LOGICAL INCREMENTALISM

TABLE OF CONTENTS
1

Strategy Change Process

Approaches to Strategy

Findings from the Study of the actual change

Deliberate and Emergent Strategies

Critical Strategic Issues

Precipitating events and Incremental logic

Diversification and Reorganization subsystem

Logical Incrementalism

Managing Incrementally

10

Integrating the Strategy

STRATEGY CHANGE PROCESS

Usually not rational and analytical
Strategic change process in major companies are:
Fragmented
Evolutionary
Intuitive

APPROACHES TO STRATEGY
1. Formal system planning approach
Focuses on Quantitative factors
Underemphasizes
Qualitative factors
Organizational factors
Power factors

Should be one building block in the progress that creates

organizational strategy

APPROACHES TO STRATEGY
(CONTINUED)
Multiple
Multiple
goal
goal
structures
structures

2. The Power behavioral

approach
Ignores contributions of
useful analytical
approaches
Offers few practical
recommendation for the
strategies

Politics
Politics of
of
strategic
strategic
decisions
decisions

Powe
r

Practice
Practice of
of
muddling
muddling

Bargaining
Bargaining
and
and
negotiatio
negotiatio
n
n
processes
processes

FINDINGS FROM THE STUDY OF THE ACTUAL

CHANGE

Neither describes strategy process adequately

Effective strategies emerge incrementally and
opportunistically
The cognitive and process limits tends the above processes to
be managed and linked and it is described as logical
incrementalism
Incrementalism is not muddling

DELIBERATE AND EMERGENT STRATEGIES

CRITICAL STRATEGIC ISSUES

Design of an
organization's
structures
Organization
s innovative
capabilities

Characteristi
c
Management
style

Technological
changes

External
relations
Acquisitions

PRECIPITATING EVENTS AND INCREMENTAL

LOGIC
The 1973-74 Oil Crisis, the GM
were forced to shift in the
posture.
It effectively doubled the real
price of crude oil at the refinery
level
Caused massive shortages in
the U.S

Acquisition cost of Crude Oil (19702006)

PRECIPITATING EVENTS AND INCREMENTAL

LOGIC (CONTINUED)
Haloid Corporation originally manufactured
photographic paper and equipment.
They founded the Xerox in 1906
TheXerox 914was the first one-piece plain paper
photocopier, and sold in the millions.

Pilkington Group Ltdis aglass manufacturing MNC

Pilkington then allowed the Float Process to be used
under licence by numerous manufacturers around the
world.

DIVERSIFICATION AND REORGANIZATION

SUBSYSTEM
Diversificatio
n

Reorganizatio
n

Excellent Example
for incremental
process

Logical
incrementalism
avoids negative
effect

Prepares firm to
move
opportunistically

Allows to modify
ideas

Works well in large

scale

LOGICAL INCREMENTALISM
Sequential
Sequential
arrange
arrange of
of
strategy
strategy over
over a
a
period
period of
of time
time

Strong
Strong enough
enough
in
in devastating
devastating
events
events

Dynamic
Dynamic ,, no
no
definite
definite end
end

Not
Not MUDDLING
MUDDLING

Constant
Constant
reconfigure
reconfigure
structure
structure

Allows
Allows firm
firm to
to
advantage
advantage from
from
best
best available
available
information
information

Allows to blend
analysis, politics
and needs to
company's
benefit

MANAGING INCREMENTALLY
Being Ahead of the formal information system
Building credibility
Legitimizing new viewpoints
Broadening political support
Trails Balloons and systematic waiting
Creating Pockets of Commitment
Crystallizing the focus
Formalizing Commitment
Continuing the Dynamics and mutating the Consensus
Not a Linear Process

INTEGRATING THE STRATEGY

Concentration
Concentration on
on Key
Key
Thrusts
Thrusts

Coalition
Coalition management
management

Seek 6-10 central themes

Maintains focus and
consistency
Easy to monitor directions

Heart of controlled strategy

development
Stakeholders form coalition
Ultimate control top executive
have