Difference between Williamson and chandler

Chandler capabilities helps oligopolies remain dominant in their field and economy. Creation- during the knowledge acquiring process when commercialising products They are learnt from solving problems of scaling up the processes of production, from acquiring knowledge of customers needs and altering product and process to services needs, etc. Basically acquiring knowledge necessary for firms survival- manifested itself in the firms facilities for production and distribution. They are firm-specific and industry-specific.

Asset specificity specialised physical facilities and human skills that are only used in the production and distribution of specific products and services. They lose value if deployed in other activities- firm-specific assets. Asset specificity, amongst other things (bounded rationality and opportunism) determines whether transaction costs will be lower if they are internalised within the firm.

Main difference between capabilities theory and Asset specificity For Williamson, the transaction is the basic unit of analysis. That is, the transaction costs determine what activities go on in the market and which ones go on in the firm. Whereas, for Chandler, the specific nature of the firms facilities and skills is the most significant factor in determining the boundaries between the firms and the markets- that is, what goes on in the firm and what goes on in the markets.