Businesses have evolved greatly over time from small communal groups sharing resources to the complex global capitalism system we see today. Early systems included feudalism where monarchs delegated resources and farming began to include tenant systems and small profits. Mercantilism introduced global trading and banking grew in respect. The Industrial Revolution brought major innovations like the steam engine that reduced costs and allowed mass production, revolutionizing farming, transportation, and displacing many workers. Modern capitalism is defined by private property, production, trade, and distribution where individuals can build their own wealth and success in business rather than relying on aristocratic powers.
Change is rarely linear, a smooth line of continual incremental improvement. It's more typical to see a punctuated equilibrium, where long periods of stability punctuated by rapid periods of change.
This slides are a work in progress where I'm trying to break the evolution of businesses (as opposed to the business landscape) into a number of distinct phases and describe what causes the shifts and what organisations focus on during the periods of stability.
Feel free to contact me if you have and thoughts / builds on the slides.
Cause of Diversity
Evolution
Lamarck’s Theory of Evolution
Darwin’s Theory of Evolution
Natural Selection
Evidence of Evolution
Misconceptions
References
16. Revolution in Farming Steam engines increase productivity Workers displaced Common land was taken back Immigration was on the rise
17. Money to be Made Aristocrats no longer had power People made their own millions Business is still booming
18. References Axia College (2007). The Evolution of Business, Week One, Chapter 2 reading. Retrieved from Axia College, Bus/210 website. Windows XP Clip Art (2010) Retrieved March 26, 2010.
Editor's Notes
Since the Stone Ages, people have used some form of business systems. In the beginning, clans and tribes shared in the work and profits to survive. The most wealthiest became the Monarchs, who gained control of all valuable resources.
Feudalism is a “business or economic system in which one class of people (aristocrats) control the property rights of all valuable resources, including people.” (Axia College, 2007, p. 40)
To increase their wealth, Monarchs delegated their authority. Aristocrats controlled the King’s resources and were responsible for increasing productivity and wealth in his name.
To increase motivation and productivity, aristocrats let the commoners farm their land for a fee, called rent. The farmers were allowed to keep a very small profits. The percentage of the profits were determined by bargaining and negotiating.
Conflicts over profits started feuds between the farmers and aristocrats. Some aristocrats started wars with each other. Land and valuable resources were taken. The Hundred Year War in England, resulted from the end of Feudalism. Kingdoms increased their wealth by force.
Trading began across the countries. Merchants borrowed capital from the wealthy, to buy products in large quantities. They sold the products in other parts of the world where the price was higher. Bankers were middlemen for the wealthy. (Axia College, 2007) People could increase their capital by lending it out for a share of the profits it would generate.
By signing the Magna Carta, King John gave the aristocrats the right to hold properties in their own names. (Axia College, 2007, p. 48). The shifted the balance of power forever. The throne could no longer control one of the most valuable resources, land.
“Capitalism is the economic, business and political system that allows people to own resources and use them to engage in production, trade, and the distribution of services.” (Axia College, 2007, p. 51).
Commerce is a process through which products, goods and services flow through the channels of business.
“More and more people found opportunities to share in the wealth being generated by the combination of all four productive resources—land, labor, capital, and enterprise.” (Axia College, 2007, p. 48).
With the success of global trading, innovation started to flourish. The invention of the steam engine meant cheaper transportation and distribution costs for merchants. New technologies enabled factories to increase their production and profits steadily increased.
The steam engine then powered farm equipment, increasing productivity and profits for farmers and merchants. Millions of people were replaced by the new machines. Common land was claimed by property rights and many people lost their homes as a result. Immigration to America was sometimes their only hope to survive.
The evolution of business has come a long way through out history. Aristocrats no longer had the controlling power they once had. Merchantilism changed the world and the Industrial Revolution enabled Commerce to evolve into the system that we know today. Anyone could enter into the world of business and start their own dynasty.