There were so many authors, who have given different opinions about strategy. In the year 1993, Richard Whittington had identified four approaches of strategy formulation, i.e. classical, evolutionary, systematic and processual approach. To describe these strategic trends and concepts, Whittington uses two variables such as; strategic processes and strategic goals. These two variables are placed on two axes, with the objectives on vertical axis and outcomes on horizontal axis. In today’s business world, it is very important to find most appropriate school of strategy for the goals of organization and it offers great reward for it (Whittington, 2002). This paper includes the analysis about differences and similarities between evolutionary and processual approach. The author recommended that these approaches can be distinguished on the basis of outcome of strategy, profit maximization and practices on both the axes to present it visually about two significant questions, i.e. “what is strategy to?” and “how an organization develops the strategy?”
The critical analysis has been evaluated that processual approach of Whittington is the best as compared to other approaches of strategic planning. Whittington has compared all the approaches on the basis of their objective, planning and outcome of the implemented strategy. Processual approach is better than evolutionary approach because it emphasizes on plural objectives than profit maximization and it recognizes different possible results than only profit and revenues. The comparison of both the approaches is done by considering the possible outcomes of the approaches to strategy making. It is best suitable for the current business environment as it considers different functions and areas in an organization.
Furthermore, it includes the challenges of differences and similarities of evolutionary and processual approaches to the thoughts about classical school of strategy. Evolutionary and processual approaches are challenging for the classical approach because these both approaches are emergent and classical is deliberate. These practices challenge the thoughts and objectives of the classical approach, given by Whittington. About these approaches, it can be said that approach of organization to strategy-formulation process has different implications for knowing about and implementation of Strategic Human Resource Management (SHRM).
According to Richard Whittington, evolutionary approach of strategy is utilized to formulate the strategies with the objective of survival. This is affected by biology and economics and strategy is formulated based on external factors, majorly market. Under this approach of strategy, short-term strategies are developed for surviving in the industry and not to sustain the business in long run. The components of this approach believe that success of a company depends on its environment than on its management (Barney, 2014). This perspective of strategy was developed during the market led 80s that was only about the survival of the company and its business. It shifts the emphasis from business and outcomes to creating a different when attempting organizational success. This approach of strategic planning recommends that markets are very much competitive for costly strategizing and volatile to outguess. The people, who are evolutionists, believe that refined strategies can offer only temporary benefits and some of them recommend emphasizing on transaction cost management and efficiency.
One of Whittington’s generic approaches is processual school of strategy. Under this approach, the strategies are developed with the unclear goals. This classification is affected by the psychology and formulation of strategy is done based on internal aspects, primarily perception and politics (Barbuto, 2016). The strategies, which come under this category, are very risky and the companies implementing these strategies are risk oriented. This type of approach denies to both the strategic method and profit increment objective. For attaining the goals of company, the processual theoreticians describe the strategy of organization as the sum of thoughts, opinions and efforts of individuals. This is one of the significant approaches for strategy formulation. Under this approach, organization establishes the objective for enhancing the quality and increasing the market share of company (Cole, 2013).
However, all the approaches of strategic planning are created on the basis of different phenomenon, but they share some similarities in terms of profit maximization, outcome of strategy etc. From the analysis, it can be stated that to survive in the processual and evolutionary perspectives, there is more significance that is attributed to the resource based and firm specific view in comparison to classical approach. When it comes to compare and contrast both evolutionary and processual perspectives, it can be seen that there are both similarities and differences as well. However, both the perspectives give different views of a firm can formulate its strategies to attain its long term and short term objectives. Understanding these differences and similarities can assist in knowing about the objectives and term of its business operations in competitive business environment (Cox, Ladle and Moore, 2016).
First, there is the discussion about the similarities, which can be seen while comparing the evolutionary and processual approach of strategy. There are various similarities in both perspectives. Both the processual and evolutionary perspectives have same insights on strategy making process that these both approaches are emergent. It states that most of the strategies emerge as a component of competitive process. Under this process, stronger performers get success and weak are overwhelmingly clasped from ecological position. In addition, both approaches are uncertain about the capacity of strategist to lead the strategy in a balanced hierarchical manner (Drucker, 2007). Under the schools of strategy, Whittington includes that classical strategy is created on the basis of probability and stability. But processual and evolutionary perspectives consider this predictability and stability as improbable and, thus these are more careful and emphasized upon creating different contingencies rather than long term programs. Moreover, Evolutionists and Processualists suggest that the strategy makers be more flexible in their view, to become capable to handle the sudden and unpredicted changes in operating contexts. Same as Evolutionary approach, rational planning is not considered in the processual approach. They state that strategy develops from fundamental processes of organizational practices and strengths of market, in which the capabilities are entrenched in bottom-up trend of company (Eden & Ackermann, 2013). In the process of strategic formulation, processual and evolutionary perspectives share similarity to cope with an uncertain atmosphere. Both of these perspectives seem to become more suitable to industries that are in the early growth stage and in-flux. It can be understood by looking at the industry life cycle. These are accounted to come into the process component of the strategy, such as; it states that how the company develops or emerges its strategies and tactics.
Apart from these similarities, there are some differences between processual and evolutionary approaches. As discussed above, evolutionary perspective claim that environment is change too fast, so management team should focus on the routine operations and viability while making the option open. Processual approach has the uncertainty that both market and organization work with the hardnosed effectiveness and efficiency that evolutionary claims and it ascents towards strategies with refinement of core competencies and incremental adaptation (Gallén, 2006). In contrast to evolutionary perspective, processual follow the pluralist objectives because it pursues more than profit maximization as an estimated result of implemented strategy. Processualists argue that companies emphasize on fulfilling rather than profit maximization and organizational managers tend to comply with the preset routines because they make efforts to make simpler. They focus on developing competencies and flexibility for developing adjustment. This approach emphasizes on bottom-up phenomenon, under which the strategy emerge from the people in the company seeking to incorporate their individual objectives as a part of company’s goals (Johnson, et al, 2014).
Moreover, evolutionary considers allowing the market for determining the appropriate strategy, whereas processual requires from the company to sustain the status quo and go ahead with it. Processual Approach states that one should adopt the world as it is, instead of implementing changes, while evolutionary believes that the growth and success of the company is dependent on the environment and it is working in and not its management. Like evolutionary, processual approach will be cautious, but it will emphasize deeply and strategic responses will be given on the basis of small scale and frequent re-adjustments (Hill, Jones and Schilling, 2016). It states that profit maximization is comparatively unrealistic objective.
Processual approach refuses the classical approach and claims that strategy is constructed, whereas evolutionary approach do agree with the classical approach in maximizing the profits and consider that it is necessary for the survival of company. Moreover the major focus of the evolutionary is to determine externally via the effect of market and the approach of Darwin of natural selection, like; the survival of business is dependent on differentiation strategy, while major focus in processual is on determining the success of failure internally via political processes and skills and competencies of human resources, working with the organization. Against evolutionary perspective, processual perspective is not more confident about the firm in attaining the maximum profitability. Under processual, strategy will fail, if the company does not possess required skills and abilities, but environment and market play more significant role than skills in evolutionary approach (Jenkins, Ambrosini & Collier, 2016).
Thus, it can be clearly stated that processual and evolutionary schools of strategies are both similar and different. They are different in terms of objective, strategy, rationale, key influences and majorly focus. This can be understood by looking at the below-given diagram. The diagram includes three different schools of strategic planning. It clearly indicates the difference between evolutionary, processual and classical approach of strategic planning.
By considering these approaches, an organization can make decisions on its strategy and tactic for achieving its predetermined objectives and goals, which may be related to different practices of the organization, like; profit maximization, marketing objectives, employee satisfaction, improvement in the quality of products and services, product differentiation etc. Using these perspectives, the companies will be able to formulate effective strategies, which will lead the organization to overall growth and success in today’s competitive business environment (Kotlar, & Armstrong, 2014).
The classical school of strategy is considered as most prominent approach of all the approaches to strategy formulation. It is a deliberate and rational method of strategic planning with the single objective of profit maximization. This perspective of strategy undertakes the environment of business to be anticipated and so it creates a logical and rational scheme, which will make the company able to attain its overall objectives and goals (Laszlo, 2010). It is processed via long term planning, which the users of this approach are able to attain the profit-oriented objectives of strategy. This approach is about to plan how to utilize resources of organization appropriately for attaining the long term objectives. The major features of this perspective are rational evaluation, isolation of conception from implementation and obligation of profit maximization.
This perspective was introduced in duration of 1960s by Alfred Chandler, theorist Igor Ansoff and businessman Alfred Sloan. All three had given same viewpoints on classical perspective that is named as rational and planned approach of strategic planning. Under this approach, company understands that senior executives are in the control of creation of policy, whereas managers in operations are accountable to the execution of that strategy. As per the classical approach, the strategy of an organization is to determine the long term objectives and goals of a company and execution of actions and effective allocation of resources essential for those objectives (Model, Soule and King, 2016). Under this approach, rational planning is used, such as; PESTLE analysis to formulate strategy and tactics. This approach has a limitation, i.e. the improbability of events may happen in the micro environment of organization, which may solidify the approach obsolescent. The authors highlighted this approach in the model of different components in effective strategies, where, there are obvious objectives, comprehending the competitive environment, resource allocation and appraisal and implementation of strategies. Under this approach, the strategy of company can be seen at three levels, firstly at corporate level, then at business level and thirdly at operational level (Olavarrieta, 2015).
Both of these approaches challenge the thought of Whittington towards classical school of strategy (Whittington, 2002). The challenges to Classical approach are stated below;
The challenges of evolutionary approach are less effective than processual approach as both of these approaches focuses on an only objective, i.e. profit maximization. The objective under classical approach is very much clear. The evolutionary and classical methods share similarity, because they both have only objective of profit maximization as a result of strategy. But, evolutionary approach takes a diverse place because it depends on the capability of market to safeguard the maximization of profits (Pearce, and Robinson, 2011). The approach challenges classical approach because if the company prefer to implement evolutionary approach, then it will make focus on environment and not on its managers and employees. This phenomenon will be changed with the implementation of classical approach, as it focuses on utilization of resources for attaining long term objectives of the company. It can be stated that classical method focuses that management will implement profit maximization strategies via rational planning, but evolutionary does not use rational planning. Thus, there is a major role of management and hierarchical structure in classical approach, but evolutionary focuses on the environment primarily, not on its managers (Peteraf, Gamble & Thompson, 2014).
There are so many challenges, which are posed by processual approach and they impact the thoughts under this approach. In classical approach, strategy planners prefer to do rational analsyis, but processualists deny and state that the strategies must comply with the existing regulations and rules of a company. This poses threats to the thoughts and opinions of this approach. Moreover, in classical approach, the strategy is first created and then executed. In processual approach, it is another way because it is through course of actions, which the strategy gets revealed. This approach emphasizes on internally vision of the company rather than external anticipation (Thompson, 2016). Against classical view, processual approach of strategy is less confident about the company in attaining the profitability and revenues. The goal of classical approach is to maximize the profit, which is very clear, but goal of processual approach is vague. It challenges the implementation of the approach of strategy in an organization. The focus in classical approach can be determined by looking at the internal factors via quality of planning and management, whereas success can be determined by internal politics and skills and abilities in processual approach (Whittington, 2002).
Thus, it can be understood that each of approaches, i.e. evolutionary and processual can pose challenges on what Whittington calls about the classical school of strategy. Implementation of on approach can challenge the execution of another approach (Varadarajan, 2010).
Conclusion
Each and every company and individual exist and run the business in changing business environment with the objective of attaining one goal or time to time with diverse goals, subject to different circumstances, thus executing irrelevant approaches in favor of options and more related approaches. No doubt, Whittington has made a significant contribution to the strategy making process, which will go ahead with the passage of time, because it responds to the changes in the business environment. Strategy is an important aspect for the organization because it provides meaning to a company and its business operations. It makes its employees able to expand their own identity. As discussed in above report, there are different approaches, which come under two processes, such as; emergent and deliberate. The report includes the discussion about three approaches majorly, i.e. Evolutionary, Processual and Classical approach. Both processual and evolutionary approaches pose the challenges on the thoughts of classical approach.
From the above critical analysis, it can be concluded that it is not sufficient for a company to possess an effective strategy, the development and execution of strategy must flow simultaneously through the process of strategy planning. It can be stated that processual approach is the best approach to deal with the issues in the current business environment. The organization in today’s business environment should go ahead with this approach as it fulfills various objectives of the company rather than profit maximization. From the description of Whittington, it can be analyzed that processual approach is an emergent approach, which emphasizes on the internal development of organization. For external development, it is very important to develop the workplace internally. It forces the people in organization to follow the existing rules and regulations in the company. Thus, it can be stated that processual approach is better evolutionary approach of Whittington.
References
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