Chandler's theory of the firm

Chandler’s theory of the firm emphasizes that companies grow and evolve primarily through managerial decisions and organizational structures, rather than market forces alone. He argues that successful firms develop specialized management hierarchies and processes to coordinate resources efficiently, enabling sustained growth. Essentially, the firm’s internal structure—its divisions, procedures, and leadership—are central to its ability to expand, innovate, and adapt over time. This perspective highlights the importance of organizational choices and management practices in shaping a company's development and long-term success.