Processual Strategy
Processual, Rational, Fuzzy, Evolutionary
1. Processual approach: Strategy is produced in an incremental fashion, as a 'pattern in a stream of decisions'. Fuzzy approach: Companies sometimes adopt an incremental approach to change. What's different between these two approach?
The Processual approach is really talking about strategy emerging from the many different day-to-day decisions taken by the staff. It’s incremental, in that it is occurring by being added to with each decision taken. Each decision taken is based on what seems like the best thing to do at the time; and really, only by looking back can you see the pattern – the strategy – being followed by the organisation.
The Fuzzy approach is really when a firm has a stated strategy. It is likely to be following a rational approach to strategy, and it may be doing it very successfully. However, at the same time, it might also be doing something outside of its stated strategy too. This is the “fuzzy” aspect. The example on Page 3.28 is of Macquarie Bank, who had a stated strategy of being the leading investment bank in Australia, but was also involved in 6 different overseas countries at the same time. The idea is that there are reasons why this is a good idea – first, the business might want to change their strategy, but rather than trying to change everything at once they take an incremental approach to making the change – changing some things, and then more later etc. A second reason is that opportunities arise, which the business might want to take advantage of – so an excellent acquisition opportunity arises in NZ and Macquarie take advantage of it, despite it not being part of their stated strategy, for example.
Clearly, the two ideas overlap somewhat, as it is not that clear to the observer if maybe a new strategy is just kind of emerging (Processual) or whether it is quite intentionally not following the stated strategy as it is slowing changing the strategy or simply taking advantage of an
1. Processual approach: Strategy is produced in an incremental fashion, as a 'pattern in a stream of decisions'. Fuzzy approach: Companies sometimes adopt an incremental approach to change. What's different between these two approach?
The Processual approach is really talking about strategy emerging from the many different day-to-day decisions taken by the staff. It’s incremental, in that it is occurring by being added to with each decision taken. Each decision taken is based on what seems like the best thing to do at the time; and really, only by looking back can you see the pattern – the strategy – being followed by the organisation.
The Fuzzy approach is really when a firm has a stated strategy. It is likely to be following a rational approach to strategy, and it may be doing it very successfully. However, at the same time, it might also be doing something outside of its stated strategy too. This is the “fuzzy” aspect. The example on Page 3.28 is of Macquarie Bank, who had a stated strategy of being the leading investment bank in Australia, but was also involved in 6 different overseas countries at the same time. The idea is that there are reasons why this is a good idea – first, the business might want to change their strategy, but rather than trying to change everything at once they take an incremental approach to making the change – changing some things, and then more later etc. A second reason is that opportunities arise, which the business might want to take advantage of – so an excellent acquisition opportunity arises in NZ and Macquarie take advantage of it, despite it not being part of their stated strategy, for example.
Clearly, the two ideas overlap somewhat, as it is not that clear to the observer if maybe a new strategy is just kind of emerging (Processual) or whether it is quite intentionally not following the stated strategy as it is slowing changing the strategy or simply taking advantage of an