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Comparisons of Four Theories of Action

Business Strategy according to Whittington

Feb 25, 2009 Gwendolyn Cuizon

The theories of strategy in business form the basis for action. These 4 theories enable the business to determine the result and what to expect when adopting a strategy.

Business strategy according to Richard Whittington in his book "What is Strategy - and Does it Matter?(2002)" has four different perspectives. He identifies these four basic "theories of action" in business strategy as follows: the classical planning approach; the efficiency-driven evolutionary approach; the craft-like processual approach; and the internationally-sensitive, systemic approach.

Where These Theories of Strategy Originate

Theories are important. They contain the basic assumptions about key relationships in business life. Theories tell you what to look out for, what our first steps should be and what to expect as a result of your actions. These theories of business strategy actually provide short-cuts to action.

These theories are often not very explicit or very formal. Whether building from experience or from books, all tend to have own private assumptions about how things work and how to get things done. Providing the basic grounding for our behavior, Argyris (1977) calls these assumptions as the ‘theories of action’.

The danger is forgetting that we have these theories. Until we surface our implicit ‘theories of action’ we cannot test their accuracy and amend them to the conditions of the day. Those who do not actively confront their underlying assumptions are condemned to be ‘prisoners of their own theories’ (Argyris 1977:119).

Comparisons of the Theories of Action in Strategy

There are the four ‘theories of action’. By knowing the differences of these theories, it would be easy to decide which theory matches your business needs. The four approaches to strategy differ in their views and perspectives.

Classical school believes in rational or objective approach. Evolutionary and Processual are doubtful that rational approach is the best strategy. Evolutionists believe that the environment is the biggest factor in business since it is too unpredictable and changeable for the firm.

Processual believes that it is not the environment or the calculated rationality that are important. Instead, they think that it is in compromise and adjustment, both internal and external, that matter. Systemic approach takes into consideration the social environment the firm is revolving in. In this approach, the ends and means of the business strategy depends largely on what is the prevailing social systems.

Applying the four basic theoretical approaches of strategy-making to a series of key strategic issues would enable the business to compare practical implications of the different theories in actual situations. Business leaders are challenged to critically evaluate their own personal approach to strategy-making. This way, one could effectively utilize the different theories of action relevant to their business.

Reference:

Whittington, Richard. "What is Strategy - and Does it Matter?” (2002) Thomson Learning, UK.

The copyright of the article Comparisons of Four Theories of Action in Business Management is owned by Gwendolyn Cuizon. Permission to republish Comparisons of Four Theories of Action in print or online must be granted by the author in writing.

Theories of Action