Strategic management is becoming more important for business construction. Especially, the changing in business environment could threat to organization’s stability. Whittington (2000) introduced four approaches to strategy which are classical approach, systemic approach, evolutionary approach and processual approach. Whilst planning are made through market changes adaptability in classical school, strategies must be updated daily to survive in unpredictable market in evolutionary school. Different from the two approaches, Whittington, 2000 mentioned: “ Processualist emphasis the sticky imperfect nature of all human life, pragmatically accommodating strategy to the fallible processes of both organizations and markets. Systemic approach is relativistic, regarding the ends and means of strategy as inescapably linked to the cultures and powers of the local social systems in which it takes place”
Whittington noted that the main principle of “processual” is to accept unattainable ideal of rational fluid action and work with it. The Approach was laid by American Carnegie School. It focused on the complexity within an organization. Under this school, the micro- political view implies that firms not only made up of its single goals, but also different individual’s interests when they joint business goals together as pluralism. When more than one view point involved in strategic, conflicts occurred and solutions must be recommended. For example, in healthy sector, the professional in different group had their own issues on preventing the human diseases, all have different wishes to support their ideas might lead to crisis in healthy improvement. Stacy (1996) recommended the integrated model of decision making and control which deals with dynamic troubles within an organization and base on degree of certainty or agreement on the issue. The dynamic ranged from “technically rational” which issues seemed to be high level of certainty and agreement. In different ways, “political decision making” considered the desirable issues are close to certainty but far from agreement. In contrast, “judgmental decision making” shows high level of agreement but low certainty of outcomes. The furthest point is the edge of chaos, management approaches seems ineffective. In short, the Processual approach focuses on internal politics with the key processes are bargaining and influences on psychology.
The Systemic approach gives a strong idea about the business’s interdependence on its social to carry out their plans and action effectively. The firms are different from the others, according to their social and economic systems. As whitley, 1991 mentioned: “Different kinds of enterprise structures become feasible and successful in particular social context, especially where culture are homogeneous and share strong boundaries with nation states”. The Viable System Model (VSM), Stafford Beer is an improvement of organization which based on system thinking. According to Stafford Beer, VSM was used as a conceptual tool to understand the organization and support it to change. It consists of five key systems for an effective operation which are Implementation, Co-ordination, Control, Intelligence and Policy. Nowadays, organization should not use the ordinary systems which carry out daily problem solving to fit with business objectives. Stacy (1996) shows another aspect of strategy management which is extraordinary system- an understanding of business context, not just learning for better. According to Boisot(1995), the systemic perspective must be both “codification” and “diffusion” to make explicit and spread communication. Therefore, each subsystem of the business could adapt its requirement from both internal and external.
In order to select the best relevant to any organization, it seems essential to figure out shortly some main differences between systemic and processual school of thought. Whilst the processual school sees the market as irrationality, systematic one is totally different. “Processual” sees strategy as “crafted” which will be used in only emerging situation. In contrast, “systemic” are often “embedded” within the social system. Apart from that, processual approach concerns the political or cognition’s bargaining process while systemic focus on external or societies such as its competitors.
Credit: Modern Strategic Management-MGU