LOGIC OF ACTION - Completely Explained

Strategy is ‘action’, perhaps, we all know that; it is not planning. 

The understanding of Strategy can be approached through Mintzberg’s 5 Ps (Plan, Ploy, Position, Pattern & Perspective); but it forms meaning only when transformed into action. So, what is action? Simply put, it is ‘to do something’ or ‘the act of the doer’. 

But then all action has a logic, whether rational or quixotic. 

This is referred to the Logic of Action. Interestingly, according to the Carnegie School, Logic of Action has two components – Logic of Consequences (LoC) and Logic of Appropriateness (LoA). 

These two components together help understand and predict behaviour.

LoC is ‘analysis-based’ action which deliberately considers options, assessing outcomes and influenced through preferences; amounting to a calculated choice. But Man being a bounded rational, LoC is inherently subjective and imperfect. 

Here, it involves an increased but bounded level of information processing. LoA, on the other hand, is governed and guided by ‘rules’; amounting to fixed responses to defined situations, generally. 

Rules can be broad, including both tacit and explicit forms; for instance: intuition, habits, routines, knowledge, policies, norms, laws, etc. and even technologies. 

Rules can have a wide variety of meaning and can originate from prior actions of an actor or other actors. But LoA does not refer to moral or aesthetical appropriateness; just the matching of rules to specific situations; so, it is often considered as ‘recognition-based’ LoA.

As the underlying cognitive processes are primarily based on intuition, it enables quick responses and minimal information processing, resulting in routinization, specialization, knowledge re-use and imitation.

The study and understanding of Logic of Action is truly interesting and challenging, principally when applied to varying situations. At Indian School of Business and Computing we offer a 1 Year British MBA which focuses on Mintzberg’s 5 Ps (Plan, Ploy, Position, Pattern & Perspective)

Therefore, I invite and welcome contributing streams of thought on this evolving topic, especially through its application.