Lesson 2 will discuss the loss of oil markets with the invention of electric light and the almost simultaneous regaining of new markets with the development of the automobile. It also discusses the decline in the dominance of Standard Oil with the discovery of oil in other parts of America and the subsequent emergence of competitors. We will discuss how Ida Tarbell exposed Standard Oil’s business practices, which led to the public hatred against big oil and the cry for the Federal government to break up Standard Oil as a way of overcoming its monopoly. The rise of Royal Dutch/Shell as a major international oil company and the fall of the Russian oil industry will also be discussed.
Major Lesson Themes
- The Old House (Standard Oil) was dominant but markets were shifting
- Kerosene’s dominance threatened by electric lighting, but oil markets saved by the automobile
- New oil finds and competition: Russia, Sumatra, California, Texas & mid-continent
- The decline of Standard's market share from forces of competition
- Business practices of SO exposed by Ida Tarbell - roots of hatred against big oil
- The Rise of Progressivism
- How public sought the Federal Government as the ultimate check on monopoly power
- Politics & business became intertwined
- Oil business is a quest for balance in vertical integration and new markets
- Management is critical as strategic mistakes can be fatal
- Political unrests & impact on oil supply disruptions
Learning Outcomes for Lesson 2:
At the end of this lesson, you should be able to:
- account for what led to the decline of kerosene and the new market for oil;
- explain the decline in the dominance of Standard Oil with new oil finds and competition;
- identify what motivated Ida Tarbell and how and what she found;
- explain Progressivism and the root of the public hatred for Rockefeller and big oil;
- describe how the dragon was slain and modern applications;
- give the historical evolution of Royal Dutch/Shell as a major competitor;
- outline how politics and business were intertwined in the oil business;
- explain the importance of integration, markets, and management in the oil industry;
- rationalize the impact of unrest and instability on oil supply.
What is due for Lesson 2?
This lesson will also take us one week to complete. Please refer to the Course Syllabus for specific timeframes and due dates. Specific directions for the assignment below can be found within this lesson.
|Activity||Location||Submitting Your Work|
|Read||The Prize: Chapters 4, 5, & 6 - (select sections)||No Submission|
|Read||The Quest: Chapters 2 & 4 - (select sections)||No Submission|
|Read||Online Lesson 2: Standard Oil Trust and the Oil Wars||No Submission|
|Complete||Lesson 2 Participation Activity||Canvas|
|Take||Lesson 2 Quiz||Canvas|
Each week an announcement is sent out in which you will have the opportunity to contribute questions about the topics you are learning about in this course. You are encouraged to engage in these discussions. The more we talk about these ideas and share our thoughts, the more we can learn from each other.