuous technological innovation and mass production; and before the 1980s, had traditionally regarded the government’s proper role to be that of an eager customer with very deep pockets. In sharp contrast to this model, the Japanese semiconductor industry consisted of six huge, vertically integrated electronics firms (Nippon Electric, Fujitsu, Hitachi, Toshiba, Mitsubishi Electric, and Oki Electric Industry), which had been developed with direct assistance from the government for the express purpose of growing Japan’s high-technology sector.

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A focus on improving fab materials and equipment meant that SEMATECH would need to transform itself from a “horizontal” research collaboration among peers to what Noyce called a “’virtual’ vertical integration” between its members and the suppliers from whom they bought equipment and materials. In many ways this made SEMATECH even more like a Japanese research consortium—roughly 80 percent of which were vertically integrated—than had originally been imagined.46 Once the mission was defined, Noyce began speaking of SEMATECH as an effort to “strengthen the infrastructure” that supported the semiconductor manufacturing business.

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Business cards: Miller Bonner, interview by author; Dan Seligson, interview by author. Organization chart: Turner Hasty, interview by author. From our base of shared knowledge: Noyce, “National Advisory Council on Semiconductors, Remarks by Dr. Robert N. Noyce,” 8 Mar. 1989, ST. Virtual vertical integration: Noyce quoted in “Partnering for Total Quality,” (“Prepared by SEMATECH for the U.S. Semiconductor Industry”), vol. 1, 15 Jun. 1990, 1, ST. Vertical integration of 80 percent of Japanese consortiums: Grindley, Mowery, and Silverman, SEMATECH and Cooperative Research, footnote 15. 88 percent small businesses: A Strategic Industry at Risk, 12. Supplier-manufacturer relations: An excellent survey from the late 1980s is Government Accounting Office, SEMATECH’s Efforts to Strengthen the U.S.

The Practice of Cloud System Administration: DevOps and SRE Practices for Web Services, Volume 2
by Thomas A. Limoncelli , Strata R. Chalup and Christina J. Hogan
Published 27 Aug 2014

Building such infrastructure requires large amounts of engineering talent, from physical engineering of a datacenter’s cooling system, electric service, and design, to technical expertise in running a datacenter and providing the services themselves. All of this can be very expensive. Amortizing the expense over many customers reduces cost. By comparison, doing it yourself saves money due to the benefits of vertical integration. Vertical integration means saving money by handling all levels of service delivery yourself, eliminating the uplift in cost due to “middle men” and service provider profit margins. There is a break-even point where vertical integration becomes more economical. Calculating the total cost of ownership (TCO) and return on investment (ROI) will help determine which is the best option. Deciding whether the cost of private versus public clouds is appropriate is similar to making a rent versus own decision about where you live.

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This appendix provides a history of five eras of computing technology: preweb era, first web era, dot-bomb era, second web era, and cloud computing era. For each era, describe the level of economic prosperity, the technological improvements, and the expectations for reliability and computing power. 2. The practice of owning the entire process instead of using external providers for certain steps or parts is called “vertical integration.” Which examples of vertical integration were described in this appendix? What were the benefits? 3. What role did open source software play in the maturation of the second web era? 4. Describe the redundant reliability levels replaced by ROC-style distributed computing. 5. The history discussed in this appendix is described as inevitable.

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Federal Emergency Management Administration web site, 324 User Acceptance Testing (UAT), 216 User identity in three-tier web service, 76 User satisfaction, monitoring, 336 User-specific data, global load balancing with, 82–83 User stories, 189 User wait time, automation for, 253 Utilization, segmentation by, 103 Utilization Limit load balancing, 74 Vagrant framework, 219 Value streams in DevOps, 176 Varnish HTTP accelerator, 478 VCSs (version control systems), 265–266 Velocity in DevOps, 179 Vendor lock-in, 56 Vendors design for operations, 48 oncall escalations, 298 Version conflicts in containers, 60–61 Version control systems (VCSs), 265–266 Version-controlled builds, 191 Vertical integration, 64 Views in live schema changes, 234 Virtual machine monitor (VMM), 58–59 Virtual machines benefits, 58 deployment phase, 218 disadvantages, 59–60 IaaS, 52 I/O, 58–59 overview, 57 service platform selection, 66 Virtual offices, 166–167 Virtuous cycle of quality, 200–201 Visibility at scale, 10–11 Visual Display of Quantitative Information, 362 Visualization, monitoring, 333, 358–362 VMM (virtual machine monitor), 58–59 Voice calls for alerts, 293 Volatile data in OS installation, 219–220 Wait time automation for, 253 service delivery, 201 WAN (wide area network) connections, 83 Warmed caches, 106 Watchdog timers, 130 Waterfall methodology overview, 173–175 phases, 199 WAUs (weekly active users), 373 “Weathering the Unexpected” article, 320 Web “Hit” logs, 340 “Web Search for a Planet: The Google Cluster Architecture” article, 464 Web servers, single-machine, 70–71 Web services four-tier, 77–80 three-tier, 71–77 Weber, W.

Fancy Bear Goes Phishing: The Dark History of the Information Age, in Five Extraordinary Hacks
by Scott J. Shapiro

Paras had started his own DDoS mitigation service, ProTraf Solutions, and wanted Rutgers to pick ProTraf over Incapsula. And he wasn’t going to stop attacking his school until it switched. Vertical Integration In the hit NBC comedy 30 Rock, the corporate executive Jack Donaghy (played by Alec Baldwin) tries to explain to one of his head writers, Liz Lemon (played by Tina Fey), the economic concept of vertical integration: “Imagine that your favorite corn chip manufacturer also owned the number one diarrhea medication.” Liz’s eyes light up. “That’d be great ’cause then they could put a little sample of medication in each bag.”

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“That’d be great ’cause then they could put a little sample of medication in each bag.” Jack can see that Liz does not fully appreciate the business logic. “Keep thinking.” Liz turns the idea over in her mind as she works out the economics. “Except then they might be tempted to make the corn chips give you…” Jack smiles. “Vertical integration.” Although Donaghy called it “vertical integration,” lawyers have traditionally used another term: racketeering. In its strictest sense, a racket is a fraudulent scheme in which the racketeer creates a problem and forces the victim to pay for the solution. In a protection racket, for example, the local strongman threatens to torch neighborhood stores or beat up merchants if they do not pay for “protection”—the proverbial offer you can’t refuse.

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Mobsters do not offer this umbrella protection out of gratitude or goodwill. Their aim is to freeze out competitors. If a rival racketeer tries to muscle in, the local boss will protect his turf. The local mobster aims to monopolize protection services and be the only provider. When Donaghy described vertical integration to Lemon, she was shocked because his corn chip maker was running a scam—a diarrhea racket, if you will. It sold the medicine to cure the ailment it caused. “Wow, this should not be allowed to happen,” she gasped. According to the famous sociologist Charles Tilly, it is allowed to happen.

The Global Auction: The Broken Promises of Education, Jobs, and Incomes
by Phillip Brown , Hugh Lauder and David Ashton
Published 3 Nov 2010

The modular organization is not limited to the formal organization giving them greater options in regard to what is done, how it is done, and where it is done because what is different now is not only the global supply of highly educated workers but also a growing number of low-cost providers able to deliver more for less. 102 The Global Auction What corporations produce themselves, for instance, will depend on the degree to which they focus on core competencies over trying to do everything for themselves within vertically integrated organizations. The fashion within American business literature is to focus on a narrow range of core competencies. This has encouraged corporate executives to virtually disintegrate rather than vertically integrate their organizations because it was assumed to offer a competitive advantage in areas of business for which they are best suited, with all other activities purchased or partnered. A senior manager for a British bank spoke of the “fever” among companies to stick to core competence, increasing the use of outsourcing.

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See also high-skill, low-wage workforce hourly wages, 117, 118 income inequalities, 124–25 industrial policy, lack of, 158 industrial revolutions, 21 Wilensky, Harold, 80 Williamson, Peter, 43, 57–58 Wilson, Timothy, 68 The Winner-Take-All Society, 122 IT revolution, 127 knowledge wars, 45–48 winner-takes-all, 11, 123, 160, 165n7 win-win scenario, 20, 111, 152–53 National Institute on Drug Abuse, 146 opportunity trap, 137 R&D (research and development), 44, 45 World Bank, 59, 130, 149 The World Is Flat, 66 World Trade Organization (WTO), 41 STEM subjects studies, 37–38, 39, 153 trade imbalance, 108–9 World University Rankings, 95 WTO (World Trade Organization), 41, 52 war for talent, 86 working poor, 163 universities. See colleges and universities 198 wage inequalities, 59–60 Wall Street, 111, 148 war for talent, 9, 83–90, 93–97, 148, 176n8, Young, Michael, 133, 182n3 value chain, 52, 54–56, 58, 98, 108–10, 128 Zeng, Ming, 43, 57–58 zero-sum game, 22 venture capital, 114–15 vertical integration, 103 Zhou, Eve, 45 ZTE, 42 Index 

The New Elite: Inside the Minds of the Truly Wealthy
by Dr. Jim Taylor
Published 9 Sep 2008

They owned the inventions and the patents and the intellectual property. They owned the railroads, the steamships, and other means of distribution. They set the prices. They owned the public stock, the private bonds, and had strong relationships with the merchant bankers who financed it all. Today we’d call it being ‘‘vertically integrated.’’ Back then it was The Wealth of the Nation 29 less of an admired business strategy and more a source of populist resentment—a resentment which still lingers today. What happened to these name-brand fortunes? They were passed on to the heirs of these familiar names and distributed through the many high-profile charitable ventures that also bear their names.

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During the past decade, many iconic luxury brands, whose entire product lines were once extremely high priced and truly exclusive, have rolled out more accessible products (often accessories and jewelry) at price points well within the reach of the mass market. At the same time, several other trends have been subtly reshaping the luxury industry. Strong merger and acquisition activity has resulted in classic luxury brands becoming conglomerates—a brand portfolio within a growth-focused, vertically integrated commercial enterprise. Consider, for example, the inelegantly named LVMH Moët Hennessy—Louis Vuitton. Its lengthy moniker is a by-product of the company’s strategy of accumulating classic brands through (sometimes contentious) acquisitions. Now with over sixty brands and 60,000 employees, LVMH owns some of the world’s most famous luxury brands in a variety of categories, including champagne (Dom The New Luxury 95 Pérignon, Moët & Chandon), fashion (Louis Vuitton, Fendi, Donna Karan, Givenchy, Marc Jacobs), fragrances (Dior), watches (Tag Heuer), and retailing (Sephora, DFS, eLUXURY.com).

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Supreme Court, 26, 27 U.S. tax code, 26, 30, 37, 207 urban population, in 1800s, 23 vacations, 77 children’s influence on, 181 by mavericks, 142 by patrons, 152 values, 46, 56 Vanderbilt, Cornelius, 15, 26–27, 28 Vanderbilt, William, 27 Vanity Fair, 146 Veblen, Thorstein, 2 venture capital, 114 venture capital pool, 37 vertical integration, 28–29 vividness effect, 60 Vontobel, 215 wage increases, 31 Wall Street Journal, 64, 66, 142 Wal-Mart, 78, 179 Walton, Sam, 38 Made in America, 115–116 Washington, George, 22 wealth affluent teens’ view of creation, 175 concentration of, 5–6 consequences of, 138 241 distribution in U.S., 199–201 diversity, 127 explosion, 3 first five years, 118–120 learning about living with, 114–115 snowballing of, 122 Wealth and Democracy (Phillips), 25, 202, 206 wealth formation epochs, 21 agrarian wealth, 22–24 corporate wealth, 30–35 entrepreneurial wealth, 35–39 industrial wealth, 24–30 wealthy, 229 childhood of, 43–44, 46 current views of, 17–18 defining, 9–10 goals yet to attain, 189 images of, 15–16 misconception about, 20 myths and realities, 70–71 reinvention, 187–188 top activities of, 55 wealthy lifestyles, general attitudes toward, 15–16 Wilson, Charles, 31 wines, differentiating, 104 Winfrey, Oprah, 41, 99 Wiseman, Richard, 53 work ethic of children, 169 World War II, economic impact, 31 Worth, 143, 146 Worth-Harrison Taylor Study on the Status of Wealth in America, 226–228 wrestlers’ lifestyle, 128, 134–139 characteristics, 135 Yachting, 64 Yale School of Music, 192–193 youth, see teens Zildjian, Avedis, 100 This page intentionally left blank About the Authors Jim Taylor, Ph.D., is Vice Chairman of the market research consultancy Harrison Group and is among the country’s most respected marketing and branding consultants.

The Innovation Illusion: How So Little Is Created by So Many Working So Hard
by Fredrik Erixon and Bjorn Weigel
Published 3 Oct 2016

Lately, however, M&A strategies have become associated with hidebound business operations. They are intended to consolidate, rather than build competition. Hence they are sometimes, if not often, used in order to defend market positions – and, in that way, they form part of a different type of globalization that emerged in the 1990s and promoted horizontal expansion, vertical integration, and corporate attempts to create stronger network effects on the market. More importantly, however, latter-year M&As are a sign of middle-aged corporates that have lost their ability to reproduce through innovation and have to get their vitality from other firms to stay on the market. Management and shareholders in middle-aged capitalism have chosen between different alternative uses of their capital, favoring mergers with or acquisitions of other companies because they believe they can better control the returns of M&As compared to other alternatives on offer.

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But as globalization changed character, modern competition typically came to be defined by controlled or managed competition within long, multiple, and fragmented supply chains. That process helped to increase scale and other benefits. Yet, given other market conditions, especially the rising fixed costs of market entry, vertical integration hardly promoted contestability of established markets close to the end customers. On the contrary, as entry costs to end markets increased significantly with globalization and supply-chain competition, competitive ambitions seem, perhaps surprisingly, to have turned further away from the ideal scenario of constant competition moving markets and prices toward the marginal costs of production.

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; Cecchetti and Kharroubi, “Reassessing the Impact of Finance on Growth.” 57.Swagel, “The Financial Crisis.” 58.Cecchetti and Kharroubi, “Why Growth in Finance Is a Drag on the Real Economy.” 59.Christensen, Kaufman, and Shih, “Innovation Killers,” 1–2. 60.Piketty, Capital in the Twenty-First Century, 264–81. 4 The Rise and Rise Again of Corporate Managerialism 1.Martti, Nokia: The Inside Story. 2.Steinbock, The Nokia Revolution. 3.Ahmad, Nokia’s Smartphone Problem. 4.Kuittinen, “Nokia Sells Handset Business to Microsoft.” 5.Lomas, “Nokia’s $7.2BN Devices & Services Exit.” 6.Cheng, “It’s Official: Motorola Mobility Now Belongs to Lenovo.” 7.Bass, “Microsoft’s Concept Videos.” 8.Jenkins, “Jenkins: Only Bill Gates Can Change Microsoft.” 9.Yarow, “Here’s What Steve Ballmer Thought about the iPhone.” 10.A good survey of companies failing at exits is McGrath, The End of Competitive Advantage. 11.Steinberg, “Among the First to Fall at I.B.M.” 12.Crainer, “‘Saving Big Blue.’” 13.Clinch, “How Apple Prompted This Country’s Downgrade.” 14.Schumpeter, Capitalism, Socialism and Democracy, 132. 15.Coase, “The Nature of the Firm,” 388. 16.Oliver Williamson, who received the Nobel Prize in economics for his work on economic governance, developed the idea of firm boundaries and put the emphasis on the internal or endogenous capacity of the firm to generate output that is more competitive than the market. 17.Santos and Eisenhardt, “Organizational Boundaries and Theories of Organization,” 491. 18.Coase, “The Nature of the Firm,” 390. 19.Coase, “The Nature of the Firm,” 404–5. 20.Zenger, Felin, and Bigelow, “Theories of the Firm–Market Boundary.” 21.Tett, The Silo Effect. 22.Morieux, “How Too Many Rules at Work Keep You from Getting Things Done.” 23.See, for instance, Caliendo and Rossi-Hansberg, “The Impact of Trade on Organization and Productivity.” 24.Zhou, “Coordination Costs, Organization Structure and Firm Growth.” 25.Langlois and Everett, “Complexity, Genuine Uncertainty, and the Economics of Organization”; Joskow, “Vertical Integration.” 26.Strom, “Big Companies Pay Later.” 27.Rajan and Zingales, “The Firm as a Dedicated Hierarchy.” 28.Bhide, The Origin and Evolution of New Business, 94. 29.Rajan and Zingales, “The Firm as a Dedicated Hierarchy,” 7. 30.Teece, “Profiting from Technological Innovation.” 31.Jensen, “Agency Cost of Free Cash Flow, Corporate Finance, and Takeovers.” 32.Stein, “Agency, Information and Corporate Investment”; Matvos and Seru, “Resource Allocation within Firms.” 33.See Berger and Ofek, “Diversification’s Effect on Firm Value”; Rajan, Servaes, and Zingales, “The Cost of Diversity.” 34.Scharfstein and Stein, “The Dark Side of Internal Capital Markets.” 35.Scharfstein and Stein.

Competition Demystified
by Bruce C. Greenwald
Published 31 Aug 2016

THE COORS DIFFERENCES During this period of consolidation, Coors’s share of the market remained stable at around 8 percent. It maintained its position despite—or perhaps because of—an approach to the business that set it apart from all the other brewers. When it went national after 1977, Coors counted on many of these differences to secure its success in the anticipated beer wars. First, Coors was vertically integrated to a staggering degree. It had its own strain of barley grown for it by farmers under contract and it processed for itself a large portion of the other grains that went into the beer. It designed an all-aluminum can, which it purchased from a captive manufacturer. In 1977, it bought its bottle supplier.

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In 1977, it bought its bottle supplier. It built much of its brewing and bottling equipment. Its much heralded “Rocky Mountain spring water,” which, it claimed, gave its beer superior drinking properties, came from land the company controlled. It developed its own coal-field to supply its energy requirements. This vertical integration may have been symptomatic of a frontier preference for self-reliance. It did not produce a permanent cost advantage. In 1977, Coors’s production costs were $29 per barrel, compared with $36.60 for AB. By 1985, Coors cost had risen to $49.50. AB, still not integrated, spent $51.80, not a major difference.

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Also, these components were equal to or better than those Compaq produced. Compaq’s competitive edge at the top end of the market had been eliminated, and it was left with nothing to show for its higher overhead expenses. Just as Ford’s plant at River Rouge, where iron ore entered at one end and finished automobiles emerged from the other end, became a victim of vertical integration as the automobile industry matured and external suppliers became more dependable and efficient, so Compaq was being hurt by doing internally too many of the steps that went into turning out a personal computer. ECONOMIES OF SCALE IN A GROWTH INDUSTRY Compaq’s original approach to the PC industry, targeting corporate customers with higher-quality machines for which they would be willing to pay a premium, was undoubtedly a success, even though it had to work its way through several serious challenges.

Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier
by Edward L. Glaeser
Published 1 Jan 2011

Late-twentieth-century Detroit was dominated by a single industry that employed hundreds of thousands of less-skilled workers in three vast vertically integrated firms. What a toxic mixture! Cities like Detroit with big firms have suffered weaker employment growth than cities with more and smaller employers. In metropolitan areas, a 10 percent increase in the number of firms per worker in 1977 is associated with 9 percent more employment growth between 1977 and 2000. This relationship holds, no matter what types of industries are involved, how old the companies are, or how big the cities are. Big, vertically integrated firms may be productive in the short run, but they don’t create the energetic competition and new ideas that are so necessary for long-term urban success.

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Just as in Rio’s favelas, in East Boston the density that enabled poor people to sell their labor enabled bacteria to flow, and Patrick Kennedy died of cholera. Kennedy’s son, however, also named Patrick, thrived. He started off working on the docks and saved enough to buy a saloon. He soon owned a second and then a third drinking establishment, catering increasingly to wealthier Bostonians. He vertically integrated his business—by importing whiskey. Patrick Kennedy followed the example of former Massachusetts governor Sam Adams, combining alcohol and politics. He was first elected to the Massachusetts legislature in 1884 and served several terms as a state representative and then state senator. In 1888, this son of a poor immigrant rose high enough to give a speech at the Democratic national convention.

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Ashbie health, see disease and health Henry IV, King Hershey highways hip-hop Holland Home Insurance Building homicide Honda Hong Kong Honolulu Hood, Raymond Horace horse travel housing, homes African Americans and in California in Chicago construction costs of in Dallas depreciation of in Detroit fair-housing laws federal policies on heating and cooling of home ownership in Houston land availability and in Leipzig Levittown in Los Angeles mass-produced middle-income families and mortgages and in New York City in Paris population growth and price swings in relationship between supply and affordability of renting of in Santa Clara County second homes in Sunbelt vouchers for wages and in Youngstown Housing and Urban Development, Department of Houston building construction in carbon emissions in commuting in energy use in Galleria shopping mall in housing in The Woodlands Howard, Ebenezer human capital see also education and skills Hunt, Richard Morris Hurricane Katrina Ibibo ideas and innovation in Bangalore and cities as gateways between cultures knowledge-destroying, in decline of Detroit in medieval world in New York City proximity and talent and creativity see also entrepreneurship Illinois immigrants in Boston in Canada Irish nativism and in New York City restaurants and impact bias income and wages crime rate and in Detroit gap between urban and rural areas in Harris County, Texas housing costs and middle-income families in New York City population size and productivity and skills and India Bangalore, see Bangalore building restrictions in carbon emissions in cars in crime in government in growth patterns in information technology industry in Kolkata Mumbai, see Mumbai Mysore urbanization in Indonesia industrial cities industry and manufacturing large, vertically integrated firms in in New York City information technology in India Jevons’s paradox and in Silicon Valley Infosys infrastructure building new restaurants and spending on water supplies Interfaith Internet Iowa Irish immigrants Islamic world Italy Milan Jacobs, Jane The Death and Life of Great American Cities Jacobs, Robert Japan education in Ministry of International Trade and Industry Nagasaki Tokyo Jefferson, Thomas Jenney, William Le Baron Jerusalem Jevons, William Stanley complementarity corollary of paradox of jobs business tax breaks and crime rate and diversity of outsourcing of unemployment wages from, see income and wages Johnson, Edward C.

From Airline Reservations to Sonic the Hedgehog: A History of the Software Industry
by Martin Campbell-Kelly
Published 15 Jan 2003

It was this business environment that most distinguished Silicon Valley from the other nexus of electronics and telecommunications in the United States: Route 128 in Massachusetts, where large vertically integrated firms such as DEC and RCA predominated.6 It is now accepted that a cluster of firms is much more dynamic and responsive than a giant corporation. In the world of the personal computer, the IBM-compatible PC and the Macintosh exemplify the two approaches, the former being sourced from dozens of different suppliers and the latter being a product of a single vertically integrated firm. Clusters ultimately outperformed the “command economy” of vertically integrated corporations. Geographical proximity is crucial to the operation of a cluster.

…

CSC was widely regarded as the best-managed company in the industry, and it was one of the few to eventually rescue something from the computer utility fad. UCC was less fortunate. In 1969, at the height of the boom, UCC’s Sam Wyly decided to enter the computer utility market. He planned a completely vertically integrated operation—hardware, communications, and software. In terms of hardware, UCC introduced its own terminal device, called COPE (Communications Oriented Processing Equipment), which was to be manufactured by its Computer Industries Inc. subsidiary. To establish a communications infrastructure, UCC attempted to merge with Western Union.

Bricks & Mortals: Ten Great Buildings and the People They Made
by Tom Wilkinson
Published 21 Jul 2014

At its peak in the 1930s the Rouge complex was the size of a city: it covered two square miles, employed 100,000 workers and produced 4,000 cars a day. Raw materials were shipped in from Ford’s mines via a specially dug canal, and within 28 hours had been transmuted into a car dispatched via a dedicated railway: ‘From ore to auto’, so the slogan went. This was the first vertically integrated operation in the world and perhaps the most complete example of vertical integration ever. Meanwhile, Ford’s reach, which had spread to encompass a world empire of suppliers and distributors, also began to infiltrate the domestic sphere of his workers. Ford’s home invasion was a response to the discovery that the assembly line, though fast, wasn’t quite as fast as he had hoped.

…

In his public pronouncements he constantly attributed the genesis of his own buildings to ‘Mr Ford’s ideas’ and proclaimed architecture to be ‘90 per cent business, 10 per cent art’. He had rearranged his own practice as a production line years before he began working for Ford, turning the traditional craft-based atelier of the genius architect into a collaborative and highly rationalised plan factory. Vertical integration, via the combination in one office of 400 designers, draughtsmen, clerical staff and mechanical and structural engineers (Kahn’s was one of the first firms of architects to directly employ engineers), and the organisation of these specialists into project teams, allowed the streamlined production of an enormous quantity of industrial buildings – among them over 1,000 structures for Ford, 127 for General Motors, 521 factories in the USSR and numerous domestic and public buildings.

Modern Monopolies: What It Takes to Dominate the 21st Century Economy
by Alex Moazed and Nicholas L. Johnson
Published 30 May 2016

Companies like Pets.com made the mistake of choosing a linear business model in the age of the platform. What is a linear business model? It’s the model that has dominated in various forms since the Industrial Revolution, when new technologies like steam power and railways gave rise to the large, vertically integrated organization. All of the titans of industry from the early twentieth century were linear businesses, including Standard Oil, General Motors (GM), U.S. Steel, General Electric, Walmart, Toyota, ExxonMobil, and on and on. Each of these companies created a product or service and sold it to a customer.

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By creating the optimal combination of activities, you would create a coherent system—a value chain—that would allow you to create and sustain a competitive advantage against your industry rivals. Figure 2.3. Value chains defined how a business was organized. Porter’s value chain and Henderson’s economies of scale have been the core tenets of business strategy for the last thirty years. Together, they became the strategic foundation of the large, vertically integrated organizations of the late twentieth century. However, even in these large organizations, Hayek’s local knowledge problem reared its head. The coordination problems related to local knowledge that Hayek described are a primary reason why Henderson’s economies-of-scale graph is U-shaped (see Figure 2.4).

…

Remember that transaction costs were the glue that held together a company’s value chain and determined what activities an organization internalized. As processing speeds radically increased and transaction costs fell at the end of the twentieth century, some value chains began to break up. With lower transaction costs, there was less need for vertically integrated organizations. Smaller, more agile competitors started to outmaneuver their larger, older rivals. A smaller competitor could attack one piece of an incumbent company’s value chain and disintermediate it or provide the same quality offering at a much lower price (see Figure 2.5). Figure 2.5.

British Rail
by Christian Wolmar
Published 9 Jun 2022

This was, of course, essential to the improvement of every aspect of British Rail’s services. In short: my purpose was to produce a better railway. He goes on to make points about the structure of the industry: This structure was determined after widespread consultation. Initially I was in favour of a vertically-integrated rail system, but persuasive arguments encouraged me to move away from that concept. I was influenced by the fact that the safest transport industry in the country was also the most fragmented: namely Civil Aviation. The Airlines lease their aircraft; Airports are in multiple ownership; Air traffic control is another separate entity.

…

But the lady who famously claimed she was ‘not for turning’ wavered, and at the following year’s conference, held two months before her resignation, Parkinson announced that the government was now ‘determined to privatise British Rail’ and went on to emphasize the approach by saying, ‘The question now is not about whether we should privatise it, but how and when.’4 A working group of ministers and officials from the Department of Transport was set up to establish how this could be achieved, but its work was distracted not only by Thatcher’s replacement by John Major in the autumn of 1990 but also by the departure of Parkinson and the appointment of Malcolm Rifkind. There was fierce disagreement between the Treasury and the Department of Transport over whether there should be a vertically integrated model, where track and operations were kept together, or – as the Treasury favoured – a track authority model, which allowed different operators to run on tracks owned by a separate company. At one point, the Treasury was intent on creating an auction to sell each individual train path to the highest bidder – £x million for the 0800 from Kings Cross to Leeds, £y million for the 0900 – a madcap idea which was at the extreme end of free-market thinking and foundered on the rocks of reality when it was pointed out that train services are highly interdependent and people wanted the freedom to take any train, not just those of a particular operator.

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One of the oddities of this story is that there is a small part of the United Kingdom’s rail network that was left out of the 1993 Railway Act and allowed to continue without being privatized or fragmented. The rail network in Northern Ireland was considered too small to bother separating out or privatizing, and the political situation in the province too delicate to upset with such a radical move. Therefore, in the post-BR era, Northern Ireland Railways has continued to operate as a vertically integrated railway under state ownership. It has invested in new trains and upgraded its infrastructure, and it achieved its highest ever passenger numbers of fifteen million in the year 2018/19, before the pandemic. Despite the fact that the United Kingdom was in the European Union, there was no pressure on the railway in Northern Ireland to separate out its functions and the British government left it very much to its own devices, even paying for the recent high level of investment.

Uncommon Grounds: The History of Coffee and How It Transformed Our World
by Mark Pendergrast
Published 2 Jan 2000

The Arbuckle plant along the Brooklyn waterfront occupied a dozen city blocks and stabled two hundred draft horses. Arbuckle started his own barrel factory after he got into the sugar business. The barrels were made from Arbuckle-owned timber stands in Virginia and North Carolina. The Brooklyn plant had its own hospital and dining room for employees. In the days before “vertical integration” became a buzzword, Arbuckle had mastered the concept. Out in the American West, strong, boiled Ariosa became the cowboy’s coffee of choice. “Cookie, pour me a cup o’ that condensed panther y’u call coffee,” a macho cowpoke would say. “This is the way I like it, plum bare-footed [black]. None o’ that dehorned stuff y’u get in town cafes for me.”

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Known as a predatory businessman, Havemeyer already had driven most competitors out of business. Outspoken, gruff, and dictatorial, Havemeyer saw nothing wrong in predatory pricing to drive out competition, but he was of course happy to allow Arbuckle to sell sugar, as long as the coffee magnate bought his product. Arbuckle, who had always sought vertical integration (control of a business at every stage of production), decided to build his own sugar refinery and go into competition with Havemeyer. Late in 1896 Havemeyer summoned coffee broker Hermann Sielcken. “He asked me in which way he could do a large business in roasted coffee,” Sielcken recalled later.

…

He accused the well-intentioned folks who sell Fair Trade coffee of “cultural imperialism,” blasting those who blend “suffering, pain, and humiliation” into the beans they sell to “the affluent but guilt-ridden, Birkenstock-shod, politically correct, myopically naive creature known as the ‘huppie’”—whom he defined as a combination hippie-yuppie. McAlpin built a vertically integrated coffee empire under the name Distant Lands Trading Company. He owned thirteen coffee farms and three processing mills in Costa Rica and another processing mill in Colombia. He had joint ventures and quality control employees in Sumatra, Guatemala, Brazil, Honduras, and Ethiopia, along with roasting plants in Tyler, Texas, and Seattle.

An Empire of Wealth: Rise of American Economy Power 1607-2000
by John Steele Gordon
Published 12 Oct 2009

Needless to say, Carnegie had calculated closely what he would get out of it. First, the Carnegie Steel Company would get guaranteed supplies of coke at the best possible price; second, he would get the surpassing executive skills of Henry Clay Frick; and third, he would further the vertical integration of the steel industry in general and his company in particular. Vertical integration simply means bringing under one corporation’s control part or all of the stream of production from raw materials to distribution. It had been going on since the dawn of the Industrial Revolution (Francis Cabot Lowell had been the first to integrate spinning and weaving in a single building) but greatly accelerated in the last quarter of the nineteenth century as industrialists sought economies of scale as well as of speed to cut costs.

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South Carolina, 62, 82–83, 85–86 nullification crisis and, 97 South Carolina colony, 24 Soviet Union, 361, 362, 375–76, 391, 403, 413 collapse of, 414–15 space race, 403–4 Spain, xv, 8–11, 15, 22, 23, 63–64 spinning jenny, 88 Sputnik, 403–4, 410 stagflation, 383 Staggers Act, 392 Stalin, Joseph, 354, 377 Standard Oil, 255–59, 263 standard time, 235–36 steamboats, 135–40, 162 monopolies in, 137, 142–45 steam engine, 132–34, 140, 141, 409 steam turbine, 305–6 Stedman, E. C., 213 steel industry, 240–49, 324, 371 Carnegie and, 242–43, 247–48 consolidation and mergers in, 262 expansion of, 259 Homestead strike and, 253–54 vertical integration in, 246–47 Steiger, William, 394–95 Stephenson, George, 147, 150 Stevens, John, 147 Stevens, Robert Livingston, 147 Stewart, A. T., 161–62 Stimson, Henry, 325 stock market crash of 1929, 314–16 prelude to, 311–15 see also Great Depression stock market crash of 1987, 397–98 stock markets, 154, 197–200, 232, 265, 321 boom of 1990s and, 417–18 brokerage techniques and, 368–69 brokered deposits and, 399–400 call money market of, 312–13 corruption in, 207–8, 215–16 crash of 1987 and, 397–98 deregulation of, 393–94 gold rush and, 185–86 panic of 1907 and, 278–80 postwar boom and, 367–69, 370 reform of, 339–42 security regulation and, 215–16 telegraph and, 157–58 Whitney scandal and, 341–42 World War I and, 289, 294 see also New York Stock Exchange strikes, 249, 371, 372 Homestead, 253–54 Strong, Benjamin, 312–13, 319, 397 Strong, George Templeton, 151, 165–66, 208, 221 Stuyvesant, Peter, 37–38 suburbs: automobile industry and, 300–301 after World War II, 366–67 sugar trade, 22–23 Supplies Priorities and Allocations Board (SPAB), 354 Supreme Court, U.S., 127, 239 income tax rulings of, 274–75, 276 New Deal and, 342, 344 separate-but-equal ruling of, 374 Standard Oil ruling of, 263 steamboat monopoly ruling of, 143–45, 146 Wabash ruling of, 237 Supreme Court in United States History, The (Warren), 145 Sutter, John, 179–80, 187 Symington, William, 134–36 Symmes, Zechariah, 34 Taft, William Howard, 276 Taft-Hartley Act, 371–72 Talleyrand, Charles de, 75 Taney, Roger B., 126 Tarbell, Ida, 256–57 Tariff Act, 73 Tariff of Abominations, 97 tariffs, 72–73, 76, 90, 96, 195, 200, 272, 273, 275, 292–93, 311, 378 nullification issue and, 97 Smoot-Hawley Act and, 320–22 taxes: capital gains, 394–95 direct, 274 income, see income tax indirect, 273–74 Tax Reform Act of 1978, 395 telegraph, 155–58, 166, 183, 301 Tennessee, 85, 124 Tennessee Valley Authority, 335 Terre Haute Express, 182 Texas, 86, 331 Theory of Moral Sentiments, The (Smith), 189 Thomas, Norman, 330 Thompson, Jeremiah, 110–11 Times (London), 109, 175–76 time zones, 235–36 tobacco trade, 14–17, 19–20, 22, 23, 45 Toleration Act (Maryland), 21–22 Tonnage Act, 73 transatlantic cable, 156–57 transcontinental railroad, 216–20 transistor, 407–8 transportation, 99–110, 184, 186–87, 255, 281, 402–3, 404 deregulation of, 392–93 see also automobile industry; Erie Canal; railroads; shipping industry; steamboats Treasury Department, U.S., 68, 70–71, 80, 119, 120, 192, 226, 332–33, 349, 389 Trevithick, Richard, 140, 146–47 “triangle trades,” 32 Trollope, Anthony, 246 Truman, Harry S., 369, 371–72, 374, 375–77, 380 Truman Doctrine, 376 Trust Company of America, 279 trusts, 258–59, 262–63 Tudor, Frederic, 177–78 Turkey, 285, 288, 375, 376 Twain, Mark, 139, 260 Tweed Ring, 220–21 unemployment, 264–65, 343, 346, 381, 383, 396 in Great Depression, 322, 324, 328, 336 in World War II, 355, 358 Union Pacific Railroad, 217, 219, 229–30 unions, see labor relations U.S.

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T., 161–62 Stimson, Henry, 325 stock market crash of 1929, 314–16 prelude to, 311–15 see also Great Depression stock market crash of 1987, 397–98 stock markets, 154, 197–200, 232, 265, 321 boom of 1990s and, 417–18 brokerage techniques and, 368–69 brokered deposits and, 399–400 call money market of, 312–13 corruption in, 207–8, 215–16 crash of 1987 and, 397–98 deregulation of, 393–94 gold rush and, 185–86 panic of 1907 and, 278–80 postwar boom and, 367–69, 370 reform of, 339–42 security regulation and, 215–16 telegraph and, 157–58 Whitney scandal and, 341–42 World War I and, 289, 294 see also New York Stock Exchange strikes, 249, 371, 372 Homestead, 253–54 Strong, Benjamin, 312–13, 319, 397 Strong, George Templeton, 151, 165–66, 208, 221 Stuyvesant, Peter, 37–38 suburbs: automobile industry and, 300–301 after World War II, 366–67 sugar trade, 22–23 Supplies Priorities and Allocations Board (SPAB), 354 Supreme Court, U.S., 127, 239 income tax rulings of, 274–75, 276 New Deal and, 342, 344 separate-but-equal ruling of, 374 Standard Oil ruling of, 263 steamboat monopoly ruling of, 143–45, 146 Wabash ruling of, 237 Supreme Court in United States History, The (Warren), 145 Sutter, John, 179–80, 187 Symington, William, 134–36 Symmes, Zechariah, 34 Taft, William Howard, 276 Taft-Hartley Act, 371–72 Talleyrand, Charles de, 75 Taney, Roger B., 126 Tarbell, Ida, 256–57 Tariff Act, 73 Tariff of Abominations, 97 tariffs, 72–73, 76, 90, 96, 195, 200, 272, 273, 275, 292–93, 311, 378 nullification issue and, 97 Smoot-Hawley Act and, 320–22 taxes: capital gains, 394–95 direct, 274 income, see income tax indirect, 273–74 Tax Reform Act of 1978, 395 telegraph, 155–58, 166, 183, 301 Tennessee, 85, 124 Tennessee Valley Authority, 335 Terre Haute Express, 182 Texas, 86, 331 Theory of Moral Sentiments, The (Smith), 189 Thomas, Norman, 330 Thompson, Jeremiah, 110–11 Times (London), 109, 175–76 time zones, 235–36 tobacco trade, 14–17, 19–20, 22, 23, 45 Toleration Act (Maryland), 21–22 Tonnage Act, 73 transatlantic cable, 156–57 transcontinental railroad, 216–20 transistor, 407–8 transportation, 99–110, 184, 186–87, 255, 281, 402–3, 404 deregulation of, 392–93 see also automobile industry; Erie Canal; railroads; shipping industry; steamboats Treasury Department, U.S., 68, 70–71, 80, 119, 120, 192, 226, 332–33, 349, 389 Trevithick, Richard, 140, 146–47 “triangle trades,” 32 Trollope, Anthony, 246 Truman, Harry S., 369, 371–72, 374, 375–77, 380 Truman Doctrine, 376 Trust Company of America, 279 trusts, 258–59, 262–63 Tudor, Frederic, 177–78 Turkey, 285, 288, 375, 376 Twain, Mark, 139, 260 Tweed Ring, 220–21 unemployment, 264–65, 343, 346, 381, 383, 396 in Great Depression, 322, 324, 328, 336 in World War II, 355, 358 Union Pacific Railroad, 217, 219, 229–30 unions, see labor relations U.S. Employment Service, 335 U.S. Steel, 262, 315 Vail, Alfred, 156 Van Buren, Martin, 130–31 Vandenberg, Arthur, 377 Vanderbilt, Cornelius, 142–43, 210, 260 in Erie Wars, 210–15 Vanderbilt, William H., 233–34 Vermont, 86 Versailles Treaty, 294, 311, 346, 379 vertical integration, 247 Veterans Administration, 365 Vietnam War, 383, 391, 403 Virginia, 74, 87 Virginia colony, 12–14, 21, 22, 40, 45, 47, 61 emigration to, 27–28 representative government in, 17–18 slavery in, 18–20 tobacco trade in, 14–17, 19–20 see also Jamestown colony Virginia Company, 10, 17 Volcker, Paul, 396 Voting Rights Act of 1965, 374 Wabash Railway vs.

The Quest: Energy, Security, and the Remaking of the Modern World
by Daniel Yergin
Published 14 May 2011

“Here was a type of organization that was flexible and capable, a company that was tackling all the issues at the same time—exploration, production, and engineering—and everybody pursing the common goal, and not each branch operating separately.” He came back to Moscow convinced that the typical organization found in the rest of the world—vertically integrated companies with exploration and production, refining and marketing all in one company—was the way to organize a modern oil industry. Prior to the collapse of the Soviet Union, his efforts to promote a vertically integrated state-owned oil company were rebuffed. Opponents accused him of “destroying the oil sector.” He tried again after Russia became an independent state. For to stay with the existing setup, he said, would result in chaos.8 In November 1992, President Yeltsin adopted this approach in Decree 1403 on privatization in the oil industry.

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For to stay with the existing setup, he said, would result in chaos.8 In November 1992, President Yeltsin adopted this approach in Decree 1403 on privatization in the oil industry. The new law provided for three vertically integrated oil companies—Lukoil, Yukos, and Surgut. Each would combine upstream oil production areas with refining and marketing systems. They would become some of the largest companies in the world. The state would retain substantial ownership during a three-year transition period, while the new companies tried to assert control over now semi-independent individual production groups and refineries; quell rebellious subsidiaries; and capture control over oil sales, oil exports, and the hard currency that came from these transactions.

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Abramovich eventually sold Sibneft to the Russian gas giant Gazprom and moved to England, where he was said to be the second-richest person in the country, exceeded only by the Queen herself.12 Overall, by 1998, within six years of the collapse of the Soviet Union, the Russian oil industry had gone from a system run by a series of ministries and subordinated to central planning to a system of large vertically integrated companies, organized, at least in rough outline, similarly to the traditional companies in the West. During these years, they all operated largely autonomously from the state. Eventually the Russian Federation would have five large energy companies, each of whose oil reserves were comparable to the size of the largest western majors.

The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success
by William Thorndike
Published 14 Sep 2012

These companies had long been paragons of financial conservatism, using little leverage, reliably paying dividends, and rarely repurchasing shares. Most of them had followed fashion and actively diversified during the 1960s and 1970s in the quixotic pursuit of synergy, and many had ended up in restaurant and agricultural businesses in search of the elusive benefits of “vertical integration.” Ralston Purina was fairly typical of this group. In the early 1980s, Ralston was a Fortune 100 company with a long history in agricultural feed products. During the 1970s under CEO Hal Dean, the company had followed the same path as its peers, taking the enormous cash flow provided by its traditional feed businesses and engaging in a diversification program that left it with a melange of operating divisions, ranging from mushroom and soybean farms to the Jack in the Box chain of fast-food restaurants, the St.

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(TCI), 33, 83–107 —acquisitions at, 92–93, 94–95, 103–105, 203, 212–213 —capital allocation at, 88, 95, 102–104, 107, 212 —cash flow at, 10, 88, 89, 90–91, 92, 96, 100, 101 —decentralized approach at, 106–107 —frugality in cost control at, 88–89, 107 —joint ventures at, 93–94, 97, 105–106 —stock performance at, 98–99, 99f, 107 —stock repurchase programs at, 85, 91–92, 97, 105 Teledyne, 37–58 —acquisitions by, 11, 40–41 —capital allocation by, xii, 38, 42, 55, 57, 207 —cash flow at, 11, 44–45 —closing of underperforming business unit at, 45 —decentralized approach at, 43–44, 57 —diversification at, 40–41, 151 —dividend policy at, 37–38, 46, 51, 57 —investor relations at, 53, 54, 57 —portfolio investment at, 48–49, 50f, 57 —spin-offs at, 50–51, 96 —stock performance at, 38–39, 42, 42t, 47, 52–53, 52f —stock repurchase programs at, xi, 10, 45–48, 48t, 54–56, 142 Teledyne return, 44 Teleport, 95, 97 television industry, 14, 15–16, 18, 19–20, 24, 25, 28–29, 31, 111, 115, 116, 120–121, 154 Templeton, John, 1, 9 Texaco, 49 Texas Pacific Group (TPG), 164 textile industry, 133, 167–168, 182–183 Textron Corporation, 62 Thinking, Fast and Slow (Kahneman), 200 Thornton, Tex, 39, 43, 53 Tillerson, Rex, 201, 203, 206–207 Time Warner, 88, 101, 150 Tolstoy, Leo, 5 TQM, viii tracking stocks, 95 Transdigm, 34–35 Travelers Corporation, 175 Trenton Times, 113 Triangle Communications, 18, 29, 30, 31 Trump, Donald, 2 Turner, Ted, 93, 94 Turner Broadcasting System, 94 Ulrich, Laurel, xv Union Carbide, 134 United Artists Cable, 94 Unitrin, 51 Unitymedia, 213 US Airways, 175 Van de Kamp frozen seafood brand, 135 Vasco Metals, 41 vertical integration, 130 Viacom, 94 Vie, Dick, 51 Waldenbooks, 156 Wall Street Journal, 19, 38 Walton, Sam, xviii Wargo, David, 33, 89, 97, 101, 105, 106, 149, 161 Warner Communications, 85, 104 Washington Post. See Washington Post Company Washington Post Company, 109–127 —acquisitions by, 113, 115–116, 119–121 —Buffett and, 113, 114, 115, 117, 118, 120, 121, 122, 124, 125, 173, 186 —capital allocation by, 118–120 —cash flow at, 117, 118 —decentralized approach at, 125 —diversification by, 116, 119–120, 127 —divestiture by, 116 —dividends at, 118 —Pentagon Papers crisis and, 112 —pressmen’s strike at, 113–114 —stock performance at, 110, 111f —stock repurchase programs at, 114, 119, 121–122, 122f —Watergate scandal and, 112–113 Washington Star, 114, 117 Watergate scandal, 112–113 Weill, Sandy, 175 Welch, Jack, vii–viii, ix, x, xii, 1, 2, 5, 53, 62, 63, 197, 198f Wells Fargo, 175–176, 186 Western Tele-Communications, 96 Westinghouse, 93 Wexner, Leslie, 155 Whiz Kids, 43 Wiggins, Russ, 111–112, 123 Woodward, Bob, 112 Woodworth, Bob, 31 WTEN, 16–17, 24 Wyman, Tom, 130 Zelnick, Bob, 20 Zuckerberg, Mark, xviii About the Author Will Thorndike is a graduate of Harvard College and the Stanford Graduate School of Business.

The Raging 2020s: Companies, Countries, People - and the Fight for Our Future
by Alec Ross
Published 13 Sep 2021

But as the poultry industry grew more consolidated, the Layfields found it harder and harder to stay afloat. Among economists, a business arrangement where a single company controls multiple stages of production is known as vertical integration. The more of the supply chain the company controls, the more it can reduce its production costs. Lower production costs mean lower prices, and lower prices mean more customers. Vertical integration is what enabled Gilded Age monopolies to conquer their industries. Modern poultry integrators have used it to entrench their dominance over the chicken supply chain. With integrators leveraging economies of scale, it became almost impossible for independent feed mills, hatcheries, farmers, and processors to stay in business.

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See also US Congress checks and balances in Code War and corporate power in cyber war and equality of opportunity in government of government service in gross domestic product of health care in loss of status as go-to model meat consumption in minimum wage in Nordic model and open vs. closed systems in organized labor in paralysis of government in political polarization of populism and race for technological dominance and social contract in tax havens and techno-authoritarianism in vetocracy in weakened institutions in World War II and United States Digital Service (USDS) University of California, Berkeley University of Chicago University of Massachusetts Amherst University of Toronto US Commerce Department US Congress lobbying and Tax Cuts and Jobs Act US Constitution US Customs and Border Protection US Department of Defense US Department of Labor US House of Representatives US Munitions List USNS Comfort US Senate US State Department U.S. Steel US Supreme Court Utah value-added tax (VAT) venture capitalist Verisign Verizon vertical integration Veterans Affairs Department (VA) vetocracy Visa Volkswagen Wagner Act (1935) Wall Street Wall Street Journal Walmart Walt Disney wartime, corporations and wastewater wealth gap WeChat welfare system. See safety net programs West Virginia West Virginia Public Employees Insurance Agency Wilson, Charles E.

Crude Volatility: The History and the Future of Boom-Bust Oil Prices
by Robert McNally
Published 17 Jan 2017

Standard Oil and the drillers went their separate ways—Standard Oil put its new Ohio crude on the market and Pennsylvania drillers decided “to compete with Standard Oil by developing their own transport, refining, and marketing organization.”94 STANDARD OIL’S IMPACT ON PRICE STABILITY By the mid-1880s, Standard Oil dominated all aspects of the oil business, from crude production to the marketing of refined products.95 The order and stability Rockefeller imposed on the oil industry enabled it to enormously grow in the United States and increasingly in nascent markets in Europe and Asia. Monopolization of refining and vertical integration with railroads and pipelines sufficed to indirectly limit the flow of oil from the wells and thereby, abolish pre-Standard Oil boom and bust price cycles, even if Rockefeller’s control was insufficient to solely set oil prices or entirely eliminate oil price volatility.96 During the twenty-one years preceding Standard Oil’s dominance, crude oil prices gyrated on average about 53 percent per year (figure 1.1).97 During Rockefeller’s period of control, prices fluctuated by about half as much—24 percent.

…

Within each sector, firms are wary of investing in excessive capacity that could result in lower prices and profits. As we have seen, early drillers attempted to reach horizontal agreements to restrain drilling and production, and Standard Oil approached horizontal integration with the more aggressive method of buying and closing small, competing refineries, as well as vertical integration by controlling pipelines and drilling wells. By integrating, oil companies could naturally hedge themselves against price fluctuations elsewhere in the supply chain. In addition to securing supply chains, integration dampened the tendency of individual oil companies to drill too many wells, build too much refining capacity, and erect too many bulk transportation and storage facilities.

…

Nordhauser, The Quest for Stability, 10–11. 65. de Chazeau and Kahn, Integration and Competition, 134. 66. “The small producer, with a lucky strike, can always hope to improve his market share; it may be in the interests of all to stabilize, but there will always be a maverick to start the competitive snowball. But the big firm, and especially the big vertically integrated firm, has heavy investments elsewhere which cry out for the assurance of continued supplies over time, investments which make it certain that he cannot hope to drive his rivals, similarly circumstanced, from the market. The big firm has more at stake and that larger stake makes it more conscious of the need and more willing to shoulder the burden of doing something to stabilize crude oil markets….

High Steel: The Daring Men Who Built the World's Greatest Skyline
by Jim Rasenberger
Published 15 Mar 2004

For the moment, the business of AOL Time Warner—communications—was the red-hot center of the American economy, very much as steel had been a hundred years earlier. “Global media,” said Gerald Levin, then CEO of Time Warner, “will be and is fast becoming the predominant business force of the twenty-first century.” AOL Time Warner, much like that corporate behemoth of a century earlier, U.S. Steel, aspired to vertical integration of its industry, only now the plan had a new name: “synergy.” Instead of iron ore, the raw material would be human ideas. Rather than manufacture and ship steel ingots, the new company would produce and distribute “content” in the form of images, words, and sounds. But the goal was the same: to control the product from one end to the other.

…

Nowhere was the deck more unevenly stacked against workers than in the steel industry. The kind of corporation that Andrew Carnegie and his fellow steel magnates envisioned controlled every aspect of production and distribution, much of this carried out by subsidiaries. The concept of total control was called “vertical integration,” and the steel-frame skyscraper was its soaring triumph. From the raw iron ore deposits of the Mesabi Range in northeastern Minnesota, Big Steel’s reach extended to the coalmines that supplied the coke needed to fuel the furnaces that converted the iron ore into steel. It included the plants along the Monongahela River near Pittsburgh, where the ore was melted down, swept clean of slag, and molded into steel ingots.

…

See Ernst & Young building Time Warner Center Christmas fight at design of hole of ironworker dangers at ironworker frustrations at ironworkers from, at World Trade Center disaster ironworker skills at lack of steel at Monday mornings for ironworkers at raising gangs of safety at status of ironworkers after finishing superintendent job at topping out of walking bosses at winter weather at work at, after destruction of World Trade Center topping out, Time Warner Center Tower Building tower cranes Tracy, Jack Tracy, Mickey Treahy, Frank “Red,” Triborough Bridge Trinity Building Trinity Church Trump, Donald Trump World Tower truss bridges trusses Time Warner building World Trade Center trust tuberculosis tubes, framed tying off unions attempts to break Bloody Friday hard-hat riots and Chicago Chicago Local cleanup of World Trade Center disaster and Davis-Bacon Act and Wagner Act decline of dynamite conspiracy of history of, for ironworkers Los Angeles and Mohawk Indians and Newfoundlanders and New York City Local New York City Local New York City Local New York City membership book steel industry and strikes (see strikes) violence and, (see also violence) walking delegate Sam Parks and (see Parks, Sam) United Building Trades United Housesmiths’ and Bridgemen’s Union of New York and Vicinity U.S. Commission on Industrial Relations U.S. Commission on Labor Relations U.S. Steel building U.S. Steel Corporation (USX) unit stress Van Alen, William Verrazano-Narrows Bridge vertical integration vestibular-ocular reflex Victoria Bridge Vietnam War, Bloody Friday and violence Christmas fight at Time Warner Center dynamite conspiracy hard-hat riots midair murder union organizing and unions and Viollet-le-Duc wages bridgemen bridgemen, on Quebec Bridge ironworker workers compensation and Wagner Act walking boss job Walking Delegate, The (book) walking delegate job.

The Secret Life of Groceries: The Dark Miracle of the American Supermarket
by Benjamin Lorr
Published 14 Jun 2020

Ford brought in his own coal on his own barges, smelted his own steel in his own plants, and cast, cut, and machined those ten thousand parts to fit his own internally created gauge. Which is to say, he attacked the logistical nightmare of mass auto production by dislocating his jaw and swallowing it whole: a quest for perfect vertical integration. Where we didn’t go big, we made things simple: homogenizing what was once a customizable product made by a small number of highly skilled generalist engineers into a single unvarying form capable of being assembled by swarms of men each skilled at exactly one twenty-four-second motion.

…

These two forces fed each other: parts that were interchangeable were less of a burden to stockpile; plants designed to make a single type of machine were capable of digesting raw materials far quicker. The result was nothing short of a revolution in production.* None of this was possible in Japan. Geographically, there wasn’t the same physical expanse or westward ho mentality. Geologically, Japan had limited natural resources, so vertical integration—tying together the coal, iron ore, barges, and smelting plants—was impossible. Financially, widespread post–World War II inflation prevented the type of liquidity needed to advance purchase and stockpile tens of thousands of discrete parts. And perhaps most trying, the Japanese consumer simply did not share the American preference for the monotonous, homogenized, and mass-produced, valuing the customizable and unique instead.

…

These facilities operate aboveground and aboveboard, registering with industry associations and inspected frequently by teams of auditors. The space I visit is operated by one of the largest seafood producers in the world, a company that buys directly and exclusively from brokers, processors, and ponds that operate under its specifications. It is a model of vertical integration borrowed from the American poultry industry, and allows for far greater oversight and control. However, even here, where explicit exceptions are never made, I’m told implicit ones do. If an upstream buyer, e.g., your grocery store, is in need—say, the holidays have come and the people need their shrimp—there is no hesitation to apply pressure on brokers to increase their supply.

Once Upon a Time in Russia: The Rise of the Oligarchs―A True Story of Ambition, Wealth, Betrayal, and Murder
by Ben Mezrich
Published 13 Jun 2016

“As you may know,” Abramovich said, moving closer along the railing, “my trading company moves oil from the state refinery at Omsk in Siberia, which in turn gets its crude from the state-owned production units in Noyabrsk. I’ve spent the past few years familiarizing myself with this production line—from the drilling to the processing to the barrels I transport—and I’ve come to believe that, given the opportunity, I could do it better.” “By that you mean . . .” “Vertically integrate, combine the production and refining businesses with my trading company. Run it along my already existing shipping network—and we’ve got an entire oil company moving petroleum across all of Europe.” Berezovsky no longer felt the boat rocking beneath his feet as he focused in on what the younger man was proposing.

…

“As long as we’re being direct—how much profit does your trading company currently bring in?” It wasn’t exactly polite conversation, asking a man how much money he made. But there would be time for cocktail chatter later. For his part, Abramovich didn’t seem put out by the question. “Forty million a year.” “And if we can organize this proposal of yours—if we ‘vertically integrate’ Omsk and Noyabrskneftegaz—how much cash would you generate?” “Maybe a hundred million a year?” Berezovsky reached forward with both hands and clasped the younger man by the shoulders. “It is from this that I will require certain funds to cover the expense of keeping things running smoothly.”

World Without Mind: The Existential Threat of Big Tech
by Franklin Foer
Published 31 Aug 2017

Google spread its money across Washington with joyous ecumenicism. Google spent about $17 million on influence peddlers of both partisan varietals. By one count, Google poured more into its D.C. apparatus than any other public company. An investigation by The Intercept concluded: “Google has achieved a kind of vertical integration with the government.” Somehow Google managed to overcome the recommendation of staffers on the Federal Trade Commission who found Google’s monopolistic machinations worthy of a lawsuit. Lobbyists for the companies have preserved a blissful state of barely regulated, barely taxed monopoly.

…

Google executives set foot in the Obama White House more often than those of any other corporation: David Dayen, “The Android Administration,” Intercept, April 22, 2016. By one count, Google poured more into its D.C. apparatus than any other public company: “Mission Creep-y,” Public Citizen report, November 2014. “Google has achieved a kind of vertical integration with the government”: Dayen, “Android Administration.” Somehow Google managed to overcome the recommendation of staffers on the Federal Trade Commission: Brody Mullins, Rolfe Winkler, and Brent Kendall, “Inside the U.S. Antitrust Probe of Google,” Wall Street Journal, March 19, 2015. “Assuring the public has access to a multiplicity of information sources”: McChesney and Nichols, Death and Life, 151.

Once Upon a Time in Russia: The Rise of the Oligarchs and the Greatest Wealth in History
by Ben Mezrich
Published 26 May 2015

“As you may know,” Abramovich said, moving closer along the railing, “my trading company moves oil from the state refinery at Omsk in Siberia, which in turn gets its crude from the state-owned production units in Noyabrsk. I’ve spent the past few years familiarizing myself with this production line—from the drilling to the processing to the barrels I transport—and I’ve come to believe that, given the opportunity, I could do it better.” “By that you mean …” “Vertically integrate, combine the production and refining businesses with my trading company. Run it along my already existing shipping network—and we’ve got an entire oil company moving petroleum across all of Europe.” Berezovsky no longer felt the boat rocking beneath his feet as he focused in on what the younger man was proposing.

…

“As long as we’re being direct—how much profit does your trading company currently bring in?” It wasn’t exactly polite conversation, asking a man how much money he made. But there would be time for cocktail chatter later. For his part, Abramovich didn’t seem put out by the question. “Forty million a year.” “And if we can organize this proposal of yours—if we ‘vertically integrate’ Omsk and Noyabrskneftegaz—how much cash would you generate?” “Maybe a hundred million a year?” Berezovsky reached forward with both hands and clasped the younger man by the shoulders. “It is from this that I will require certain funds to cover the expense of keeping things running smoothly.”

Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages
by Carlota Pérez
Published 1 Jan 2002

Technological Revolutions and Financial Capital 18 Table 2.3 A different techno-economic paradigm for each technological revolution, 1770 to 2000s Technological revolution Country of initial development Techno-economic paradigm ‘Common-sense’ innovation principles FIRST The ‘Industrial Revolution’ Britain Factory production Mechanization Productivity/time keeping and time saving Fluidity of movement (as ideal for machines with water-power and for transport through canals and other waterways) Local networks SECOND Age of Steam and Railways In Britain and spreading to Continent and USA Economies of agglomeration/Industrial cities/National markets Power centers with national networks Scale as progress Standard parts/machine-made machines Energy where needed (steam) Interdependent movement (of machines and of means of transport) THIRD Age of Steel, Electricity and Heavy Engineering USA and Germany overtaking Britain FOURTH Age of Oil, the Automobile and Mass Production In USA and spreading to Europe FIFTH Age of Information and Telecommunications In USA spreading to Europe and Asia Giant structures (steel) Economies of scale of plant/vertical integration Distributed power for industry (electricity) Science as a productive force Worldwide networks and empires (including cartels) Universal standardization Cost accounting for control and efficiency Great scale for world market power/‘small’ is successful, if local Mass production/mass markets Economies of scale (product and market volume)/ horizontal integration Standardization of products Energy intensity (oil based) Synthetic materials Functional specialization/hierarchical pyramids Centralization/metropolitan centers–suburbanization National powers, world agreements and confrontations Information-intensity (microelectronics-based ICT) Decentralized integration/network structures Knowledge as capital/intangible value added Heterogeneity, diversity, adaptability Segmentation of markets/proliferation of niches Economies of scope and specialization combined with scale Globalization/interaction between the global and the local Inward and outward cooperation/clusters Instant contact and action/instant global communications Technological Revolutions and Techno-Economic Paradigms 19 developed and developing countries.

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In an article in Fortune magazine, Geoffrey Colvin gathered evidence of overpaying for some of the mergers and acquisitions and suggested that this was probably due to having excess money.163 This aggregation process is another one of the changes brought about by each technological revolution and its enabling infrastructure. As a consequence, the typical size of the largest firms in each paradigm can be greater than that in the previous one and the ‘shape’ is also likely to be different. In the third surge, vertical integration from raw materials to final client in a core product became the ‘ideal’ form of the most powerful firms of the period. In the fourth surge, horizontal integration was more typical, so that final product manufacturers widened their range of similar products, rather than integrate backwards into raw materials.

Reinventing Capitalism in the Age of Big Data
by Viktor Mayer-Schönberger and Thomas Ramge
Published 27 Feb 2018

The following year sales doubled, while prices fell. The company was back on track. Many firms, and not just those in the automotive industry, have followed Ford’s model of combining the division of labor with centralized decision-making. These companies manufacture products within a tightly controlled, largely vertically integrated organization. Some critics of capitalism have argued that firms will increase in size and combine to form monopolies or oligopolies that may ultimately control the economy and undo the market as we know it. Although we have seen vast concentration in a number of sectors—from trains and steel in the late 1890s to huge conglomerates (sometimes called national champions) in the latter half of the twentieth century to digital behemoths such as Amazon, Google, Facebook, and Baidu in the twenty-first century—the firm hasn’t yet replaced the market.

…

Honda’s sales fell from 90 percent to 30 percent of the market in Vietnam within only five years. The Chinese had not only deconstructed the basic architecture of state-of-the-art Japanese motorcycles, they had also deconstructed the basic organizational architecture of motorcycle manufacturing. Rather than opting for a firm’s centralized control and vertical integration, they succeeded by drawing on participants in a market to efficiently produce affordable motorcycles. Decentralized and diffuse or centralized and hierarchical? This is the choice we face when we want to coordinate efficiently. Do we opt for the market or choose the firm? Each offers unique qualities, and each differs starkly from the other.

The Grid: The Fraying Wires Between Americans and Our Energy Future
by Gretchen Bakke
Published 25 Jul 2016

This was also the year that saw the creation of the Standard Oil Trust, a business entity that brought 90 percent of the world’s oil production and refining under the control of a nine-person board, headed by John D. Rockefeller. With twenty thousand oil wells, most in Pennsylvania, four thousand miles of pipeline, five thousand tank cars, and over one hundred thousand employees, Standard Oil was a thorough monopoly. Rockefeller’s sprawling vertically integrated corporation perfectly captured the trend in the late 1800s of replacing many small companies in competition with one another with single large entities capable of producing and moving products to market at a scale inconceivable to family businesses or local undertakings. The electricity business might have been a chaotic diversity of competing interests and alternate systems in the final decades of the nineteenth century, but it was the exception not the rule.

…

Even power systems that had existed well before the utility monopolies had been established, such as small hydro in streams (popular in California well into the 1920s) or cogeneration plants (which in 1908 produced almost 60 percent of the electricity made in the United States), had been almost utterly erased by the utilities’ preference for large, dedicated power plants. And since no one else could enter the market, because the utilities wouldn’t buy their product no matter how cheaply or cleanly they made it, that was pretty much that. Regulation, back when it was hashed out in the early 1900s, had presumed exactly this kind of vertically integrated electricity system. No one really anticipated that one day more than half a century later that same entity might be in the position of a “customer” for modest quantities of electricity produced by someone else. Monopsony powers had been granted to the utilities almost by accident. This was what PURPA reversed: The utilities could still be monopolies, but they couldn’t be monopsonies anymore.

…

But PURPA was not only important because it changed our ideas about how power might be “better” made, it also opened the door to honest-to-goodness competition in electrical power generation. As bidding auctions between small power providers gradually became the most effective way to integrate new forms of generation, and the companies making it, PURPA helped to prove that bigger wasn’t better and that monopoly-governed, vertically integrated, government-regulated megacompanies were far and away not the best way to make and manage American power. Small was not only beautiful but efficient, and, as it has turned out, cost-effective. The unexpected success of PURPA was a momentous outcome for the culture of electricity in this country.

Surveillance Valley: The Rise of the Military-Digital Complex
by Yasha Levine
Published 6 Feb 2018

A year later, President Bill Clinton signed the Telecommunications Act of 1996, a law that deregulated the telecommunications industry, allowing for the first time since the New Deal nearly unlimited corporate cross-ownership of the media: cable companies, radio stations, film studios, newspapers, phone companies, television broadcasters, and, of course, Internet service providers.73 The law triggered massive consolidation, culminating in just a handful of vertically integrated companies owning the bulk of the American media market. “This law is truly revolutionary legislation that will bring the future to our doorstep,” President Clinton declared when he signed the act. A handful of powerful telecommunications companies absorbed most of the privatized NSFNET providers that had been set up with funds from the National Science Foundation a decade earlier.

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So was Cory Doctorow, a best-selling young adult science fiction author whose books about a totalitarian government’s surveillance were read and admired by Laura Poitras, Jacob Appelbaum, Roger Dingledine, and Edward Snowden.122 Doctorow was a huge personality in the crypto movement who could fill giant conference halls at privacy conferences. He publicly endorsed OTF’s Internet Freedom mission. “I’m proud to be a volunteer OTF advisor,” he tweeted. From behind this hip and connected exterior, BBG and Radio Free Asia built a vertically integrated incubator for Internet Freedom technologies, pouring millions into projects big and small, including everything from evading censorship to helping political organizing, protests, and movement building. With its deep pockets and its recruitment of big-name privacy activists, the Open Technology Fund didn’t just thrust itself into the privacy movement.

…

The industry would continue to consolidate over the next decade, not just domestically but also internationally. As I write this in 2017, two decades after the Telecommunications Act of 1996 was passed, the US media and telecommunications markets are concentrated in a way that has not been seen for a century: a handful of global, vertically integrated media companies—Verizon, AT&T, Comcast, Charter Communications, Time Warner—own most of the domestic media today, including television and radio networks, film studios, newspapers, and, of course, commercial Internet service providers. 77. “Louis Rossetto Sr., 78, Typesetting Executive,” New York Times, July 31, 1991. 78.

Jihad vs. McWorld: Terrorism's Challenge to Democracy
by Benjamin Barber
Published 20 Apr 2010

16 These questions suggest that, after looking at the four distinctive elements of film, television, books, and theme parks and how they have become at once both internationalized and Americanized, we will need to take notice of the new merger and acquisitions frenzy in the information sector—a vertical integration frenzy in the name of free choice and free markets that could result in a monopoly more perilous to liberty than any dreamed of by mineral and durable goods megamonopolists like John Rockefeller, Sr., or Andrew Carnegie.17 6 Hollyworld: McWorld’s Videology TO WHOM OR to what belongs this expiring century?

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(books) Capital Cities/ABC (newspapers, broadcasting) Cox Communications (newspapers) CBS (broadcasting) Buena Vista Films (Disney; motion pictures) Dow Jones (newspapers) Gannett (newspapers) General Electric (television) Paramount Communications (books, motion pictures) Harcourt Brace Jovanovich (books) Hearst (newspapers, magazines) Ingersoll (newspapers) International Thomson (newspapers) Knight Ridder (newspapers) Media News Group (Singleton; newspapers) Newhouse (newspapers, books, magazines) News Corporation Ltd. (Murdoch; newspapers, magazines, motion pictures) New York Times (newspapers) Reader’s Digest Association (books) Scripps-Howard (newspapers) Time Warner (magazines, books, motion pictures) Times Mirror (newspapers) Tribune Company (magazines) Vertical integration and horizontal integration go hand in hand: the imperative is to own deep and own wide. If you own movies, buy book companies and theme parks and sports teams (Paramount acquiring Simon & Schuster, Viacom buying Paramount). If you own hardware, buy software (Sony swallowing Columbia). If you own television stations, buy film libraries (Turner imbibing MGM’s library).

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Mandl (chief executive officer of AT&T’s Communications Services Group) says in explaining AT&T’s $12.6 billion projected buyout of McCaw Cellular Communications Inc. (it didn’t quite come to pass), “we’d like to see the AT&T brand on a national basis. We can offer end-to-end service.”4 The key to it all remains the informational/creative core, the software. In the terse words of Sumner Redstone, “software is the name of the game.”5 The vertical integration of media is a relatively new phenomenon. Bagdikian’s careful record-keeping suggests that most newspapers and magazines remained independent from the end of World War II into the 1970s. The early mergers occurred within sectors, creating newspaper empires, book conglomerates, and movie studio mergers—an unwelcome intrusion of monopoly but one that respected the boundaries separating different kinds of information and entertainment and that studiously avoided the durable-goods production domains on which spectators and consumers depended.

A Pipeline Runs Through It: The Story of Oil From Ancient Times to the First World War
by Keith Fisher
Published 3 Aug 2022

By 1888 over 70 per cent of crude shipments in the United States would be by pipeline, almost entirely by Standard’s National Transit Co.47 Standard Oil, through the control it wielded over crude transit, was now able to dictate which refineries would survive and how large they could grow. The only way to operate independently of the Standard alliance was by adopting Tidewater’s strategy of ‘vertical integration’ of operations, from production, through transit, to refining, designed to prevent Standard from holding all hostage by controlling either of the latter two stages. Tidewater had to establish its own refineries, the Ocean Oil Co. and the Chester Oil Co., after several independents that its pipeline was intended to serve, such as the new Solar Oil Co. at Williamsport, were taken over by Standard.

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The nation had been rid of human slavery … but the conviction was universal that the country was in real danger from another kind of slavery sought to be fastened on the American people, namely, the slavery that would result from aggregations of capital in the hands of a few individuals and corporations controlling, for their own profit and advantage exclusively, the entire business of the country.114 STANDARD OIL, PRODUCERS AND INDEPENDENTS Through the 1880s and into the 1890s, Standard Oil continued to dominate the US oil industry by maximizing its control over oil transit – the key to its control over producers and refiners.115 Standard was quick to pre-empt the emergence of competitors who, following the vertically integrated example of Tidewater, might successfully forge an unbroken chain from production, through transit, to refining and marketing to achieve full operational independence. In 1883 Standard Oil trustee W.G. Warden, concerned about competition from independent gathering pipelines, wrote to Rockefeller, ‘We must prevent all such enterprises from making any headway and make it as discouraging as possible for any such to start – No difference how small such an enterprise may start, we must prevent it from taking root as far as we can do so by legitimate & fair means.’116 Thus, to prevent the Baltimore & Ohio Railroad from establishing an integrated oil business, in 1885 Standard made a rare, early purchase of a production site in West Virginia.

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Pattison, who had originally ratified the law, vetoed a first attempt to repeal it, arguing, ‘The inevitable effect would be to drive competing lines into consolidation or to put the shippers of this important product at the mercy of the great monopolies which might be able to secure and hold the controlling interest in the stock or bonds of competing lines.’129 The successes of Mellon’s and Emery’s vertically integrated oil enterprises were, however, notable exceptions to the rule of Standard Oil’s huge dominance over oil transit, refining and marketing. Since in most producing areas Standard was the sole purchaser of crude oil, local oil trading and the oil exchanges became virtually irrelevant, to the extent that from January 1895 Standard’s crude oil purchaser, Joseph Seep, took to dictating to producers a daily ‘posted price’.

The Great Fragmentation: And Why the Future of All Business Is Small
by Steve Sammartino
Published 25 Jun 2014

You have their attention, and that’s the asset that matters, especially when we’re living in a world of absolute channel explosion. There is only so much attention being handed out. The connection many of us already have is what large companies want most. We now live in the age of the one-person media company: ‘Nonglomerate’. We’re all nodes The vertically integrated mega corporate is being replaced by highly distributed horizontal networks of tiny nodes. We are those nodes. In the new media landscape a corporation, by definition, must now start as a single node, nothing but one single point of interest in the vast swathe of the internet. Now that the self-selected node can choose to create and attract attention and traffic, it can grow.

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Do expect marginalisation Our new digital world reveals unforeseeable alternatives to industry around every corner. While change is predictable, the new winners and the way they win often surprises. Small holes in the finance bucket are being created and it’s hard to see the revenue leaks being repaired. The next phase of finance will be for a far less vertically integrated service. More horizontal funding structures will emerge, each taking on parts of what banks offered, in ways we haven’t thought of just yet, and using means that technology hasn’t quite enabled yet. Banking revenue streams will be eroded by players who are not from the finance realm. New players and network connections will continue to be weaved through our financial system.

The People's Platform: Taking Back Power and Culture in the Digital Age
by Astra Taylor
Published 4 Mar 2014

(Counterintuitively, given his outspoken libertarian views, PayPal founder and first Facebook investor Peter Thiel has declared competition overrated and praised monopolies for improving margins.30) What’s more, many of the emerging info-monopolies now dabble in hardware, software, and content, building their businesses at every possible level, vertically integrating as in the analog era. This is the contradiction at the center of the new information system: the more customized and user friendly our computers and mobile devices are, the more connected we are to an extensive and opaque circuit of machines that coordinate and keep tabs on our activities; everything is accessible and individualized, but only through companies that control the network from the bottom up.31 Amazon strives to control both the bookshelf and the book and everything in between.

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There are other possibilities worth considering. To prevent what may be the next wave of consolidation, Tim Wu, coiner of the term “Net neutrality,” argues that a “Separations Principle” is necessary, erecting a firewall between firms that transport and create information. Wu is worried about the potential vertical integration of companies like Verizon and Google or AT&T and Facebook into “information empires,” but his principle would also have more immediate effects. Apple, for example, would not be able to sell or stream music or movies at a loss to buoy the sale of hardware; Amazon would be prevented from pursuing its ambition of controlling the book market (a scenario in which most volumes are either published by or self-published through the company and tethered to the Kindle platform); and Google would be forbidden to promote its own products above competitors’ in search results.

The Digital Party: Political Organisation and Online Democracy
by Paolo Gerbaudo
Published 19 Jul 2018

The mass party displays a number of distinctive features: a mass base which contributes to the functioning of the party both financially and with its political militancy; a large and permanent bureaucracy occupied by professionalised political personnel; a highly hierarchical and centralised organisational structure; a capillary territorial presence; the vertical integration of cultural and social annex organisations; a clear class base (the working class for the left and the bourgeoisie for conservative parties); an explicit and persistent ideological orientation of the party’s strategy and policy platform.53 Mass parties were the parties of a mass society and were instrumental to the functioning of these societies as the vehicle for the social integration of the masses in the political arena, in response to the atomisation created by industrialisation and secularisation, as proposed by Sigmund Neumann and Moisei Ostrogorski.54 Pointing to the analogy between the mode of production and the mode of organisation in different historical eras, Italian intellectual Marco Revelli proposes that the mass party was the political equivalent to what the Fordist factory was in the economic sphere.

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It resembled it in its ‘gigantism’ and its effort ‘to incorporate large masses of men in a stable way, by arranging them in solid and permanent structures’.55 The party was conceived as a factory where politics had to be produced through collective ‘political work’, inspired by Taylorist criteria of efficiency and rationalisation, as if politics were some sort of manufactured good. In this structure, the militants were, according to Revelli, the equivalent of workers in the assembly line, the local cadres being the production technicians and the central committee the corporate board of directors. Members were vertically integrated starting from their place of abode, through the presence of local sections and cells, in turn coordinated in regional or provincial councils, and from there in national assemblies responsible for electing the party leadership. The analogy between the Fordist factory and the mass bureaucratic party goes a long way towards explaining why the crisis of the former has been accompanied by a decline of the latter.

The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power
by Michael A. Cusumano , Annabelle Gawer and David B. Yoffie
Published 6 May 2019

In the longer term, however, driving competitors out of business ends up restricting consumer choice, which tends to lead to higher prices. At least, that is the theoretical argument against the kind of customer tying (for example, marketing different products and services to Amazon Prime members) and vertical integration (such as using information gained on third-party sales through the Amazon Marketplace transaction platform to enter those product segments directly) that Amazon has pursued.52 Historically, Amazon took advantage of a 1992 U.S. Supreme Court ruling that a U.S. state can require retailers to collect a sales tax only if they have a physical presence in that state.

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Microsoft, 181, 182 Vagenas, Andrew, 145–46 value geometric increases in digital platforms, 13 starting with a value proposition, 65–66 of transaction platforms, 80–81 Uber’s value proposition, 78 Van Alstyne, Marshall, 82–83, 111 Verge, The (news and media network), 132 Vertex, 232 vertical integration, 201 Vestager, Margrethe, 184 video games, 43–44 violence ethnic and religious violence related to false news, 188 extremist content, 203–4 mass shooting misinformation and harassment, 203 responsibility for, 178–79, 187 on YouTube, 203–5 See also hate speech virtual reality applications, 143–44 VMWare, 162–63 voice recognition, 220–23 Walmart competitors, 154–55 Flipkart purchase, 158–59 growth of, 153–54 Jet.com purchase, 156–58 whistleblower raises concerns, 158 Wang, Cher, 143 Waze (Google), 51–52, 53 WeChat (China), 41, 58, 101 WhatsApp (Facebook), 53, 77, 78 White Pages, 37 Whitman, Meg, 119–20, 123 Whole Foods, 56 Williams, Ev, 89 wind farm benefits from industrial Internet, 161 winner-take-all or winner-take most outcomes overview, 25, 31–32, 49, 214–17, 215t AT&T’s monopoly, 36–37 failed platforms resulting from, 109–10 hubris-related crashes, 124–25 See also platform market drivers Wired (magazine), 128, 132, 188 Wojcicki, Susan, 203–4 WordPerfect, 87 workforce, contract labor vs. employees overview, 192–93 Deliveroo, 195–96 FedEx, 196 Handy, 193–95 Xanadu (Canada), 227 Yahoo!

India's Long Road
by Vijay Joshi
Published 21 Feb 2017

Another source of disquiet about dominant firms in India’s private sector is that so many of them are ‘business houses’, i.e. conglomerates that are controlled by ‘promoter’ families and family trusts. It has been claimed, quite rightly, that the prevalence of conglomerates is not surprising, given the weakness of the state: it makes sense to do things in-​house and in vertically integrated operations since the infrastructure is poor, the legal system is slow at contract-​enforcement etc.23 But is promoter/​family control a healthy phenomenon? So far, overall, business houses have stood up to competitive challenges admirably. But family-​controlled firms have well-​ known problems such as loss of efficiency over time due to an inability to prevent management falling into the hands of incompetent offspring.

…

The crucial point is that if the government chooses to privatize, and indeed even if it does not, the operation of a natural monopoly must be accompanied by regulation to prevent exploitation of consumers. Indeed, regulation is unavoidable in any network industry (e.g. electricity) that includes some natural monopoly element, even if other parts of the industry produce outputs which can be competitively produced. It follows that vertically integrated monopolies (like electricity) should be broken up, state or private monopoly being retained O w n e r s h i p, I n f r a s t r u c t u r e , a n d t h e E n v i r o n m e n t [ 117 ] 118 only where technically necessary, with the whole structure subject to an independent regulator. Although the discussion in this section has focused on non-​financial PSEs, it applies closely to financial PSEs such as public sector banks (PSBs).

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This deters investment and modernization, not only in electricity distribution but in electricity generation too.19 It does not help that the Constitution allows central and state governments to act at cross purposes since electricity is a ‘concurrent subject’. O w n e r s h i p, I n f r a s t r u c t u r e , a n d t h e E n v i r o n m e n t [ 121 ] 122 The Electricity Act of 2003 was supposed to change all this. On paper, it is excellent. It introduced a new framework requiring each state to unbundle its vertically-​integrated SEB into transmission, generation, and distribution companies, privatise if desired, allow competition and private sector entry in generation and distribution, and set up a regulator to issue licences and set tariffs. ‘Open access’ was mandated by the Act. This meant that large consumers were supposed to be able to buy electricity from multiple sellers (including directly from producers).

The Idea Factory: Bell Labs and the Great Age of American Innovation
by Jon Gertner
Published 15 Mar 2012

During the trial, the judge would eventually hear a mountain of persuasive evidence put forward by government litigators; one after another, competitors would testify how Ma Bell had thwarted their efforts to enter the telecommunications business. At the same time, one could view the trial as a great war over ideas. To William Baxter, the driving force at Justice, AT&T’s fundamental problem was that it was both vertically and horizontally integrated. Vertical integration meant that the company controlled its research, development, manufacturing, and deployment. One way to visualize the verticality was to see Ma Bell as a series of boxes, stacked one atop another, each representing essential units of the company. The bottom box, where ideas and innovations began, was Bell Laboratories.

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The bottom box, where ideas and innovations began, was Bell Laboratories. Above that was Western Electric, where those innovations were in turn mass-produced. Above that was the top box, AT&T, which deployed the new technologies in the long-distance and local markets.23 Baxter did not object to the idea of vertical integration. It made sense that companies should fund research and bring the fruits of those investments to the market. It was the horizontal integration he considered unacceptable. Horizontal integration could be seen as a series of boxes, too, but these boxes stretched from side to side, or really from coast to coast, instead of from top to bottom.

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Pierce, “Mervin Joe Kelly: 1894–1971, National Academy of Sciences, Biographical Memoir, 1975. 12 Among academics, the widely accepted notion that Bell Labs was exclusively a “closed” innovation model—whereby every innovation is started and developed within the firm, as opposed to a more modern “open” innovation model, whereby a parent company depends collaboratively on customers and outside innovators for ideas—deserves more consideration. Without question, AT&T depended upon its vertical integration for innovations. But Bell Labs’ staffers were open to a stream of outside ideas through regular contacts with other industrial labs, military contractors, academic affiliates, patent licensing partners, and participants in weekly Bell Labs symposiums. Managers also acquired superior technologies from outside when warranted.

Connectography: Mapping the Future of Global Civilization
by Parag Khanna
Published 18 Apr 2016

Global infrastructures are morphing our world system from divisions to connections and from nations to nodes. Infrastructure is like a nervous system connecting all parts of the planetary body; capital and code are the blood cells flowing through it. More connectivity creates a world beyond states, a global society greater than the sum of its parts. Much as the world evolved from vertically integrated empires to horizontally interdependent states, now it is graduating toward a global network civilization whose map of connective corridors will supersede traditional maps of national borders. Each continental zone is already becoming an internally integrated mega-region (North America, South America, Europe, Africa, Arabia, South Asia, East Asia) with increasingly free trade coupled with intense connectivity across their thriving city-states.

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China seeks foreign raw materials and technology, not foreign territory. In our haste to make analogies between today’s global dynamics and pre–World War I Europe, most observers have missed the enormous differences. European nations traded heavily across each other prior to World War I, but they did so as vertically integrated mercantile empires exploiting raw materials from their own vast colonies. They traded in finished goods and didn’t outsource production to each other; we did not have today’s international manufacturing networks in 1895. The nineteenth and twentieth centuries brought trade interdependence; in the twenty-first century, we have complex supply chain dispersal as well.

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Throughout the first decade of the twenty-first century, Japan, Korea, Taiwan, and China continued massive spending on boosting innovation ecosystems through R&D, subsidies, and guaranteed purchases of companies’ output.7 A typical example is Japan’s backing of NEC’s satellites to boost its market share against American and European firms. Today, Toyota City near Nagoya and Samsung Town in Seoul are vertically integrated ecosystems of research, design, management, and components—hundreds of companies treated as extensions of the mother ship itself. When countries compete, they do so with their entire supply chains. That includes America: Washington’s bailout of General Motors was not only to salvage one company but to prevent its failure from wiping out all its secondary suppliers—and about one million jobs—across the country.

Coffeeland: One Man's Dark Empire and the Making of Our Favorite Drug
by Augustine Sedgewick
Published 6 Apr 2020

Their San Francisco–based cattle-raising/butchering/meatpacking operation was the only agricultural concern to rank among the country’s two hundred largest industrial enterprises in 1900, and its workforce was rigidly structured along racial and ethnic lines.25 Adams’s academic approach to the question of labor was based on his experience in the field. His work for two vertically integrated operations had pointed his thinking in a direction that diverged from the traditional California model of racial and ethnic competition. Instead, he ascribed to the state’s diverse social groups distinct traits. “Negro Laborers” took “readily to handling horses and mules” but were “notorious prevaricators”; “Mexican Laborers” were “peaceful, somewhat childish, rather lazy, unambitious, fairly faithful” but “not particularly adept at milking”; Japanese were “good hand workers” but “not mechanically inclined”; and so on.

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These high margins weren’t a problem for neighborhood grocers before World War I, because they generally didn’t compete against each other on price.18 That changed during the war, when increases in food prices made small independent grocers especially vulnerable to competition from new, centrally managed, vertically integrated chains of hundreds or thousands of stores. In many cases, the chain stores set up shop in small grocers’ coffee margins, cutting off their business at the pressure point of price, and no chain more so than the immense coffee business known as Great Atlantic & Pacific Tea Company—the A&P. Even in 1863, when it was one tea shop among many in Lower Manhattan, the A&P called itself “great.”19 Historian Richard Tedlow has described why tea was a good business “for an ambitious grocer to concentrate on” at the time.

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Even in 1863, when it was one tea shop among many in Lower Manhattan, the A&P called itself “great.”19 Historian Richard Tedlow has described why tea was a good business “for an ambitious grocer to concentrate on” at the time. The great distance between tea plantations and American stores, and the many businesses traditionally involved in the process of getting the product from one to the other, meant that retail tea prices were usually high. A&P found an advantage through vertical integration, bringing the functions of tea importer, roaster, wholesaler, and retailer together under one roof, and often beating other grocers’ tea prices by a third. Success in tea subsidized the growth of its stores. A&P had 200 outlets at the turn of the twentieth century and 650 by 1914. These early stores were similar to independent neighborhood grocery stores.

How to Fix Copyright
by William Patry
Published 3 Jan 2012

Companies that buy the copyrights and then sell commodities embodying someone else’s creativity hopefully provide essential marketing skills and a revenue stream, but they are not engaging in creative activity themselves.111 Not everything that goes on in a media company can fairly be characterized as reliant on copyright. The largest purchasers and sellers of copyrighted works are large, vertically integrated multinational companies that generate revenue from thousands of sources, many of which have nothing to do with copyrighted works, including trading in monetary fluctuations, trading in financial instruments, real estate ventures, and operating theme parks. Counting total revenues at such companies as dependent on copyright because some of the revenues involve selling copyrighted works is poor economics.

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To recap, there is the highly result-oriented initial classification of some industries, but not others, as being part of the creative industries.Then, the aggregate figures for those industries are derived by attributing all revenues generated as being dependent on copyright, as if nothing would have been done without copyright protection, as if every revenuegenerating part of every company in the industry is directly involved in producing works dependent on copyright, and without ever specifying what level of copyright is required even for those few works that may remotely be said to be copyright dependent. These are vast, vertically integrated multinational companies, with revenue sources from thousands of activities, many of which have nothing to do with the production or distribution of copyrighted works.147 Creativity Can’t Be Measured Beyond all this, no efforts are ever made to measure creativity even by those who loudly assert that copyright is necessary to increase creativity.148 If we want to increase creativity levels we have to be able to measure those levels; otherwise we can’t tell if creativity is being increased or decreased.

Narconomics: How to Run a Drug Cartel
by Tom Wainwright
Published 23 Feb 2016

The opium gum is boiled with water and lime in order to extract morphine, which is then turned into heroin with the help of a few readily available chemicals: sodium carbonate, hydrochloric acid, and a bit of charcoal. By now barely 5 percent of its original weight, the finished product is ready for shipment. Keeping the business vertically integrated, from production to distribution, allows the cartel to reap greater rewards. “The profit margins are higher on heroin—there’s no payback to Colombia,” says Kevin Merrill, the assistant special agent in charge of the DEA’s division in Denver, Colorado. Mexican cartels have historically been reluctant to enter the heroin market for two reasons.

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The amount of heroin seized at the US border with Mexico octupled, from about 250 kilograms in 2005 to more than 2,000 kilograms in 2013. For the United States, the DEA figures that Mexican cartels now supply virtually all the heroin in the West, and about half of that in the East (the rest is mostly from Colombia and Afghanistan). The vertical integration of the heroin business has been maintained, with the cartels selling the drug through cells of mainly Mexican and Honduran dealers. Members of the cells are recalled to Mexico every four to six months, outfoxing the DEA’s attempts to infiltrate the groups. Dealers work the streets between 6:00 a.m. and 5:00 p.m. before counting up the proceeds and reporting back to base in Mexico, where the “command and control” still takes place, Merrill says.

Celebration of Fools: An Inside Look at the Rise and Fall of JCPenney
by Bill Hare
Published 30 May 2004

Putting 20 designer pieces into each Macy's meant a production run of 260. For Penney, it would mean 32,000. And the flip side of meeting the production challenge, of course, seemed to be turning the designer brand into a commodity. So a big Penney contract did not seem to be worth it to the majority of upscale suppliers. It was a lose-lose situation. Vertical Integration! Still, there were some victories. In addition to men's designer Lee Wright's signing, Halston, who was fading in stature but still well known, agreed to design a women's line for Penney. Also, the company's developing private brand expertise in wool was revved up further. If more big names wouldn't sign on, Penney would produce and promote more private brand apparel.

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Now six "merchandising divisions" had been created, a grab-bag term relating to multiple functions and not just actual "merchandising" per se. Each division contained three general areas along with support functions: merchandise (buying), merchandising (presentation), and marketing (promotion). The idea was that vertically integrated divisions— women's, men's, children's, home, home improvement, and automotive—would spawn faster, more focused results. Overall plans would still come from the executive suite, but important day-to-day moves would be decided much closer to the action. Bill Howell, the former field leader who had been handpicked by Seibert over the other finalists, Bob Gill and Dave Miller, immediately praised this new arrangement (to which he had contributed).

Rebooting India: Realizing a Billion Aspirations
by Nandan Nilekani
Published 4 Feb 2016

As the accompanying diagram illustrates, taxes added up at each stage, and attempts to avoid this ballooning tax bill created distorted incentives for manufacturers. T. Koshy, a former executive director at the National Securities Depository Limited, who has worked extensively in the field of taxation, gives us an example. ‘The cascading tax system incentivizes vertical integration so that the same firm tries to carry out as many of the intermediate manufacturing steps as possible in order to pay less tax.’ In our example, that would mean one firm controlling the entire manufacturing and supply chain, all the way from making yarn to selling the finished shirt in a retail store.

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Equally important, the system is set up to be self-policing; the taxes from every stage feed into the next, and if one link in the chain fails—one manufacturer does not file taxes correctly, for example—the entire chain collapses. Since it applies only to the value added by each manufacturer and not to the total value, VAT also encourages specialization, rather than the kind of vertical integration that arose in the earlier cascading tax regime. Increasing the levels of transparency and making it harder to game the system result in increased revenue collection and a lesser burden of oversight upon the tax authorities. Koshy adds, ‘VAT is a truer measure of economic growth than creating artificial incentives through tax holidays and exemptions.’

Red Flags: Why Xi's China Is in Jeopardy
by George Magnus
Published 10 Sep 2018

Foreign trade became a state monopoly, the main objectives of which were self-sufficiency and an import structure tailored by the demand for essential producer goods. Plans would replace prices as the means of deciding what would be produced, how resources would be allocated and what people would get paid. Industrial firms were largely vertically integrated enterprises, which controlled and managed employment strictly, and which, from about 1951, took on typical urban spending and cradle-to-grave care commitments, commonly known as the ‘iron rice bowl’. Agriculture was organised on a collective basis, migration from the countryside was subject to rigidly applied regulations and controls, and there was no labour mobility.

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When Trump visited China later in the year, the US side made hay over $250 billion of trade agreements. Both sides had an interest in hailing breakthroughs, but little of substance was achieved. The Obama administration had actually agreed the resumption of beef imports. China’s appetite for natural gas is limited because vertically integrated coal to chemical companies are much more likely to burn coal. Although China ostensibly welcomed the admission of credit-card companies, and credit-rating agencies, and the easing of limits on foreign ownership of financial services companies, its enthusiasm and tolerance are much less than its rhetoric.

Ghost Road: Beyond the Driverless Car
by Anthony M. Townsend
Published 15 Jun 2020

All of this points toward diversification for taxis in the driverless revolution, rather than a new round in ride-hail’s endless race to a profitless bottom. Uber is clearly turning in this direction. “We want to be the Amazon for transportation,” CEO Dara Khosrowshahi declared in 2018, as the company moved toward forming a new kind of vertically integrated urbanmobility empire. “We are going to also offer third-party transportation services. . . . All of it to be real-time information, all of it to be optimized for you, and all of it to be done with a push of a button,” he promised. Coming off a wave of acquisitions, investments, and partnerships that brought a vast array of bike-share, car-share, and scooter-share services under its umbrella, Khosrowshahi was well on his way to delivering on this bold vision.

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See driverless shuttles Shyp, 133 Sidewalk Labs, 209, 210, 211, 222, 232 Silverdome (Pontiac, MI), 196n SilverRide, 95 Singapore, 97, 167, 169, 177, 209, 211 singletons, 237–38 Singularity predictions, 234–35, 236–38 Skype, 56 smartphones, 13, 64, 89, 90, 139, 169 see also mobile phones SoftBank, 176, 176–78, 238 software trains, 70–71, 70–72, 197, 200–201, 202, 204, 206 Son, Masayoshi, 176, 178 Space10 (IKEA), 72–73 specialization overview, 16 shifts in daily travel patterns, 53–54 of taxibot rides, 95–97 of traditional automobiles, 52, 80 vehicular variety increase, 16, 18, 52–55 see also specific types of AVs Speedostat, 24 Sprinter delivery vans (Mercedes), 125 Stae, 247 Standard Oil, 174 Starship conveyors, 55–56, 57, 125, 192 Starship Technologies, 56, 57, 124–25 Starsky Robotics, 46 status quo bias, 49–50, 52 steering wheel introduction, 4 Steffens, Lincoln, 180 store closures in US, 117–18, 121 streetcars, 58, 59, 88–89, 106, 174–75, 180–81, 186 “street furniture,” 77 suitcases, semi-autonomous, 125 Sullenberger, Chesley, 45 Superintelligence (Bostrom), 236–37 supermarket, origins of, 116 Superpedestrian, 66 surge pricing, 17, 87, 181 Swift Nick, 161 task model for computerization of work, 150–54, 151, 155 taxibots (AV cabs) computer models of growth, 97–98, 99 doubts about cost-effectiveness, 97–98 impact on taxi business, 94–95 overview, 60–61, 94–95 price savings, 94, 96 rides for pregnant women, 96–97 specialization of rides, 95–97 traffic congestion and, 99 Waymo self-driving taxi service, 8, 46, 97, 230, 240–41 see also mobility as a service taxis automation predicted by 2030, 10–11 impact of taxibot takeover, 94–95 meters in, 169 number of vehicles, 10 ride-hail push to deregulate the taxi business, 40 Waymo self-driving taxi service, 8, 46, 97, 230, 240–41 Teague, 127 TECO Line streetcar (Tampa, FL), 58, 59 Teetor, Ralph, 24, 26 Tel Aviv’s traffic gridlock, 85–87, 88 Tesla, 26–29, 44, 60, 62, 231 three big stories of the driverless revolution, 16–20, 187–88, 238, 248, 253 see also financialization of mobility; materialization; specialization Thrun, Sebastian, xiv, 7, 8 ticketing in transit systems, 89, 90–91, 93, 109, 110–11 time wasted on commuting, 9, 12, 30–31 Toffler, Alvin, 120 toll roads in Great Britain, 162–63 Toronto, Canada, 209–10, 213–14, 222 traction monopolies investors, 176–78, 182–83 in New York City, 174, 174, 180 in Philadelphia, 180 SoftBank, 176, 176–78, 238 in streetcar era, 174, 174–75, 180 traffic congestion cost of time wasted, 9, 12, 30 driverless shuttles and, 106 predicted effects of AVs, 9 ride-hail and, 168 taxibots and, 99 see also congestion pricing trafficgeddons, 85–86 Trafi, 109, 216 transects of the driverless city, 187–88, 188–89, 194–95, 198–99, 200–201, 206–7, 208 transit oriented development (TOD), 200, 202, 203–4 transit systems autonomist contempt for, 214–15 impact of ride-hail, 215–16 as mobility integrators, 216 response to driverless revolution, 214–17 ticketing in, 89, 90–91, 93, 109, 110–11 as transportation utilities, 216 workforce changes, 216–17 TransMilenio (Bogotá), 69 Trikala, Greece, 102–3 trip chaining, 54 Tron (film), 137 trucks and trucking accident risks, 156 automated fleets impact on economic risks, 156–58 automation and types of truck drivers, 153–54 freight AVs and, 125–26 industrial sprawl and, 12–13 investment in self-driving truck startups, 152 “land trains” and “road trains,” 69 last-mile delivery, 121–29, 154, 218 platoons and platooning, 68–69, 70–71 self-driving tractor-trailers, 68, 122 software trains, 70–71 volatile energy costs, 157 Tsukuba, Japan, 6, 8, 216 turnpike trusts in Great Britain, 162–63 Turpin, Dick, 161 Uber betrayal of cities, 181 Careem purchase by, 177 competition with Lyft, 177–78, 179 congestion pricing, 179, 181 dynamic pricing, 181 fatal AV–pedestrian accident, 231 Greyball program, 178 initial public offering, 97, 177, 181 Jump bike-share platform, 202 limited global footprint, 98 market cap, 97 Micromobility Robotics, 67 number of vehicles, 10 partnerships with public transit, 110–11 relationship with transit, 215 SoftBank and, 177 specialization and variety of rides, 95, 96, 110–11 subscriptions, 244 surge pricing, 17, 87, 181 taxibots, 97 traffic congestion and, 168 Uber Eats, 124 vertically integrated urban-mobility empire, 98 Udelv, 57–58 unmanned aerial vehicles (UAVs), 246 UPS, 116, 120, 127, 130 urban design and driverless cities automation and urban concentration, 186–87 automobiles and urban expansion, 185 complete streets (shared streets), 208–9 core, 187, 188, 188–96, 194–95 desakota, 187, 189, 205–8, 206–7 freight tunnels, 211 fulfillment zone, 187, 188, 196–99, 198–99 infill housing, 204, 253–55 legibility, 229–30, 231 megablocks, 209–10 microsprawl, 187, 189, 200–201, 200–205, 243 parking, 189–93 population growth and home building, 253–54 separation of people and vehicles, 208–12, 210 transects, 187–88, 188–89, 194–95, 198–99, 200–201, 206–7, 208 transit oriented development (TOD), 200, 202, 203–4 urban growth since 1950, 186 Urbanetic, 58 Urban Mobility in a Digital Age, 88 urban ushers, 76–77, 77–79 Vélib system (Paris), 63 VeoRide, 67 Via, 107 Vickrey, William, 165–67, 168, 169, 172 Vinge, Vernor, 233–34 Vision Fund, 176, 178 Vitruvius, 169 von Neumann, John, 234 “Walking City” (Herron), 74 warehouseless distribution systems, 157–58 Waste Management, 142 wayfinding, 229–30 Waymo improvement in rate of disengagement, 42 lidar cost reduction, 35 market cap, 97 market share goal for 2030, 11 remote human safety monitors, 46, 98 self-driving taxi service, 8, 46, 97, 230, 240–41 see also Google Waze, 86–87 Webb, Kevin, 233 Where Do Cars Go at Night?

Why Aren't They Shouting?: A Banker’s Tale of Change, Computers and Perpetual Crisis
by Kevin Rodgers
Published 13 Jul 2016

Thus it was that tens of thousands of individual loans, each of which was risky and definitely ‘sub-investment grade’ (a rating lower than BBB, or, less kindly, ‘junk’), were transformed by the power of combination, blending and high-speed computerised mathematics into securities where, according to S&P’s definition of AAA, ‘the obligor … has extremely strong capacity to meet its financial commitments’.16 Designing the deals was made easier by the credit agencies’ helpful practice of making their evaluation software available to banks – this allowed the desired ratings to be built into structures right from the drawing board. It was computer-aided design for CDOs. Through 2005, 2006 and 2007 the variants kept coming. In July 2006, to great internal fanfare, Deutsche acquired MortgageIT, a US mortgage originator, for $429 million. ‘It is a key element of the Bank’s build-out of a vertically integrated mortgage origination and securitization platform [and] will provide significant competitive advantages, such as access to a steady source of product for distribution into the mortgage capital markets’, said the press release in the rather bland manner of such things.17 What it meant was that the one-stop shop was getting yet another aisle and growing still further as a result.

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The ‘steady source of product’ was more loans to be packaged into CDOs for eager investors, thus solving the perennial problem of finding enough assets for them to buy. In truth, we at Deutsche were a little late to this particular party; our rivals at the big US banks had already bought other originators. Lehman Brothers – a giant in the mortgage market – had bought five. This vertical integration was an attempt to simplify, or at least internalise, the complex chain of deals behind any CDO: a broker would persuade a borrower to take out a loan from the originator; that loan would be sold from the originator to a bank (or, rather, to a bank-owned special purpose vehicle); it would then be repackaged and sold on to the end investor.

Pinpoint: How GPS Is Changing Our World
by Greg Milner
Published 4 May 2016

Atari, the company he cofounded in the early seventies, marketed simple video games that utilized chips and logic gates, but no microprocessor—essentially, computer games that required no expensive computer—and had a huge hit with Pong. These games first appeared in bars and taverns—as with games like darts and pool, they were an inducement for customers to stay and order more drinks—but their popularity soon merited their own dedicated arcade spaces. Bushnell’s next step was to vertically integrate by moving these games back into taverns. Except now, the “taverns” would be his own chain of pizza parlors, Chuck E. Cheese’s Pizza Time Theatre, heavily stocked with video games, their incessant bleeps and chirps competing with the sound of “live” music performed by a band of anthropomorphic animatronics.

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“The car companies were all brain-dead. We could show them that they could sell navigation systems all day long for $1,500 to $2,000, with an installation time of just two hours. I have no idea what their little minds were thinking, but it was really pedestrian.” Bushnell’s mind once again turned to vertical integration. He decided that the company’s most valuable product was the map data Etak had synthesized for use in the devices. Reasoning that people with telephones received free Yellow Pages—a $9 billion advertising market at the time—why not sell Etak devices loaded with paid merchant info? “That was our core plan: sell the equipment and give away the mapping software loaded with McDonald’s and Chevron Oil,” he says.

Postcapitalism: A Guide to Our Future
by Paul Mason
Published 29 Jul 2015

By 1915, two industrial giants dominated the German electrical sector; the chemical, mining and shipping industries likewise each had just two dominant players. In Japan the whole economy was dominated by six zaibatsu, conglomerates that had begun as trading companies but evolved into industrial empires, vertically integrated around mining, steel, shipping and weapons with a powerful banking operation at the centre. By 1909, for example, Mitsui produced at least 60 per cent of Japan’s electrical engineering output.10 To create these massive companies, finance was organized in a new way. In the USA, Britain and France, the stock market and investment banks drove the process.

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During the war, both Lenin and the Bolshevik theorist Nikolai Bukharin had produced works inspired by Hilferding, each drawing the conclusion that finance-dominated capitalism was proof of the system’s imminent doom. Lenin called this new, declining model ‘imperialism’, and defined it as ‘capitalism in transition’. The scale of organization – by vertically integrated corporations, cartels and the state – meant that the economy was actually becoming socialized under capitalism: ‘Private property relations,’ Lenin wrote in Imperialism (1916), ‘constitute a shell which no longer fits its contents, a shell which must inevitably decay if its removal is artificially delayed, a shell which may remain in a state of decay for a fairly long period … but which will inevitably be removed.’19 Bukharin’s pamphlet, written in an all-night library in New York in 1915, went further.

Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time
by Howard Schultz and Dori Jones Yang

Starbucks has an unusual approach to business, one that is perhaps unique among brand-name consumer-products companies. We’re so fanatical about quality control that we keep the coffee in our hands every step of the way from the raw green beans to the steaming cup. We buy and roast all our own coffee, and we sell it in company-owned stores. That’s vertical integration to the extreme. Why? The answer can be found in the last cup of lousy coffee you drank. Unlike shoes, or books, or soft drinks, coffee can be ruined at any point from its production to its consumption. To begin with, the beans themselves could be poor. They can be roasted wrong. If the beans aren’t fresh, if they’re ground wrong, if they’re brewed with too much or too little water, if the water tastes bad to begin with, the coffee can taste wrong.

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Buying ahead was our normal strategy of protecting ourselves, the theory being that it was both necessary to ensure our inventories and a good investment for Starbucks’ capital. Long-term contracts also allowed us to lock in the more limited supplies of top-quality coffee. Overall, we were in a better position than many specialty coffee companies because we are vertically integrated: We buy and roast all the coffee we sell, rather than purchasing pre-roasted beans from independent roasters. After the frost hit, I was relieved to hear we had so much inventory on hand. But what if green coffee prices kept rising? Should we buy more coffee now before they rose even further?

A Small Farm Future: Making the Case for a Society Built Around Local Economies, Self-Provisioning, Agricultural Diversity and a Shared Earth
by Chris Smaje
Published 14 Aug 2020

These differential tracks of modernisation, and their links to farming, become especially evident in the origins and spread of new infectious diseases like Ebola, novel flu strains and the novel SARS-CoV-2 virus responsible for the COVID-19 pandemic. The full story of these diseases is still emerging and is far too complex to tell here, but it involves worldwide disease transmission pathways established not only by cheap mass travel but also by a globalised meat industry dominated by a few vertically integrated multinational companies, a focus on intensive production of pigs and poultry with whom humans share certain virus susceptibilities, the disturbance of wild ecosystems for agriculture and bushmeat harvesting, and the disturbance of human geographies.95 In any given outbreak, the initial smoking gun may be a large industrial poultry or pig unit, a backyard one where poultry more readily interact with wild birds, or poor farmers and foragers pushing into wilderness frontiers and harvesting bushmeat.

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That’s certainly one strand of the capitalist story, and it’s still in evidence, especially in emerging sectors, but generally less than in the early heyday of industrial capitalism. From the latter part of the 19th century, the familiar manifestation of capitalist industrialism came to be the vast horizontally and vertically integrated corporation, which in numerous ways was integrated with and not autonomous from centralised states and government. Though farming and food production has never been as industrialisable as manufacturing, much the same occurred: corporate plantation agriculture in tropical colonised countries and agribusiness models of the kind pioneered in Chicago, where cowboys and small-scale prairie farmers were the initial feedstock for an increasingly mechanised global distribution system of meat and grain that ultimately dispensed with them in the Global North.116 A common image we still have of capitalism is the innovative entrepreneur opening up a new and lucrative market niche (the alternative farming sector has its own versions of this) with the invisible hand of the market delivering public benefit (supply matching demand) out of private vice (profit-motivated self-interest).117 The idea is still routinely invoked as a justification of modern capitalism, but it’s out of date.

Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown
by Philip Mirowski
Published 24 Jun 2013

Grant makers, Fink argued, would do well to invest in change along the entire production continuum, funding scholars and university programs where the intellectual framework for social transformation is developed, think tanks where scholarly ideas get translated into specific policy proposals, and implementation groups to bring these proposals into the political marketplace and eventually to consumers.56 Although the language dealt in terms of “markets” and “consumers,” the reality was a vertically integrated set of operations, whose outlines were apparent by the 1980s. The expansion of the think-tank shell proceeded apace with the expansion of the MPS presence, as revealed in Figure 2.1. One can appreciate the amount of groundwork that had preceded the “breakout” decade of the 1980s for the neoliberal project described by Fink from this and other indicators of the activities of the thought collective

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By the 1970s, antitrust policies were generally repudiated in the United States, as neoliberals took the curious anomaly in American case law treating corporations as legal individuals and tended to inflate it into a philosophical axiom.104 Indeed, if anything negative was ever said about the large corporation, it was that separation of ownership from control might conceivably pose a problem, but this was easily rectified by giving CEOs appropriate “incentives” (massive stock options, golden handshakes, latitude beyond any oversight) and instituting marketlike evaluation systems within the corporate bureaucracy, rectifying “agency problems.”105 Thus the modern “reengineering of the corporation” (reduced vertical integration, outsourcing supply chains, outrageous recompense for top officers) is itself an artifact of the neoliberal reconceptualization of the corporation. This literature had a bearing on the crisis, since it was used to argue against aspersions cast that many financial firms were “Too Big to Bail,” and that the upper echelons in those firms were garnishing dangerously high compensation packages.

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The spectacle of shaming is not merely a lightning rod for burning resentment; nor is it just an inconsequential occasion for rubbernecking by people with truncated attention spans; it is also a technology for recasting economy and society. After all, what is the vast industry of “job retraining” than a government-subsidized walk of shame? The economy and the theater of cruelty have been merged into a vertically integrated conglomerate. It is a parable of the droves and the wishes. It can be deployed in a myriad of ways under a variety of circumstances; the question here is whether there is some special common denominator in the ways it has been used in a didactic sense in the last three decades. Shock jock or shock doctrine, it cannot be written off as merely a surefire expedient to divert attention.

Principles of Corporate Finance
by Richard A. Brealey , Stewart C. Myers and Franklin Allen
Published 15 Feb 2014

The architects of these mergers have pointed to the economies that come from sharing central services such as office management and accounting, financial control, executive development, and top-level management.3 Economies of Vertical Integration Vertical mergers seek to gain control over the production process by expanding back toward the output of the raw material or forward to the ultimate consumer. One way to achieve this is to merge with a supplier or a customer. Vertical integration facilitates coordination and administration. We illustrate via an extreme example. Think of an airline that does not own any planes. If it schedules a flight from Boston to San Francisco, it sells tickets and then rents a plane for that flight from a separate company.

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/ A Long-Term Financial Planning Model for Dynamic Mattress/Pitfalls in Model Design/Choosing a Plan 29-6 Growth and External Financing Summary Further Reading Problem Sets Finance on the Web 30 Working Capital Management 30-1 The Operating and Cash Conversion Cycles 30-2 Inventories 30-3 Credit Management Terms of Sale/The Promise to Pay/Credit Analysis/The Credit Decision/Collection Policy 30-4 Cash How Purchases Are Paid For/Speeding Up Check Collections/International Cash Management/Paying for Bank Services 30-5 Marketable Securities Calculating the Yield on Money-Market Investments/Yields on Money-Market Investments/The International Money Market/Money-Market Instruments Summary Further Reading Problem Sets Finance on the Web Part Ten: Mergers, Corporate Control, and Governance 31 Mergers 31-1 Sensible Motives for Mergers Economies of Scale/Economies of Vertical Integration/Complementary Resources/Surplus Funds/Eliminating Inefficiencies/Industry Consolidation 31-2 Some Dubious Reasons for Mergers Diversification/Increasing Earnings per Share: The Bootstrap Game/Lower Financing Costs 31-3 Estimating Merger Gains and Costs Right and Wrong Ways to Estimate the Benefits of Mergers/More on Estimating Costs—What If the Target’s Stock Price Anticipates the Merger?

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But such a contract can never allow for every conceivable change in the way that the activities may need to interact. Therefore, when two parts of an operation are highly dependent on each other, it often makes sense to combine them within the same firm, which then has control over how the assets should be used.4 Nowadays the tide of vertical integration seems to be flowing out. Companies are finding it more efficient to outsource the provision of many services and various types of production. For example, back in the 1950s and 1960s, General Motors was deemed to have a cost advantage over its main competitors, Ford and Chrysler, because a greater fraction of the parts used in GM’s automobiles were produced in-house.

Super Thinking: The Big Book of Mental Models
by Gabriel Weinberg and Lauren McCann
Published 17 Jun 2019

Moats are situationally dependent. The following are some cases in which they are used (not mutually exclusive): Protected intellectual property (copyright, patents, trade secrets, etc.) Specialized skills or business processes that take a long time to develop (for example, Apple’s vertically integrated products and supply chain, which meld design, hardware, and software) Exclusive access to relationships, data, or cheap materials A strong, trusted brand built over many years, which customers turn to reflexively Substantial control of a distribution channel A team of people uniquely qualified to solve a particular problem Network effects or other types of flywheels (as described in Chapter 4) A higher pace of innovation (e.g., a faster OODA loop) Elon Musk notably sparred with Warren Buffett on the concept of moats.

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It arguably had significant moat protection in all the categories mentioned above, successfully fending off competitors and reaping outsized profits for a century: Protected intellectual property: It held many photography patents and trade secrets. Specialized skills or business processes that take a long time to develop: They had a vertically integrated supply chain serving all sides of the market, from cameras to film to printing. Exclusive access to relationships, data, or cheap materials: It had many exclusive business deals, and being the biggest in the industry, it could negotiate to secure supplies more cheaply than competitors.

City: Urbanism and Its End
by Douglas W. Rae
Published 15 Jan 2003

No firm of that period had the organizational capacity to manage a workforce of 50,000 of a production process designed to reach national (even world ) markets on a massive scale. By 1910, direct ownership had been displaced at the center of the American economy by the joint stock corporation and its associated institutions—equity markets integrated across wide geographies, professional management, vertical integration, penetration of immense markets, and aggressive accumulation of capital. These changes were, however, linked to the prevailing technologies of the era. As Alfred Chandler, the great historian of American business, writes: The modern corporation had its beginnings in the eighteen fifties with the swift spread of the railroad network and the factory system during that decade.

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Recall that this is an era of corporate integration, both horizontal and vertical.22 Horizontal integration—combining competing firms in a single industry across the country—would diminish the grounding of top management in each city. This is because top management of the combined corporation would be located in one city, often distant from the cities in which most of the subsidiaries were located. Vertical integration—combining firms at each step, from raw materials to manufacturing to sales and distribution—would have something of the same effect on grounded leadership in the towns that might otherwise have been home 128 L I V I N G L O C A L 0 Upscale streets Nine Squares Homes of CEOs .5 1 Mile Figure 4.9.

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Each store was hooked up by huband-spoke supply chains to vast national corporations, among which A&P was an overwhelming leader by 1950—at which time this retail organization ranked second in total sales among all U.S. corporations, topped only by General Mo241 E N D O F U R B A N I S M Dixwell Ave. Whalley Ave. State St. Grand Ave. Congress Ave. Figure 7.7. Chain grocery stores deployed along arterial streets, 1935. tors. These companies were integrated across space and across multiple steps of food production. They thus constituted a classic example of vertical integration in a capitalist economy.46 From the viewpoint of a New Haven neighborhood, an A&P store constituted a large facility, providing a substantial stream of supply to families electing to use it. This was true even of the smaller A&P stores, often 30 by 40 feet, sometimes as little as 20 by 30.

The Power Law: Venture Capital and the Making of the New Future
by Sebastian Mallaby
Published 1 Feb 2022

But the Valley’s success in turning basic research into commercial products reflected the triumph of a less fashionable science: sociology. AnnaLee Saxenian, the Berkeley sociologist who has written perceptively about this phase in tech history, put her finger on the key difference between the Valley and its competitors.[3] In Boston and Japan, the electronics business was dominated by large, secretive, vertically integrated corporations: Digital Equipment and Data General, Toshiba and Sony. In contrast, Silicon Valley was a bubbling cauldron of small firms, vigorous because of the ferocious competition between them, formidable because they were capable of alliances and collaborations. The special virtue of the Valley’s small companies, Saxenian argued, was that boundaries between them were porous.

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A sales manager could quit a startup on Friday and begin at another one on Monday; sometimes he didn’t even have to change parking lots, because the two companies were in the same building. Hierarchical organizations can be good at coordinating people when the objectives are clear: think of an army. But when it comes to commercializing applied science, the Valley’s culture of “coopetition” has proved more creative than the self-contained, vertically integrated corporations of Boston or Japan. Large companies bottle up ideas and often waste them. Shifting coalitions of small ones conduct myriad experiments until they find the best path forward. Why did it take a sociologist to spot Silicon Valley’s advantage? Economists have always acknowledged the vitality of industrial “clusters”—finance in New York, movies in Hollywood, tech in Silicon Valley.

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In semiconductors, for example, venture-financed upstarts such as LSI Logic and Cypress Semiconductor helped to develop the market for specialty circuits, allowing the Valley to regain its crown as the world’s semiconductor leader.[47] In disk drives, West Coast VCs backed more than fifty startups in the first years of the decade, and although the overcrowding resulted in dozens of failures, the survivors ensured that the Valley stole the industry away from the vertically integrated, East Coast computer behemoths.[48] All in all, Northern California’s tech firms added more than sixty-five thousand net new jobs during the 1980s, more than triple the number created around Boston. By the end of the decade, the Valley was home to thirty-nine of the nation’s hundred fastest-growing electronics companies.

State-Building: Governance and World Order in the 21st Century
by Francis Fukuyama
Published 7 Apr 2004

In addition, market efficiency rests on the existence of a large number of market participants in competition with one another. But large numbers tend to turn into small numbers in many specialized contracting situations, allowing contractors to take advantage of asymmetric information. Again, the solution was to bring these activities within the boundaries of the hierarchy through vertical integration. Economics put its distinctive stamp on organizational theory, however, when it began to import its own individualistic behavioral assumptions inside the boundaries of the firm. Organizations are collections of individuals who manifest both cooperative and competitive or self-interested behavior.

The Silent Intelligence: The Internet of Things
by Daniel Kellmereit and Daniel Obodovski
Published 19 Sep 2013

In many respects, that’s just an ecosystem-wide view of what goes on. We believe there are multiple investment opportunities in hardware — despite the traditional reluctance of investors to enter this space. In the Internet of Things, opportunities in hardware spread from new energy- and cost-optimized silicon to vertically integrated devices for specific markets. There are tremendous opportunities in figuring out the whole data-acquisition space — sensor calibration and integration; hardware platforms, which would allow building of new devices as quickly and cheaply as mobile phones today; smart and self-tuning antennas, which would fit small enclosures without losing signal strength; energy management and harvesting, which includes various sensors, capacitors, and new types of flexible or even spray-on batteries; and many more.

The Firm
by Duff McDonald
Published 1 Jun 2014

Consultants.17 Regulatory efforts paid another rich benefit to the likes of McKinsey: Restricted from cutting backroom deals with each other, firms were thus obliged to actually compete, which meant they needed to make their operations more efficient. Here again, consultants were the answer. But perhaps the circumstance that most aided the creation of the consulting industry was the entry of a new, key player into business itself. Empire builders with names like Carnegie, Duke, Ford, and Rockefeller had built huge, vertically integrated companies, but they had neither the time, the talent, nor the inclination to create and carry out management systems for those entities. These were the conquerors of capitalism, not its administrators. And yet, as Chandler pointed out, “their strategies of expansion, consolidation, and integration demanded structural changes and innovations at all levels of administration.”18 Into the breach stepped a new economic actor who was neither capital nor labor: the professional manager.

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In a 2001 Quarterly, the consultants wrote: “Enron has built a reputation as one of the world’s most innovative companies by attacking and atomizing traditional industry structures—first in natural gas and later in such diverse businesses as electric power, Internet bandwidth, and pulp and paper. In each case, Enron focused on the business sliver of intermediation while avoiding the incumbency problems created by a large asset base and vertical integration.” As critics of Enron emerged and started to question the firm’s accounting methods, McKinsey issued ever more ringing endorsements. As far as McKinsey was concerned, “[deal-making] skills have become more important than scale or scope, and strategic insight and foresight more important than structural position.”17 It’s a statement that is baffling in its implication—that what matters is not what you actually are, but what you want to be.

Radical Technologies: The Design of Everyday Life
by Adam Greenfield
Published 29 May 2017

There are, nevertheless, a small number of commercial enterprises whose size and concentrated technical competence now span much of the terrain of ordinary experience: Apple, Amazon, Google and Facebook, with Microsoft trailing a considerable distance behind. The American science fiction writer and commentator on technology Bruce Sterling calls these concerns “the Stacks,” emphasizing the strategy of vertical integration by which each of them seeks to control the network, as well as the platforms, applications, physical devices and content that run on and are connected by it.1 Foremost among the Stacks, for the moment, anyway, is the company founded as Google, and later reorganized as a cluster of business units operating under the Alphabet umbrella.

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Consider, instead, what Amazon is doing as it links drones, robotics and the internet of things in a single, purposive, increasingly coherent proposition. Each of the Stacks claims a piece of the puzzle that its peers would like to have, and this comprises its competitive advantage. Apple, of course, pioneered the strategy of ruthless, end-to-end vertical integration in its contemporary form. It ushered computation into the post-PC era through its iPhone and iPad devices, owns state-of-the-art mobile and desktop operating systems, sits cozily in the home through the Apple TV media player, and takes a 30 percent cut of everything sold through its App Store or downloaded from iTunes; it is now aimed squarely at wearables, point-of-sale payments, healthcare and semi-autonomous vehicles.

Factory Girls: From Village to City in a Changing China
by Leslie T. Chang
Published 6 Oct 2008

If you wear athletic shoes, chances are you have worn a pair that was made at the Yue Yuen factory in Dongguan. The Taiwanese-owned factory is the biggest manufacturer for Nike, Adidas, and Reebok, along with smaller brands like Puma and Asics, all of whom stopped making shoes years ago and farmed out production to factories that could do it more cheaply. Yue Yuen’s secret is vertical integration: It controls every step of the manufacturing process—from initial design to making glues, soles, molds, and lasts to cutting, stitching, and assembling the finished products. One-third of the world’s shoes are made in Guangdong Province, and the Yue Yuen plant is the biggest of them all. Seventy thousand people work at its Dongguan factory.

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Petty theft is rampant; workers are banned from dorms during work hours in an effort to reduce such crimes. Factory-floor quarrels carry over into the dorms, where workers on the same production line are required to room together for the sake of efficiency. Gangs thrive inside Yue Yuen. Some rob workers of their wages on payday; others focus on stealing shoe parts. The gangs practice a vertical integration of their own. One group may spirit shoelaces out of the factory, while another smuggles out soles. The parts are assembled into shoes and distributed in other parts of the city. In the universe of Chinese counterfeiting, theirs is a distinctive sub-specialty—the illicit assembly of authentic parts.

The Way We Eat: Why Our Food Choices Matter
by Peter Singer and Jim Mason
Published 1 May 2006

After numerous phone calls that involved working our way through seemingly endless menu options, we spoke to Consumer Services' Renee Zahery, who told us that "information about our procurement and processing of our product is considered proprietary in nature" and suggested we take up these questions with "a great source," Janet Riley, senior vice-president at the American Meat Institute.' When we talked with Riley, she told us only that Oscar Mayer probably has contracts with suppliers such as Tyson, Smithfield, and some of the lesser-known, vertically integrated pork producing companies. So although we could not identify any of the specific farms that produce pigs for Oscar Mayer, it seems a fair assumption that their bacon comes from a cross section of today's intensive pork industry. What is that industry like? THE POOP ON PIGS When Peter first wrote about factory farming in America in 1975, there were more than 660,000 pig farms producing just under 69 million pigs a year.4 Over the next thirty years, nearly 90 percent of those pig farms vanished, so that by 2004 there were only 69,000.

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In fact, allowing sows the ability to build nests-having both space and the freedom of movement to build the nest from materials natural to the environment or provided by the farmer-is a requirement of the AWI standards, because it is regarded as a key element of good sow welfare. The sow does not appear to be in a hurry, so as we sit and watch, we chat about Mike's former life working in the confinement buildings of one of the nation's largest vertically integrated corporate pig producers. Mike tells us how he had to move pregnant sows from the crates of the gestation buildings to the farrowing crates in another building. "There were these long, slippery concrete runways. The sows were late in gestation and they weren't very comfortable. They weren't in very good shape because in their stalls they hadn't been able to move around.

Television Is the New Television: The Unexpected Triumph of Old Media in the Digital Age
by Michael Wolff
Published 22 Jun 2015

And, in fact, that is just the digital publishing business now. Undoubtedly it will morph into something even further from publishing as we know it. Denton took advantage of a moment when he could use new technology to bootstrap himself into creating an original and influential new publishing form. But today’s “vertically integrated digital media company,” in Vidra’s self-hoisting words, is another duck altogether. The peculiar development, full of dramatic irony, is that television, with its more circumscribed audiences making much more active selection and choice, becomes upscale media, and digital, with its mass reach and reflexive actions, becomes the downscale side.

Utopia or Bust: A Guide to the Present Crisis
by Benjamin Kunkel
Published 11 Mar 2014

With this in mind, Jameson has proposed a sort of homeopathic role for theory: intellectual de-differentiation countering the cultural/economic variety. At any rate, it shouldn’t be too surprising to find so much differentiation and de-differentiation taking place side by side. You might draw an analogy with business practices, which shift between vertical integration, or doing everything within one company, and subcontracting, in which tasks are farmed out. All together, the sophistication of Jameson’s work and the breadth of his references had a dual effect. He wrote stirringly of the vocation of “dialectical philosophy and Marxism” to “break out of the specialized compartments of the (bourgeois) disciplines and to make connections among the seemingly disparate phenomena of social life generally,” and clearly his own work belonged to and even crowned this Western Marxist lineage.

Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World
by Don Tapscott and Alex Tapscott
Published 9 May 2016

This doesn’t mean smaller firms in terms of revenue or impact. To the contrary, we’re talking about building twenty-first-century companies, some that may be massive wealth creators and powerful in their respective markets. We do think enterprises will look more like networks rather than the vertically integrated hierarchies of the industrial age. As such there is an opportunity to distribute (not redistribute) wealth more democratically. We’ll also take you on a stroll through the mind-boggling world of smart contracts, new autonomous economic agents, and what we call distributed autonomous enterprises where intelligent software takes over the management and organization of many resources and capabilities, perhaps displacing corporations.

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Costs of (Re-)Building Trust—Why Should We Trust One Another? As we have explained, trust in business and society is the expectation that another party will be honest, considerate, accountable, and transparent—that he or she will act with integrity.28 It’s a lot of work to establish trust, and many economists and other academics argue that we have vertically integrated firms because establishing trust is easier within corporate boundaries than in an open market. With trust at an all-time low, the challenge for firms is not simply figuring out whom to trust, but how to get outside capability to trust them. Indeed, economist Michael Jensen and colleagues made the case that integrity is a factor of production.

The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger
by Marc Levinson
Published 1 Jan 2006

Barbie, simple girl though she is, had developed her very own global supply chain.1 Supply chains like Barbie’s are a direct result of the changes wrought by the rise of container shipping. They were unheard-of back in 1956, when Malcom McLean placed his first containers on board the Ideal-X, and in 1976, when high oil prices brought sky-high freight costs that stifled the flow of world trade. Until then, vertical integration was the norm in manufacturing: a company would obtain raw materials, sometimes from its own mines or oil wells; move them to its factories, sometimes with its own trucks or ships or railroad; and put them through a series of processes to turn them into finished products. As freight costs plummeted starting in the late 1970s and as the rapid exchange of cargo from one transportation carrier to another became routine, manufacturers discovered that they no longer needed to do everything themselves.

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Lines McLean Trucking: business of; creation of; management of; and mergers; and recruiting; sale of; and trailership scheme McNamara, Robert Macmillan, Harold Maersk Line Malaysia Manchester, England Manhattan: employment in; and port traffic; water-front of Manila manufacturing: economic role of; and freight transportation; just-in-time; location of; vertical integration in Marine Steel Corporation Marseilles, France Maseru, Lesotho Massachusetts Port Authority Matson Navigation Company: adoption of containerization by; and containers; contrast of with Pan-Atlantic; and East Asia service; fleet of; and intermodal service; and Japan service; and military service; mistakes of; Oakland base of; and standardization; and union relations Mattel Corp.

Open Standards and the Digital Age: History, Ideology, and Networks (Cambridge Studies in the Emergence of Global Enterprise)
by Andrew L. Russell
Published 27 Apr 2014

Kelty, Two Bits: The Cultural Significance of Free Software (Durham, NC: Duke University Press, 2008); Matthew Nelson, ed., “Open Libraries: More Than Just Open Books or Open Doors,” Oregon Library Association Quarterly 16 (2010). 40 Hutcheon and Kent, “Influence of Size, Function, and Design”; Jonathan Zittrain, The Future of The Internet – And How to Stop It (New Haven, CT: Yale University Press, 2008); Joseph Farrell and Philip J. Weiser, “Modularity, Vertical Integration, and Open Access Policies: Towards a Convergence of Antitrust and Regulation in the Internet Age,” Harvard Journal of Law and Technology 17 (2003): 85–134; W. Russell Neuman, Lee McKnight, and Richard Jay Solomon, The Gordian Knot: Political Gridlock on the Information Highway (Cambridge, MA: The MIT Press, 1998), 94–112. 41 For richly theorized discussions of standards and standardization, see W.

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They did not necessarily need to see or act like a state in order to generate powerful organizational capabilities.9 An organizational lens is particularly helpful for bringing into focus two key conceptual questions at the heart of this book: What organizational options did network designers and engineers have at their disposal, and how did they choose among those options? Many historians of capitalism and innovation, most notably Alfred D. Chandler, Jr., have tended to emphasize large, vertically integrated enterprises that were directed by layers of managerial hierarchies. Such hierarchies emerged, in Chandler’s view, in situations where managers believed that hierarchies would provide more efficient coordination mechanisms than one-time exchanges guided only by the invisible hand of the market.

Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future
by Ashlee Vance
Published 18 May 2015

And the loop proposal was nothing but bamboozling people who do not know anything about kindergarten physics with a very old, long publicized Gedankenexperiment in kinetics. . . . There are many inventive Americans, but in that lineup Musk would be trailing far behind.” The comments were blunt and surprising given some of the things Smil celebrated in his recent book. He spent a good deal of time showing the positive impact that Henry Ford’s vertical integration had on advancing the car industry and the American economy. He also wrote at length about the rise of “mechatronic machines,” or machines that rely on a lot of electronics and software. “By 2010 the electronic controls for a typical sedan required more lines of software code than the instructions needed to operate the latest Boeing jetliner,” Smil wrote.

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It would not take much to argue that SpaceX is America’s only hope of competing against China in the next couple of decades. As for mechatronic machines, SpaceX and Tesla have set the example of fusing together electronics, software, and metal that their rivals are now struggling to match. And all of Musk’s companies, including SolarCity, have made dramatic use of vertical integration and turned in-house control of components into a real advantage. To get a sense of how powerful Musk’s work may end up being for the American economy, have a think about the dominant mechatronic machine of the past several years: the smartphone. Pre-iPhone, the United States was the laggard in the telecommunications industry.

Vertical: The City From Satellites to Bunkers
by Stephen Graham
Published 8 Nov 2016

‘Is it too far-fetched to believe’, architect Anthony Wood wonders, ‘that [with] drive and planning, what has started at 10m elevation in cities such as Hong Kong, Minneapolis or Calgary could not occur at 100m, or 200m, in those cities and others?’55 Such a question goes to the heart of the politics of vertical urbanism, which, as Dutch architect Darrel Ronald suggests, ‘must represent a dynamic vertically integrated urban space of transportation, public space, landscape, infrastructure and interchanges.’56 Japanese architect Hiroshi Hara offers an intervention here. He argues that ‘rather than concentrating on the vertical aspect, which creates a spatial dead-end’, a fully three-dimensional city should ‘depend on sky passages that connect buildings together at certain levels.

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Instead, the word has been used to describe how organizations, firms, social classes, cities and state bodies are related ‘vertically’ within hierarchies or supply chains at various scales – ‘local’, ‘urban’, ‘regional’, ‘national’ and ‘international’ – as imagined across a flat geographic surface. See, for example, Mark Casson, Multinationals and World Trade: Vertical Integration and the Division of Labour in World Industries, London: Routledge, 2012; Cindy Fan, ‘The Vertical and Horizontal Expansions of China’s City System’, Urban Geography, 20:6, 1999, pp. 493–515. 13See Doreen Massey, John Allen and Steve Pile, eds, City Worlds, London: Routledge, 1999, p. 4. 14See, for example, Neil Brenner, ‘Theses on Urbanization’, Public Culture 25:1, 2013, pp. 85–114; Nikos Katsikis, ‘On the Geographical Organization of World Urbanization’, MONU 20, April 2014, pp. 4–11, available at http://urbantheorylab.net. 15It should be noted that such perspectives are now starting to link mining and extraction to the growth of global cities – though still through a largely flat perspective.

Virtual Competition
by Ariel Ezrachi and Maurice E. Stucke
Published 30 Nov 2016

Fear or suspicion that one’s speech is being monitored by a stranger, even without the reality of such activity, can have a seriously inhibiting effect upon the willingness to voice critical and constructive ideas.”23 Soon we may have our digital personal assistant hovering nearby, without being conspicuous. The Purist Assistant The predictions outlined in this chapter are driven by the assumption that most of the future private assistants will be developed and provided by the super-platforms and other powerful, vertically integrated firms. Would there be any possible counter measure to these devious helpers? We certainly hope so. We can anticipate a class of independent assistants, developed by independent firms with our interests in mind. Our purist assistant could warn us when behavioral discrimination is at play, when 200 Frenemies outside options are ignored, when price alignment seems out of order, or when our information is harvested.

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And if you did invest money, do you know if the promise of privacy and control was truly delivered by your service provider? The likely answers to these questions may help us all appreciate why the evolutionary path tilts in favor of the Frenemy dynamic and the devious helper. Key here are data-driven network effects, Big Data, Big Analytics, vertical integration, bundling of ser vices, and interoperability, which all seem to favor the super-platforms. Let us explain in more detail: First, to excel in its role, the personal assistant must know our preferences. To learn and predict our desires, personal assistants require a significant store of data and opportunities to experiment.

The Dying Citizen: How Progressive Elites, Tribalism, and Globalization Are Destroying the Idea of America
by Victor Davis Hanson
Published 15 Nov 2021

In my own environs of southern Fresno County, almost all the small forty- to two-hundred-acre family farms of my youth have vanished. They have become the tesserae of vast corporate mosaics. Most megafarms are many thousands of acres, the conglomerations of brilliant family farmers who had the vision and the will to take the advice of their lenders long ago to “go big or go broke.” Thus arose vertically integrated farms, incorporating packers, processors, truckers, shippers, brokers, and merchandisers rather than just farmers dependent on a chain of mercurial middlemen well beyond their control. The iconic old clapboard farmhouses of the region, once owned by a rich diversity of first- and second-generation agrarian Americans of Armenian, Basque, Dutch, Greek, Italian, Mexican, Portuguese, and Scandinavian ancestry, are now often the homes of mostly impoverished Mexican nationals, many without legal residence.

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And many of the outsourced products were to be bought inexpensively by the often struggling and sometimes out-of-work American middle and lower classes whose jobs had been shipped abroad in the first place. But eventually China’s westernized engineering graduates and corporate teams began replacing their erstwhile mentors, as Beijing began to vertically integrate and absorb an increasing share of world manufacturing and assembly. Inexpensive and mass jet travel likewise eroded borders. It translated entering and leaving a country into a mere bureaucratic process of airport security rather than waiting for visas, butting against border walls and fences, crossing rivers, or climbing mountains.

Money Free and Unfree
by George A. Selgin
Published 14 Jun 2017

It is hard to imagine an efficiency-enhancing rationale for such restrictions. Two reasons consistent with the fiscal hypothesis suggest why past monarchs preferred owning monopoly mints to taxing private mints. First, as the modern theory of vertical integration suggests, monitoring and enforcement problems would likely be lower with vertically integrated (state-owned) mints. Second, increases in the seigniorage rate might be accomplished at lower cost than equivalent increases in the rate of mint taxation, in part because the incidence of an increased mint tax would be more transparent, more concentrated, and therefore likely to meet with more political resistance than a debasement.

The Perfectionists: How Precision Engineers Created the Modern World
by Simon Winchester
Published 7 May 2018

With careful investment and slow and steady expansion (and a commitment to the business philosophy of vertical integration, whereby a firm owns or has control of most of the companies that provide its parts or raw materials), it can fairly be said that Hattori flourished. To recount his rise leaves one almost breathless. He set up an American-style factory for the mass production of clocks, employing the same principle of interchangeable parts that had been born in New England two centuries before. By 1909, Hattori’s concept of vertical integration was refined to the point where every single component of every single timepiece was made by a firm he owned, just as they still are today.

Power Play: Tesla, Elon Musk, and the Bet of the Century
by Tim Higgins
Published 2 Aug 2021

They registered the company in Delaware on July 1, 2003—nine days ahead of Tesla’s date of birth 147 years earlier—and began trying to figure out what they needed to know about being in the auto industry. Admittedly, they knew little. They saw that as an asset. The industry was undergoing structural changes, as behemoths such as GM tried to adapt to changing customer tastes and legacies of debt, high labor costs, and shrinking market share. For generations, carmakers had pioneered vertically integrated operations, where in-house part suppliers fed the pieces needed to make a car to the assembly end of the business. To slash cost, those parts makers were being spun out to become third parties around the world. In theory, Eberhard bet, tiny Tesla could buy the same parts being used by the big players to make his sports car.

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Kelty feared the complexity was too great, and that it would be pushing his counterparts at Panasonic into a novel solution: In Straubel’s grand plan, Panasonic would essentially be setting up shop inside a Tesla factory to build cells at one end, while Tesla assembled battery packs at the other. It would be a vertically integrated facility, with raw material for the cells coming in and battery packs coming out, for use in the Model 3s to be assembled in Fremont. Build it in the U.S. and the savings in shipping alone could amount to 30 percent. But Tesla was going to need even more savings if it was going to lower the cost of its cars and make a mainstream electric vehicle.

The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources
by Javier Blas and Jack Farchy
Published 25 Feb 2021

But the trade abruptly dried up when John Rockefeller bought up control of nearly all the refining capacity in America for his Standard Oil Trust. With only one buyer in town, there was no competition, and so no market. 20 The price of oil was decided by Rockefeller. The US government broke up Standard Oil in 1911, but the oil market continued to be dominated by an oligopoly of large companies that were vertically integrated to include oil wells, refineries and retail outlets. By the 1950s, the oil market was controlled by seven large companies. They came to be known as the ‘Seven Sisters’ – the forerunners of the companies that are today ExxonMobil, Royal Dutch Shell, Chevron and BP. Many of them were the descendants of Standard Oil, created in the wake of its break-up.

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The story of the country’s Friday night crisis was told to the authors by Hart. 2 In the first half of the 1980s, Jamaica was the third-largest bauxite producer after Australia and Guinea, and the fourth-largest alumina producer after Australia, the US and the USSR, according to the US Geological Survey. 3 ‘History of Aluminum’, The Aluminum Association, 2019, accessed: https://www.aluminum.org/aluminum-advantage/history-aluminum . 4 US Geological Survey data. 5 Stuckey, John A., Vertical Integration and Joint Ventures in the Aluminum Industry (Harvard University Press, 1983), p. 84. 6 European Commission decision on aluminium imports from Eastern Europe, 19 December 1984, accessed: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:31985D0206&from=GA . 7 US Geological Survey data. 8 ‘World Bauxite Industry: Recent Trends and Implications of Guyana’s Nationalization Moves’, CIA, April 1971, accessed: https://www.cia.gov/library/readingroom/docs/CIA-RDP85T00875R001700010006-3.pdf . 9 Waszkis, Helmut, Philipp Brothers: The Rise and Fall of a Trading Giant , p. 120. 10 ‘Guyana’s Bauxite Industry Since Partial Nationalization’, CIA, December 1972, accessed: https://www.cia.gov/library/readingroom/docs/CIA-RDP85T00875R001700040056-5.pdf . 11 ‘Bodies on the Doorstep: Jamaica in the 1970s’, Association for Diplomatic Studies and Training, accessed: https://adst.org/2016/12/bodies-doorstep-jamaica-late-1970s/ . 12 ‘Rules Bent for Jamaica, Helping US Industry’, New York Times , 1981, accessed: https://www.nytimes.com/1982/04/28/business/rules-bent-for-jamaica-helping-us-industry.html . 1 3 Davis, Carlton, Jamaica in the World Aluminium Industry , 2011, vol. 3, p. 67; and USGS yearbooks. 14 Hugh Hart, interview with the authors, Kingston, March 2019, and Manny Weiss, interview with the authors, London, March 2019. 15 ‘What’s Behind the Govt., Marc Rich Relationship?’

The Next Shift: The Fall of Industry and the Rise of Health Care in Rust Belt America
by Gabriel Winant
Published 23 Mar 2021

In the aftermath of the strike wave of 1934, Congress passed the National Labor Relations Act (NLRA), seeking to reestablish stability in industrial relations by facilitating collective bargaining through the National Labor Relations Board (NLRB).15 When the Supreme Court constitutionalized collective bargaining in 1937, it was in a steel industry case from western Pennsylvania: National Labor Relations Board v. Jones & Laughlin Steel Corporation. The Court found that the internal operations of a vertically integrated firm like Jones & Laughlin affected and constituted interstate commerce, thus rendering constitutional the federal government’s regulation of the corporation’s labor relations. In its landmark decision, the Court quoted the NLRB’s conclusion that the steel works in western Pennsylvania “might be likened to the heart of a self-contained, highly integrated body.

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Then, hugely overleveraged, it collapsed in 1998 in the largest nonprofit health care bankruptcy in history.81 Eventually, insurance giant Highmark (the former Blue Cross) acquired AHERF’s remnants in Pittsburgh. The insurer bought up AHERF’s hospitals to compete with UPMC in the hospital market, just as UPMC had launched an insurance subsidiary to compete with Highmark in the insurance business. The Pittsburgh health care industry thus became consolidated into two warring vertically integrated firms, one a hospital company with an insurance subsidiary, the other an insurance company with a hospital subsidiary, each seeking leverage against the other. The period of competition and market revolution, in the end, proved short. Less than twenty years after federal legislation to introduce market discipline to health care, UPMC controlled 42 percent of the hospital beds in Allegheny County, and its growth was far from complete.

The Flat White Economy
by Douglas McWilliams
Published 15 Feb 2015

Input Output statistics There is a very detailed source of economic information, of interest normally only to the purists, called ‘input output statistics’.2 These split the economy into over one hundred sectors and show how each of these sectors trade with each other as well as selling goods and services for final use to the consumer, investor, to the government and for overseas trade. Most government statistics for the economy treat the economy as if it were vertically integrated as one company a sort of ‘UK plc’. For many purposes this is a useful simplification, but not always. The input output statistics vertically ‘disintegrate’ the economy, showing the messy detail of business-to-business sales. This is becoming especially important in modern business models as sub-contracting is a key business asset and having high quality suppliers is critical for companies.

Intertwingled: Information Changes Everything
by Peter Morville
Published 14 May 2014

In all the dreams of hypertext, from Otlet and Bush to Nelson and Englebart, users were able to build and explore shared trails, but that’s not the realized model. In HTML, authors create one-way links inside the file. This simple, modular approach helped the Web to spread like wildfire, yet it also ruled out core features of earlier visions. Ted Nelson imagined a vertically integrated system that managed everything from code and interface to copyright and micropayment. Xanadu’s transpointing windows would support bidirectional links, transclusion, and side-by-side comparison. It would elevate the work of scholars and advance Doug Englebart’s dream to augment human intellect, so we might understand and resolve the world’s seemingly insoluble problems.

Merchants of Truth: The Business of News and the Fight for Facts
by Jill Abramson
Published 5 Feb 2019

“We realized if we: “The Engagement Project: The VICE Guide to Engagement,” Thinking with Google, June 2013, https://www.thinkwithgoogle.com/marketing-resources/the-vice-guide-to-engagement/. “It paid to be perceived: Gavin McInnes, Suroosh Alvi, and Shane Smith, The Vice Guide to Sex and Drugs and Rock and Roll (London: Revolver Books, 2006), 11. McInnes asserted, “This: Anne Elizabeth Moore, “The Vertically Integrated Rape,” The Baffler, no. 24, January 2014, https://thebaffler.com/salvos/the-vertically-integrated-rape-joke. But before Szalwinski could sell: Alexandra Molotkow, “Giving Offence: Gavin McInnes Co-Founded Vice Magazine: As It Got Big, He Got Ousted,” The Walrus, May 1, 2017, https://thewalrus.ca/giving-offence/. “Those guys had a real struggle: Ibid.

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Some employees were afraid to discuss publicly any of these issues because they had all signed nondisclosure agreements, unusual for a news organization. The “non-traditional workplace agreement” they were given warned, “Sexually provocative and other explicit images, videos and audio recordings are regularly present in VICE’s offices.” The Baffler, an intelligent magazine for political and cultural analysis, dubbed Vice “the vertically integrated rape joke.” The entrenched culture of misogyny was one major problem. Another was uncontrolled expansion. Smith kept adding and adding. “The growth became cancerous,” said Morton. As NBC hired Tim Russert and ABC George Stephanopoulos, Vice hired some veterans of the Obama White House, including Reggie Love, the president’s body man, and Alyssa Mastromonaco, his deputy chief of staff for operations who had worked for Obama since 2005.

Quality Investing: Owning the Best Companies for the Long Term
by Torkell T. Eide , Lawrence A. Cunningham and Patrick Hargreaves
Published 5 Jan 2016

Thanks to the globalization of travel and media, premium brands transition relatively easily into new markets. Louis Vuitton and Nike are well-known in all corners of the world, even where their merchandise is not yet available. Manufacturers operating their own stores enjoy a particular advantage, as their vertical integration makes them less reliant on a country’s infrastructure. The uncertainty of geographic expansion leads us to prefer companies with proven track records of successfully exporting competitive advantages into new geographic areas. pricing, mix and volume Viewed from a purely financial perspective, growth in revenue can be broken down into price, product mix, and volume.

The fortune at the bottom of the pyramid
by C. K. Prahalad
Published 15 Jan 2005

The horizontal integration deficiency was addressed through customer relationship management (CRM)-based solutions that were used to identify and provide for the nonstandard needs of customers in an industry where the basic services had been standardized. Customized IT application and realignment of business goals and processes were deployed to manage risk and build the organization’s knowledge base. The e-Choupal network was conceived to achieve virtual vertical integration by extending ITC’s engagement all the way to the farmer in the field. The Social Imperative The social agenda is an integral part of ITC’s philosophy. ITC is widely recognized as dedicated to the cause of nation-building. Chairman Y. C. Deveshwar noted, “ITC believes its aspiration to create enduring value for the nation provides the force to sustain growing shareholder value.”

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This demonstrates the income potential and spurs nonperformers to work. The zeal to perform sometimes leads to territorial disputes, but ITC does not interfere in their resolution because it encourages sanchalaks to better service their customer bases. Sustaining Commercial Volume Virtual vertical integration can work only if there is a continuous flow of information between the e-Choupals and ITC. Because of the number and spread of the e-Choupals, this communication must be initiated by the sanchalaks. If their motivation to communicate with ITC diminishes, the channel will still function for procurement, but will lack the vitality to manage supply risk, distribution, or product design.

Superclass: The Global Power Elite and the World They Are Making
by David Rothkopf
Published 18 Mar 2008

Thanks to his unparalleled success, his guiding principles and practices have not only influenced the shape of every multinational corporation on earth today but have led to a profound shift in world power structure. His legacies in this regard have included a wide range of contributions, from his collaborative style of management to his centralized ownership but decentralized decision structure, from his focus on consolidation which he described as “cooperation” and his ideas about the vertical integration of enterprises, to his political strategies and views on charitable giving. The actions of the successor companies to Standard Oil in reshaping much of the modern world, leading the exploration for oil in the Middle East, Latin America, the former Soviet Union, and now Africa, have changed the international order, giving once small and secondary nations great influence even as those companies exerted great influence within and on behalf of those nations.

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Building on his networks and the easy access to cash, Khodorkovsky made the meteoric rise from capitalist guinea pig to legitimate fat cat in just a few years. After creating Menatep bank, he served a brief stint as a government adviser and then, with Menatep and the help of his friends in the government, he engineered the purchase of a vertically integrated oil giant, the second largest in Russia, called Yukos. Yukos proved to be both Khodorkovsky’s triumph and his downfall. Rumors swirled that he was able to purchase Yukos only through favoritism, and it was hard to deny the self-dealing involved in the 1995 Russian privatization process. (Banks that were awarded oversight of the auction of state assets typically ending up owning those assets themselves, for example.)

One Less Car: Bicycling and the Politics of Automobility
by Zack Furness and Zachary Mooradian Furness
Published 28 Mar 2010

Cycling historian ross petty develops a number of these concepts in his careful research, including bicyclists’ collective role in the development of U.S. traffic laws, the bicycle industry’s development of mass marketing, and the use of bicycles by U.S. postal Service and Western Union employees.7 Glen norcliffe similarly explicates the influence of Colonel albert pope’s innovative model of mass production on the ensuing automobile industry, specifically crediting pope with a number of the innovations typically attributed to famed automobile mogul, and failed colonialist Henry Ford, including the modernization of the labor process, the vertical integration of production, the creation of machines with interchangeable parts, and the construction of mass markets for transportation technologies.8 as much as this body of work helps to explain how the bicycle era “prepared the way for the automobile,” there have been few attempts to critically interrogate the cultural formations linking the bicycle era and the automobile age.9 norcliffe provides a valuable point of entry for this task because he locates the meaning of bicycle technologies and the practice of cycling in the broader context of modernization, suggesting that the dominant paradigm of modernity—namely, scientific rationalism, a focus on individual autonomy, and a fascination with newness—prompted the technological innovations that gave rise to the bicycle and subsequently framed it as a symbol of modern life: a technological expression of progress.10 Bicycles, according to his argument, gained meaning within this cultural context just as cycling—a performative and spectacular expression of the modern ethos—became one of the principal means by which modernity was “locally embedded” in north america.11 norcliffe helps to construct a more complex view of bicycles and cycling that ultimately draws attention to mobility as a crucial paradigm for thinking through the pitfalls and prospects of modernity, though he falls into the pattern of most cycling historians who either perpetuate a sharp division between the cultural assemblages of the bicycle and those of the automobile, or largely ignore the twentieth century altogether.12 recent scholarship on automobility complements cycling history because it effectively maps the cultural trajectories that inform and are informed by mobile practices and mobile ontologies in the modern era.

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Within this context, the difficulties posed by simultaneously recentralizing the means of bicycle production and decentralizing (and democratizing) its ownership, are manifold. as noted previously, the bicycle is already a fully globalized technology and has been for more than a century: it is virtually impossible for any company or country to manufacture a bicycle from scratch without importing parts, let alone the raw materials and technologies necessary to produce such basics as sturdy steel frames and tires.63 Even raleigh, whose massive production plant in nottingham, England, was once an icon of vertical integration, still relied on other companies to produce its ball bearings and tires at a time when every other part on its bicycles was manufactured in-house.64 Despite this conundrum, there are very real possibilities for working toward a more egalitarian vision of production that could simultaneously minimize the bicycle’s environmental impact. in order to think through these options, bicycle advocates and professional cycling organizations that profess an honest interest in creating a healthier, more sustainable world through bicycle transportation must begin to offer more substantive explanations for how those objectives square with the realities of a globalized bicycle industry in which ownership is concentrated into a corporate oligopoly and the overall commitment to workers’ rights and environmental regulations is at best sketchy.

The Great Railroad Revolution
by Christian Wolmar
Published 9 Jun 2014

However, in view of the primitive nature of the available technology and the arduous nature of the construction methods, the rapid spread of the iron road represented an astonishing achievement. Having built a railroad, the question then was how best to run it. One of the early decisions made in Britain was that the railroad should be a vertically integrated operation—in other words, the railroad company would control the line that it had built by not only providing the locomotives and the track, but also determining the timetable and regulating the operations. There had been some initial moves to operate lines in the same manner as canals or turnpikes.

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See also Carriages Pullman News, 185–186 Pullman strike, 186, 235–238, 262 Rail network, US (2010), xvi–xvii (map) Rail World, 354 Railroad Bureau, 100, 103 Railroad Safety Appliance Act, 199–200 Railroad Temperance Society, 206 “Railroad wars,” xxii, 94, 107, 173–174 Railroads 1850, xv (map) 1880, x–xi (map) 1916, xii–xiii (map) Rails iron-covered, 3, 45–46 L-shaped, 3–4 steel, 196 toothed, 15 T-shaped, 45–46 Railway barons, 238–252, 255–256, 290, 298, 355 Railway charters, 11, 12, 17, 19–20, 23, 26, 29, 48 Railway companies and antitrust legislation, 274, 290–291 consolidation, 68, 123–124, 165, 167, 200–201, 238, 248, 256, 259–262, 293–299, 347, 358 labor relations, 231–238 (see also Labor unions) management structures, 229–232 monopoly powers, 30, 65, 205, 216, 238, 255, 259, 271, 273, 294, 316 public hostility, 119, 204–206, 216, 238–239, 243, 245, 250–257, 271, 290, 295, 355–356 and regulation, 256–257, 272–274 Railway company agents, 169, 172 Railway construction, 25–50 costs, 46–48 labor, 38–40 promotion, 33–36, 37, 38 See also Transcontinental railroads Railway manias, 23, 85, 124, 163 Railway travel collective travel, 222–223 connections, 84 experiences, 73–85, 161–162, 167–168, 208–213 luxury and prestige services, 181–190, 263–268, 300–303, 308, 309–315, 324, 325, 327–328, 329 (see also Passenger services) nighttime, 81, 83 and segregation, 208, 212–213 Sunday travel, 83 Railways achievements and impact, 216–230 British investment, 124 deregulation, 347–350 early opposition, 27, 63, 86–87, 92 government support, 28–34, 51, 52, 85, 129, 153, 166, 173, 233, 341–345, 356 and immigration, 169–173 interwar boom, 307–308 nationalization, 291–292 postwar expansion, 121–124, 159–165 regulation, 192–193, 256–257, 295–296, 297–298, 311, 347 route mileages, 68, 72, 85, 90, 123–124, 159, 174–175, 215, 259, 261, 288–289, 306, 307, 308, 318–319, 349–350 vertical integration, 48 Western expansion, 168–180 Rainhill Trials, 16, 17 Ramsey, Joseph, 247 Raquette Lake Railroad, 224 Raton Pass, 173 Rea, Samuel, 290 Redfield, William, 53, 125 Refrigerated wagons, 179, 255, 333 Reno brothers’ gang, 202, 203 Rensselaer & Saratoga Railroad, 23 Reutter, Mark, 62 Richmond, Fredericksburg & Potomac Railroad, 106 Richmond & Petersburg Railroad, 103 Rifkind, Simon, 325 Ripley, William Z., 296 River transportation, 6 Roads, 10–14 “corduroy roads,” 10 and government funding, 12, 332, 343, 356 interstate highways, 304–306, 308, 321, 332 plank roads, 69, 70 safety, 318 “shunpikes,” 12 turnpikes, 8, 11–13, 26–28, 29, 31, 48, 217, 303–304 Robber gangs, 202–206 Robinson, John and Lester, 132 Rockefeller, John D., 225 Rocket, 16 Roosevelt, Franklin D., 308, 322 Roosevelt, Theodore, 272 Rosecrans, William, 113 Roulette, 4 Royal Blue, 264–265 Royal Gorge, 173–174 “Runners,” 84 Russia, 171–172, 294, 357 Russian Revolution, 294 Ruth, Babe, 227 Sacramento Valley Railroad, 128, 129, 132 Safety, 48, 80, 190–200, 251, 256, 318, 323, 351, 354 Saint, Eva Marie, 266 Salamanca, 15 San Francisco Examiner, 237 Sand Creek massacre, 148 Sandboxes, 45 Santa Fe Railroad.

The Finance Curse: How Global Finance Is Making Us All Poorer
by Nicholas Shaxson
Published 10 Oct 2018

When Republican Ronald Reagan became president in 1980, Borkist lobbyists increasingly used another odd argument – similar to the one that James Murdoch would use to try and bamboozle Britain many years later – that antitrust laws had to be diluted in the name of building up American national economic champions in order to defend ‘America’s international competitiveness’.15 Let them exploit American consumers and workers, they were saying, to boost their profits so they can better compete on the world stage. Similar arguments were being made in Europe, where since the 1960s policymakers had fretted about high-tech US multinationals running rampant in their recovering markets. Many US firms were then large vertically integrated companies guided by Fordism – a one-stop-shop production model named after the Ford Motor Company, which brought coal, iron ore and other raw materials into one side of its vast River Rouge Complex, finished cars emerging from the other. US antitrust authorities recognised that in industries such as vehicle manufacture it was necessary to operate on a large scale, so they tolerated these behemoths, but they tried to ensure there were several competing against one another in any market.

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The fragmented, clueless firm then stumbled into a suicidal contract with Virgin Trains that it clearly didn’t understand. Several months and several actual train crashes later, Railtrack collapsed among recriminations and a huge taxpayer bill.24 The financially driven push towards private-sector outsourcing, breaking up large, vertically integrated corporations and reassembling them into entities that look more like trading companies, linked to extensive supply chains that provide the functions previously carried out in house, has yielded tremendous profits and in some cases has even delivered lower costs for consumers. But it has also hollowed out a once-thriving industrial ecosystem.

Empire of Cotton: A Global History
by Sven Beckert
Published 2 Dec 2014

Despite the riches that they had accumulated during the American Civil War, many went under during the rapid fall in cotton prices in its aftermath. Moreover, the changes in transportation infrastructure and the advent of the telegraphic connection to Liverpool and with it the trade in futures on Indian cotton squeezed the speculative profits of merchants who sold on consignment. Major European merchants responded by vertically integrating their businesses—connecting growers and manufacturers—as the Volkarts had done with spectacular success, a move that Indian merchants, who lacked the ability to establish a presence close to European manufacturers, could not replicate. As a result, Indian merchants were increasingly under pressure, especially in the overseas trade.

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In fact, so successful had merchants become in connecting distant growers and manufacturers to one another that their own labor had become less and less important. Pressured by manufacturers who sought to cut transaction costs, the myriad intermediaries who had moved cotton from the plantation to the factory before the 1860s consolidated, to be replaced by a few vertically integrated cotton dealers. New characters now strode onto the cotton empire’s stage, people who would connect growers directly to manufacturers. The old-style importers and brokers declined. Some, such as the Browns, in a savvy move, had already mostly exited the cotton business before the Civil War.

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See the analysis of ex-slaves’ narratives at “Ex-Slave Narratives: Lowell Cloth,” accessed August 12, 2013, http://library.uml.edu/clh/All/Lowcl.htm; Pierre Gervais, “The Cotton ‘Factory’ in a Pre-industrial Economy: An Exploration of the Boston Manufacturing Company, 1815–1820” (unpublished paper, in author’s possession, 2003), 3; Peter Temin, “Product Quality and Vertical Integration in the Early Cotton Textile Industry,” Journal of Economic History 48, no. 4 (December 1988): 897; Ronald Bailey, “The Other Side of Slavery: Black Labor, Cotton, and Textile Industrialization in Great Britain and the United States,” Agricultural History 68, no. 2 (Spring 1994): 45, 49. 21.

The Mesh: Why the Future of Business Is Sharing
by Lisa Gansky
Published 14 Oct 2010

Truly engage partners by mutually sharing resources and information—including customer feedback and other data on their preferences—that enable better designed, more timely, and more relevant products and services. As Better Place demonstrates, the most important innovations often can’t be done alone. 4. Integrate the supply chain, in forward and reverse. Tight integration of a distributed (not vertically integrated) supply chain increases efficiencies of cost and time. It often improves the quality of raw materials, and the product or service to be integrated. Walmart has driven its suppliers to thoroughly integrate using shared software and data platforms. These systems—and years of data—allow the company and its suppliers to review and analyze many aspects of their businesses over time.

Startup Communities: Building an Entrepreneurial Ecosystem in Your City
by Brad Feld
Published 8 Oct 2012

Rapid technological disruption played perfectly to Silicon Valley’s culture of open information exchange and labor mobility. As technology quickly changed, the Silicon Valley companies were better positioned to share information, adopt new trends, leverage innovation, and nimbly respond to new conditions. Meanwhile, vertical integration and closed systems disadvantaged many Route 128 companies during periods of technological upheaval. Saxenian highlights the role of a densely networked culture in explaining Silicon Valley’s successful industrial adaptation as compared to Route 128. Finally, the third explanation of startup communities, the notion of the creative class, comes from geography.

Palo Alto: A History of California, Capitalism, and the World
by Malcolm Harris
Published 14 Feb 2023

Increasing the supply of Chinese workers increased the demand for Chinese food, and the new cohort of California Chinese gardener-peddlers found they could make a decent, reliable living on relatively small plots, and without the risk or trouble of the gold business. The gardening work was much more labor-intensive than industrial wheat farming, but the produce sold for a lot more, and the cultivators could vend their products themselves locally or in the surrounding region, vertically integrating their operations and cutting out the middlemen and the speculators. Until the introduction of refrigerated train cars at the end of the 1880s, these perishable goods mostly fed California, not Europe or other nodes on the global market. It’s also worth noting that small, internally diverse plots made for a much stronger food system and a more resilient income stream for the growers.

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As they scaled, growers also fell prey to middlemen packers and commission agents who could play them against one another. Already fed up with the situation in 1893, a German-born merchant turned orange grower in Southern California named P.J. Dreher organized some of his neighbors into a small cooperative so they could take over their own packing. They gained enough benefits from this vertical integration that others quickly joined. The California Fruit Growers Exchange (CFGE) scaled up, and by 1905 it had counted among its membership nearly half the state’s citrus growers, a number that continued to plump. By centralizing packing beyond any individual grower’s purview, the exchange could ensure that no one undermined the collective agreement regarding output.

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There was a lot of work in a finished circuit, and it broke down into the fabrication of the silicon wafers (with the various doping and etching steps) and the circuit-board assembly. Once the big silicon wafer is done, workers need to slice it into individual components, mount and wire them on boards, test them, and package them. All of it is delicate work. In its early years, Fairchild vertically integrated these steps in its Bay Area facilities. The firm hired women to do the assembly work and men to supervise them, echoing the gender-segregated division of labor in the orchards and canneries.47 Fairchild had three main ways to reduce labor costs: reduce the amount of labor per chip via automation, find a way to reduce the cost of the labor per chip, or, preferably, both.

Big Bucks: The Explosion of the Art Market in the 21st Century
by Georgina Adam
Published 14 Jun 2014

One failed attempt was the purchase, again by Sotheby’s, of the André Emmerich Gallery in 1996. The idea was to handle artists’ estates, but the gallery soon lost a significant one, the Albers estate, and Sotheby’s closed the gallery in 1998. Undaunted by these examples, Christie’s pursued the idea of vertical integration by attempting to enter the primary market. In 2007 the firm bought the British art gallery Haunch of Venison from Harry Blain and Graham Southern, provoking much shock and protest by art dealers, who saw this as the potential end of art galleries altogether. If the auction houses could successfully sell ‘wet paint’ art, then primary-market dealers were left with no role at all.

Think Twice: Harnessing the Power of Counterintuition
by Michael J. Mauboussin
Published 6 Nov 2012

For example, outsourcing does not make sense for products that require the complex integration of disparate subcomponents. The reason is that coordination costs are high, so just getting the product to work is a challenge. Think of IBM in the early days of the personal computer industry. The company made almost all its own components to ensure compatibility. In this stage, vertically integrated businesses do best. Outsourcing does make sense for industries where subcomponents are modules. In these cases, the performance of the subcomponents is well defined, and the final assembly is straightforward. Today, you can build a personal computer yourself with standardized modules. Once an industry defines the modules, it makes more sense for suppliers to specialize in one component instead of trying to make them all.

Blockchain Chicken Farm: And Other Stories of Tech in China's Countryside
by Xiaowei Wang
Published 12 Oct 2020

And part of internet thinking involves farming at a scale and degree of precision possible in software—a level of control over every microscopic variable along the way, such as pig stress levels. Weiyang’s entire approach is crudely transparent—food, like engineers, can be a pipeline and sourcing issue, solved through increased vertical integration. NetEase has set up numerous massive online open courses (MOOCs) to create a population of skilled workers for recruiting directly into their company, addressing the existing shortage of skilled high-tech workers. Similarly, Weiyang skips the step of working with sources, instead creating its own source of high-quality pork, further eliminating any point of failure. 3.

The Relentless Revolution: A History of Capitalism
by Joyce Appleby
Published 22 Dec 2009

He had a fine technical education, and he turned out to be a natural business organizer, developing a highly sophisticated structure of operations. He expected his department managers—often men in their twenties and thirties—to be as versatile as he was in handling both technical and marketing matters. The vertical integration he achieved in most of his production lines gave him enormous cost advantages. Yet despite the size of his operation, he maintained family control until the 1920s. Thyssen was a larger than life figure. He invested in new technologies that involved a constant addition of capital, a response that contrasted sharply with the now-cautious British entrepreneurs.5 Ernst Werner von Siemens was more a scientist, an engineer, and an inventor than a businessman, yet he founded one of the world’s most successful corporations.

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Families, like the Swifts, Deeres, Eastmans, Schwabs, Firestones, Dows, Watsons, McCormicks, Westinghouses, and Armours maintained control over their firms longest because they grew through internal developments rather than acquisitions. Still, while personal attachment counted for much, the challenges to grow and diversify intensified. Not all heirs were equally able, steering expansion required a breadth of knowledge, and most family firms did not have the deep pockets to meet the considerable costs of vertical integration and managerial reorganization. For instance, only the Vanderbilts had the money to modernize their railroad system. The gifts of Pierre du Pont make this point better. Responsible for restructuring the DuPont Company after 1904 and General Motors after 1920, du Pont was both wealthy and astute enough in financial affairs not to have to repair to Wall Street for expansion.

Digital Accounting: The Effects of the Internet and Erp on Accounting
by Ashutosh Deshmukh
Published 13 Dec 2005

Second, changes in different areas, such as product design, production planning and control, and product life cycle management, are investigated, with particular emphasis on SAP SCM software. Third, changes in cost accounting due to SCM are explained. Finally, a summary of the chapter rounds off the discussion. Supply Chain Management SCM is not a new concept; in fact, managing supplies and suppliers can be traced back to the vertical integration undertaken by the automotive industry in the 1930s. Modern origins of SCM could be traced to the 1960s, when systematic efforts to increase operational efficiency and inventory reduction were undertaken by corporations. Preliminary efforts were in the areas of optimizing warehousing and transportation functions.

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CPFR standards enable open and secure communications, flexibility, support for different data types and interoperability across differing protocols. Many organizations also use EDI in CPFR. The CPFR scenario discussed so far includes two partners, or two tiers — the supplier and customer. The CPFR that deals with the entire supply chain or, in a vertically integrated industry that deals with more than two partners, is called n-tier CPFR. Though more complex, the core ideas behind n-tier CPFR are similar to the two-tier CPFR. The primary advantages of CPFR are removing bottlenecks and constraints to fulfill customer expectations, optimizing production and distribution facilities, and streamlining administration and operations.

Rentier Capitalism: Who Owns the Economy, and Who Pays for It?
by Brett Christophers
Published 17 Nov 2020

Crucially, the third of the overall UK economy given over to manufacturing activity in 1970 looked very different from the manufacturing sector of today, and not just in terms of size. The country – indeed, the Global North as a whole – was on the cusp of, but had not yet begun to experience, revolutionary transformations in the organization of production. On the way out were the vertically integrated manufacturing giants of the Fordist era. When ‘flexible specialization’ and ‘just-in-time’ production became strategic watchwords of post-Fordism, from the mid-to-late 1970s, the Fordist dinosaurs began relentlessly to disaggregate and outsource operations, thus spawning the web of complex contractual relationships – between end-product producers, contractors and subcontractors – that is more familiar today.27 In 1970, that is to say, contract rents, at least in UK manufacturing, were rare.

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See Office for National Statistics, ‘The UK National Balance Sheet Estimates: 2018’, 29 August 2018, p. 6 – pdf available at ons.gov.uk. 15. See especially M. Wolf, ‘Why We Must Halt the Land Cycle’, Financial Times, 8 July 2010. Compare P. Askenazy, Tous Rentiers! Pour une autre répartition des richesses (Paris: Odile Jacob, 2016). 16. Note the close parallel here with a phenomenon described in the previous chapter: namely, vertically integrated infrastructure rentiers such as the UK water companies, where the network owner is also the service provider, and where the company’s service-provision ‘arm’ effectively pays an internal rent to the infrastructure ‘arm’, and passes that cost on to the consumer of water and sewerage services. 17.

The Oil Factor: Protect Yourself-and Profit-from the Coming Energy Crisis
by Stephen Leeb and Donna Leeb
Published 12 Feb 2004

But nonetheless it’s a terrific choice for most portfolios and offers a low-risk and potentially highly rewarding way to take a position in one of the most compelling alternative energies for the near and intermediate term. That’s because in 2002, for $225 million, the company acquired Enron Wind, putting it in the forefront of what down the road is likely to become a burgeoning and massive market for wind energy. Enron Wind is a vertically integrated producer of wind energy: it generates wind energy on its own wind farms and is a leading manufacturer of wind turbines and blades. While currently its revenues and profits would barely constitute a rounding error on its parent company’s balance sheet, it is likely to be making major contributions to General Electric’s bottom line within a short time.

The Butcher's Guide to Well-Raised Meat: How to Buy, Cut, and Cook Great Beef, Lamb, Pork, Poultry, and More
by Joshua Applestone , Jessica Applestone and Alexandra Zissu
Published 6 Jun 2011

No two slaughterhouses, big or small, are created equal. We deal strictly with small, local slaughterhouses that kill from ten to fteen steers per week and similarly low numbers of other animals; larger commercial processing plants slaughter as many as twenty- ve thousand steers per day. We don’t work with these vertically integrated factory-farm monster operations. Our animals are brought to our slaughterhouses from local farms with very little time in transit; travel stresses them. They are allowed to rest before being slaughtered. Unlike in an industrial setting, they are brought in one by one by a person. The local slaughterhouse is a farmer’s best friend.

Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy
by Jonathan Taplin
Published 17 Apr 2017

We certainly are not preparing our students for a career writing “sponsored content,” like the kind Jacob Silverman described in The Baffler: Also called native advertising, sponsored content borrows the look, the name recognition, and even the staff of its host publication to push brand messages on unsuspecting viewers. Forget old-fashioned banner ads, those most reviled of early Internet artifacts. This is vertically integrated, barely disclaimed content marketing, and it’s here to solve journalism’s cash flow problem, or so we’re told. “15 Reasons Your Next Vacation Needs to Be in SW Florida,” went a recent BuzzFeed headline—just another listicle crying out for eyeballs on an overcrowded homepage, except this one had a tiny yellow sidebar to announce, in a sneaky whisper, “Promoted by the Beaches of Fort Myers & Sanibel.”

Vertical Vegetables and Fruit
by Rhonda Massingham Hart
Published 14 May 2011

Sold with fasteners and wall anchors, they are a complete, self-contained growing system. Green Living Technologies manufactures modular stainless-steel and aluminum planters that are used to create a range of living walls (including, at 2,380 square feet [221 m2], the largest living wall in North America on the PNC Bank building in Pittsburgh, Pennsylvania). Vertical Integration to the Nth Degree A more ambitious approach is to build your own wall of soil, which provides tremendous vertical surface area for growing. The idea is to erect a sturdy, rigid wire frame (heavy-duty welded-wire panels work well for this), line the frame with fabric, fill it with soil mix, and plant.

Silicon City: San Francisco in the Long Shadow of the Valley
by Cary McClelland
Published 8 Oct 2018

Of course, the new generation is also super important for the economy here. But it’s because people coming out of school will work 24/7. It’s the engine on which a lot of the value is built, this incoming talent cycle. So it’s important that they find it desirable to go and join these massive companies. It’s all part of the ecosystem. The whole complex feels vertically integrated: someone finishes undergrad, they have a path, they go straight to a big company, graduate school, then a firm. These institutions keep them insulated from much of the world, and the next thing you know, they’re a senior person in their field. They have resources. They have influence. But they’ve never actually worked outside of a pretty sheltered context.

The Metric Society: On the Quantification of the Social
by Steffen Mau
Published 12 Jun 2017

The particular strength of indicator-based governance thus lies in its ability to render hierarchical control interventions largely unnecessary; instead, such methods act on individuals and institutions by building certain relevance criteria into the DNA of institutional structures and social environments. This ‘government at a distance’ (Miller & Rose 1990: 9) achieves greater vertical integration largely through normative pressure and emulation. How normative pressure arises is aptly illustrated by the aforementioned Pisa system, which has led to the prioritization of certain types of educational and learning content over others. Richard Münch, who has earned a reputation as a harsh critic of the Pisa regime in recent years, argues that competition for the best results is diminishing the freedom of schools, in that everything is now judged by a single criterion.

Internet for the People: The Fight for Our Digital Future
by Ben Tarnoff
Published 13 Jun 2022

While these companies generally buy a share of a cable as part of a consortium, Google has been building its own infrastructure. Unlike telecoms, tech firms are not acquiring backbones in order to sell capacity, but to use them for themselves. As they continue to remake the global architecture of the internet, constructing vertically integrated digital empires that control both the pipes and the information inside them, they are remaking the internet remade by the 1990s into an even more privatized form. The Internet’s Slumlords The proponents of a privatized internet claimed it would be good for everyone. It would lead to better service, wider access, more investment.

Wealth, Poverty and Politics
by Thomas Sowell
Published 31 Aug 2015

For outsiders to attempt to change a culture may be resented as well as resisted. As economic historian David S. Landes put it, “criticisms of culture cut close to the ego” and “injure identity and self-esteem.”93 Outsiders can seldom change a lagging culture, without a receptivity to cultural changes within the lagging group itself. a “Vertical integration” is a term used by economists to describe producers who expand their operations to include things usually produced by other firms that supply the materials used in the production process. Examples would include steel mills which own their own iron ore deposits or restaurants which grow food in their own gardens or farms.

…

Army: 102, 164, 193, 204–206, 243 wars: 54, 81, 129–130, 240, 268, 413 Waterloo: 219 World War I: 76, 96, 102, 164, 185, 192, 205–206, 207 World War II: 89, 96, 122n, 193, 248, 372 Mill, John Stuart, 123, 136–137, 236, 255–256 Millionaires and Billionaires, 266, 298–299, 328–329, 330, 334, 335, 361–362 Minimum Wage Laws, 277–279, 403 Mississippi River, 18, 33, 36, 38–39, 79, 163, 339, 340 Mobility geographic mobility: 167, 174–178 social mobility: 164, 167, 180–183, 213, 263, 369, 383, 386–387 Moors, 69, 78, 92, 108, 124, 244, 343 Morality, 245, 274–275, 347, 354, 359, 362, 390 honesty: 115, 136–138, 140–142, 303, 382 ideals: 390, 420 merit: vi, 356, 357–358, 363 moral issues versus causal issues: viii, 5–7, 245, 271, 348, 388, 407 moral neutrality: viii “social justice”: 179, 305, 336, 346–347, 354–360, 362, 363 Moriscos, 108, 130, 312, 414 Morocco, 4, 46–47, 49, 52, 168, 400 Motives, 350, 402 Mountains, 4, 10, 18–19, 31, 32, 36, 37, 44–56, 59, 63, 64, 67, 70, 73, 80, 90, 101, 120, 168, 173, 174, 178, 185, 211, 228, 229, 230, 231, 233, 243, 348, 364, 400, 409, 432 (endnote 9) backwardness: 4–5, 45, 46, 211, 243, 348, 353, 432 (endnote 9) children: 52, 53 exodus: 52–54 fragmentation of populations: 228, 229 geography: 18, 32, 44–56, 80, 120, 432 (endnote 9) government: 228–232 handicrafts: 56, 399–400 in-breeding: 211 IQs: 53, 210, 211, 444–445 (endnote 54) isolation: 45, 46, 52, 211, 229–230, 441–442 (endnote 9), 442 (endnote 10) military mercenaries: 54 mountain passes: 47, 230 mountain people: 4, 19, 49, 50, 52, 54–55, 90, 211, 399–400, 445 (endnote 55), 486 (endnote 11) mountain population: 18–19, 45, 46, 51–52 mountain valleys: 46, 47, 167, 230, 231 mountain villages: 4, 21, 46, 48, 49–50, 51, 72, 184, 185, 211, 364, 392, 400, 406–407 poverty: 45, 50–51, 271, 348, 353, 359 remittances: 54 soil: 46, 47 topography: 47, 486 (endnote 11) Movies, 372n, 399, 416–417 Moynihan, Daniel Patrick, 146, 309 Multiculturalism, 119, 165–166, 213, 287 Multiple Prerequisites (see also Causation, interactions of causes), vi, 393, 394–402, 404 achievements with multiple prerequisites: vi, 394–395 different prerequisites in different endeavors: 396 retrogressions: vi, 395–396 Murder (see Crime, homicide rates) Murray, Charles, 135, 184, 207n, 337 Myrdal, Gunnar, 204, 490–491 (endnote 2) Names, 41n, 250, 339–341 Nations and Empires, 227–233, 234, 235, 236–245, 247 Natural Resources, 8–9, 19, 21–22, 56–60, 89, 73–74, 75–76, 89, 93, 136, 138, 169, 222, 229, 247–248, 414 Navigability, 30–31, 32, 33–34, 38, 40, 45, 55, 79 Nazis, 134, 165, 177, 248, 251–252, 253, 257n, 266, 419 Neighborhoods, 101, 174–175, 176–177, 194, 197, 198, 276, 287, 289, 290, 297–298, 370, 386n, 409n The Netherlands, 41, 56, 108, 141, 208, 244, 340 New England, 42, 67, 153, 162n, 163, 192, 193–194, 212, 250, 337, 339–340 New York City, 63–64, 141–142, 230, 289n, 340 city colleges: 163, 377 Harlem: 176–177, 197, 198, 287–288, 386n high schools: 101, 145, 163, 188, 189–190, 191, 194, 264, 282, 369, 373, 377 Hudson River: 37, 209–210 Lower East Side: 101, 163–164, 197, 409n racial and ethnic groups: 101, 106, 140, 145, 163, 164, 174–175, 176, 190, 191, 197, 198, 263, 264, 281, 282, 284, 285, 303, 369, 370, 373, 374, 409n, 496–497 (endnote 11) Niger River, 32, 33, 232, 240 Nigeria, 8–9, 10, 11, 81, 89, 129, 130, 133, 146, 147, 151, 171, 242, 260n, 264, 284, 377, 419 corruption: 138 geography: 33, 240, 241 Nigerians abroad: 241, 242, 348, 387–388 Nile River, 30, 36, 37, 38, 58, 59 Nineteen Sixties, 286, 290, 300, 301, 304, 362n Non-Judgmental Attitudes, 280, 286, 287, 288, 291, 296, 297, 303, 355, 504 (endnote 75) North Africa, 21, 49, 54, 69, 71, 72–73, 75–76, 78, 123–124, 125, 177, 227, 235, 238 North America, 10, 38n, 43, 44, 62, 69, 70, 91, 104, 108–109, 116, 117, 174, 175, 228, 243–244, 252, 257, 515 (endnote 8) lakes: 28, 32, 37, 79 mountains: 4, 18, 31, 37, 45, 46, 47, 48, 51, 53, 229, 243 rivers: 18, 28, 31, 33, 36, 37, 38, 39, 79, 106, 163, 209–210, 339, 340 Northern Europe, 3, 22, 111n, 176, 204, 205, 208 Norway, 5, 6, 141, 209–210, 337 Oceans, 10, 17–18, 28, 33, 35, 37, 38, 39–42, 61–62, 67, 70, 79, 160, 161, 162, 168, 177, 186, 204, 219, 228, 290, 297, 304, 390, 391, 403, 421 Oil, 22, 28, 56–58, 89, 93, 136, 138, 379, 414, 422 Opportunity, 173–174, 180–181, 369–370, 394, 403–404, 421 Ottoman Empire, 6, 50, 124, 129, 144, 177, 235, 244, 254, 264, 266, 284 Pacific Ocean, 17–18, 28, 35, 40, 41n, 161, 162, 168, 228 Paris, 28, 63–64, 249, 409n Patents, 143, 152, 473 (endnote 80) Peddlers, 101, 103, 104, 168 Perón, Juan, 112, 351 Personal Experiences, 163n, 386n, 409n, 502 (endnote 47) Peru, 71, 99–100, 114–115, 117, 129, 419 Petroleum, 21, 22, 57, 93, 136, 414 Philanthropy, 363–364 Philippines, 129, 132, 133, 237, 242, 244, 247, 266 Philosophy, viii, 2, 80, 123, 124, 125 Photography, 96, 123, 395 Piketty, Thomas, 323–324, 325, 327, 332, 333, 356, 357 Plains, 4, 27, 30, 31, 34, 35, 37, 45, 51, 54, 59, 67, 71, 79, 120, 136, 314 Po River, 35, 36, 185 Poland, 80, 164, 209, 227, 337 Policies, v, 311, 375, 381 confiscation: 7, 107–108, 253, 312–313, 344, 350, 356, 357, 415–416, 420 redistribution: 312, 355–356, 358, 359, 380 welfare state: 211, 273–305, 401, 403 Polio, 190, 377–378 Politics, viii, 10, 112, 128–129, 147, 190, 215–305, 368 decisions: 217, 219, 221, 222–223, 377 entitlement: 130, 148, 292–293, 301, 305, 504 (endnote 75) grievances: 127–128, 130, 148, 292, 296–297, 301 incentives: 129, 159, 199, 200, 228, 229, 251, 305, 357 intellectuals: vii–viii, 131–132, 146–147, 301–302, 353, 361–362, 380 isolation: 170, 269 leaders: 131, 160, 268–272, 385–386 nations and empires: 227–233, 234, 235, 236–245, 247 polarization: 145–146, 147, 261–272 political beliefs: 354, 407 politicians: viii, 346, 380, 381, 386 power: 343–344 resentment: 128–129, 131, 190, 262–268, 269 secession: 269 “solutions”: 361–367 victimhood: 301, 393 welfare state: 381, 401, 504 (endnote 75) Population, 72, 167–183, 473 (endnote 80) biased samples: 186–187 demographic composition: 171–174 density: 169 food: 167–168, 170 fragmentation of populations: 228, 229 geographic mobility: 168 mountain population: 18–19, 45, 46, 51–52 poverty: 167, 169–170 size: 167–171 social mobility: 178–183 Portugal, 112, 116–117, 209, 221, 243–244, 337 the Portuguese: 41, 113, 114, 115, 141, 244, 397 Poverty, v, vi, 2, 7, 8, 100–101, 173, 191, 198, 200, 211, 220, 229, 232, 243, 268, 275, 278, 280, 281–282, 290, 311, 313, 314–315, 328, 361, 365, 371, 380, 383 defined: 280, 297, 311 the poor: v, vi, 275–276, 415 reducing poverty versus reducing disparities: 311–312, 359, 408, 409–410, 411 rises from poverty: 81, 101–102, 103, 104, 105–106, 107, 108, 110, 123, 133, 283, 300, 353, 365, 366–367, 371, 374, 383, 408, 413, 421n Power, 251–257, 343–344 Prerequisites consequences: vi multiple prerequisites: vi, 393, 394–402, 404 Privilege versus Achievement (see also Advantages and Disadvantages), 190, 371–372, 374, 376, 380 Production and Productivity, 8, 226, 262, 315–316, 341–342, 349, 350, 355–356, 357, 358, 359, 363, 375–381, 410 economies of scale: 225, 227 incentives: 92–93, 343 technological advances: 410, 423 Professions, 211 Progress, vi, 281 Public Housing Projects in England: 290, 294 in the United States: 288–290 Punctuality, 139 Quantification, 12 Quebec, 116, 132, 147 Race and Ethnicity, 20–21, 51, 83, 95, 109–110, 160, 184, 209, 233, 234, 353, 392, 393, 417 color differences: 134, 233, 366 discrimination: 185 ethnic succession in sports and entertainment: 397–399 eugenics: 204, 210 genetic determinism: 185 racial and ethnic differences: 17, 185, 250 racial and ethnic leaders: 91, 130, 131, 132, 185, 196–197, 262–263, 265, 268–270, 283, 296, 300–301, 365 racial and ethnic polarization: 147, 252, 261–272 racial and ethnic tolerance: 134, 147, 495 (endnote 41) racial and ethnic violence: 108, 134, 251–252, 264, 265, 266–268, 282–283, 286, 301–304 racism: 185, 251–252, 264, 286–287, 366, 385, 416–417 ranking races: vi, 375 stereotypes: 185, 374 Radius of Trust, 135–136, 140, 228–229, 251 Railroads, 47, 48, 121, 123, 243, 379 Rainfall, 18, 22, 23, 27, 33, 35, 36, 54–55, 60, 67, 73, 223, 382, 439 (endnote 30) Randomness, vii, viii, 103–104, 174–177, 186, 336–341, 404, 416 Ranking Peoples, vi–vii Rawls, John, 344, 354, 355, 356, 358–359, 360, 361 Redistribution, 341–342, 343–346, 355–356, 358, 359, 370, 371, 378, 380, 423 Religion, 163, 168, 229, 250, 390, 395 Remittances, 54, 349 Resentment, 103, 115, 128–129, 131, 133–134, 159–160, 190, 194, 213–214, 262–268, 269, 421 Retrogression, vi, 125–126, 191, 194–197, 202, 211, 217, 219, 220–222, 279–280, 281–305, 367n, 386, 395–396, 403, 407 Rich and Poor, 280, 292, 331–335, 347, 359, 362, 378, 379, 408, 423 Rif Mountains, 4, 46–47, 49, 50, 54 Riots, 240, 267, 282–283, 285, 292–293, 301–302, 304, 418 Rivers, 18, 27, 28, 30–39, 42, 46, 55, 58, 59, 72, 79, 106, 120, 163, 185, 209–210, 230, 232, 234, 240, 243, 339, 340 navigability: 30–34, 37–38, 45, 55, 79 river valleys: 4, 36, 59 Robinson, Eugene, 334 Rockefeller, John D., 255, 263, 332–333, 378–379 Roman Empire, 30, 70, 78, 82, 96, 119, 126–127, 185, 187, 220, 221–222, 227, 228, 233, 237, 239–240, 247, 254–255, 270–271 Romania, 98, 128, 146, 147, 264–265, 281, 418 Romanians, 98, 128, 146, 147, 264–265, 281, 418 Romans, 70, 78, 82, 96, 126–127, 185, 187, 220–221, 222, 227, 239–240, 247, 254, 255, 270–271, 410 Roots, 146, 187, 470 (endnote 49) Russia, 35, 39, 62, 80, 95–96, 97, 98, 110, 112, 119, 128, 160, 164, 175–176, 244, 337, 414 economy: 136, 137, 138, 143, 222, 255, 312–313 honesty: 136–138 human capital: 143, 312–313 natural resources: 136, 138, 222 Russians: vii, 97, 102, 128, 136, 137, 138, 160, 244, 285, 312–313, 364 Soviet Union: 136, 137–138, 170, 171, 222, 255, 313 voluntary organizations: 364 Rwanda, 134, 266–267, 303 Sahara Desert, 21, 61, 71, 436 (endnote 15), 448 (endnote 7) Salk, Jonas, 190, 378 Sarnoff, David, 179 Saving (see also Spending), 66, 105, 110, 111, 112, 114, 284 Scandinavia, 111–112, 256n, 295–296, 392 Science, 40, 81, 92, 124, 125, 143, 145, 148, 184, 201, 249, 312, 347, 406 Scotland, vi, 12, 44–45, 49, 50, 54, 82, 107, 123, 133, 160, 164, 205n, 209, 211, 296–297, 312, 337, 365, 394, 413 Seas, 27, 28, 29, 32–33, 34–35, 41, 42, 79, 120–121, 130n, 235 Secession, 269–270 Semple, Ellen Churchill, 9, 118, 226, 229 Shaker Heights, 196, 199, 213, 370, 384 Shining Shoes, 150 Sierra Leone, 10, 11, 103–104, 105, 176 Singapore, 63, 107, 117, 143, 169, 227–228 Sinhalese Language, 132 Sinhalese People, 132, 144, 267–268, 283 Skills, 80, 92, 95–96, 97, 111, 128, 130, 143, 145, 148, 153, 159, 160, 221, 264, 268–269, 272, 285, 312, 341–342, 377, 400 Slavery, viii, 6, 252, 362n, 363, 367, 381n, 404, 491–492 (endnote 7) abolition of slavery: 234, 235, 236, 252, 381n, 390, 391, 520 (endnote 17) economic role: 6, 235–236, 349, 413, 414 extent: 177, 185, 186–187, 228, 232, 233–235, 236, 254–255, 390–391 “legacy of slavery”: 191, 198, 279–280, 285–286, 293, 294, 391, 403 power: 253, 254, 255 race: 177, 233–235, 236 slaves and their descendants: 81, 109, 192, 244, 271, 363 sources of slaves: 177, 186–187, 233–235, 236 treatment of slaves: 253, 254–255, 271, 390 Slaves, 81, 109, 177, 185, 186–187, 192, 228, 232, 233–236, 244, 253–255, 271, 363, 381n, 390, 404, 413, 473 (endnote 80), 487 (endnote 24) “Social Justice,” 179, 305, 336, 346–347, 354–360, 362, 363 Social Mobility, 178–183, 369, 370–372 Soil, 20, 22–23, 27, 39, 41, 42, 44, 46, 47, 58, 59–60, 64, 73, 75, 101, 109, 112, 120, 133, 136 fertility: 22–23, 46, 59–60, 64, 73, 75, 109, 110, 120, 136 limestone: 22 loess: 22, 23 swamps: 22 topsoil depth: 60, 109 water retention: 22 South America, 38, 41, 43, 44, 54, 59–60, 62, 63–64, 69, 71, 91, 96, 99, 104, 109, 113, 116, 117, 174, 175, 228, 230, 231, 243–244 Southern Europe, 24, 34, 35, 54, 64, 71, 124, 162, 165, 176, 178, 204, 205, 208, 235, 244, 392, 475–476 (endnote 20) Southern United States, 46, 52, 53, 79, 134, 149, 152–153, 163n, 185, 192, 195, 204–205, 206, 212, 235, 243, 250, 252, 281, 282–283, 287, 304, 337, 363, 366, 367, 386n, 390, 398, 399, 473 (endnote 80) Soviet Union (see also Russia), 136, 137–138, 222, 313 central planning: 137–138, 255, 256, 257, 381 famine: 170, 171 Sowell, Thomas, 163n, 386n, 409n, 427–428, 502 (endnote 47), 513–514 (endnote 54) Spain, 7, 21, 36, 53, 54, 55, 78, 108, 124, 125, 130, 168, 209, 210, 219, 244, 337 attitude toward work: 93, 109–110, 111–112, 113, 114, 115, 150, 244, 312, 414 culture: 6, 93, 109–110, 111–112, 113, 114, 115, 116, 150, 244, 312, 414 empire: 6, 92–93, 108, 109, 116–117, 237, 243–244, 245, 247, 271, 312, 349, 413–414 skills: 92, 93, 312 spending: 6, 92–93, 312, 413–414 translations: 90, 125 Spending (see also Saving), 6, 92–93, 111, 160, 274, 277n, 312, 413–414 Sports and Entertainment, 401–402 entertainment: 398–399, 416–417 sports: 337–338, 369, 377, 396–398 sportscasters: 399 Sri Lanka, 50, 81, 129, 132, 133, 144, 146, 147, 237, 242, 260n, 264, 267–268, 283, 284, 495 (endnote 41) Standard of Living, 1–2, 4, 7–8, 20, 130, 169, 170, 221, 271, 312, 315, 342, 354, 363, 375, 407 Statistics, ix, 33, 245–246, 319–335, 344, 361, 408 correlation versus causation: 12, 382, 383–384 “disparate impact” statistics: 259, 341, 404 income statistics: 319–335, 361 origins of statistical data versus origins of causation: 173, 370, 385, 388–389 predictive validity: 187–203 probability: 369 randomness: vii, viii, 103–104, 174–177, 186, 336–341, 394, 404, 416 statistical categories versus specific sets of human beings: 320–327, 331, 347 statistical disparities: 5, 6, 7, 8, 262, 311, 346–351, 385 survey research: 212, 278n–279n wealth statistics: 332–333 withholding statistical data: vii–viii, 203, 367 Stereotypes, 165–166 Stiglitz, Joseph, 369, 370, 371 Stuyvesant High School, 101, 145, 188, 189–190, 191, 282, 369 Sweden, 337 Switzerland, 8–9, 48, 54, 168, 178, 233 economic level: 5, 6, 8–9, 243–244 geography: 18, 47, 230, 231–232, 233 handicrafts: 56, 400 Taking Sides, vii–viii Tamils, 81, 129, 132, 133–134, 144, 264, 267–268, 284 Taxes, 298, 403 capital gains taxes: 329–331 “fair share” of taxes: 328, 329 income taxes: 328, 329, 330 tax rates versus tax revenues: 329, 420 Technology, 2–3, 18–20, 38, 41, 46, 64, 66, 92, 122, 125, 126, 148, 161, 201, 249, 250, 316, 347, 406 Temperate Zones, 20, 43, 44, 59–60, 62–63, 64, 65, 66–67, 77, 78, 79, 91, 94, 231 Temperature, 9–10, 34, 36, 61–64, 65, 67, 209–210, 231, 314, 382, 434 (endnote 25) Thernstrom, Abigail, 202, 289n Thernstrom, Stephan, 202, 289n Third World, 1, 89, 140, 151, 245, 247, 265, 268, 350, 361–362, 377n, 395, 419 Time, 66, 91, 357 the past: 25, 245, 271–272, 275, 360, 411 punctuality: 91–92 retroactivity: 24, 187, 271 time horizon: 91, 272 timing: 66, 116 transience: 323, 324, 325, 326, 332–333 Tolerance and Intolerance, 134, 147 Top One Percent (see Income) Topography, 29, 30, 32–33, 36, 42, 43, 44, 45, 47, 72, 230, 232, 382, 486 (endnote 11) Tornadoes, 17, 314, 394 Toynbee, Arnold, 94, 96, 130n, 134, 305, 402, 443 (endnote 36), 451 (endnote 8) Translations, 90, 125 Transportation, 4, 18, 19, 24, 27, 28, 29, 31, 33, 34–39, 40, 44, 46, 47, 48, 49, 68–72, 170, 220–221, 226, 228, 242–243, 348, 437 (endnote 2) “Trickle Down” Theory, 410n Tropics, 18, 20, 44, 60, 62–63, 64–65, 66–67, 77, 78, 79, 94, 231 Truth, viii, 368, 370, 381 Uganda, 7, 130, 265, 415, 419 Unemployment, 145, 147, 148, 277–279, 283, 286, 290, 293, 295, 298 United States of America, 1–2, 10, 11, 17, 21, 23, 28, 31, 36, 37, 46, 51, 54, 57, 60, 67, 70, 79, 81, 100–101, 102, 104, 105, 106, 108, 121–122, 133, 134, 136, 141, 143, 149, 152, 160–161, 171, 174–175, 176, 182, 183, 186, 187, 209, 211, 226, 235, 241, 242, 243, 246–247, 250, 252, 269–270, 280, 286, 300, 301, 302, 303, 304, 305, 314, 315, 320, 322, 335, 337, 339–340, 343, 350, 363, 364, 387, 390, 391, 416, 422, 423, 436 (endnote 15), 437 (endnote 2), 445 (endnote 55), 473 (endnote 80), 491–492 (endnote 7), 499 (endnote 40) Universities and Colleges, 97, 98, 101, 102–103, 105, 117, 119, 122, 145–147, 151, 163, 184, 192, 193–194, 195, 200–203, 241, 263, 294n, 332, 338–339, 363, 368, 371, 395, 419 Urbanization, 3–4, 22, 24, 58, 59, 169, 245, 313, 339–340, 341, 393 Uruguay, 59–60 Vertical Integration, 139n Victimhood, vii, 261, 294, 301, 334, 388, 389–390, 393, 406, 422 Violence, 195, 282–283, 290 homicide rates: 286 intergroup violence: 130, 134, 145–146, 159, 177, 240, 242, 249, 264, 265–267, 268, 286, 301–304 Vlach Language and People, 49, 52, 178 Volga River, 35, 39 Voluntary Philanthropic Activities, 363–364 Wales, 82, 296–297, 337 War, 81–82, 89 World War I: 76, 96, 102, 164, 185, 192, 205–206, 207 World War II: 89, 96, 122n, 193, 248, 372 Washington, D.C., 9–10, 192, 194, 199, 280, 384–385, 434 (endnote 25) Watches and Clocks, 159–160, 178, 400 Water aqueducts: 221 dew: 36 drainage: 22, 120 drinking water: 27, 28 evaporation: 18, 55 rain and snow: 18, 36, 55, 59 Waterfalls, 27, 34, 37, 46 Waterways, 27–42, 55, 60, 82, 230 canals: 32 effect on temperatures: 61–62 fish: 27 harbors: 21, 28, 29, 30, 32, 36, 37, 109, 120, 219 irrigation: 27, 55 lakes: 28, 32, 34–35, 37, 42, 79, 230 navigability: 29, 30–31, 32, 33–34, 37–38, 40, 45, 55, 79 oceans: 28, 37, 39–41, 70, 161, 162, 177, 186, 219 rivers: 18, 27, 28, 30–39, 42, 46, 55, 58, 59, 72, 79, 106, 120, 163, 185, 209–210, 230, 232, 234, 240, 243, 339, 340 Wealth, 96, 171, 263, 382, 413 confiscation of wealth: 7, 107–108, 253, 312–313, 344, 350, 356, 357, 415–416, 420 differences from income: 328 differences in wealth: 2 distribution: 17 inherited wealth: 263 transfer: 8 turnover in wealthiest families: 332–333 unearned wealth: 357, 413–414 Welfare State, 211, 273–305, 381, 400–401, 403, 413 entitlement: 292–293, 294, 305 grievances: 294, 416–417 poverty definition: 280 progress and retrogression: 281–305, 381, 402–403 welfare state vision: 273–280, 293, 294, 299–300, 362n, 365, 403 Western Civilization, 2, 51, 79–80, 119, 121, 125, 133–134, 151, 235, 236, 249, 364, 366, 380–381, 391 Western Europe, 3–4, 6, 10n, 27, 30, 33, 34, 35, 36, 60, 67–68, 89, 110, 119, 123, 124, 125, 126–127, 136, 151, 162, 165, 170, 177, 220, 221, 227, 234, 243, 244, 257, 312, 315, 353–354, 366, 515 (endnote 8) Western Hemisphere, 6, 17–18, 36, 41, 43, 44, 59, 63, 67–68, 69, 70, 71, 72–73, 76, 77, 92–93, 98–99, 100, 109, 110, 115, 140, 187, 231, 233–234, 237, 244, 245, 246, 247, 312, 349, 414 Wheat, 110, 112 Wheels, 46, 47, 48, 68–69, 70, 375, 376 Whites, 77, 106, 145, 164, 172–173, 186, 187, 189, 196, 197, 199, 202, 209, 210, 211, 213, 234, 279–280, 282, 286–287, 301, 302–303, 304, 362n, 365, 366, 369, 370–371, 374, 384, 389, 397n, 404, 416, 420, 499 (endnote 40) in the American South: 51, 52–53, 149, 152, 185, 192, 195n, 204–205, 212, 235, 250, 363, 398, 399, 445 (endnote 55), 473 (endnote 80) in England: 241, 290–297, 303, 305, 383, 385, 386, 387, 403, 421 Why Nations Fail, 1n, 10, 313, 315, 432 (endnote 14) Williams, Walter E., 289 Wilson, Woodrow, 256, 345 Windfall Gains, 59, 92–93, 94 Words (see also Definitions), viii–ix, 346, 369–381, 389–390 ambiguous words: viii–ix, 422 camouflage words: 344, 345 counterfeit words: 345 insinuations: 179, 370, 433 (endnote 20) semantics: 179, 328, 344, 374 verbal sleight of hand: 181, 375 words spoken to children: 172 Work attitude toward work: 92, 93, 115, 292, 293 disincentives to work: 298–299, 402 earnings from work: 42, 172, 180, 182–183, 321, 326, 327, 329, 330, 331, 412n hours of work: 101, 104, 129, 263, 293, 370–371, 373 indentured labor: 100, 161 “menial” work: 150 social consequences, 294n unemployment: 145, 147, 148, 277–279, 283, 286, 290, 293, 295, 298 work habits: 110, 111–112, 113, 115–116, 149–150, 151, 152, 153, 263–264 Wright Brothers, 143, 179 Yangtze River, 18, 30, 32, 33 Zaire River, 18, 33, 36 Zambezi River, 32

Democratizing innovation
by Eric von Hippel
Published 1 Apr 2005

One might think that an alternative approach would be to identify lead users before they have innovated. Alert manufacturers could then make some prior arrangements to get preferred access to promising user-developed innovations by, for example, purchasing promising lead user organizations. I myself think that such vertical integration approaches are not practical. As was shown earlier, the character and attractiveness of innovations lead users may develop is based in part on the particular situations faced by and information stocks held by individual lead users. User innovation is therefore likely to be a widely distributed phenomenon, and it would be difficult to predict in advance which users are most likely to develop very valuable innovations.

Platform Scale: How an Emerging Business Model Helps Startups Build Large Empires With Minimum Investment
by Sangeet Paul Choudary
Published 14 Sep 2015

If the platform cannot entice a group of producers to act and engage consistently, it is unlikely to be successful at creating value. b. Shift in Competitive Advantage: From Resources to Ecosystems Pipes competed through resource ownership and control. This led to the rise in popularity of the vertically integrated business as well as the idea of scaling through mergers and acquisitions. In a world of pipes, firms compete based on the control and ownership of internal resources and intellectual property. This traditional view of competitive advantage – that bigger is better and the more you own, the more you win – has broken down.

Does Capitalism Have a Future?
by Immanuel Wallerstein , Randall Collins , Michael Mann , Georgi Derluguian , Craig Calhoun , Stephen Hoye and Audible Studios
Published 15 Nov 2013

It was the revenge of party nomenklatura and military commanders for the fear and humiliations at the hands of secret police. In 1956 the new Soviet leader Nikita Khrushchev denounced the crimes of Stalin—and merrily survived this indiscretion. He would be toppled in 1964 only after attempting to undo the bastions of bureaucratic intransigence in the gigantic vertically integrated industrial ministries, the Soviet equivalent of economic corporations. The nomenklatura cadres certainly desired a limited de-Stalinization. But they wanted to stop the changes once officialdom had achieved their bureaucratic paradise of life tenure, generous perks, and a more relaxed work pace.

Makers
by Chris Anderson
Published 1 Oct 2012

The Tesla factory operates on a principle of manufacturing “units of one,” closer to the dream of mass customization than any automotive manufacturer has ever come. Because so much of the car is made in the factory itself, there is no need for a big inventory of components or long supply chains and the inflexibility that comes with them. With vertical integration comes total control—it’s the ultimate just-in-time process. It fabricates what it needs, when it needs it. Contrast this with the GM/Toyota factory that previously occupied this space. In 1984, NUMMI was launched as an ambitious effort to bring to American car-making the previous revolution in production efficiency, the Japanese “lean manufacturing” techniques that had been pioneered by Toyota.

Ctrl Alt Delete: Reboot Your Business. Reboot Your Life. Your Future Depends on It.
by Mitch Joel
Published 20 May 2013

We all still do (think about banks, cable companies, airlines, telecommunications firms, and a few others). Now, think about how many of those industries are engaged and connected in these channels and how it has fundamentally changed the way the public perceives them. While this is painting with very broad strokes, it comes down to vertical integration versus horizontal integration. When a business claims to be moving in the direction of becoming a more social business, the brands that often fail are the ones that have a social media department within another department (usually marketing and/or communications); their work involves things like campaigns currently in-market or individual initiatives.

Private Island: Why Britain Now Belongs to Someone Else
by James Meek
Published 18 Aug 2014

But the main beneficiaries of this weren’t customers: they were the firms that distributed and sold the power. Excessive profit margins simply shifted from one set of electricity companies to another. The inevitable next stage was for the companies that distributed electricity to merge with the companies that generated it. This was ‘vertical integration’, just the kind of cosy arrangement, with all its potential for price-fixing and abuse of market dominance, that Littlechild wished to avoid. The introduction of Neta shed no light on the real costs to companies that sell customers electricity they’ve ‘bought’ wholesale from themselves. There was only one set of companies rich, powerful and experienced enough to take advantage of Britain’s burgeoning oligopoly.

Smartcuts: How Hackers, Innovators, and Icons Accelerate Success
by Shane Snow
Published 8 Sep 2014

“He just simply doesn’t believe in failure,” Cantrell adds. “And that makes this guy special.” It was an easy fix. A launch failure typically took NASA or others six months to figure out what happened, three months to get a new rocket out on the launch pad, and another two or three to get it certified for flight. With it’s vertically integrated factory and startup spirit, SpaceX found the problem and put the next Falcon 1 on the launchpad in five weeks. And on September 28, 2008, it flew perfectly.* As the first privately developed spacecraft orbited the earth for the first time in history, the triumphant SpaceX team celebrated at their favorite dive bar in nearby El Segundo.

The Secret World of Oil
by Ken Silverstein
Published 30 Apr 2014

Already the world’s biggest middleman, it now wants to control the entire business chain, from mines and smelters to storage facilities for finished products, and from pumping oil to shipping it to refineries, while trading and hedging all along the way. Take copper, for example: Glencore mines it, refines it, transports it, and makes wire and other finished products. “That’s one way that Glencore makes so much money,” a Geneva-based industry source told me. “When you are vertically integrated you make more at every step. The money stays in the same pocket.” Another way Glencore makes so much money is by leveraging information to take advantage of the wild swings that have marked global commodity prices in recent years, with oil yo-yoing from $147 a barrel in mid-2008 down to $40 later that year.1 Poor countries that sell commodities often end up losers when prices go down—like Zambia, which in recent years has been intermittently walloped by a combination of rising prices for agricultural products and sharply falling prices for copper and the other mineral exports on which it depends.

Final Jeopardy: Man vs. Machine and the Quest to Know Everything
by Stephen Baker
Published 17 Feb 2011

Early on, as corporate customers gobbled up PCs, it seemed as though IBM would go on to dominate this next stage of computing. But there was a crucial difference between these desktop machines and the mainframes. Nearly every component of the mainframes, including their processors and software, was made by IBM. In the lingo of the industry, the computers were vertically integrated. This was not the case with PCs. In order to get to market quickly at a low price, IBM built them from off-the-shelf technology—microprocessors from Intel and a rudimentary operating system, MS-DOS, from a Seattle startup called Microsoft. Since the PC had commodity innards, it took no time at all for newcomers, including Compaq and Taiwan’s Acer, to plug them into cheaper “IBM-compatible” computers, or clones.

Borrow: The American Way of Debt
by Louis Hyman
Published 24 Jan 2012

While in Detroit, limited space had forced Ford to rely on elevators; at River Rouge he could lay out every building in one story. Production could be flatter and thus more efficient. It could also be self-sufficient. Ford had fumed at the shortages of World War I. Unlike GM, which continued to outsource whenever possible, as Durant had done from the very beginning, Ford pushed toward full vertical integration. The River Rouge Plant could take in raw ore and uncut lumber, and then, thirty-three hours later, turn out a new car. Nothing could compete with the mechanical apotheosis of the River Rouge plant. River Rouge lowered automobile production costs to the absolute minimum. Ford didn’t need anyone else.

Rebel Ideas: The Power of Diverse Thinking
by Matthew Syed
Published 9 Sep 2019

Yet, these were the superficial differences. The key contrast consisted in the structure of networks, and the dynamics of information spillover. And this would prove utterly decisive. The Route 128 firms had scale. They made chips and boards, monitors and frames, all internally. They even made disk drives. This vertical integration made sense economically. It meant that they had impressive efficiency in production. But this integration had another, less remarked upon consequence (a consequence it didn’t need to have). These large firms became socially isolated. Gordon Bell, a vice president of Digital Equipment Corporation, said: ‘DEC was a large entity that operated as an island in the regional economy.’

I Hate the Internet: A Novel
by Jarett Kobek
Published 3 Nov 2016

“Is that not a problem for thee, sirrah? Surely for thine own self to tire of the cupcake of the pastry is a betrayal of your sweet whole life, is it not? Isn’t every little thing that you speaky, in the end, all the opinions of you Internet lost boys, all the precious thoughts that you cast into the wind, all the vertical integration and decisioning and disruption and incubation and innovation and cross-function collaboration, all of these little kisses that you scatter across Never Never Land, isn’t it all just someone in a Star Wars t-shirt talking about the cupcake and the pastry?” Erik Willems left Adeline standing at the corner of South Van Ness and 17th Street.

The Dark Cloud: How the Digital World Is Costing the Earth
by Guillaume Pitron
Published 14 Jun 2023

But I learn that the sector is structured around the owners of the cables (typically, operators such as Deutsche Telekom, AT&T, Telecom Italia, Vodafone, and Orange), manufacturers (such as Alcatel Submarine Networks, SubCom, and NEC), and ship owners, who install and repair the infrastructure (Global Marine Systems Ltd, in particular). Of note: given their strategy of vertical integration, the FAANGs now have their own undersea cables — a serious disruption for telecom operators. This is the case for Facebook, which has formed its own team dedicated to its subsea foundations. And for good reason: in 2013, within a few hours of the social network launching the video auto-play feature, ‘it took up so much bandwidth that their IT infrastructure almost went down’, a submarine telecom specialist tells me.17 As the old adage goes, if you want something done properly, do it yourself.

Drink: A Cultural History of Alcohol
by Iain Gately
Published 30 Jun 2008

European innovations such as steam engines and microscopes were introduced, and the ever-growing railway network was used to extend distribution. Contemporary advances in cooling technology and ice storage enabled them to produce lager all year round, and their consistent, refreshing product made many converts to the German way of brewing. Once they had stimulated demand, the brewers sought to control it. They became apostles of vertical integration, buying saloons in imitation of the tied pub system of their British counterparts. These profited at the expense of independent competitors by a combination of lower prices and clever marketing strategies, which latter included washing the sidewalk in front of the saloon with beer so that its compelling aroma, mingled with the scent of alcohol evaporating in the sunlight, would lure drinkers in through the doors.

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Persia Peru Pétain, Philippe Petronius Arbiter peyote Philadelphia, Pennsylvania Philadelphia College of Physicians Philippines Phillip, Arthur phylloxera vastatrix Physiology of Taste (Brillat-Savarin) Picasso, Pablo Picts pilsner beers pinard wine piracy Pittsburgh, Pennsylvania Place, Francis plague Plato Platt, Hugh Pliny the Elder Pliny the Younger plonk Plymouth Colony Plzen, Czechoslovakia Poe, Edgar Allan Poland Pollock, Jackson Polo, Marco polygamy polytheism Pope, Alexander port Port Jackson, Australia Port Royal, Jamaica porter Porter, David Portugal Pound, Ezra Prague, Czech Republic Praxiteles prehistoric brews Presbyterians presidios Presley, Elvis Preston Temperance Society Priapus Priestley, Joseph Prince Edward Island privateers Procope (coffee shop) Prohibition Prohibition Party Prometheus prostitution Protestantism Protz, Roger Prussia public houses (pubs) and coffee shops and leisure time and the Licensing Act in London and ordinaries Orwell’s idea of and political unrest and settlement of Australia sin associated with and vertical integration and wartime restrictions and World War pulque Punic War Puritans Pushkin, Aleksandr Putin, Vladimir Putnam, Isaac Quakers quality control Quartering Act Quebec quintessence Raleigh, Walter Ramsay, Allan rap music Reagan, Ronald Reformation refrigeration Reinheitsgebot Rémy Martin Renaissance Republican Party resinated wines restaurants Restoration Revere, Paul Reynière, Alexandre Balthasar Grimnod de la Rheingau region Rhode Island Rhône Valley rice wine Richard (Richard the Lionheart) Ridge Vineyards Riesling wines Rimbaud, Arthur Rio de Janeiro, Brazil Roanoke settlement rock ’n’ roll music Rodrigues, Joāo Roẹderer, Louis Roman Catholic Church Roman civilization and the Bacchus cult and barbarian invasions and Britain and Christianity divided and entertainment and gender issues and Judaism and the Renaissance sacked Senate Roman civilization (continued ) and viticulture and warfare Romantic movement Roosevelt, Franklin Delano Rosee, Pasqua Rothko, Mark Rothschild, Philippe de Rousseau, Jean-Jacques Royal College of Physicians (RCP) Royal Navy Royal Society RU- rum in African rituals and the American Revolution- and Barbados and Benjamin Franklin and New England and piracy and the Royal Navy and settlement of Australia and the slave trade and Washington and World War Rum Regiment (New South Wales Corps) rum-runners Rush, Benjamin Russia Saccharomyces Safer, Morley Sahagun, Bernadino de Saint-Évremond, Marquis de sakazuki ritual sake Salem, Massachusetts saloons Salt Lake City, Utah Samnite civilization samogon Samuel Adams Ale San Francisco, California San Juan Capistrano, California Santa Anna, Antonio ópez de Santa Clara, California Santa Fe Trail Santo Domingo Sapporo Brewing Company Saracens Sasanids Sassoon, Siegfried Saxons Schlitz, Joseph Schlitz Company Schubert, Max Schwann, Theodor Schweppe, Jacob Scotland Scott, George Scythians Sedgwick, Robert Sedley, Bill Selective Service Act Semele Senegal Serra, Junipero Seven Years’ War Shakespeare, William Shelley, Percy Sherry (“sack”) Shias Shinto Shiva Sicily Sickert, Walter Silenus Skara Brae settlement slavery and Dickens and emancipation and New Orleans and the rum trade and sugar production and the temperance movement Slippery Rock, Pennsylvania Smart, J.

Elon Musk
by Walter Isaacson
Published 11 Sep 2023

Years later, after many bitter disputes and a lawsuit, they agreed that all five of them would be called cofounders. 21 The Roadster Tesla, 2004–2006 Straubel takes Governor Arnold Schwarzenegger for a test drive in a Roadster Cobbling together pieces One of the most important decisions that Elon Musk made about Tesla—the defining imprint that led to its success and its impact on the auto industry—was that it should make its own key components, rather than piecing together a car with hundreds of components from independent suppliers. Tesla would control its own destiny—and quality and costs and supply chain—by being vertically integrated. Creating a good car was important. Even more important was creating the manufacturing processes and factories that could mass-produce them, from the battery cells to the body. But that’s not the way the company began. Just the opposite. When producing their Rocket eBook, Martin Eberhard and Marc Tarpenning had outsourced the manufacturing process.

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Sixteen years later, he would be the self-installed chief of five major companies, but in 2007 he thought that he should be like almost every other CEO and stick to one company, in his case SpaceX. So he tapped a Tesla investor, Michael Marks, to be interim CEO. Marks had been the CEO of Flextronics, an electronics manufacturing services company, which he turned into a highly profitable industry leader by pushing a strategy that Musk liked: vertical integration. His company took end-to-end control of multiple steps in the process. Musk and Marks got along well at first. Musk, who had the odd habit of being the world’s wealthiest couch surfer, would stay at Marks’s home when he visited Silicon Valley. “We’d have some wine and shoot the breeze,” Marks said.

Devil's Bargain: Steve Bannon, Donald Trump, and the Storming of the Presidency
by Joshua Green
Published 17 Jul 2017

“We really ended up negotiating with his bankers, J. P. Morgan.” The acquisition gave The Firm a client roster that included Cameron Diaz, Leonardo DiCaprio, Ice Cube, and Limp Bizkit. “We were pirates, and Jeff was the King Pirate, shocking Hollywood,” said Bannon. Kwatinetz and Bannon had grand visions of a sprawling, vertically integrated business that would “brand” its A-List artist-clients across a dizzying array of platforms: not only recording and film but also concerts, clothing, animation, video games, and television. Bannon was as effusive about clients such as the rapper/actor Ice Cube as he would later be about TV star/politician Donald Trump.

Big Data: A Revolution That Will Transform How We Live, Work, and Think
by Viktor Mayer-Schonberger and Kenneth Cukier
Published 5 Mar 2013

Some fortunate enterprises straddle the different domains as a matter of conscious strategy. Google collects data like search-query typos, has the bright idea to use it to create a spell checker, and enjoys the in-house skills to execute the idea brilliantly. With many of its other activities, too, Google benefits from vertical integration in the big-data value chain, where it occupies all three positions at once. At the same time, Google also makes some of its data available to others via application programming interfaces (APIs) so it can be reused and further value can be added. One example is Google’s maps, which are used throughout the Web by everyone from real estate agencies to government websites for free (though heavily visited websites have to pay).

The Autonomous Revolution: Reclaiming the Future We’ve Sold to Machines
by William Davidow and Michael Malone
Published 18 Feb 2020

The difficulty in managing the railroad systems is perhaps best illustrated by an 1855 report that noted that the cost of freight per mile was less on systems that were 50 miles in length than on those that were 500 miles or more in length.42 Running the railroads effectively required administrative structures, internal controls, standard procedures, good communication, and professional managers. The management model that the railroads developed was quickly adopted by other businesses.43 Vertically integrated, professionally administered firms grew to massive scales, dominating markets.44 Today, in the early years of the Autonomous Revolution, the forms of organizations are changing again. Some hugely profitable corporations employ relatively few full-time workers, drawing instead on the services of people who work in the “gig” economy.

The New Rules of War: Victory in the Age of Durable Disorder
by Sean McFate
Published 22 Jan 2019

If a multinational corporation and a terrorist army married, their offspring would be a drug cartel. It can buy a kilo of cocaine in the highlands of Colombia or Peru for around $2,000 and sell it for upward of $100,000 in foreign markets—a 4,900 percent increase. And that’s just cocaine. The Sinaloa cartel is both diversified and vertically integrated, producing and exporting marijuana, heroin, and methamphetamine as well. The CEO of this Narcotics Inc. is Joaquin “El Chapo” Guzman, a ruthless murderer with business savvy. He made Forbes magazine’s list of top billionaires, and he is arguably the most powerful man in Mexico. The US intelligence community considers the Sinaloa cartel “the most powerful drug trafficking organization in the world.”4 Then the Zetas moved in.

Space 2.0
by Rod Pyle
Published 2 Jan 2019

Another company, OneWeb, has been planning a similar system for years, using 650 or more satellites. Others are eyeing this potentially lucrative market as well. How quickly this plan comes to fruition at SpaceX, and how soon it can turn a profit, has much to do with lowering launch costs. This gives SpaceX an advantage. It’s a classic example of vertical integration, where all the needed services can be provided within one company, keeping costs down and increasing profits. The global broadband satellite initiative is already a hotbed of competition, with the various players working to clear government regulatory hurdles. Besides the Federal Aviation Administration, which must grant permission to operate rockets within US territory, the Federal Communications Commission must also approve the plans, since they will involve the use of government-controlled commercial telecommunications bandwidth.

Live Work Work Work Die: A Journey Into the Savage Heart of Silicon Valley
by Corey Pein
Published 23 Apr 2018

The spacious high-end real estate, like the valuation, indicated NerdWallet had “room to grow.” Another floor in the same building rented for a reported $51 per square foot. Based on that, and median commercial rents in the area, NerdWallet was probably paying more than $2 million a year in rent to its landlord, a “vertically integrated” and publicly traded real estate company based in Los Angeles, Hudson Pacific Properties. NerdWallet was unusual among unicorn-mules in that it claimed to turn a profit. The company made money from advertising and referral fees earned whenever it steered users toward a certain credit card, mortgage, insurance policy, business investment, or student loan.

The End of Medicine: How Silicon Valley (And Naked Mice) Will Reboot Your Doctor
by Andy Kessler
Published 12 Oct 2009

But why can’t we take charge of our own health care? The old way is getting stale: get sick, read up, hector your doctor to do something. There are no best practices, just best doctors. It’s not an industry, it’s a collection of studious folks who memorized the organic chemistry textbook. They’re isolated practitioners. Medicine is not vertically integrated or horizontally integrated—it’s not integrated at all! Medical knowledge is scattered to the wind—little bits of it in lots of individuals. There is no product—you and I are the product. Medicine consumes us. But if I learned one thing in the last year, it’s that change was starting to take place in medicine, and was only going to accelerate.

The First Tycoon
by T.J. Stiles
Published 14 Aug 2009

Mail and Pacific Mail Steamship companies agreed in January to cease competing with each other, the first retreating to the Atlantic and the latter to the Pacific.20 But Vanderbilt had delivered a clear warning that he was going to fight for the California trade, with English capital or not. And when he fought, he usually won. ONE DAY IN THE FUTURE there would be a name for it: vertical integration. Late in the nineteenth century, John D. Rockefeller and Andrew Carnegie would emerge as leading exponents of this form of organization, in which a single owner takes control of businesses at every step of the manufacturing process, from mining raw materials to production of finished goods. A vertically integrated company captured profits (or reduced costs) at every point. Perhaps more important, in an age when few industries existed it helped ensure supply that otherwise might be diverted to a competitor.21 Ship owner Charles Morgan understood the principle as early as the spring of 1851, when he bought control of a leading engine manufacturer in Manhattan, T.

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Perhaps more important, in an age when few industries existed it helped ensure supply that otherwise might be diverted to a competitor.21 Ship owner Charles Morgan understood the principle as early as the spring of 1851, when he bought control of a leading engine manufacturer in Manhattan, T. F. Secor & Co., and renamed it the Morgan Iron Works. Ironically, Morgan's move quickened Vanderbilt's own steps toward a vertical integration of his budding steamship business. Already he had taken direct control of the Simonson shipyard, which constructed hulls; now he joined with the men whom Morgan had bought out, T. F. Secor and John Braisted, along with Daniel Drew, to purchase New York's other large steam-engine plant, the Allaire Works.

The Prize: The Epic Quest for Oil, Money & Power
by Daniel Yergin
Published 23 Dec 2008

Standard Oil could certainly be numbered at the top of the list of "other things." Rockefeller created the vertically integrated petroleum company. Many years later, one of Rockefeller's successors at Standard Oil of Ohio, who had, as a young lawyer, worked with him, mused on one of Rockefeller's great achievements. "He instinctively realized that orderliness would only proceed from a centralized control of large aggregations of plant and capital, with the one aim of an orderly flow of products from the producer to the consumer. That orderly, economical, efficient flow was what we now, many years later, call 'vertical integration.' " He added, "I do not know whether Mr.

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.: Meckler Publishing, 1984), pp. 4 ("cut-throat"), 6 ("safe and profitable"); Hawke, John D., pp. 79 ("war or peace"), 106 ("good sweating"), 170 ("brass band"); Nevins, Study in Power, vol. 1, pp. 216 ("feel sick"), 224 ("barrel famine"), 223 ("Morose"); Akin, Flagler, p. 67 ("blankets"); McLean and Haigh, Integrated Oil, p. 63. [8] Archbold to Rockefeller, September 2, 1884, Box 51, Archbold folder (1.51.379), Business Interests, 1879-1894, RG 1.2, Rockefeller archives; Jerome Thomas Bentley, "The Effects of Standard Oil's Vertical Integration into Transportation on the Structure and Performance of the American Petroleum Industry, 1872-1884" (Ph.D., University of Pittsburgh, 1976), p. 27. [9] Archbold to Rockefeller, August 15, 1888, Box 51, Archbold folder (1.51.378), Business Interests, 1879-1894, RG 1.2, Rockefeller archives; Destler, Roger Sherman, pp. 85 ("overweening"), 95 ("Autocrat"), 132 ("gang of thieves"); Nevins, Study in Power, vol. 1, p. 337 ("Rockefeller will get you")

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Oil Pioneer. London: Sidgwick and Jackson, 1961. Belasco, Warren James. Americans on the Road: From Autocamp to Motel, 1910-1945. Cambridge: MIT Press, 1979. Benn, Anthony. Against the Tide: Diaries, 1973-76. London: Hutchinson, 1989. Bentley, Jerome Thomas. "The Effects of Standard Oil's Vertical Integration into Transportation on the Structure and Performance of the American Petroleum Industry, 1872-1884." Ph.D. dissertation, University of Pittsburgh, 1976. Berenger, Henry. Le Pitrole et la France. Paris: Flammarion, 1920. Bergengren, Erik. Alfred Nobel: The Man and His Work. Trans. Alan Blair.

House of Cards: A Tale of Hubris and Wretched Excess on Wall Street
by William D. Cohan
Published 15 Nov 2009

The article's author, Pierre Paulden, noted that after the firm's $26 million purchase of Encore Credit Corporation, a subprime mortgage originator, and the 2005 initiation of Bear Stearns Residential Mortgage Corp., which originated mortgages in twenty-nine states through a (now defunct) Web site, Beardirect.com, the firm originated 31 percent of the loans it securitized in the third quarter of 2006, almost double the amount it had originated a year earlier. Bear also owned EMC Mortgage Corporation, a loan acquisition and servicing operation. The idea of these small acquisitions was to become a fully vertically integrated mortgage factory capable of originating mortgages, servicing them, packaging them into marketable securities, and selling them off. “Until lately, Bear has been running downhill,” Paulden wrote. “But now the playing field is starting to tilt upward.” He noted that the housing market was cooling off, with mortgage originations in the United States falling to $2.4 trillion in 2005 from $2.7 trillion in 2004, with a further 15 percent decline expected for 2006.

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The firm's “mortgage franchise continues to lead the industry,” the Annual Report said. “We ranked number one for the third consecutive year in US mortgage-backed securities underwriting, secured the top spot in the securitization of adjustable-rate mortgages, and ranked in the top five in the global collateralized debt obligation (CDO) market…. Our vertically integrated mortgage franchise allows us access to every step of the mortgage process, including origination, securitization, distribution and servicing.” The firm's CDO business grew by 50 percent in 2006. “Our success across all sectors of the CDO market and in both European and US issuance reflects our 10-year presence in this business, combined with strong overall market growth,” the firm trumpeted.

Wonderland: How Play Made the Modern World
by Steven Johnson
Published 15 Nov 2016

Hagenbeck truly was an inveterate traveler, averaging more than thirty thousand miles in a year—the equivalent of ten flights across the Atlantic. In the age of trains and steamships, that was a staggering amount of time on the road. But Hagenbeck did almost none of the actual animal capture himself; instead, he ran a vertically integrated system that stretched from trappers in sub-Saharan Africa to the showrooms and expositions that Hagenbeck began establishing across Europe and the United States. Wild-animal trader has an undeniably buff ring to it as a job description, but in the end Hagenbeck’s success was largely due to his skills at supply chain management.

Industry 4.0: The Industrial Internet of Things
by Alasdair Gilchrist
Published 27 Jun 2016

Examples include the improvements in advanced robotics and the onset of 3D printing technology as well as rapid prototyping. With these drivers at work, industries are finding it increasingly imperative to keep up with the times, especially if they plan to remain competitive. Four Main Characteristics of Industry 4.0 Proponents of Industry 4.0 name four main and distinct characteristics: 1. Vertical integration of smart production systems Smart factories, which are essentially the core of Industry 4.0, cannot work on a standalone basis. There is a need for the networking of smart factories, smart products, and other smart production systems. The essence of vertical networking stems from the use of cyber-physical production systems (CPPSs), which lets factories and manufacturing plants react quickly and appropriately to variables, such as demand levels, stock levels, machine defects, and unforeseen delays. 199 200 Chapter 13 | Introducing Industry 4.0 Similarly, networking and integration also involve the smart logistics and marketing services of an organization, as well as its smart services, since production is customized in such a way that it is individualized and targeted specifically to customers. 2.

Food and Fuel: Solutions for the Future
by Andrew Heintzman , Evan Solomon and Eric Schlosser
Published 2 Feb 2009

As well, large operations tend to buy their supplies outside the community, while small farms frequent local suppliers, keeping the rural economy alive. In 1994, a University of Minnesota study found that farms with incomes of $100,000 a year bought 90 percent of their inputs locally, while those with sales of $900,000 or more bought only 20 percent locally.20 This is because large operations are tied to vertically integrated food processors that not only slaughter animals, but also sell farmers feed and dictate the breeds of animals they will raise. With such a top-down system, it is cheaper for the processor to buy feed from a central location rather than at several local operations. While this can be good for the corporate bottom-line, it is bad for rural economies and communities.

The Battery: How Portable Power Sparked a Technological Revolution
by Henry Schlesinger
Published 16 Mar 2010

Sony was soon joined by South Korean manufacturers and even Chinese companies as the Far East became the center of Li-ion battery manufacturing. What is interesting is that American companies were not “beaten” at the rechargeable battery market by low wages, but seem to have made the decision not to aggressively participate on a large scale. Some place blame on the vertical integration of the Asian electronics manufacturers or the low profit margins compared to primary batteries. This state of affairs has caused no little concern among electronics manufacturers in the United States. While America continues to act as an innovator of the new technologies, there is some question as to how long that will last.

The Darwin Economy: Liberty, Competition, and the Common Good
by Robert H. Frank
Published 3 Sep 2011

Herbert Gintis, “The Nature of the Labor Exchange and the Theory of Capitalist Production,” Review of Radical Political Economics 8, 1976: 36–54. 5. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, State College, PA: Penn State University, 2005, p. 19 (originally published in 1776). 6. For a discussion, see Benjamin Klein, Robert G. Crawford, and Armen A. Alchian, “Vertical Integration, Appropriable Rents, and the Competitive Contracting Process,” Journal of Law and Economics 21, October 1978: 297–326. 7. For detailed discussions of Walmart’s labor practices, see Steven Greenhouse, The Big Squeeze, New York: Knopf, 2008; and in Nelson Lichtenstein, The Retail Revolution, New York: Metropolitan, 2009. 8.

The Enigma of Capital: And the Crises of Capitalism
by David Harvey
Published 1 Jan 2010

It is possible to look backwards and define ‘eras’ of capitalist development that roughly correspond to the railroads, steamships, the coal and steel industry and the telegraph; the automobile, the oil, rubber and plastics industries and the radio; the jet engine, refrigerators, air-conditioners, the light metals (aluminium) industry and TV; and the computer chip and the new electronics industry that underpinned the ‘new economy’ of the 1990s. What is missing from this account is an understanding of the revolutionary and contradictory social consequences of the capital–state dynamic and its associated shifts in organisational form (such as the move from family firms to vertically integrated corporations to horizontally networked systems of production and distribution). The thesis of regularly spaced and mechanically occurring temporal (and spatial diffusion) waves in technological and organisational innovation does not, in my view, work. But the insight that technological and organisational forms become, as it were, paradigmatic for a time until their possibilities are exhausted, only to be replaced by something else, is important.

The Entrepreneurial State: Debunking Public vs. Private Sector Myths
by Mariana Mazzucato
Published 1 Jan 2011

Companies like Bonus and Vestas were able to purchase patents generated by the Danish research programme and smaller-scale wind turbine pioneers, giving them control over collective knowledge and learning taking place. They then applied their experience producing farm equipment and superior capital to produce robust machines on a larger scale and eventually seek vertical integration (Kamp 2002; Heymann 1998). Denmark’s R&D activities overlapped with investment tax credits that were phased out over a decade. The tax credits helped launch a domestic market for wind energy, while California state and federal incentives created export opportunities for Danish producers. ‘Big government’ R&D in the US and Germany was largely dubbed a ‘failure’ precisely because reliable wind turbine designs that could be successfully commercialized were not produced immediately as an outcome of their programmes.

Two Nations, Indivisible: A History of Inequality in America: A History of Inequality in America
by Jamie Bronstein
Published 29 Oct 2016

In contrast with the situation in Europe, where the transformation to rational farming often meant a flood of former farm laborers from farms into factories, the availability of land meant that American farmers could keep moving westward until almost the end of the century. Until about 1880, American industry was mostly small-scale and grew in small increments and by expanding westward. Vertical integration, and firms that employed thousands of people, would really have to wait until the advent of the railroads.4 While antebellum Americans outside New England and the mid-Atlantic states did not, then, experience an “industrial revolution” like that of contemporary Britain, they did experience a “market revolution” that gave rural dwellers access to finished goods and caused the development of inland towns.5 With the advent of the steamboat, freight rates on the Mississippi River fell from 6.2 cents per ton-mile upstream to 0.4 cents per ton-mile.

Peers Inc: How People and Platforms Are Inventing the Collaborative Economy and Reinventing Capitalism
by Robin Chase
Published 14 May 2015

Getting it right across the sum of Peers Inc organizations constructing the new collaborative economy as a whole will portend our ability to transition to an economy that provides people with more agency, more satisfaction, and more equality and that is ultimately more sustainable. The constantly shifting power dynamic between the Inc and the peers feels very different from the old economy, with its vertically integrated companies, in which hierarchy was the name of the game. My hypothesis is that there are four phases that many (though not all) successful Peers Inc efforts travel through: the controlled kernel, the everyone-welcome stage, power imbalance, and power parity. An unsuccessful company may make it through the initial stages but not all the way down the path.

Leading From the Emerging Future: From Ego-System to Eco-System Economies
by Otto Scharmer and Katrin Kaufer
Published 14 Apr 2013

The people must embody the essence of the initiative with everything they do—like all of the change-makers whose stories we’ve told in these pages: Jon, Suyoto, Alexandra, Claudia, Judy, Michelle, Luiz, Guilherme, Marcelo, Hal … Summing Up Table 11 outlines how the evolution of the corporation is embedded in the evolutionary stages of economic development and its underlying logic. The purpose of the 1.0 company is control over the entire value chain. The logic revolves around economies of scope; the focus is on vertical integration (for example, the old IBM). The purpose of the 2.0 company is profit. The logic revolves around economies of scale, and the focus is on horizontal integration (for example, Intel and Microsoft). The purpose of the 3.0 company is eco-system domination. The logic revolves around network economies.

Ugly Americans: The True Story of the Ivy League Cowboys Who Raided the Asian Markets for Millions
by Ben Mezrich
Published 3 May 2004

Teddy Sears, the former Barings trader, looked fairly ridiculous in a bright blue parka, his long blond hair tied back beneath a wool cap. “We put ski slopes on mountains and make the people come to them. The Japanese simply put the mountain in the middle of the city.” Sears nodded, his hat nearly toppling off his head. “I guess you could call this vertical integration. Cut out the middleman—nature—and go right for the market. I’m glad you came up with this idea, Malcolm. It certainly beats a Guinness lunch at one of the local pubs.” Malcolm nodded. When he’d heard that Sears was going to be blowing through town, he’d immediately booked some time with his former boss.

AI Superpowers: China, Silicon Valley, and the New World Order
by Kai-Fu Lee
Published 14 Sep 2018

THE LIGHT TOUCH VERSUS HEAVYWEIGHTS But the O2O revolution showcased an even deeper—and in the age of AI implementation, more impactful—divide between Silicon Valley and China—what I call “going light” versus “going heavy.” The terms refer to how involved an internet company becomes in providing goods or services. They represent the extent of vertical integration as a company links up the on- and offline worlds. When looking to disrupt a new industry, American internet companies tend to take a “light” approach. They generally believe the internet’s fundamental power is sharing information, closing knowledge gaps, and connecting people digitally. As internet-driven companies, they try to stick to this core strength.

The Fourth Revolution: The Global Race to Reinvent the State
by John Micklethwait and Adrian Wooldridge
Published 14 May 2014

The pragmatic answer, which people of all persuasions should seize upon, relies on improving management and harnessing technology, particularly information technology. Fifty years ago, companies suffered from the same bloat that government now does. Business has changed shape dramatically since then, slimming, focusing, and delayering. So can government. The state is still stuck in the era of vertical integration, when Henry Ford thought it made sense to own the sheep whose wool went into the seat covers of his cars. Government is lousy at spreading successful ideas. There is no good reason why California schools should be so much worse than Finnish or Singaporean ones, particularly given that California spends more per pupil.

The New Gold Rush: The Riches of Space Beckon!
by Joseph N. Pelton
Published 5 Nov 2016

The communications satellite industry, however, is today divided into a number of key parts. The biggest sector in terms of revenues is the satellite broadcasting industry. Companies in this field broadcast television directly to homes and businesses and in the process sell video entertainment directly to consumers on a retail basis. Because of their vertical integration, which includes satellite deployment and operation, entertainment sales to the home or business client, etc., they have by far the largest revenue stream and greatest profitability. Most of the other satellite service providers are one or two steps removed from the consumer and thus have lesser revenues and lower profit margins.

Lying for Money: How Fraud Makes the World Go Round
by Daniel Davies
Published 14 Jul 2018

But if you try to sell it for more than $x, someone will be able to undercut you. So, the only consistent price is exactly $x. * With a large amount of overlap, of course, as disreputable waste management companies have often turned out to have significant cross-ownership with organised crime families in the USA. There’s a degree of vertical integration if you often have bodies to dispose of. * Techically, ‘shrinkage’ covers all losses from theft, both shoplifting by customers and pilfering by employees. Clarence Saunders, of course, had less of a problem with the latter. * If you are a broker or large investor who can make special arrangements with your broker, that is.

Ludicrous: The Unvarnished Story of Tesla Motors
by Edward Niedermeyer
Published 14 Sep 2019

Though the Model T had undeniable design advantages, its utter dominance of the early car market was a product of Ford’s manufacturing breakthrough, which continuously lowered the price of the car and thus expanded its market. Even after the Model T had become hopelessly outdated and rival companies started eating into its once-dominant market share, Ford’s formula of standardized parts, vertical integration, and economies of scale continued to define the car business for nearly a half century. Eventually, this too was surpassed by the Toyota Production System, or TPS. TPS grew out of the teachings of W. Edwards Deming and others and has now become the foundation on which every automaker’s culture is built.

Cobalt Red: How the Blood of the Congo Powers Our Lives
by Siddharth Kara
Published 30 Jan 2023

These semi-refined forms of cobalt are loaded onto trucks and driven to seaports in Dar es Salaam and Durban for export to commercial-grade refiners, most of which are in China. In 2021, China produced 75 percent of the world’s refined cobalt. The largest single refiner was Huayou Cobalt with a market share of 22 percent.5 Huayou owns Congo DongFang Mining, one of the largest copper-cobalt mining companies operating in the DRC. The vertical integration of Chinese companies across the cobalt supply chain has accelerated in recent years, solidifying the country’s dominance over the rechargeable battery industry. Although it would seem advantageous for the DRC to refine cobalt to commercial-grade form and control more of the value chain, a senior official at Gécamines explained, “In Congo, we do not have sufficient electricity capacity to refine cobalt.”

Ashes to Ashes: America's Hundred-Year Cigarette War, the Public Health, and the Unabashed Triumph of Philip Morris
by Richard Kluger
Published 1 Jan 1996

Duke had little reason to disabuse the world regarding Reynolds’s noisy protestations that he was an untethered proprietor; after all, the Winston brawler was ringing up profits for him, and Buck now controlled two-thirds of the plug trade. III NOT content with domination of the cigarette and chewing tobacco business, Duke devoted the opening years of the twentieth century to rounding out his tobacco trust. He was set upon both horizontal and vertical integration of the industry; his targets for takeover included the snuff business, cigars,” and stogies; the sectors of the tinfoil, wooden-box, and cotton-sacking industries devoted to the packaging of tobacco goods; the licorice paste business, dealing in the chief flavoring ingredient for many forms of tobacco; and the tobacco retailing trade.

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As McComas’s final contribution to the salvaging and reshaping of PM, he diversified the company’s product line with the purchase in 1957 of Minneapolis-based Milprint, Inc., a manufacturer of flexible packaging materials and a supplier to Philip Morris of foil, laminated cigarette-carton cellophane, and the little red “tear tape” for opening packs. Here, through vertical integration, was a way for PM to cut its supply costs while also ending its total dependency on cigarette sales. The new unit added some 15 percent to Philip Morris’s gross revenues, but its low profit margins, characteristic of highly competitive industries like packaging, did nothing to lift PM’s net, stuck in the range of 4 percent of revenues, the lowest in the tobacco industry and only one-third as high as top-earning RJR’s figure.

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But it did not work; he remained no lover of organizations and protocol, and in time, while still a young man, Ronnie Thomson became a Swiss citizen, set up shop as a financial, marketing, and personnel consultant in Geneva, bought a villa overlooking the lake, and continued to drive snappy sports cars. V IF PHILIP MORRIS’S overseas forays were reaping rewards by the early ’Seventies, the same could hardly be said for its non-tobacco ventures. Its early moves into packaging and adhesives manufacturing had been easy and sensible forms of vertical integration, but these industrial units gobbled up capital for returns at most one-third of what the core cigarette business earned, and they could not readily improve their margins without charging higher prices to their parent company, thus killing one of the chief benefits of their purchase. Far more sensible had been the plan to buy up makers of consumer products compatible with Philip Morris’s marketing know-how and distribution system—laggards that could be turned around with the wizardry the company was now bringing to its soaring cigarette business.

Corporate Finance: Theory and Practice
by Pierre Vernimmen , Pascal Quiry , Maurizio Dallocchio , Yann le Fur and Antonio Salvi
Published 16 Oct 2017

What are the strengths of a trend analysis? Why start a financial analysis with a study of wealth creation? Is financial analysis always doomed to be too late to be useful? What is your view of the Italian proverb traduttore, traditore (to translate is to betray) in the context of a financial analysis? Why will vertical integration be dismissed as being of little value after an analysis of the value chain? What assumptions are made in a comparative financial analysis, especially on an international scale? At the end of the day, what is the objective of the financial analyst? More questions are waiting for you at www.vernimmen.com.

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However, in 2015, the group was just above its operating breakeven point (+4%) from which it was a long way off (9%) in 2011 as a result of the erosion of its margin on variable costs, which fell from 35% to 24% over the period. If its performance had been constant, ArcelorMittal would have been 7% above its operating breakeven point in 2015. This decline in its margin on variable costs can probably be blamed on Arcelor­Mittal’s vertical integration drive, which prevents it from taking as much advantage as its competitors of falling rawm aterials prices (iron ore and coke). Even though this strategy pays off in times of soaring raw materials prices (until mid-2011), as it partially protects the group against rising raw materials prices, it penalises the company when prices start to fall.

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Currency Wars: The Making of the Next Gobal Crisis
by James Rickards
Published 10 Nov 2011

Morgan and Time Warner were a single company, with Bill Clinton as its CEO. Gazprom’s revenues are about 10 percent of Russia’s gross domestic product. Gazprom produces over 85 percent of Russia’s natural gas and over 20 percent of the world’s supply. It controls almost 20 percent of global gas reserves and 60 percent of Russian gas reserves. It is fully vertically integrated, including exploration, production, transmission, processing, marketing and distribution. In addition to energy, it has major interests in media, banking and insurance, and operates an internal investment company. Dmitry Medvedev, elected president of Russia in 2008, twice served as chairman of the board of Gazprom.

One Up on Wall Street
by Peter Lynch
Published 11 May 2012

It has picked up the active funeral parlors that bury a dozen or more people a week, ignoring the smaller one-or two-burial parlors. At last count the company owned 461 funeral parlors, 121 cemeteries, 76 flower shops, 21 funeral product-and-supply manufacturing centers, and 3 casket distribution centers, so they’re vertically integrated. They broke into the big-time when they buried Howard Hughes. They also pioneered the pre-need policy, a layaway plan that’s been very popular. It enables you to pay off your funeral service and your casket right now while you can still afford it, so your family won’t have to pay for it later.

The politics of London: governing an ungovernable city
by Tony Travers
Published 15 Dec 2004

The mayor’s huge electorate and the GLA’s strategic role suggest devolved regional government, like the Scottish Parliament and the Welsh Assembly, but the financial rules and close continuing central government control make it look more like local government. While it is hard exactly to specify what the GLA is, it is easier to say what it emphatically is not: it is not the top tier in a vertically integrated hierarchical system of metropolitan government. As set out in the legislation, and 68 The Politics of London confirmed in practice, the powers of the mayor are largely those of patronage, persuasion and publicity. Patronage, through his or her ability to appoint to the functional bodies; persuasion, using limited control over resources, and position at the centre of what is a continuing system of network and multi-level governance; and publicity through exploiting the mayor’s legitimacy, accountability and democratic claim to ‘speak for London’.

The Virgin Way: Everything I Know About Leadership
by Richard Branson
Published 8 Sep 2014

Brett Godfrey summed it up perfectly when describing the difference in (then) Virgin Blue’s work environment and that of Qantas, our major competitor in Australia, by saying, ‘Our people are always in “volunteer mode”, while over there, certainly if industrial unrest is any indicator, they seem to be in perpetual “prisoner mode”.’ One of the many things that makes the Virgin group of companies unusual, dare I say unique, in the corporate world is the hugely disparate range of products and services that carry our brand. We have never been into vertical integration as the primary reason for starting something, albeit that a lot of our ventures have over time started to connect at the edges – like airlines and hotels. A lot of companies make it an overarching policy to ‘stick to their knitting’, that is to say, stick with what you know best and don’t stray too far from the comfort zone.

Garbage Land: On the Secret Trail of Trash
by Elizabeth Royte
Published 1 Jan 2005

“I don’t care about the recycling,” I said. “It’s not my plastic or metal or glass. I want to see where you’re dumping trash, my trash.” “It’s just too dangerous,” Donato said. “I won’t get out. I’ll ride up with a truck driver if you don’t have time.” “No. There are liability issues. Those are private trucks.” “But you’re vertically integrated! Those are your trucks. And I’ve already talked to Mr. Flood. He let me into the transfer station; he knows what I’m doing.” “There are no IESI trucks from New York today.” “Then I could ride with another driver.” “No.” I was running out of steam. “Okay, well, tell me this: is it a big hole up there or are you building layers?”

The Butterfly Defect: How Globalization Creates Systemic Risks, and What to Do About It
by Ian Goldin and Mike Mariathasan
Published 15 Mar 2014

The idea is that banks can easily “unload” those assets from their balance sheets without incurring losses. Translating this idea to global supply networks, firms have to make emergency plans for quickly changing from one supplier to another. Some firms already have such emergency plans in place, but others choose to acquire and vertically integrate with their suppliers. Helping large global corporations to prepare for systemic disasters can also include making detailed plans on how to shut down their operations without affecting substantial parts of the global economy. For example, a major pandemic could severely disrupt financial markets or a major earthquake in China could destroy a significant part of global rare earth element production, negatively affecting the production of many high-tech products.

Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth
by Michael Jacobs and Mariana Mazzucato
Published 31 Jul 2016

In the machine-tool industry, the overwhelming success of the Japanese against the major US companies was followed in the 1990s by the emergence of export-oriented, small- and medium-sized enterprises producing for specialised niche markets. In the steel industry, the innovative response of the United States was the emergence of minimills, using electric arc furnaces and scrap metal, as distinct from the traditional vertically integrated mills that converted iron ore into crude steel before making finished products. The most perilous, but ultimately successful, US response to Japanese competition was in the semiconductor industry. By the middle of the 1980s, the Japanese had used their integrated skill bases to lower defects and raise yields in the production of memory chips.

Hustle and Gig: Struggling and Surviving in the Sharing Economy
by Alexandrea J. Ravenelle
Published 12 Mar 2019

The mill became one of the first successful cotton-spinning factories in the United States and was soon joined by a number of other factories in the Blackstone Valley.15 At its peak, the Blackstone River and its tributaries, described as “America’s hardest-working river,” provided power to more than eleven hundred mills along a forty-five-mile stretch between Worcester, Massachusetts, and Providence, Rhode Island. In 1823, a group of Boston investors took advantage of the thirty-two-foot drop of the Merrimack River’s Pawtucket Falls to establish the first large-scale, planned textile center, a town they later named Lowell. Lowell was different from other mill towns. Relying on vertical inte-gration, the mill combined spinning and weaving under one roof. Approximately 75 percent of its workers were women and girls, some as young as thirteen. By 1840, the mills employed eight thousand women. In this true “company town,” workers lived in dormitories provided by the companies and were subject to strict codes of conduct.

Radical Markets: Uprooting Capitalism and Democracy for a Just Society
by Eric Posner and E. Weyl
Published 14 May 2018

The basic dilemma was that while the trusts damaged market competition, enabling them to overcharge for their goods and services, they also could spread the fixed costs of production over many more consumers because of their vast scale, resulting in lower prices, and eliminate local monopolies by buying up land and local business monopolies in what economists call “vertical integration.” It would thus never have made sense simply to abolish big business. Yet antitrust law could do some good by outlawing “horizontal” concentration among competitors when it did not generate scale economies. The William Taft administration brought even more antitrust suits than Roosevelt’s did.

Rocket Billionaires: Elon Musk, Jeff Bezos, and the New Space Race
by Tim Fernholz
Published 20 Mar 2018

It was a recognition of the failures that came before, when entrepreneurs from other sectors—notably the telecom entrepreneurs behind satellite constellations—tried to use the same contractors as the government, without commensurately deep pockets. Mark Albrecht, the former Lockheed executive, says, “If you ask Elon and Bezos, ‘Why are you so fanatical about vertical integration? Why do you build every single nut and bolt on your rockets?’ the answer is: ‘We learned from the nineties, when guys just like us went out to the defense contractors and they destroyed our business.’” Still, that morning in 2004, Svitek did his best to lobby the billionaire entrepreneur against investing in rocket development.

Amazon: How the World’s Most Relentless Retailer Will Continue to Revolutionize Commerce
by Natalie Berg and Miya Knights
Published 28 Jan 2019

On the far right, former Trump advisor Steve Bannon has called for tech giants to be regulated like public utilities since they have become so essential to 21st-century life; while Democratic Party leaders pushed for a wider antitrust crackdown in 2018 as part of their ‘Better Deal’ economic platform. ‘We’re seeing this incredibly large company getting involved in almost every area of commerce and I think it is important to look at the power and influence Amazon has’, said Democratic Senator Bernie Sanders in 2018.3 Khan argues that predatory pricing and vertical integration are highly relevant to analysing Amazon’s path to dominance – and that current doctrine underappreciates the risk of such practices. The playing field has been tilted since day one, from the moment that Bezos convinced his early investors that a growth-over-profits strategy would yield results in the long run.

Test Gods: Virgin Galactic and the Making of a Modern Astronaut
by Nicholas Schmidle
Published 3 May 2021

When SpaceShipTwo landed, Stucky and Mackay climbed out of the cockpit, pumped their fists, and high-fived the crew. Stucky crossed the runway to where his colleagues were whistling and applauding. He hugged Agin. Whitesides handed him a microphone. “I don’t know where to start,” Stucky said. “Some of us have been waiting years to do that again!” They were years late but on their way to being a vertically integrated spaceship company: flying rockets, with their own pilots, in their own spaceship, with their own rocket motor. Dillon Stucky (left) taking a photo of Mark Stucky and Dave Mackay, in 2018. “Richard has been waiting longer than all of us,” said Stucky. “Hopefully, we gave him a good flight

Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud
by Ben McKenzie and Jacob Silverman
Published 17 Jul 2023

According to experts such as Carol Alexander, a professor of finance at University of Sussex Business School, it may be because, like some of its competitors, Binance plays a number of roles that may pose conflicts of interest. As Alexander pointed out, Binance is not just an exchange where people can buy and sell crypto. The company, whose valuation some employees once claimed may be as high as $300 billion, is practically its own vertically integrated crypto economy, offering crypto loans and the widest selection of tokens. If that weren’t enough, Binance itself trades on its own exchange. In traditional markets, this kind of arrangement would never be allowed, as the conflicts of interest—and potential for market manipulation—are glaring.

Golden Gates: Fighting for Housing in America
by Conor Dougherty
Published 18 Feb 2020

The Levitts were early adopters of the prefabricated walls and roofs that would come to define the tract home, and over time the brothers reduced house building to a twenty-seven-step process in which single-task, unskilled and un-unionized workers only painted or only tiled or only hammered. They also vertically integrated their company to take control of their own concrete and timber production. Despite what the cultural snobs would say about cookie-cutter communities, the techniques pioneered by Levitt and other home builders constituted a lightbulb moment of genuine innovation that made housing profoundly cheaper and Americans better off.

Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism
by Jeff Gramm
Published 23 Feb 2016

WALL STREET WIZARDRY While Buffett added tremendous value to Berkshire Hathaway in the late 1960s by buying an insurance company and a bank, many of his contemporaries took sound businesses and desecrated them with senseless acquisitions. The “go-go” stock market of the 1960s launched what is known as America’s third major merger wave (after the 1890s and 1920s). It was in large part a pointless bastardization. Whereas the previous merger booms focused on horizontal and then vertical integration, public companies in the ’60s binged on acquisitions merely for the sake of growth, which was richly rewarded by Wall Street no matter how it was obtained. The go-go era collapsed quickly, but a new generation of corporate raiders emerged from the ruins. Jim Ling’s 1978 battle with Harold Simmons highlights the hostile raider’s ascendance.

Powerhouse: The Untold Story of Hollywood's Creative Artists Agency
by James Andrew Miller
Published 8 Aug 2016

PATRICK WHITESELL: They went into sports the way they did because we were looking at Arn Tellem. But the more we looked at it, we saw it was a shitty business at scale with low margins. If I have a hundred football players, what does that really do for my television business or my movie business? There’s no vertical integration. What we liked about IMG was that it was only 10 percent high-end representation and 90 percent assets you can actually control and own. We aren’t in the sports representation business like what they’re doing. We are after huge growth and a way bigger business. I couldn’t sign enough actors to do what we’re going to be doing this year alone with our sports business.

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They are more patient and more disposed to the type of diplomacy needed in today’s environment. In the past decade, now Not-So-Young Turks have been able to silence critics who have charged that they never built a business (and couldn’t) but merely inherited an empire from the founding fathers. Now that the agency has vertically integrated and expanded as it has, that argument has begun to fade away. When it comes to lessons learned, however, the original leaders can take the crown. They took their bills of particulars from their days outside the helm at William Morris and built a world designed to make sure their biggest complaints—strict borders between departments, unfair compensation formulas, and a strangling pseudo-aristocratic culture—were not repeated.

Cadillac Desert
by Marc Reisner
Published 1 Jan 1986

The one-thousand-ounce aluminum Pope’s cap installed in the pinnacle of the Washington Monument when it was completed in the mid-nineteenth century was the largest ingot of its day. After the First World War, aluminum became cheaper, though still not common. The raw material, the production flow, the manufacturing patent, and the end uses were pretty much controlled by the Aluminum Company of America, which was to vertical integration what William Randolph Hearst was to yellow journalism. Hearst, at least, had competition; Alcoa didn’t—except from Adolf Hitler, who made Germany the world leader in aluminum production soon after seizing power, for reasons the Allies did not immediately discern. When the first electricity began to flow out of Bonneville Dam, the Corps of Engineers’ big power and navigation dam three hundred miles downriver, the government tried to induce Alcoa’s potential competitors to build plants in the Northwest by offering them bargain rates, but nobody was particularly interested.

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A sense of the concentration of agricultural wealth in California can be gained from “Getting Bigger,” by the California Institute for Rural Studies, which profiles the 211 largest farming companies in the state (the smallest of the 211 is a 5,000—acre operation). The study, a superb piece of research, reveals a good deal about interlocking directorates, holding companies, vertical integration in the food market, parent companies, hidden partnerships, market penetration, and so on. Most of the information on the big growers benefiting from the State Water Project comes from CIRS. It is almost impossible to understand water and California history without consulting the California Water Atlas, a huge (in dimension), beautifully produced work that really does deserve to be called unique.

The Vegetarian Myth: Food, Justice, and Sustainability
by Lierre Keith
Published 30 Apr 2009

As the industry grew, farming as a lifestyle declined; forty percent of Americans lived on farms in 1900, compared to less than two percent today…. Fifty years ago, hundreds of thousands of farmers raised small flocks of chickens. Today, a few corporations produce nearly all our chickens through a system known as vertical integration: a single corporation owns all stages of production and marketing…. Most people today don’t realize that chicken used to taste very different.142 Nor do we realize what’s happened to our land, our communities, and our food. When Schmid says “locally grown food” that means an actual farmer raised it, instead of a corporate-owned factory producing it.

Living in a Material World: The Commodity Connection
by Kevin Morrison
Published 15 Jul 2008

The company also had iron ore mines in northern Michigan, Minnesota and Wisconsin to turn into steel for the frames and bodies of the cars, plus thousands of acres of forests in Michigan,13 the wood was used to make panels for the interior of the cars (Iacocca, 1998). Few companies in the free-market societies ever matched Ford’s vertical integration plan. The business fashion today is still scale, but specialization is also a focus: return on capital is key. Ford’s concept was disbanded after he died in 1947. The car industry and industrial consumers pay close attention to the supply of copper, where it comes from and the security of supply.

The Wisdom of Crowds
by James Surowiecki
Published 1 Jan 2004

In other words, the fact that corporations exist doesn’t tell us anything about the way they really work. For much of the twentieth century, though, we knew how companies worked. In fact, we assumed that corporations all, in some sense, had to work in the same way, at least if they wanted to be successful. First, a corporation was vertically integrated, which meant that it had full control over most of its supply chain. Few companies went to the extremes that Henry Ford did in insisting that Ford Motor Company own the iron ore and the sand that went into its cars, but on the whole the assumption was that what a company could do for itself, it should do for itself.

Kill Chain: The Rise of the High-Tech Assassins
by Andrew Cockburn
Published 10 Mar 2015

In a revealing address to a 1992 meeting of DEA veterans held to commemorate the twentieth anniversary of the strategy’s inauguration, Bonner spoke of the corporate enemy they had confronted: “… major [drug trafficking organizations] by any measure are large organizations. They operate by definition transnationally. They are vertically integrated in terms of production and distribution. They usually have, by the way, fairly smart albeit quite ruthless people at the top and they have a command and control structure. And they also have people with expertise that run certain essential functions of the organization such as logistics, sales and distribution, finances and enforcement.”

The Panama Papers: Breaking the Story of How the Rich and Powerful Hide Their Money
by Frederik Obermaier
Published 17 Jun 2016

Objectively, this has the advantage that if one of its companies encounters legal problems, Mossfon can comfortably distance itself from the subsidiary company. Former US Senate investigator Jack Blum describes this tactic in Vice magazine. The trick is not only used by Mossfon but also by numerous other companies and involves working as ‘seamless, vertically integrated top-down organisations’, Blum explains, ‘until the minute that a cop or investigator comes along. Then they disintegrate into a series of unconnected entities, and everyone swears they don’t know anything about anyone else in the system. It’s like a jigsaw puzzle that’s assembled but suddenly falls apart when someone starts investigating.’

Flying Blind: The 737 MAX Tragedy and the Fall of Boeing
by Peter Robison
Published 29 Nov 2021

By 1928, almost one-third of U.S. airmail was carried by Boeing Air Transport, and the following year Boeing merged all of his interests—by then including the engine maker Pratt & Whitney and the airline United Air Lines—into a single entity called the United Aircraft and Transport Corporation. The vertically integrated juggernaut was not to be. Airmail contracts became an early target of President Franklin Roosevelt’s new Democratic administration in 1933, and congressional investigators probed allegations of collusion in awarding them. Boeing himself was grilled for six hours by Senator Hugo Black of Alabama, later one of the longest-serving Supreme Court justices.

Human Compatible: Artificial Intelligence and the Problem of Control
by Stuart Russell
Published 7 Oct 2019

Using probabilistic programs to model human concept learning: Brenden Lake, Ruslan Salakhutdinov, and Joshua Tenenbaum, “Human-level concept learning through probabilistic program induction,” Science 350 (2015): 1332–38. 6. For a detailed description of the seismic monitoring application and associated probability model, see Nimar Arora, Stuart Russell, and Erik Sudderth, “NET-VISA: Network processing vertically integrated seismic analysis,” Bulletin of the Seismological Society of America 103 (2013): 709–29. 7. News article describing one of the first serious self-driving car crashes: Ryan Randazzo, “Who was at fault in self-driving Uber crash? Accounts in Tempe police report disagree,” Republic (azcentral.com), March 29, 2017.

Team of Teams: New Rules of Engagement for a Complex World
by General Stanley McChrystal , Tantum Collins , David Silverman and Chris Fussell
Published 11 May 2015

Management historian Alfred Chandler observed that the role of the merchant, which once embraced “exporter, wholesaler, importer, retailer, shipowner, banker and insurer,” split—like Adam Smith’s pin production—into multiple specialized businesses in the late 1800s. Years later, in what Chandler referred to as “the Managerial Revolution,” the specialized businesses were reunited when they merged into large, vertically integrated corporations with dozens of departments and hundreds of offices. Many functions were consolidated under centrally managed entities, instead of the sea of small actors responding independently to the forces of the market (Chandler dubbed this force “the visible hand” in contrast to Adam Smith’s description of market forces as “the invisible hand”).

The Great Reversal: How America Gave Up on Free Markets
by Thomas Philippon
Published 29 Oct 2019

For instance, a shop located in a hotel is a separate establishment classified in retail, while the hotel itself is in accommodation. In transportation or in telecommunications, the establishments are the permanent branch offices, terminals, and stations. A company often owns several establishments and therefore appears in more than one NAICS industry. NAICS includes specific rules to deal with vertical integration (i.e., steel mills that make steel but also produce steel castings) and joint production (a car dealership that both sells and repairs cars). Finally, when we compare the US with other countries, we use the International Standard Industrial Classification system (ISIC), organized by the United Nations.

The Crux
by Richard Rumelt
Published 27 Apr 2022

SCALE AND EXPERIENCE The most easily thought-of mechanism to achieve greater efficiency or market control is scale. If a business is bigger, won’t its costs be lower? Yes and no. Samsung produced 295 million smartphones in 2019, compared with runner-up Apple at 197 million. Since Samsung is more vertically integrated into chips and screens, you might think that its greater volume and integration would give it a strong “scale” and integration edge. But Samsung sells 150 different model phones, while Apple sells only 3 models. Most of Samsung’s so-called scale is spent on making very low-cost, low-profit phones for the developing world.

California Burning: The Fall of Pacific Gas and Electric--And What It Means for America's Power Grid
by Katherine Blunt
Published 29 Aug 2022

In allowing for competition, regulators would have to keep an eye on electricity markets and determine how utilities should be compensated for power line upkeep. But they would no longer have nearly the same say in determining what electricity ought to cost, a pivot from the philosophy John Eshleman had put forth in the Public Utilities Act of 1912, when California utilities were first becoming vertically integrated monopolies. Electricity would become a commodity, its price dictated by levels of supply and demand. The CPUC president at the time was willing to relinquish much of the agency’s regulatory control. The forces of competition, he wrote, “represent a superior disciplinary force than can be supplied over time by any system of governmental estimate or planning of which I am aware.”

Making It in America: The Almost Impossible Quest to Manufacture in the U.S.A. (And How It Got That Way)
by Rachel Slade
Published 9 Jan 2024

But traveling from small town to small town remained difficult, which kept communities isolated from one another, strengthening the “bootstrapping” myth that Americans succeeded by their wits alone, independent of larger political and economic forces. Henry Ford’s Model T would change all that. Once Ford mastered vertical integration and the assembly line, he put the automobile within reach for most Americans, albeit without the lush interiors of a Packard. Over a single decade, the number of cars on the road skyrocketed from 180,000 in 1908 to more than 17 million in 1920. Demand for a network of highways grew, and the U.S. government sent millions of dollars to the states to improve their roadways.

The Land Grabbers: The New Fight Over Who Owns the Earth
by Fred Pearce
Published 28 May 2012

Burgess says he has permission to drain much of the swamp and take 70 percent of the water flowing down the River Yala for irrigating rice. He has always thought big. His intention is “the conversion of 17,050 acres of swampland into a modern irrigated farm capable of producing rice, rotation crops, tilapia fish and a number of byproducts in a vertically-integrated, independent operation.” He also wants to plant bananas and soybeans, and even establish training centers and a radio station. Locals say they were happy for him to take on the existing failed project, but not to wade ever deeper into the swamp. But he was impatient. Without always waiting to go through bureaucratic hoops, he raised the weir 6 feet, dug more dikes and canals, leveled the land, and divided Lake Kanyaboli in two with a causeway.

The Mark Inside: A Perfect Swindle, a Cunning Revenge, and a Small History of the Big Con
by Amy Reading
Published 6 Mar 2012

Frederick Winslow Taylor pioneered the study and merciless exploitation of time as a managerial tool in his book The Principles of Scientific Management. By measuring the time it took to perform a given manufacturing task, a manager would set a standard for production that would then determine workers’ rates of pay, thus vastly increasing the output of each employee. Henry Ford pioneered the assembly line, vertical integration, and the $5 day, which effectively doubled the rate of pay for wage workers in 1914 and also spurred production. Managerial enterprises had so efficiently organized their internal operations that the supply side of the economic transaction threatened to outstrip demand. American capitalism had succeeded in figuring out how to make products, and the stores and catalogs were awash with new goods like automobiles, kitchen appliances, and canned foods.

The Economics of Enough: How to Run the Economy as if the Future Matters
by Diane Coyle
Published 21 Feb 2011

One branch of economics has long recognized that very many transactions cannot occur in a market because of the kinds of externalities and information asymmetries listed above. This is why institutions such as firms exist at all. The classic example in the literature of institutional economics14 is a vertically integrated business that cannot rely on external suppliers because of inadequate information and/or a lack of trust in dealing with another business with its own incentives.15 A BROAD INSTITUTIONAL FRAMEWORK There are problems or “failures,” then, with the two approaches to managing the economy that are usually taken to be both the only alternatives and mutually exclusive: markets and governments.

eBoys
by Randall E. Stross
Published 30 Oct 2008

In preparing the others for the visit, Dunlevie explained that he most liked the fact that artuframe had assets in the analog world, not just the digital one. He said, “They actually have to do things. To the extent that the winners in e-commerce are actually going to have more complexity and vertical integration, this is more along those lines. I think this whole thing hinges on this guy, and the more time we spent with him, the more we thought he was a pretty cool guy.” When Lederer arrived on Sand Hill Road to talk about his business, he came in a dark suit, which might as well have been a shiny black tuxedo for the way it stood out.

Arriving Today: From Factory to Front Door -- Why Everything Has Changed About How and What We Buy
by Christopher Mims
Published 13 Sep 2021

Its earliest examples were the textile factories of England, where workers, almost exclusively women who had once spun wool at home, were gathered with those who wove it into cloth. Together they attended to machines that helped the owners of these factories wipe out what had been employment at home—the original gig economy—for what one scholar estimates were two out of three women in England. Later, this kind of factory, and the attendant push toward total vertical integration, reached its apotheosis at Henry Ford’s massive River Rouge Complex, where raw materials such as rubber and iron entered at one end and finished Model Ts came out the other. Today’s factories are nothing like that. But when we think of them, the image many of us still have is of raw materials going in one end and finished goods coming out the other, with smokestacks and machines and workers on assembly lines in between.

Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens
by Nicholas Shaxson
Published 11 Apr 2011

He was talking about transfer pricing, the practice I explained in chapter 1, where banana companies trailed their accounts around the world’s tax havens in order to shift paper profits into the low-tax countries and the costs into the high-tax countries. Bennett showed Hudson exactly how large, vertically integrated multinationals could shift profits around the globe, apparently without breaking the law. The company would sell its crude oil cheap to a shipping affiliate registered in zero-tax Panama or Liberia, which in turn sold it on at a high, nearly retail price to its refineries and marketing outlets.

Common Stocks and Uncommon Profits and Other Writings
by Philip A. Fisher
Published 13 Apr 2015

Some of the reasons warranting this prestige may be perceived by some comments made by the company's Executive Vice President, Robert M. Halperin. In outlining what he called the four cardinal points to Raychem's operating philosophy, he stated: Raychem will not do anything technically simple (i. e., some-thing that would be easy for potential competitors to copy). Raychem won't do anything unless it can be vertically integrated; that is, Raychem must conceive the product, manufacture it, and sell it to the customer. Raychem won't do anything unless there is a substantial opportunity for real proprietary protection, which generally means patent protection. Unless this occurs, research and development energies will not be employed on a project, even though otherwise it might fit into Raychem's skills.

Binge Times: Inside Hollywood's Furious Billion-Dollar Battle to Take Down Netflix
by Dade Hayes and Dawn Chmielewski
Published 18 Apr 2022

After the five-minute trailer ran its course, the main presentation got under way, and a good-sized crowd (including thousands of company employees) watched via webcast. WarnerMedia CEO John Stankey strode onstage, ready to deliver a new business-school metaphor for what he and the company were building. Out went the flywheel, in came . . . the virtuous cycle. “We’ve created a vertically integrated company that will allow us to benefit from a virtuous cycle of development and growth,” Stankey said, wearing his signature entertainment-mode ensemble of navy suit and light blue dress shirt, its top button unbuttoned to signal that he was on leave from Dallas. He expanded on the concept of the virtuous cycle: “When you take our beloved, high-quality premium content and add innovative features to provide a superior user experience, it promotes subscriber engagement.

The Metaverse: And How It Will Revolutionize Everything
by Matthew Ball
Published 18 Jul 2022

Regulators will partly unbundle operating systems, but the companies that own these OSs will still thrive because their unbundled offerings are still market-leading and the emergence of the Metaverse will grow most of these markets. The overall structure of the Metaverse is likely to be similar to those we see today—a handful of horizontally and vertically integrated companies will control a substantial share of the digital economy, with their influence even greater. Regulators will place more scrutiny on them, but will probably still fall short. Some of the major category leaders in the Metaverse will be different from those we know today, while some of today’s leaders will be displaced but still survive or even grow.

Disaster Capitalism: Making a Killing Out of Catastrophe
by Antony Loewenstein
Published 1 Sep 2015

When I raised the matter of landowners being stripped of their property, he responded loudly with, “Nobody rejected it [the industrial park]!” “When you have an industrial park, it’s like a shopping center,” Sassine went on to explain. “You need to have big players. Sae-A is one of the largest garment manufacturers in the world and is vertically integrated, from designing to making their own fabric, so this is the perfect fit for us. I visited South Korea at least eight times over two years. We had a lot of support from the US administration, and if I may drop the name of Ms. [Hillary] Clinton, she convinced former president Bill Clinton, and when he talks people can’t say no to him.”

Other People's Money: Masters of the Universe or Servants of the People?
by John Kay
Published 2 Sep 2015

While the ‘robber barons’ were both financiers and businessmen, the leading industrialists of the first half of the twentieth century – men such as Alfred Sloan of General Motors and Harry McGowan of ICI – were primarily businessmen. Their skill was in developing the systems and cadre of professional managers needed to run a modern corporation. The rise of the large manufacturing company – diversified into related business, vertically integrated through control of supply and distribution, increasingly self-financing – was a key economic development of the first half of the twentieth century. The industrialists who ran these businesses had little time for the stock market – or for finance generally; Henry Ford bought out the external shareholders in his company, which did not regain a listing until 1956.

Cybersecurity: What Everyone Needs to Know
by P. W. Singer and Allan Friedman
Published 3 Jan 2014

In any market, even black markets, customer relationships are important. As one criminal posted, “Price for a million of delivered mails is starting at $100, and drop real fast, practically to $10, for regular clients. Selection of countries is free.” These independent brokers don’t represent the entire threat, though. More enterprising criminals vertically integrate; that is, they control the entire process from top to bottom. Security expert Eugene Spafford describes this as the far more daunting cybercriminal threat: “It is well-funded and pursued by mature individuals and groups of professionals with deep financial and technical resources, often with local government (or other countries’) toleration if not support.”

The Black Box Society: The Secret Algorithms That Control Money and Information
by Frank Pasquale
Published 17 Nov 2014

Black box interventions by carriers and search engines merely take this punitive impulse into the private sector, where it is unbalanced by the usual reporting requirements and appellate checks on law enforcement abuses.53 Without the adoption of digital compulsory licenses or artistic freedom vouchers, we should not be surprised if the political economy of intellectual property enforcement shifts to vertically integrated firms that use control over bottlenecks to monitor, deter, and perhaps ultimately ban content that threatens profits. SOPA ultimately failed, after provoking a powerful alliance of netizens to 204 THE BLACK BOX SOCIETY support basic principles of due process, free expression, and accountability online.

The Wires of War: Technology and the Global Struggle for Power
by Jacob Helberg
Published 11 Oct 2021

* * * What gives Huawei such a formidable 5G advantage? For starters, Huawei designs and manufactures virtually every component itself. Ericsson and Nokia, for instance, don’t make their own smartphones. Which means they have to rely on Apple or Samsung—or even Huawei—to deploy their own 5G networks. Huawei, however, is vertically integrated. Not only does it make the chips, routers, and other critical 5G hardware, it is also the world’s largest maker of smartphones (overtaking Samsung in 2020).122 Coupled with a cheap labor pool and those lucrative state subsidies, Huawei’s all-in-one model allows the company to offer its services for as much as 20 percent less than its Western competitors.123 To further fuel its 5G edge, Huawei has poured billions into R&D, pledging to spend $20 billion annually.124 According to the German firm IPlytics, Huawei has registered 1,529 5G patents (number four on the list is Chinese giant ZTE), nearly twice the 787 for Qualcomm, the American firm with the most 5G patents—though some have questioned the technical quality of Chinese patents.125 Already, Huawei has pioneered a number of breakthroughs, testing 5G at both lower frequencies (which is better for cell coverage) and higher frequencies (which yields faster data speeds).

Collision Course: Carlos Ghosn and the Culture Wars That Upended an Auto Empire
by Hans Gremeil and William Sposato
Published 15 Dec 2021

In his sights were Japan Inc.’s distinctive keiretsu system of corporate tie-ups, its custom of binding companies through cross-shareholdings and its long-standing ritual of seniority-based job promotion. Ghosn threatened an entire tradition of relationship-based business culture. Like many other big business groups in Japan, Nissan had long leaned on a network of suppliers and other affiliated companies as a kind of vertically integrated one-stop shop. Such clubs of companies, known as keiretsu in Japanese, have their benefits. They help stabilize one another’s finances in times of trouble by holding cross-shareholding in partner companies. They can lower transaction costs tied to such hassles as broken contracts and fielding bids, and they can borrow the expertise of partner companies with greater ease.

Trading and Exchanges: Market Microstructure for Practitioners
by Larry Harris
Published 2 Jan 2003

For example, by going into partnership, a farmer and a baker can eliminate their collective exposure to fluctuations in wheat prices. If the price of wheat rises, their farming profits will offset their baking losses. If the price falls, their farming losses will offset their baking profits. This partnership would be an example of a vertically integrated firm. Many firms integrate vertically to avoid exposures to price fluctuations in the markets for their intermediate goods. Although a partnership would allow a farmer and a baker to manage their price risks, it may not be the best solution to their risk management problems. Most farmers do not know much about the wholesale baking business, and most wholesale bakers do not know much about farming.

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See United States Lime & Minerals utilitarian traders, 178–94, 198, 200, 205, 216 asset exchangers, 181–82, 193 and bid/ask spreads, 313 cross-subsidizers, 191, 193 definition of, 177 fledglings, 190–91, 193 gamblers, 189–90, 193, 200 hedgers, 182–89 investors and borrowers, 178–81, 193, 200 proxies for, 316–17 tax avoiders, 192 and transitory volatility, 575–76 validity and expiration instructions, 82–83, 84 value estimates, 6, 239, 309 ValueLine Index, 371, 486 value traders, 235, 239, 243, 338–46 and bluffers, 268–69 and confidence, 557 costs of trading, 343–44 and dealers, 294 definition of, 194, 226, 227, 338, 402 as liquidity suppliers, 338–40, 402–4, 406 outside spread, 340, 341–45 risks of, 340–43 trading strategies, 196 winner’s curse, 338, 340, 341–43 value-weighted index, 485, 486, 487 variational margin payments, 42, 445 variation margin, 156 variation margin adjustments, 36 Vendor Display Rule, 99 vertically integrated firm, 183 Viagra, 228 victimized traders, 197 video display systems, 107 vigorish, 70, 93 Vinik, Jeffrey, 269 violation of confidentiality, 246 virtual shippers, 351–52, 353 Vivendi S.A., 365–66 volatility, 4, 410–16 definition of, 410 extreme, 555–83 fundamental, 410, 411–13, 416, 557–58 Internet, 343 measuring, 414–15 and Nasdaq, 511 primary spread determinants, 312–13 proxies, 315–17 return, 469–70 selling, 468 transitory, 410, 413–14, 557–58 value estimate, 309–10 Volkswagen, 181 volume-weighted average price (VWAP), 424–25, 426, 428–31 VWAP.

That Used to Be Us
by Thomas L. Friedman and Michael Mandelbaum
Published 1 Sep 2011

The company set about inventing, in collaboration with hired programmers, a new generation of software for improved continuous cutting and motion control over all automated cutting systems. Still, the world kept getting flatter and the competition from China kept increasing. “Up until 2001, we were nearly vertically integrated: we manufactured most of our products right here in our Buffalo factory,” said Stevenson. “We brought in the forging and the raw material; we cut the metal, stamped the parts, formed the parts, and assembled them into finished products.” But because of price pressures from globalization, from China, and from China’s brazen piracy, Eastman decided that to improve its profit margins it simply had to subcontract some functions to lower-cost countries.

Googled: The End of the World as We Know It
by Ken Auletta
Published 1 Jan 2009

The networks responded to the decline by cutting costs, buying local TV stations and cable properties, producing and syndicating more of their own shows, and—like the movie studios—putting their faith in hits like NBC’s Seinfeld, to save them. The media buzzwords were convergence and synergy. The common credo was that the advantage accrued to vertically integrated corporate giants—to Viacom, AOL Time Warner, News Corporation, Disney, Gannett, Tribune—those able to control every step in the process from an idea to its manufacture to its distribution. The synergies would come not from partnering with other companies but from owning content and the means to distribute it.

Makers and Takers: The Rise of Finance and the Fall of American Business
by Rana Foroohar
Published 16 May 2016

In other words, what you make makes you, economically anyway.50 Certainly, all this was on GE executives’ minds when they made the decision to move manufacturing back to upstate New York. “In the old days, we spent a lot of time looking for sources [globally] for everything we did, and then we picked the cheapest source,” says GE’s Little. “Now we’ve realized that if we can control things and vertically integrate our activities in local markets, then we don’t have to give up that margin that we might have once given to a vendor,” not to mention the value of any intellectual property created as a result.51 It’s a smarter way to think about business, and it’s certainly better for local economies. The question is just how many good new jobs such operations will actually create in America in the coming years.

Framing Class: Media Representations of Wealth and Poverty in America
by Diana Elizabeth Kendall
Published 27 Jul 2005

However, these new-media sites are closely related to old-media sources, such as newspaper chains (Gannett, MediaNews Group, McClatchy, Advance Publications, and Tribune Company) and television companies, because new media have limited ability to produce content on their own and often disseminate information from old-media sources such as the Associated Press and United Press International. Concentration of media ownership through chains, broadcast networks, cross-media ownership, conglomerates, and vertical integration (when one company controls several related aspects of the same business) impose major impediments to change in how class is represented in the news and entertainment industry. Social analysts like Gregory Mantsios are pessimistic about the prospects for reform because of the upper-class-based loyalties of media corporate elites: It is no wonder Americans cannot think straight about class.

Life Inc.: How the World Became a Corporation and How to Take It Back
by Douglas Rushkoff
Published 1 Jun 2009

That’s why they were enforced not by the market, but by arbitrary laws written by monarchs to favor the activities of the companies in which they were either directly or indirectly invested. American colonists were permitted to grow cotton, but not to make clothing from it. It had to be shipped to England for manufacture, and then purchased back in finished form. This was not economic efficiency, but economic exploitation. Charters gave corporations the exclusive right to vertically integrate anything they needed onto the credit side of the balance sheet, no matter the cost to the territory. The only thing they had to fear was revolution—but to attack a chartered corporation meant facing the army of the empire that underwrote it. It was these seventeenth-and eighteenth-century equivalents of no-bid contracts to Halliburton that led Adam Smith to write Wealth of Nations.

Fire and Steam: A New History of the Railways in Britain
by Christian Wolmar
Published 1 Mar 2009

See Wolmar, On the Wrong Line, pp. 275ff. 17 Interview with author, quoted in Wolmar, On the Wrong Line, p. 339. 18 David Willetts, a long-time senior Tory MP, admitted in a Daily Telegraph interview, 13 December 2003, that the privatization had been ‘ideologically-driven’ and a mistake. In 2006, the Shadow Transport Secretary, Chris Grayling, suggested that vertical integration – bringing back together operations and infrastructure – was the most desirable solution. 19 Though this is an area where the railways need to improve further as the technology has not kept pace with parallel developments in road transport. See, for example, Christian Wolmar, ‘Rail needs to improve its efficiency’, Transport Times, 10 November 2006. 20 Tyndall Centre for Climate Change, Living within a Carbon Budget, September 2006, executive summary, p. 9. 21 There is a debate about whether aviation is safer than trains, which rests on what assumptions are made and what factors are taken into account.

Chasing the Scream: The First and Last Days of the War on Drugs
by Johann Hari
Published 20 Jan 2015

We talked through the dense thickets of bureaucratic bargaining, drinking caffeine to keep ourselves alert. A typical sentence Barbara utters is this: “We needed to address how the state regulatory agencies and the local regulatory agencies were going to work together.” Another one is: “In the medical field, we have early vertical integration, which meant there was common ownership between the cultivation facility and the medical marijuana center where sales occur—and what that meant was we would have to license and approve both facilities before either license could be approved.” And slowly, while the intricate logistics of marijuana licensing were explained to me, I felt a strange sensation washing over me.

Stocks for the Long Run, 4th Edition: The Definitive Guide to Financial Market Returns & Long Term Investment Strategies
by Jeremy J. Siegel
Published 18 Dec 2007

HSBC has over 10,000 offices in over 80 countries and assets of over $1.8 trillion. 9. Total (France) The French oil company Total began in 1924 as the Compagnie Française des Pétroles (CFP). It created the brand name Total in 1954 and adopted it as the name of the company in 1991. Total is a vertically integrated oil company with reserves in Indonesia, Argentina, Colombia, and the North Sea. The oil company has operations in over 130 companies and earns less than one-quarter of its revenue from France. 10. Electricité de France (EDF) (France) EDF was formed from the nationalization of private utilities in 1946.

The Deal of the Century: The Breakup of AT&T
by Steve Coll
Published 12 Jun 2017

Even though the Justice lawyers had since 1974 shifted the emphasis of their relief contentions from divestiture of Western to divestiture of the operating companies—a shift that coincided with Bill Baxter’s passionate views about the case—Greene concentrated his courtroom questions and remarks about relief on Western. When AT&T witnesses talked about the benefits of the “vertical” integration of Western and the operating companies, Greene jumped into the testimony with active and skeptical cross-examination. It was clear to lawyers on both sides, as it had been to the “peer review” analysts hired by Howard Trienens, that the judge did not believe any great harm would ensue if some or all of Western was broken off.

Competition Overdose: How Free Market Mythology Transformed Us From Citizen Kings to Market Servants
by Maurice E. Stucke and Ariel Ezrachi
Published 14 May 2020

Facebook, “About Audience Network,” accessed May 2, 2019, https://www.facebook.com/business/help/788333711222886. 127.Autorité Report, 19 (“Most publishers who sell their inventory (i.e. their ad spaces, corresponding to various spaces on a webpage viewed by internet users: in columns, between paragraphs of text, etc.) through programmatic technologies use intermediaries, in that their ad space could not be sold through a vertically integrated model due to a lack of audience”), 42. 128.European Commission, Decision AT.39704, Google Search (Shopping), June 27, 2017, http://ec.europa.eu/competition/antitrust/cases/dec_docs/39740/39740_14996_3.pdf. 129.See, e.g., Bundeskartellamt, Online Advertising, February 2018, https://www.bundeskartellamt.de/SharedDocs/Publikation/EN/Schriftenreihe_Digitales_III.pdf, 8 (noting how “[s]ome even claim that the value of advertising is now first and foremost the value of the data and that the big platforms have huge market advantages on account of their combining reach with data depth”); Furman Report, 1.52, 1.73, 1.79, 1.136. 130.ACCC Preliminary Report, 80. 131.House of Commons Digital, Culture, Media and Sport Committee, Disinformation and ‘Fake News,’ Final Report 2019–8, HC 1791 (February 14, 2019), https://publications.parliament.uk/pa/cm201719/cmselect/cmcumeds/1791/1791.pdf, ¶ 116. 132.House of Commons 2019 Report, ¶ 96 (“From the Six4Three case documents, it is clear that spending substantial sums with Facebook, as a condition of maintaining preferential access to personal data, was part and parcel of the company’s strategy of platform development as it embraced the mobile advertising world.”); Sam Levin, “Facebook Documents Published by UK—the Key Takeaways,” Guardian (Manchester), December 5, 2018, https://www.theguardian.com/technology/2018/dec/05/facebook-documents-uk-parliament-key-facts. 133.House of Commons 2019 Report, ¶ 106. 134.House of Commons 2019 Report, ¶ 106. 135.Google Ads, “Grow Your Business with Google Ads,” accessed May 2, 2019, https://ads.google.com/home/ (“Your digital ads can appear on Google at the very moment someone is looking for products or services like yours”). 136.See, e.g., ACCC Preliminary Report, 87 (“Over the past two years, almost half of all complaints received by the ACCC about Google and Facebook from small businesses have been in relation to a lack of transparency in advertising services, including difficulties in disputes.”); see also Bundeskartellamt, Online Advertising: Advertisers often refer to online advertising platforms like those run by Google and Facebook as walled gardens, that is closed platforms or systems on which producers or operators impose user restrictions.

The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World
by Randall E. Stross
Published 13 Mar 2007

Willing to take risks, he picked up for a bargain price a state-of-the-art engine and pair of generators from General Electric that had been on display at the 1893 world’s fair. In only his second year on the job, he arranged to acquire his larger competitor, the Chicago Arc Light and Power Company. Branching farther out, he acquired coal mines and a steam railroad that provided vertical integration. Most innovative of all, he introduced new pricing schemes to encourage high-volume residential use spread over the entire day so that he could optimize the greatest volume of business for the least possible capital investment. With the acquisition of neighboring utilities, he created a six-thousand-square-mile regional network of power.

The Profiteers
by Sally Denton

The two would also be credited with inventing the clever “cost-plus” model of a business contract in which the government guaranteed contractors all costs of production plus a built-in profit of 10 percent. They decided to partner in a firm that would not only seek government contracts but also market to private industry, offering the mushrooming oil companies an entire construction package. “Not just pipelines, but storage tanks, refineries—the works,” as one account described their vertical integration model. They formed the Bechtel-McCone Corporation and opened a Los Angeles headquarters in May 1937. McCone became president, and Steve, with controlling interest, became chairman. “It was a success from the start,” Steve boasted later. They soon brought in as a partner Ralph M. Parsons, a forty-year-old Chicago refinery designer and aeronautical engineer.

The Bank That Lived a Little: Barclays in the Age of the Very Free Market
by Philip Augar
Published 4 Jul 2018

This strategy was confirmed by the acquisition of EquiFirst, which took them into mortgage origination for the first time. EquiFirst would be combined with HomEq’s mortgage servicing business – sending out statements and processing payments – and Barclays Capital’s capital markets capabilities to create what they called ‘a vertically integrated mortgage franchise’. It would mean that in addition to buying up other banks’ packages of mortgages and selling them on to investors, Barclays would now be dealing direct with US borrowers, offering them loans and servicing them with statements during the life of the loan. The idea was that by bringing mortgage origination in-house, Barclays would have more control over the quality of the loans it was buying and packaging.9 It proved to be a top of the market acquisition.

The Billionaire Raj: A Journey Through India's New Gilded Age
by James Crabtree
Published 2 Jul 2018

The pace and scale of Adani’s expansion drew comparison with industrial giants of earlier eras. Unable to rely on India’s ramshackle infrastructure, the tycoon built his own private railways and power lines. Lacking easy access to domestic coal, he bought mines in Indonesia and Australia, and took their contents back home through his port. In the process he built “a vertically integrated global supply chain reminiscent of when Henry Ford once owned Brazilian rubber plantations to supply his car factories,” as the New York Times put it.1 More to the point, his was an expansion that closely mirrored India’s own. As the country enjoyed its fastest ever growth in the mid-2000s, so Adani undertook one of its most extravagant investment sprees.

Retrofitting Suburbia, Updated Edition: Urban Design Solutions for Redesigning Suburbs
by Ellen Dunham-Jones and June Williamson
Published 23 Mar 2011

We see significant opportunities to direct this ongoing process toward a new set of goals, one based on efforts to retrofit suburbia for even greater diversity, variable density, a finer grain of uses, and improved access to mass transit to systemically enhance the long-term sustainable performance of these places.1 Levittown, New York, was one of the first and most highly publicized postwar planned suburbs catering to the needs of the families of returning GIs. In 1947 William Levitt set out to develop a new planned housing development on some 4,000 acres in the existing rural town of Island Trees, twenty-five miles due east of Manhattan, on New York’s Long Island. By refining an efficient, vertically integrated, standardized construction process that had first been introduced just before the war, Levitt and Sons rapidly constructed 17,500 houses, of 750 square feet each, on one-eighth-acre lots, 60 by 100 feet in dimension. Young families clamored to put their money down. By 1951, the financial success of Levittown was so clear that Levitt’s mass production model for near-instant bedroom suburbs, which took full advantage of government loan programs, was being widely copied by large merchant-builders across the country.

The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion
by Eliot Brown and Maureen Farrell
Published 19 Jul 2021

Meanwhile, he had pondered buying the real estate brokerage Cushman & Wakefield and realized the full extent of just how much money there was in the real estate services business. Brokers were getting huge commissions leasing WeWork space. Management companies were getting rich cleaning the lobbies and running security at building entrances. What if someone owned the whole system? What if WeWork vertically integrated it all? WeWork would own buildings, it would build buildings, lease buildings. It would rent apartments, expanding WeLive. WeWork would advise companies on their office space—becoming the sole solution. If companies wanted to stay in their own buildings, WeWork would design them; then it would lease them desks, run their coffee machines, sell them software.

Unscripted: The Epic Battle for a Media Empire and the Redstone Family Legacy
by James B Stewart and Rachel Abrams
Published 14 Feb 2023

To address this, the charters for both companies would specify that each would have a majority of “independent” directors—i.e., not employed by or related to Sumner. Sumner knew that this was little more than window dressing. He could still replace any director who defied him, “independent” or not. Shari firmly opposed the move. She felt an inability to choose between two contenders for the top job was no reason to split the company. Viacom was a vertically integrated entertainment company: its studios produced and sold content to its cable and broadcast operations. Its rivals, like Disney and Fox, were moving in the opposite direction. And its greater size gave it more bargaining power with cable distributors. The idea that media companies could bypass cable operators and sell directly to consumers was just gaining traction.

Seven Crashes: The Economic Crises That Shaped Globalization
by Harold James
Published 15 Jan 2023

The mystery was how losses in the subprime sector, a relatively small sector of the U.S. housing market, could produce a general collapse of financial intermediation. The whole of finance suddenly looked like a minefield, where no one could know where the unexploded detonators lay, and in consequence financial players, and retail depositors, could trust no one. Large and complex financial institutions, vertically integrated and often including mortgage originating and repackaging, were vulnerable. The value of their assets, established by internal algorithms, was unclear and no market price existed. And then the collapse occurred. The interbank market, which had seemed an absolutely secure pool of constantly accessible liquidity, dried up as banks were unwilling to take on the suddenly unknowable risks of exposure to other financial institutions.

The Pursuit of Power: Europe, 1815-1914
by Richard J. Evans
Published 31 Aug 2016

Thus firms tended to be large in scale from the outset. The average number of workers per factory in the metallurgical industries of Ukraine in 1890, for example, was 1,500, and in 1900 that number had risen to 4,600. Companies formed syndicates such as Prodameta, especially in mining and metallurgy, to control prices and divide up the market. Vertical integration proceeded apace; by 1913, twelve of the leading southern metallurgical firms owned or rented iron-ore mines, controlling 80 per cent of supplies in Ukraine, and held enough of an interest in coalmines to produce more than 2 million tons a year surplus to their own requirements. Yet the poverty of rural Russia, where the overwhelming majority of the tsar’s subjects still lived on the eve of the First World War, held them back.

…

Backing up these developments was a steady growth in trusts and cartels, in which bank representatives joined the boards of industrial companies and acted as intermediaries in mergers and acquisitions. In Germany they brokered the union of the Phönix Ironworks with the Westende coalmining concern in the 1890s, an example of ‘vertical integration’, while after the turn of the century the Darmstädter Bank was instrumental in the creation of the Luxemburg-Lorraine Pig Iron Syndicate. So closely were German banking and industrial enterprises interwoven by this time that some historians have even spoken of ‘organized capitalism’ in which open-market competition became increasingly controlled by large conglomerates, often with close links to the government.

Computer: A History of the Information Machine
by Martin Campbell-Kelly and Nathan Ensmenger
Published 29 Jul 2013

In July 1980 Lowe made a presentation to IBM’s senior management in Armonk, New York, with a radical plan: not only should IBM enter the personal-computer market but it should also abandon its traditional development processes in order to match the dynamism of the booming personal-computer industry. For nearly a century IBM had operated a bureaucratic development process by which it typically took three years for a new product to reach the market. Part of the delay was due to IBM’s century-old vertical integration practice, by which it maximized profits by manufacturing in-house all the components used in its products: semiconductors, switches, plastic cases, and so on. Lowe argued that IBM should instead adopt the practice of the rest of the industry by outsourcing all the components it did not already have in production, including software.

The Shifts and the Shocks: What We've Learned--And Have Still to Learn--From the Financial Crisis
by Martin Wolf
Published 24 Nov 2015

It created instruments that insured such assets, known as credit-default swaps, often deemed an adequate substitute for the capital required by regulators, even though they did not in any way increase the capital in the system. It led to the dissolution of the boundary between retail banking and wholesale markets. It created intense and non-transparent networks of financial relationships among institutions, both vertically and horizontally, in place of the vertically integrated silos characteristic of more traditional banking. It introduced far more competition into the financial sector. Not least, it facilitated enormous growth in credit and debt, in the US and elsewhere (see Figure 5).36 A particularly important component of the growth in debt occurred within the financial system: while debt was once held within vertical institutions, such as retail banks or mortgage lenders, it was now held through a chain of market relations among independent players.

After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead
by Alan S. Blinder
Published 24 Jan 2013

Mortgage securitization became the largest component of Bear’s fixed-income division, which was in turn the company’s most profitable line of business, generating almost half the firm’s revenues. For example, even though it was much smaller than its Wall Street rivals, Bear ranked in the top three in underwriting private-label mortgage-backed securities from 2000 to 2007.* In addition, a series of acquisitions and expansions had turned Bear Stearns into a full-service, vertically integrated mortgage machine. Its various divisions originated home-mortgage loans, bundled them for securitization, and sold the resulting securities—profiting at each step in the chain. This heavy concentration in mortgage finance was one of the reasons Bear was widely considered the weakest of the so-called Bulge Bracket firms when the financial world started teetering on Paribas Day.

The Cigarette: A Political History
by Sarah Milov
Published 1 Oct 2019

With the 1895 E. C. Knight decision, the Supreme Court all but curtailed the ability of the federal government to regulate manufacturing as interstate commerce. Under the business-friendly McKinley administration, it seemed that there was little the federal government would do to halt the horizontal and vertical integration that characterized the Great Merger Movement—until, that is, the McKinley administration unexpectedly became the Roosevelt administration. The prospect of a Teddy Roosevelt presidency was a source of dread for the business community at the turn of the century. As governor of New York, Roosevelt had burnished his reputation as a reformer by railing against excesses of large corporations.

Corporate Warriors: The Rise of the Privatized Military Industry
by Peter Warren Singer
Published 1 Jan 2003

A more complete, and less normative, assessment of the phenomenon finds that it is the cor- poratization of military service provision that sets them apart. The newest wave of private military agents are commercial enterprises first and foremost. They are hierarchically organized into registered businesses that trade and compete openly (for the most part)and are vertically integrated into the wider global marketplace. They target market niches by offering packaged services covering a wide variety of military skill sets. The very fact that a coherent industry made up of these companies is identifiable provides evidence of their distinction. Several distinguishing characteristics follow from this corporatization.

Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole
by Benjamin R. Barber
Published 1 Jan 2007

In 1996 a new deregulatory Federal Communications Act was passed, supplanting the 1934 act. It was precisely the logic of technical “spectrum abundance” that motivated deregulation and rationalized the emphasis on market activity, though the reality was that control of content was narrowing in a world of vertical integration and global media monopolies. More and more time and more and more space for a less and less varied content. Broadband originally held out the promise of greater variety. Every television channel yielded increased transmission time capacity by a factor of six. But digitalizing broadcast spectra so that one old analog station can yield six digital channels does little to increase the variety or cultural diversity of content.

The New Map: Energy, Climate, and the Clash of Nations
by Daniel Yergin
Published 14 Sep 2020

But the tech giants, looking for the next trillion-dollar market, could wield their mastery of software and platforms and their capital hoards to become dominant players—not necessarily in manufacturing but in the overall industry. After all, Apple does not manufacture its own phones. And here is where we could see the emergence of new types of companies—“Auto-Tech.” These would either be vertically integrated or strategically allied companies, from vehicle manufacture, to fleet management, to ride hailing through their own platforms. They would be the master coordinators of multiple capabilities—manufacturing, data and supply chain management, machine learning, software and systems integration, and the delivery of high-quality “mobility as a service” to customers around the world.

Your Computer Is on Fire
by Thomas S. Mullaney , Benjamin Peters , Mar Hicks and Kavita Philip
Published 9 Mar 2021

In 2017 alone, Amazon shipped more than five billion packages via its Prime subscription service.3 To accomplish this, Amazon has constructed more than 329 distribution centers in the United States, and another 380 worldwide.4 These include massive, million-square-foot warehouses like that in Tracy, California, as well as smaller, more specialized sorting and delivery stations.5 For delivery between its various facilities, Amazon relies on fleets of company-owned or leased vehicles.6 For the so-called last mile, it relies (for the moment, at least) on delivery services like UPS or FedEx and—on extraordinarily favorable terms—the United States Post Office.7 In order to further reduce its costs, Amazon has been developing an Uber-like system called Amazon Flex to further “disrupt” its dependence on third-party carriers.8 And famously (and prematurely, perhaps perpetually), Amazon has announced plans to implement entirely automated drone delivery.9 In its focus on the control and consolidation of transportation and distribution networks, Amazon resembles yet another of the early-twentieth-century corporate giants, namely Standard Oil (see fig. 1.1).10 Although Standard Oil’s dominance of the oil industry was due in part to its monopolistic consolidation of refineries, it was equally enabled by the firm’s secret manipulation of the railroad network. Like Jeff Bezos, John D. Rockefeller recognized the value of vertical integration and the necessity of access to and control over critical infrastructure. Such integration is only ever in part a technological accomplishment, and it requires social, political, and financial innovation. In this respect, the continuity between the industrial-era giants and the “Big Five” tech firms (Alphabet, Amazon, Apple, Facebook, and Microsoft) is all the more apparent.

Pandora's Box: How Guts, Guile, and Greed Upended TV
by Peter Biskind
Published 6 Nov 2023

In this vein, he continued, “I deserve better than a heart attack because people are too stupid to read a script and understand the words.”49 Darabont targeted two writers, Chic Eglee, a veteran of The Shield and Dexter, and Jack LoGiudice for delivering what he considered inferior scripts, and he told an AMC executive he should have “hunted down and fucking killed them with a brick, then gone and burned down their homes.”50 Would that his own scripts were as colorful as his emails. In December 2013, Darabont filed a suit for $280 million in damages, accusing AMC of self-dealing with its vertically integrated production arm, AMC Studios, which allegedly gifted the cable arm, AMC Networks, with abnormally low licensing fees, thereby minimizing the payouts to profit participants like himself. In 2021, Darabont (and talent agency CAA) won a payout of $200 million from AMC. With that in mind, in November 2022, producers Robert Kirkman, Chic Eglee, Glen Mazzara, and Gale Anne Hurd filed a new suit against AMC.

Andrew Carnegie
by David Nasaw
Published 15 Nov 2007

The two titans agreed not to compete with one another in the future: the Carnegie interests promised that they would neither lease nor purchase any new Mesabi mines for the length of the agreement, leaving the field open to Rockefeller to expand his holdings; Rockefeller, for his part, pledged that he would stay out of the steel business.17 “I am happy knowing that we are now secure in our ore supply,” Carnegie wrote Frick nine months after the deal with Rockefeller. “This was the only element needed to give us an impregnable position. We can now figure cost within a trifle and take contracts ahead without danger.” Though he had been hesitant, initially, to divert capital from steelmaking, he was now quite ready to acknowledge the benefits of vertical integration. “It is clear to me,” he wrote his cousin Dod on New Year’s Day 1898, “that profit is to be made in steel manufacturing only by the concerns which do every step in the process themselves.”18 Though the deal benefited both men, Carnegie, testifying in 1912 before the congressional committee investigating U.S.

…

Frick Coke Company and ironclad agreement iron ore supplies for labor issues at Lauder and Lauder’s share in market share for as non-union company as partnership Pennsylvania Railroad and Phipps and Phipps’s share in profits/profitability of publicity about rail pools and sale of. See sale of Carnegie Steel Schwab and spokesmen for structure of supplies for transportation needs vertical integration of workers’ compensation at workers’ salaries at working conditions at Carnegie Technical Schools Carnegie Trust for the Universities of Scotland, Carrère & Hastings Cassatt, Alexander Central American Court of Justice Central Pacific Railroad Central Park, New York City Central Transportation Company Century, Chadwick, Cassie Chalmers, Peter Chamberlain, Joseph Champlin, John Chandler, Alfred Charity Organization Society Chartiers, Pennsylvania Chernow, Ron Chickering Hall Childs, Asa Childs, Otis China, armament market Chinese, AC on Choate, Joseph Christian Endeavor World, Chudacoff, Howard Church, Samuel Church Peace Union Citizens’ National Committee Citizen’s Passenger Railway City National Bank Civic Forum Civil War, U.S.

The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea
by Steve Levine
Published 23 Oct 2007

“All the Baku well proprietors hate one another,” Charles Marvin wrote, “and the only sentiment they have in common is a general hatred of the Nobel Brothers.” Ludvig would not live to see all of this; he died in 1888 of heart failure, and control of the company passed to his son Emanuel. But it could be argued that in his lifetime, Ludvig had in some ways surpassed Rockefeller. True, the cunning American pioneered vertical integration decades before the term was invented. In the second half of the nineteenth century, his Standard Oil Company grew to control 90 percent of oil sales both in America and Europe. It was a triumph credited to a brilliant, “well-to-wick” transportation network that moved Rockefeller’s oil from oil field to retailer faster and more cheaply than any competitor.

How the Scots Invented the Modern World: The True Story of How Western Europe's Poorest Nation Created Our World and Everything in It
by Arthur Herman
Published 27 Nov 2001

In less than twenty years, by 1892, the Carnegie Steel Company was producing steel equal to one-half of the entire production of Great Britain. This was Adam Smith’s capitalism on a truly gigantic scale. In fact, Carnegie Steel Corporation, later United States Steel, is the ancestor of the modern industrial corporation. Carnegie created a perfectly “vertically integrated” business, controlling every aspect of production from extraction of the raw iron ore and coal to the distribution of the final product, much as John Rockefeller did with Standard Oil. But Carnegie also changed the nature of division of labor, which for a hundred years Adam Smith and his disciples had understood to be the source of all productive wealth.

The Unwinding: An Inner History of the New America
by George Packer
Published 4 Mar 2014

In 1999, having consolidated its parts divisions, including Packard, into one entity called Delphi Automotive Systems, General Motors spun off Delphi into an independent corporation, with a public stock offering and a prospectus for investors that promised to “improve operating performance” with “a ‘fix/sell/close’ plant-by-plant analysis through which we seek to improve our cost competitiveness, and various other sourcing, labor, and cost reduction initiatives.” Wall Street had been pushing GM to spin off Delphi for at least a year, thinking there would be more shareholder value in a smaller automaker and a separate parts company than in one vertically integrated GM. Tammy found the whole spin-off suspicious. “At the time, Packard Electric was profitable. As soon as we came under Delphi, we were no longer profitable,” she said. “I had a feeling then that something was not right about this. I’m not a conspiracy theorist, but I think the writing was on the wall.

We the Corporations: How American Businesses Won Their Civil Rights
by Adam Winkler
Published 27 Feb 2018

Buck Duke’s American Tobacco Company, meanwhile, was responsible for production of over 75 percent of the smoking tobacco, 90 percent of the snuff, and 80 percent of the chewing tobacco sold in America.17 As part of the Tobacco Trust, Duke took over the American licorice industry too. Seeking vertical integration, Duke bought up two-thirds of MacAndrews & Forbes stock, and then took control of all the other major American licorice root importers. He then fixed the price of licorice, divvied up customers among the companies, limited production, and refused to sell to customers unwilling to sign long-term contracts at an inflated cost.

Boom: Mad Money, Mega Dealers, and the Rise of Contemporary Art
by Michael Shnayerson
Published 20 May 2019

Artnet News toted them up.5 The first key attribute a luxury brand needed for corporate immortality, Galloway opined, was an iconic founder. By that, he meant a founder whose story was larger than life. Gagosian, with his humble start selling posters on sidewalks, then relentlessly dealing his way to the top of his field, was certainly iconic. The next was vertical integration. Absolutely: the gallery did it all. Global reach? Sixteen galleries in three continents checked that box. Premium price? Yes, again. Gagosian’s goods, which happened to be art, sold at top prices. The one key attribute that some might deny Gagosian was artisanship, but that wasn’t really fair.

Mr Five Per Cent: The Many Lives of Calouste Gulbenkian, the World's Richest Man
by Jonathan Conlin
Published 3 Jan 2019

CONCLUSION Though one struggles to imagine Gulbenkian as much of a ‘dreamer’, his skill in carving out a place for himself among the emerging giants of the cut-throat world of big oil was clearly founded on a vision: the orderly development and consolidation of a fragmented oil industry through vertical integration and international cartels. The spectacular waste of oil he witnessed during his short expedition to Baku in 1888 clearly left a deep impression. So did the price wars fought among Standard, Royal Dutch, Shell and other companies before 1900, and the logjam produced by rival powers’ attempts to secure the Mesopotamian oil concession before 1914.

The Greatest Capitalist Who Ever Lived: Tom Watson Jr. And the Epic Story of How IBM Created the Digital Age
by Ralph Watson McElvenny and Marc Wortman
Published 14 Oct 2023

He delighted his grandchildren with his antics in Greenwich, North Haven, and Antigua. He slept more but never lost his lust for adventure and pushing against boundaries. He also fretted deeply about the fate of IBM. For virtually the entire four-decade history of the computer industry, IBM’s vertically integrated business model, in which it designed, manufactured, assembled, marketed, sold, and serviced its entire product line, enabled it to dominate the industry. No single company could challenge “Big Blue,” as it was now nicknamed due to its iconic blue logo and a popular mainframe computer color, with its unmatched scale and resources, disciplined organization, engineering and research advances, technological quality, and powerful sales, service, and marketing machine.

Aerotropolis
by John D. Kasarda and Greg Lindsay
Published 2 Jan 2009

The trend is to keep going, flinging ourselves ever farther into space, until we scatter completely, forming what Melvin Webber might have called companies without propinquity—maybe the next step in corporate evolution. Corporations have struggled with how and where to best arrange themselves since Henry Ford built the world’s biggest factory outside Detroit, then changed his mind and started taking it apart. In 1937, the economist Ronald Coase wrote “The Nature of the Firm,” exploring just how big a vertically integrated one like Ford’s might get. Not much bigger, he argued, because beyond a certain point, the drag of managing huge organizations over long distances would offset any advantages of scale. Size mattered, however, if advances in transportation, communication, and management techniques could shrink these distances and di-minish the drag.

The WikiLeaks Files: The World According to US Empire
by Wikileaks
Published 24 Aug 2015

Another powerful set of actors opposed to Petrocaribe were international oil companies operating in Jamaica. In the months after Jamaica joined, the embassy had multiple meetings with officials from these companies who expressed concern about competing with the new state-owned companies. Texaco’s country manager emailed an embassy official: “It is clear, that the present Government wants to vertically integrate into the [retail] petroleum sector. This is a significant policy shift which will have serious implications for the market” [05KINGSTON2495]. While the embassy officers had “repeatedly” engaged GOJ officials on Petrocaribe, they became frustrated that they had little to offer as an alternative.

Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed
by James C. Scott
Published 8 Feb 1999

The most striking proposal designed to reconcile the American small-property regime with huge economies of scale and scientific, centralized management was that of Mordecai Ezekial and Sherman Johnson in 1930. They outlined a "national farming corporation" that would incorporate all farms. It would be vertically integrated and centralized and "could move raw farming materials through the individual farms of the country, could establish production goals and quotas, distribute machinery, labor and capital, and move farm products from one region to another for processing and use. Bearing a striking resemblance to the industrial world, this organizational plan was a sort of gigantic conveyor belt."24 Ezekial was no doubt influenced by his recent tour of Russian collective farms as well as by the plight of the depression-stricken economy.

In the Age of the Smart Machine
by Shoshana Zuboff
Published 14 Apr 1988

L., 33 Hand technology, 37, 39 Harding, Warren, 40 Harvard University, 232 Havelock, Eric, 176, 181 Hidden Injuries of Class, The (Sennet and Cobb), 239 Hierarchical authority, 221-22, 413, 448n40; and communicative behav- ior in computer medium, 372-86; computers as threat to, 266-67; de- velopment of, 235-40; limits of, in informated organization, 285-314; performance opportunities limited under, 207-8; and visibility in com- puter medium, 337-41; see also Executives; Management; Middle management Honeywell Corporation survey, 283 Hopf, Harry, 109 Horizontal integration, 399 Hounshell, David, 39 Howard, Robert, 283 How to Do Business as Business Is Done in Great Commercial Centers (Eaton), 100-101 How to Win Friends and Influence People (Carnegie), 111 Hughes, Everett, 454n12 Hypotheses, generating and testing, 197-202 Imagination, 86-88, 437n7 Imperative control, 221, 400; beliefs necessary to maintain, 250, 410- 11; managerial authority and, 224, 234, 236-37, 250, 254, 313, 356; reciprocity in maintenance of, 360- 61; traditional environment of, 390-91,394 Implicit knowledge, 79, 196; limits of, 60 Incentive payment schemes, 43, 45, 414 Individualistic orientation, 131, 202- 3,238 Individual rights, 406 Index Inductive reasoning, 93 Industrialization, 37-42,227 Inferential reasoning, 72-73, 75, 92- 96, 169 Informal communication, 362-86 Informating power of computer tech- nology, 390-91, 440n6; automa- tion and, 9-11; autonomy of, 30 I- 10, 385-86; communicative behav- ior and, 362-86; office work and, 156-71; reskilling and, 57 Informational role, 103-4 Information technology: and abstrac- tion of industrial work, 58-96; col- lective responsibility in, 355-61; managerial authority and, 245-84; mastery of, 174-218; office work and, 124-73; problem of meaning in, 79-96; scope of, in modern workplace, 3-5, 11-12, 415-22; visibility within, 315-19, 322-61, 363-72 Innis, Harold, 176 Intellective rate busting, 410 Intellective skills: action-centered skills compared with, 76, 81; cogni- tive demands of, 185-95, 216-17; development of, 191-94; division of labor and, 393; education and, 443- 44n28; impediments to competence and performance in, 206-8; mana- gerial role and, 396-99; need for, 76, 182, 253; operational compe- tence and, 286-87; pooling, 196- 200; and problem of meaning, 79- 96; social-psychological signifi- cance of, 195-206 Interchangeability of personnel, 46 Interchangeable parts, 47-48 Internal Revenue Bureau, 11 5 International banking, 160-71 International Congress for Scientific Management, Sixth, 109 International Labour Organization, 120 Invisible work, 290-96 Ironmaking, 38-40 Isenberg, Daniel, 103, 109, 196 Isolation, 125-26, 139, 141, 151-56, 171, 440n6 463 Jaikumar, Ramchandran, 283 Japan, 420-21 Johnson, Mark, 454nll Journal of the American Society of Naval Engineers, 43 Judeo-Christian theology, 25 Kanter, Rosabeth, 103, 109, 111-12, 122,196 Katz, Harry, 241-42 Knowledge, 166-67; class system and distribution of, 444-45n36; cleri- cal, 126, 133-50, 172; computer- mediated expansion of, 182-83, 395; depletion of, 391; diminished importance of, 133-36; experience- based, 36-42; hierarchical access to, 394; implicit, 60, 79, 196; informal communication and, 362-86; oral culture and, 174-78; power and, 266-67; sentience dissociated from, 61-70; withheld from workers by management, 250-54, 264, 278- 80; see also Tacit knowledge Kochan, Thomas, 241-42 Kohlberg, Lawrence, 428 Kotter, John, 102, 109, 177 Labor discipline, 33-36, 46 Labor militancy, see Trade union movement; Unions Labor statutes, assumptions common to, 237 Labor-withholding practices, 35- 36 Lakoff,George,454nll Leadership activity, 104 Leather trades, 38 Leffingwell, William Henry, 11 7-1 9, 125-26,151 Leontief, W assily, 420 Locke, John, 225 Lockwood, David, 114 Lodge, George, 226 Logical- mathematical reasoning, 193-94 Long-term memory, 192 464 Lordstown, Ohio, autoworkers strike, 241 Lynd, Helen Merrell, 240 Lynd, Robert S., 240 McCormick Reaper Works, 39 Machine dependency, 166-67, 269, 271-73 Machine tools, numerically con- trolled, 419-20 McKersie, Robert, 241-42 McLuhan, Marshall, 176 Mallet, Serge, 54 Management: action-centered skills involved in, 102-6, 112, 360-61; automation and, 245-84; and col- lective responsibility in computer- based environment, 355-61; con- trol techniques used by, 313-14, 323-27, 389, 392, 400, 404-5, 452n10; cost data and, 255-67; data access policy and, 356-61; decision making by, 104- 5; development of role of, 224-29; and etiology of white-collar work, 97-99; knowl- edge withheld from workers by, 250-54, 264, 278-80; and limits of hierarchy in informated organiza- tions, 285-314; and operator mis- trust of symbolic medium, 89; or- ganizational skill base and, 392-99; of posthierarchical organizations, 399-402; professionals and, 375- 76, 383-86; rationalization of work of, 437-38n55; recent challenges to authority of, 240-43; as science, 229-35; and social division of labor, 235-40; of socially integrated work- place, 404-12; and visibility of workers' social exchange in com- puter medium, 362-63, 372-86; workers' know-how expropriated by, 42-44; see also Executive work; Hierarchical authority; Middle man- agement; Scientific management; Worker-manager relations Man in the Moone (Godwin), 26 Manual labor, see Body Index Manufacturing, see Production Manufacturing resource planning, 412-22 March, James, 354 Martin, James, 441 n 10 Marx, Karl, 30, 221 Mass-production facilities, 43, 47-48, 51,421 Mayo, Elton, 234-35 Mead, George Herbert, 423 Meaning, problem of, 79-96 Meaningful work, 134, 273 Memory, 192 Mental imaging, 86-88, 435n7 Mercantilism, 25 Merleau-ponty, Maurice, 423 Methodology, 14, 423-29 Microcomputers, 417-18, 420 Middle Ages, 25-27 Middle management: and demands of acting-with, 110-13; etiology of, 98, 107-9; hierarchical pressures on, 249-51; and origins of clerical work, 113-23; as repository for ex- plicit knowledge of organizations, 232 Middlemen, 31 Middletown study, 240 Millar, Victor, 415 Mind, Self and Society (Mead), 423 Minicomputers, 418 Mintzberg, Henry, 103-7, 109, 177 Modern Business, 11 5 Monitoring systems, 43 Montgomery, David, 41 More, Thomas, 26 Nation, The, 229 National Academy of Sciences, 421 National Labor Relations Act, 238 National Research Council, 308 Natural attitude, 13 Natural selection concepts, 228-29, 447nl7 Neisser, Ulric, 187 New Deal legislation, 240 Newell, A., 192 New York Post, 229 Index New York Telephone Company, III Noble, David, 283 Obedience, 6, 291, 313, 431 n30, 445n2 Occupational identity, 62-63; disrup- tion of, 185-86 Offe, Claus, 236 Office, The, 12 1 Office machinery, 115-16, 118; com- puter systems compared with, 1 72 Office Management: Principles and Practice (Leffingwell), II 7 Office work: development of, 113-23; feminization of, 115-1 7; manage- rial role and, 437-38n55; mechani- zation and automation of, 115-23, 439n4, 439-40n5; on-line, 124-73; rationalization of, 113, 116-17; routinization of, 115-16; scientific management of, 117, 119-21, 123, 126, 151, 215; scope of computer applications in, 416-1 7 Oil refining, 59, 417-18 IIOld boy's network," 383 On Civility in Children (Erasmus), 26 Ong, Walter, 176 On-line offices, 124-73 Operations research, 109 II Optimology," 1 09 Oral culture: action-centered skills in, 174-78, 196,204,215; computer medium and, 362, 370-72; erosion of, 392-93; social exchanges sur- rounding professional work as, 376-86; written word mistrusted in, 77-78 Orality and Literacy (Ong), 176 Organization and Control (Gerstenberg), 447nl7 Owner-managers, 99-101, 109, 225, 227 Panoptic world view, 320-61 Parry, Adam, 176 465 Parry, Milman, 176 Participative management, 413 Partitions, 124-25, 140 Passive resistance, 352 Passivity, 69 Passwords, 353 Paupers and convicts, 225, 320 Payment systems, 46, 48-50, 273, 298-300; incentive-based, 43, 45, 50, 414; and status groupings of white-collar workers, 114 Peasants, 25-27; insurrections by, 31 Personal contacts, 333; devaluation of, 358; office work and, 439n4 Personalism, 61, 106 Personal style, 359-60 Physical labor , see Body Piaget, Jean, 428 Piece-rate workers, 32, 225; differen- tial pay for, 45 Pierenkemper, Toni, 114 Polanyi, Michael, 186 Pollard, Sidney, 99, 114,227,431 Porter, Michael, 41 5 Posthierarchical relationships, 399- 402 Pottery work, 38 Poulantzas, Nicos, 236 Power, 452n9; authority as spiritual dimension of, 221-23; division of labor and, 405-6; knowledge and, 266-67; technique as material di- mension of, 313-14 Preindustrial Europe, 25-31, III, 313-14 Printing industry, 51, 53-54 Privacy, 370; of social exchange in computer medium, 378-86; see also Surveillance Problem solving, 241, 286, 360; joint, 197-200,204,206 Procedural reasoning, 23, 75, 92, 156, 169,282 Production: abstraction of, 58-96; body's role in, 19-57; industrializa- tion and, 37-42, 227; scope of com- puter applications in, 418-22; skilled craft as root of, 36-42, 98 Production quotas, 46 466 Professional culture, differences with managerial culture, 375-76, 383- 86 Professionalization of managerial class, 230, 232 Professional schools, III, 116, 232 Protestant asceticism, 225, 233 Psychological disorders, 439-40n5 Psychological individuation, 207 Psychological issues, see Social-psycho- logical issues Pulp and paper mills, 2-5, 19-22, 42, 58-76,80-96,418-19,424 Quality circles, 241 Quality of Work Life movement, 241- 43 Quit rates, 34 Religion, 226, 229, 233 Research and development (R & D), 363-66 Ritualistic utterances, 247-48 Robot Institute of America, 420 Robots, 8, 419-21 Sabotage, 7 Saint Monday tradition, 32 Sampling, 425-26 Samuel, Raphael, 37, 39 Schrank, Roben, 50,238 Schuck, Gloria, 410 Schutz, Alfred, 430n I Schwartz, Barry, 454nll Scientific management, 99, 178; exec- utive work as approached by, 106- 10; history of, 230-35; information systems used to reproduce logic of, 283, 303; managerial control estab- lished by, 302-3; of office work, 117, 119-21, 123, 126, 151,215; philosophy and methods of, 41-44; workers' responses to, 44-45 Index Seavey, Jane, 115 Secretarial function, 122-23; see also Office work Self-made man, ideology of, 227, 446n5 Self-managing work teams, 241-42 Sennett, Richard, 239 Sentience, 61-70, 106 Service sector, 41 7-18, 424 Shaiken, Harley, 283 Shared context, 196, 204-5 Shaw, George Bernard, 248 Shirkers, 334-35 Side effects, 120, 141 Siemens, Werner von, 108 Silicon-integrated circuit (chip), 415 Simon, Herbert, 192, 354 Singer Sewing Machine Company, 39 Site visits, 333 Skills: automation's effect on, 23, 47- 49; continuous-process production and, 51-53; executive, 99-107, 43 6n 13; pay differential and, 50; production work and, 36-42, 51- 53, 98; sentient involvement and, 60; worker control and, 45; see also Action-centered skills; Craft work; Deskilling; Intellective skills Slavery, labor associated with, 25 Slichter, Sumner, 36 Smith, Adam, 221, 225-26 Smith, Jonathan Z., 247-48 Social Darwinism, 228-29, 231, 235, 238, 446-47n15 Social exchange: in computer me- dium, visibility of, 362-63, 372-86; isolation from, 139, 141, 151-56, I 71, 440n6; joint problem solving and, 197-200, 204, 206; reduced, in on-line offices, 136-50 Social integration, 25; automation and, 53-54; craftsworker's knowl- edge as source of, 41, 50, 53-54; in- dustrialization and, 227; and scope of computer applications, 403-12 Social-psychological issues: continu- ous-process production and, 51- 53; intellective skills and, 195-206; office work and, 126 Index Social stratification: class struggle and, 283; distribution of knowledge and, 444-45n36; and erosion of class dis- tinctions, 240, 250; physical labor and, 25-30; rigidified by manager- worker education differences, 228- 29,231,235,238 Sociolinguistics, 204 Soldiering, 35 IIS pan of control" concept, 452- 53n15 Spatial intelligence, 193-95, 435n7 Spencer, Herbert, 228-29 Standard operating procedures, 43 Steam power, 31, 34, 37, 39 Steel industry, 39-40,419 Stockbrokers, 438n55 Storage-and-retrieval systems, auto- mated, 41 9 Stress, 143, 440n5; of invisible work, 292; and mechanization of office work, 120-21; and symbolic refer- ence,89 Structure of Behavior, The (Merleau- Ponty),423 Supervision methods, 35-36, 294-95, 326,329-37, 340-41; circumvent- ing, 352-54; see also Management Supervisory process-control systems, 419 Surveillance, 7, 400; larger social con- text and, 319-22; managerial au- thority maintained by, 313; of social exchange in computer medium, 378-86; unilateral, 354-56, 361 Symbolic reference, 442n5; liberating aspects of, 180-81; and problem of meaning, 79-92; shared action con- text and, 196; stress generated by, 89; trust of, 76-79 Systematic management, 44 Tacit knowledge, 186-88; intellective skill development and, 192-93; re- placed by algorithms, 246 Taylor, Frederick, 41-43, 45-47, 109, 230-32,302-3,349 467 Taylor Society, 11 7 Team-based organizational structure, 203, 275-76, 346, 360, 413-14; self-managing, 241-42 Telephone, 131 Terminations, 225, 326, 431 n30 Theory-based reasoning, 93-96 Three Mile Island nuclear power plant, 201 Time-and-motion study, 42-43,46 Time study, 42-43,47 Top-down perceptual processing, 95, 169 Touche Ross International, 440n9 Touch-sensitive screens, 418 Toyoda Machine Tool Co., 421 Trade union movement, 35, 226; in- dustrialization and, 37-38; manage- rial authority and, 228, 233, 236, 240-42; Social Darwinism and, 228; see also Unions Training, 258-60, 286; division of la- bor and, 455n14; lack of, 250-54 Troubleshooting, 197-200, 286 Tucker, Josiah, 35 Turnover rates, 34, 241 Typewriter, 115-16, 1 72 U-curve hypothesis, 53-54 Ulman, Lloyd, 36 Unions, 46, 334; cost information available to, 265-66; job security and, 265; and prospect of socially in- tegrated workplace, 403-4, 406; Taylorism and, 45; see also Trade union movement United States Department of Health, Education, and Welfare, 241 United States Steel Corporation, 35 University of Pennsylvania, 232 Unmanned factories, 422 Unreality, sense of, 79-92, 130-31 Urwick, L. F., 452n15 Utopia (More), 26 Utopian thinkers, 26 468 Veblen, Thorstein, 226, 233 Vertical communication, 372-86 Vertical integration, 399 Violence, 27, 31, 36 Visibility in computer medium: impact of, 315-19, 322-41; psychology of, 342-55; of social exchange, 362- 63,372-86 Visualization, 86-88, 437n7 Voice-activated programs, 418 Wages, see Payment systems Walkouts, 241 Walton, Richard, 242 Warner, W. Lloyd, 236 Watt, J., 32 Wealth of Nations, The (Smith), 226 Weaponry, technological history of, 182-83 Weber, Max, 221, 225 Wedgwood, Josiah, 32 White-collar work: etiology of, 97-99; future of, 171-73; see also Office work; Management Index Winstanley, G., 26 Withholding effort, 35-56 Women, 225, 382-83; and feminiza- tion of office work, 11 5-1 7 Work banking, 35 Worker accountability, 69 Worker-manager relations, 24, 46; ad- versarial, 404-12; automation and, 50; and body's role in labor process, 56; in early factories, 31-36; loss of confidence in shared values of, 344- 46; rigidified by education differ- ences, 228-29, 231, 235, 238; and visibility within computer medium, 342-55; see also Management Worker's self-understanding, 238-39 Work in America, 241 Written word, 130-31; cultures un- touched by, 175-78; liberating as- pects of, 180-81; and origins of cler- ical work, 115; paper-based vs. electronic, 179-85; resistance to, 77-78, 100-101 Yates, Joanne, 116

Big Data and the Welfare State: How the Information Revolution Threatens Social Solidarity
by Torben Iversen and Philipp Rehm
Published 18 May 2022

The other driver is the growing segmentation of labor markets, which is broadly related to the transition from a Fordist industrial economy to a more decentralized knowledge-intensive, service-centered economy. However, in the past, skilled and semi-skilled workers often worked side by side in the same plants and industries, many in large vertically integrated companies that spanned several sectors and often included both urban and more rural areas; there is now sharp segregation of skilled and semi-skilled labor markets, as well as a growing differentiation by occupation and geography (advanced companies are concentrated in the urban centers with few backward linkages to small towns and rural areas).

Slouching Towards Utopia: An Economic History of the Twentieth Century
by J. Bradford Delong
Published 6 Apr 2020

A little instability could then be dealt with, and some of the wild and cranky and cruel could then be overlooked. All in all, America’s mass-produced future looked bright. Increasingly, America’s decision makers believed that the key to the modern business enterprise lay in creating enormous economies of scale that could be realized by a large, vertically integrated organization able to plan the flow of raw materials into the factory and the flow of finished goods out into distribution channels. The realization of these economies of scale required the highest output, as well as the lowest practicable prices to make sure that the output could be sold. But corporations like Ford’s were proving this formula to be practical, or at least practical enough.

The Bill Gates Problem: Reckoning With the Myth of the Good Billionaire
by Tim Schwab
Published 13 Nov 2023

What’s also notable about Inventprise is that records from the U.S. Patent and Trademark Office show the Gates Foundation has an ownership stake in the patent covering Inventprise’s 25-valent pneumonia vaccine. This presents the appearance of a new level of commercial activity in the foundation’s work, a kind of humanitarian vertical integration in which Gates gives out charitable grants to fund and develop a company’s vaccine, takes an ownership stake in the underlying technology, and then, if the vaccine is successful, will direct Gavi to buy it with taxpayer dollars and distribute it to poor nations. If the foundation also takes an ownership stake in Inventprise, which seems to be the design of its financing arrangement, sales of the new vaccine could drive new revenue into the Gates Foundation.

Piracy : The Intellectual Property Wars from Gutenberg to Gates
by Adrian Johns
Published 5 Jan 2010

The Japan jeremiads mattered because they professed to explain Tokyo’s inevitable victory in terms of culture. The peculiarly Japanese institution of the keiretsu was a favorite explanatory device. Laissezfaire was obsolescent, the argument went, and would be replaced by a social model embracing keiretsulike characteristics of cooperation, cartelism, and vertical integration. The United States had hitherto been able to hold its own only because its individualist culture favored innovation. But the Japanese had now obviated this advantage by piracy – by helping themselves to Western scientific and technological advances. (The irony of this claim in light of earlier American appropriations of European technology was not widely appreciated.)

Blackwater: The Rise of the World's Most Powerful Mercenary Army
by Jeremy Scahill
Published 1 Jan 2007

“We now have 7,300 acres, it’s a large private military facility,” he said as he gave an overview of some of the company’s operations, saying it trains about thirty-five thousand military and “law enforcement” representatives a year, including active-duty military, special operations forces, and personnel from the Department of Homeland Security as well as state, federal, and local governments. “We’re vertically integrated up and down across the board,” he said. “We have our own target business, we do full-on construction of tactical training facilities, we have our own aviation arm with twenty aircraft, canine operation with sixty dog teams deployed overseas, full-on construction, and a private intelligence service.”

The Making of Global Capitalism
by Leo Panitch and Sam Gindin
Published 8 Oct 2012

General Motors took over Vauxhall in the UK in 1925, and its purchase of Opel in 1928 completed the “virtual division” of the German auto industry between GM and Ford.22 All this was closely linked to the organizational innovations that American companies introduced in both production and consumption, including the development through the 1920s of a considerable degree of decentralization within large and vertically integrated corporations. These organizational changes were especially important in the new mass-production industries, where factory productivity grew by 75 percent; in the capital goods sector (machine tools and electrical equipment such as generators, transformers, and motors); and, especially, in the household goods sector (washing machines, refrigerators, electric stoves, vacuum cleaners).

Architecting Modern Data Platforms: A Guide to Enterprise Hadoop at Scale
by Jan Kunigk , Ian Buss , Paul Wilkinson and Lars George
Published 8 Jan 2019

Take, as a prime example, data replication in HDFS, which lifts the durability guarantees from hardware failsafes into a Java-based software framework. Another key aspect is that, despite being distributed systems, big data clusters are monolithic. Hadoop services, for example, scale horizontally across many servers but vertically integrate hardware, system-level software, and middleware infrastructure across all these servers into a single system. This requires an understanding of the cluster as a whole, rather than focusing on individual components. Case Study: A Typical Business Intelligence Project The type of organizational change that Hadoop drives is best described by an example.

The Wealth of Networks: How Social Production Transforms Markets and Freedom
by Yochai Benkler
Published 14 May 2006

Even when contracts are signed with employees or suppliers, they merely provide a probability that the employee or the supplier will in fact supply in time and at appropriate quality, given the difficulties of coordination and implementation. A broad literature in organization theory has developed around the effort to map the various strategies of collaboration and control intended to improve the likelihood that the different components of the production process will deliver what they are supposed to: from early efforts at vertical integration, to relational contracting, pragmatic collaboration, or Toyota's fabled flexible specialization. The presence of a formalized enforceable contract, for outputs in which the supplier can claim and transfer a property right, may change the probability of the desired outcome, but not the fact that in entering its own contract with its clients, the company is making a prediction about the required availability of necessary inputs in time.

Tools of Titans: The Tactics, Routines, and Habits of Billionaires, Icons, and World-Class Performers
by Timothy Ferriss
Published 6 Dec 2016

Most people forget that innovation (and investing in innovation) is a business of exceptions. “It’s easy to understand why most investors rely on pattern recognition. It starts with a successful company that surprises everyone with a new model. Perhaps it is Uber and on-demand networks, Airbnb and the sharing economy, or Warby Parker and vertically integrated e-commerce. What follows is endless analysis and the mass adoption of a playbook that has already been played. . . . Sure, [those companies] may create a successful derivative, but they won’t change the world. “I try to learn from the past without being inspired by it. My big question is always, ‘What did they try, and why did it work?’

Seeking SRE: Conversations About Running Production Systems at Scale
by David N. Blank-Edelman
Published 16 Sep 2018

It’s worth noting that not all organizations “do” SRE the same way, especially as it relates to organizational structure. The two main forms I’m familiar with are “Horizontal” SRE integration and “Vertical” SRE integration. An organization with horizontally integrated SRE staff will generally have one or more independent teams made up of folks that do SRE work for the organization. Vertically integrated staff are generally integrated directly with engineering teams and remain dedicated to said team. — Aaron Blew, director of service reliability engineering (SRE), iovation ◆ ◆ ◆ DevOps 10 years ago to me was a way to express the need for a better, nonfunctional and nonpolitic agreement between who made software and changes to said software and who had the task of keeping the service up.

The Half Has Never Been Told: Slavery and the Making of American Capitalism
by Edward E. Baptist
Published 24 Oct 2016

When the chained gang reached the end of the street, it was driven through an underground passageway that led up and out into the courtyard of a private “jail” designed for the trade. No more warehouses, barns, and taverns. From the jail, the Woolfolks sent slaves out to New Orleans by the sea route in regular dispatches, often renting entire vessels that carried one hundred or more people at a time. The vertical integration of this multistate enterprise enabled Austin Woolfolk, who had started as a mere Georgia-man, to pile up so much wealth that he could now play the grand gentleman. When University of North Carolina professor Ethan Allen Andrews visited Woolfolk at his Pratt Street pen in the 1830s, neighbors told him not only that Austin was “a most mild and indulgent master,” but also that his cash payments and standard prices proved he was “an upright and scrupulously honest man.”18 In the old Southeast, white people bought and sold black people on exceptional days.

The World's First Railway System: Enterprise, Competition, and Regulation on the Railway Network in Victorian Britain
by Mark Casson
Published 14 Jul 2009

Railway investors therefore believed that they could obtain monopoly proWts that would equal the proWts made by the early investors in canals. Furthermore, the legal mechanism for promoting a railway was basically the same as for a canal. It turned out, however, that railways were not to be the ‘new canals’—at least not as envisaged at the time. To begin with, vertical integration of track and trains quickly emerged as the preferred method of railway organization. On the canals, the boats were usually independently owned, but on the railway independent ownership of trains created congestion and was a safety hazard. Railway companies soon insisted on operating the trains themselves (or franchising an exclusive operator to do it for them). 

This Changes Everything: Capitalism vs. The Climate
by Naomi Klein
Published 15 Sep 2014

Because given the dismal track record of his fellow green billionaires on that front, it may be fair to conclude that if Branson can’t do it, no one can. The Pledge That Turned into a “Gesture” Let’s start with Branson’s “firm commitment” to spend $3 billion over a decade developing a miracle fuel. Despite press reports portraying the pledge as a gift, the original concept was more like straight-up vertical integration. And integration is Branson’s hallmark: the first Virgin business was record sales, but Branson built his global brand by making sure that he not only owned the music stores, but the studio where the bands recorded, and the record label that represented them. Now he was applying the same logic to his airlines.

Steve Jobs
by Walter Isaacson
Published 23 Oct 2011

There was one other advantage, he believed, to eliminating the cursor keys: It forced outside software developers to write programs specially for the Mac operating system, rather than merely writing generic software that could be ported to a variety of computers. That made for the type of tight vertical integration between application software, operating systems, and hardware devices that Jobs liked. Jobs’s desire for end-to-end control also made him allergic to proposals that Apple license the Macintosh operating system to other office equipment manufacturers and allow them to make Macintosh clones.

Escape From Rome: The Failure of Empire and the Road to Prosperity
by Walter Scheidel
Published 14 Oct 2019

To name just one more example, Bin Wong contrasts the multiple divisions of Europe that manifested themselves both in competition between states and, domestically, in centralizing governments’ negotiating “with distinct and delimited social groups which developed their claims on the state as the state expanded its capacities to extract resources and make war” with conditions in China, where neither elites nor commoners “enjoyed institutionalized positions of autonomous power from which they could place claims on the state as a counterweight to its continued expansion.” Instead, the Chinese merger of officials and elites “produced a continuum between state and society” with an enduring preference for “a vertically integrated unitary state.”150 Fragmentation: Exceptions Proving the Rule Before we take a closer look at some of these traits and their impact on development, it is worth starting by considering counterexamples—periods of fragmentation that tended to be associated with greater innovation. These phases reveal the conservative climate of universal empire through its temporary absence, and thus offer further support for the fragmentation thesis.

The Art of SEO
by Eric Enge , Stephan Spencer , Jessie Stricchiola and Rand Fishkin
Published 7 Mar 2012

As a last example, Figure 2-9 is a look at the Bing search results for videos with Megan Fox. Figure 2-9. Bing result for Megan Fox videos At the top of the search results in Figure 2-9, a series of popular videos are provided. Click on a video in the results, and the video begins playing right there in the search results. As you can see, the vast variety of vertical integration into search results means that for many popular queries, returning the standard set of 10 links to external pages is no longer the rule. Engines are competing by attempting to provide more relevant results and more targeted responses to queries that they feel are best answered by vertical results, rather than web results.

The Stack: On Software and Sovereignty
by Benjamin H. Bratton
Published 19 Feb 2016

That introduction can begin with the provision of an Address that allows a location to communicate data across scales, and that addressability may or may not be motivated by, for example, an avaricious splitting open of the world, from the atmosphere to the atom, toward a mandate of full-spectrum dominance. But programs for total capture are also vulnerable to their own comprehensiveness. Their interconnectedness can make them brittle.68 The Stack works by vertical integration, across scales and across technological genres. This allows it to function as a core platform for multiple economies at once and to provide universal valuation and exchangeability only to the extent that participants can be represented as similar computational events. Because of this, it can also absorb, dissipate, and deflect forms of risk that might make any one layer more vulnerable, but at the same time, that integration can also distribute and amplify destabilizing forces and factors.

The Golden Passport: Harvard Business School, the Limits of Capitalism, and the Moral Failure of the MBA Elite
by Duff McDonald
Published 24 Apr 2017

That question of influence—specifically, how big companies acquire and hang on to it—is one of a number of areas in which Chandler’s critics find his analysis somewhat wanting. Historians less inclined to view big business so dispassionately reject his argument that organizational structures were the key to big, vertically integrated companies’ successes. To many, it’s much simpler than that: Big companies captured power—political, economic, cultural—more effectively than everyone else. Period. History professor Louis Galambos, a contemporary and fan of Chandler, nevertheless points out that the latter’s work suffered from a lack of attention to the political context in which modern corporations evolved.

Public Places, Urban Spaces: The Dimensions of Urban Design
by Matthew Carmona , Tim Heath , Steve Tiesdell and Taner Oc
Published 15 Feb 2010

Lynch (1981: 291) defined urban design more broadly as encompassing a wide range of concerns across different spatial scales, arguing that urban designers may be engaged in preparing a comprehensive regional access study, a new town, or a regional park system and, equally, ‘… may seek to protect neighbourhood streets, revitalise a public square, … set regulations for conservation or development, build a participatory process, write an interpretative guide or plan a city celebration.’ Urban design typically operates at and across a variety of spatial scales. Considering urban design at particular scales might often be a convenient device, but it detracts from the notion of places as vertically integrated ‘wholes’. Urban designers need to be constantly aware of scales above and below the scale at which they are working, and also of the relationships of the parts to the whole, and of the whole to the parts. Christopher Alexander’s pattern language illustrates the range of scales at which urban design operates, with the patterns being broadly ordered in terms of scale, beginning with patterns for strategic (city-wide) design and ending with ‘interior design’.

The Age of Surveillance Capitalism
by Shoshana Zuboff
Published 15 Jan 2019

Whether what even Sidewalk CEO Dan Doctoroff, a former private equity financier, CEO of Bloomberg, and deputy mayor of New York City in the Bloomberg administration, refers to as a “Google city” succeeds, the company has interested the public by recasting our central gathering place as a commercial operation in which once-public assets and functions are reborn as the cornered raw materials earmarked for a new marketplace. In this vision, MacKay and Paradiso’s conceptions come to fruition under the auspices of surveillance capitalism in a grand scheme of vertically integrated supply, production, and sales. Sidewalk Labs’ first public undertaking was the installation of several hundred free internet-enabled kiosks in New York City, ostensibly to combat the problem of “digital inequality.” As we saw with Google Street View, the company can siphon a lot of valuable information about people from a Wi-Fi network, even if they don’t use the kiosks.74 Doctoroff has characterized the Sidewalk Labs’ kiosks as “fountains of data” that will be equipped with environmental sensors and also collect “other data, all of which can create very hyperlocal information about conditions in the city.”

Nature's Metropolis: Chicago and the Great West
by William Cronon
Published 2 Nov 2009

The packers, he said, “are making beef more palatable, attractive, and wholesome, by a proper and advanced system of refrigeration, than it was when the small slaughterer butchered a steer during the night and hung the still warm carcass in the market next morning, and are distributing this beef throughout the country at the lowest possible charge for the service rendered.”178 They had achieved these things by creating immense, vertically integrated corporations capable of exercising managerial control over the food of many nations on a scale never before seen in the history of the world. Nothing in Chicago at the end of the nineteenth century better symbolized the city’s profoundly transformed relationship to the natural world than its gigantic meat-packing corporations.

The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (The Princeton Economic History of the Western World)
by Robert J. Gordon
Published 12 Jan 2016

The efficiency of the light weight and high-power design was demonstrated when in 1909 a Model T “defeated a stable of heavier, pricier touring automobiles in a 4,100-mile race from New York to Seattle.”88 Ford’s special place in U.S. entrepreneurial history went beyond design, for it was his production innovations that allowed him to reduce the price by so much. At his famous Highland Park factory, which opened on January 1, 1910, he adopted vertical integration, including the making of most parts in house. By 1913, the moving assembly line made mass production a reality, breaking up the labor processes into repetitive motions as the cars slowly moved past each worker performing his task. Also by 1913, Ford had established a network of almost 7,000 dealers and reached small towns having as few as 2,000 inhabitants; 65 percent of Ford dealers were in rural areas.89 After the Model T became ubiquitous, its unique network of dealers and service stations selling tires, batteries, spare parts, and the cars themselves created the same sort of networking advantage that Apple and Android enjoy today in their smartphone duopoly.

Golden Holocaust: Origins of the Cigarette Catastrophe and the Case for Abolition
by Robert N. Proctor
Published 28 Feb 2012

For more than ten years the company had been churning out the thin white papers that, when rolled into cylinders around chopped fermented tobacco leaf, got smoked in the form of cigarettes. Cigarette paper wasn’t their only product: the company also produced paper for Bibles and financial forms.1 Death and taxes in a Bible sandwich, good coverage, vertical integration. Cigarette paper hasn’t gotten much attention in the recent tobacco wars, though it is worth recalling that you can’t smoke a cigarette without also inhaling the soot, tar, and gases released by burning paper. Unlike a pipe or a cigar. Today we know to blame the tobacco for the lion’s share of cancers—thanks in part to Ecusta’s experiments—but there was a time in the 1940s and early 1950s when some people blamed a pesticide (such as arsenic) sprayed on the leaf, or a chemical agent used in its manufacture, or the stems and ribs increasingly used from the leaf, or vapors released by lighters or safety matches, or outgassings from the burning paper.

Titan: The Life of John D. Rockefeller, Sr.
by Ron Chernow
Published 1 Jan 1997

In spring 1891, Archbold visited Lima, cast a proprietary eye over oil fields stretching more than one hundred miles, and gloated in a letter to Rockefeller, “We undoubtedly have, as the case stands, well in reserve the greater part of the defined territory, and we will certainly be able to produce oil in the Ohio field more cheaply than anybody else, owning, as we do, great bodies of territories which we can drill judiciously.”18 Now that Rockefeller had scored such a gratifying triumph in production, he instructed Archbold to grab anything that could still turn a profit with crude at fifty cents a barrel. “If so would buy all we can get,” he wired.19 In this rush into exploration and production, Rockefeller created the model for the vertically integrated oil giants that would straddle the globe in the twentieth century. The discovery of oil in Ohio radically redrew the map of the Standard universe, for it was senseless to ship crude oil to eastern refineries only to ship kerosene back to markets in the Midwest and Far West. In 1886, even before Frasch had completed his work, O’Day scouted northwest Ohio for an appropriate refinery site and chose the charming town of Lima itself, which was served by four railroads.

Artificial Intelligence: A Modern Approach
by Stuart Russell and Peter Norvig
Published 14 Jul 2019

In Proc. 6th ACM Workshop on Formal Methods in Security Engineering. Armstrong, S. and Levinstein, B. (2017). Low impact artificial intelligences. arXiv:1705.10720. Arnauld, A. (1662). La logique, ou l'art de penser. Chez Charles Savreux, Paris. Arora, N. S., Russell, S. J., and Sudderth, E. (2013). NET-VISA: Network processing vertically integrated seismic analysis. Bull. Seism. Soc. Amer., 103, 709–729. Arora, S. (1998). Polynomial time approximation schemes for Euclidean traveling salesman and other geometric problems. JACM, 45, 753–782. Arpit, D., Jastrzebski, S., Ballas, N., Krueger, D., Bengio, E., Kanwal, M. S., Maharaj, T., Fischer, A., Courville, A., Bengio, Y., and Lacoste-Julien, S. (2017).