Full review

CHANDLER THEORY
R E V I E W

S H E E T

HIS CLAIMS
Successful firms capitalize on economies of scale and scope, create management structures and invest in research and development.
Once a firm loses the opportunity to be a first mover, it is hard to regain competitive advantage
In order for a company to succeed, she must use the logic of managerial enterprise, which means large industrial concerns in which operating and investment decisions are made by a salaried managers governed by a board of directors. Logic of managerial enterprise: Logic of growth and competition.
BEHIND THE MANAGERIAL ENTERPRISE LOGIC
 Size
Having the cost advantages by getting big
Economy of scale
Lower the cost per unit as the output rises

Economy of scope
Use the same raw materials and production processes to make a variety of different product

*Important to mention in the exam

Keep growing, with related diversification and long-term thinking. Growth through unrelated diversification is a poor business strategy.
Short-term
For financial purpose, you can go unrelated to make money in the short term. It’s not recommended. (Stock market put this pressure) Long-term
For managerial purpose, go long-term with related diversification. If you want to stay small, that’s bad. Entrepreneurial enterprise is not a great goal, you must want to get big and become a large corporation.
 National-international marketing and distribution organizations
Going global is a reachable goal for a capital-intensive enterprise that want to go big.
 Managerial hierarchy
Separation between lower/middle managers and top-level managers, which include a CEO chosen by the board of directors.
 Be the 1st mover
It means to invest heavily on R&D, make investments, and make merger and acquisition. You have to be a first mover to keep your competitive advantage.

GREINER THEORY
R E V I E W

S H E E T

HIS CLAIM
As for the psychologist theory that claim that the