Sensemaking Processes of Scanning, Interpretation and Action - Article Example

?Article Critique Thomas. J. B., Clark, S. M. & Gioia, D. A. (1993). Strategic Sensemaking and Organization Performance: Linkages among Scanning, Interpretation, Action and Outcomes. The Academy of Management Journal, 36.2, 239-270. Introduction The authors sought to explore the ‘sensemaking’ processes of scanning, interpretation and action, and how these processes and the way they are performed is linked to the performance of different organizations. More broadly, they wanted to focus on relationships between cognition and action, and between processes and organizational outcomes. Given the complex and dynamic nature of many modern organizations, ‘the imposition of meaning on issues characterized by ambiguity has become a hallmark of the modern top manager’ (p.240). Working on this assumption, the authors held that the link between how top managers select and make sense of information, and how this influences their strategic decision-making and other actions, is a valid and indeed pressing area for academic and professional concern. Research Problem It has long been established that cognition and action are closely linked, and a considerable body of work has been built up in this field. However, the authors struck out in a new direction, by linking cognition and action to performance, and thus working towards a practical application for their research, to be considered by CEOs and executives as well as researchers. In examining these issues, the authors hoped to distinguish which linkages between sensemaking processes and organizational performance demonstrated a flourishing business, and which sensemaking processes could result in the relative failure of an organization. As they put it, ‘How are key cognitive processes and the associated actions of top managers linked to organization performance?’ (p.240). The authors acknowledge that a body of work exploring internal organizational linkages does now exist, and, appropriately given the scope of the present study, cite the opinion of Thomas and McDaniel (1990) that a ‘critical mass’ of such research now exists, and one of the major remaining issues is how to extend these relationships to cover organizational performance (p.241). This study has obviously sought to take the lead in bridging the gap, and moving towards a situation where researchers and executives will have a reliable means of evaluating the efficacy of their own scanning and interpretation processes, and the actions they induce. Review of Literature At every stage of the introduction to this paper, and the outlining of the conceptual framework, it is clear that the authors had based their new study on a range of established assumptions, drawn from a variety of recent work. In doing so, they were able to effectively draw together strands of study from across the growing corpus of work on sensemaking processes, as a firm foundation for the new material they add to the field. The rely heavily on the work of Daft and Weick (1984) and Milliken (1990), who proposed that organizational adaption relies on three main processes- scanning, interpreting and responding – the basic assumption on which the paper presently under discussion is built (p.240). As the authors assert, ‘the basic model underlying this study can be represented as a scanning-action-performance sequence’ (p.240). However, their drawing from existing literature is by no means simplistic. They systematically work through each of the three sensemaking processes, referring to the key studies which have guided their research in this area. For example, in scanning, they were heavily influenced by Mintzberg (1973), who theorized that key decision makers usually have access to far more information than they actually need or use, and that therefore the selection of what is deemed highly relevant information is a crucial process (p.241). A more facile paper might have left the analysis of literature on scanning with this assertion, but the present authors consistently adopt an entirely solid approach, going on to link Mintzberg’s work with that of Dutton and Duncan (1987), who saw scanning processes as the ‘activators’ of interpretation and action’ (p.241). This example of their success in building a waterproof conceptual framework for their study, firmly anchored in existing research, is not isolated. The authors take a similarly systematic approach to an analysis of the state of knowledge of interpretation and action also. In the section on action, for example, they draw on the work of Jackson and Dutton (1988) who suggested that interpretation might hold the key to action, as a suitable indication of the prominence of the interpretation-action link in much of the literature (p.241). As we will see, the authors’ own study adds a further dimension to the understanding of this connection. However, the authors perhaps define ‘action’ rather too broadly, as ‘any significant change in ongoing organization practices’ (p.241). Given that they only accepted responses to their questionnaire from the chief executives of organizations they contacted, this wide definition seems somewhat out of place. It would have been more pertinent had the paper looked at strategic decision-making at many levels, rather than just at the very top. Given the necessary limitations on any paper, and the understandable decision to limit informants to CEOs, one might have hoped that the definition of ‘action’ would be narrowed accordingly. Nevertheless, it becomes obvious in the course of the paper that this is an especially important study, which brings together threads from a substantial body of previous work, and forges a comprehensive framework for further study. Many studies are cited in specific sections, but the present paper reaches across these – such as scanning, and action – and produces a coherent whole of them while pursuing an extension of the current field of knowledge and a practical application of the current theories. Design The authors focused their research on a single industry, in a sensible attempt to control for the impact of distinctive industry characteristics and mechanisms in the results. They chose the health care industry as the sector for study, citing the fact that it underwent huge changes in the course of the 1980s, and was therefore a ‘fertile ground’ for investigating how top managers made strategic decisions (p.246). Their reasoning in choosing this industry can scarcely be criticized, but one may ask whether a comparison of decision-making in organizations from at least two industries would have been more fruitful, given its potential usefulness to executives from across different sectors. Of course, this is, as was noted above, the first study with this focus, but even so, the collection of data from other industries may have provided further illumination, and shown up any peculiar anomalies or distinctive features which the health care industry quite probably has. However, further research in this field will no doubt produce a clearer picture. The authors sent 545 questionnaires to hospital CEOs only in the state of Texas in 1987, and only in public-access hospitals. The decision to conduct the research based on results from a single state was surely the right one, given the potential impact of differing state health regulations on the preoccupations and direction of strategic decision-making. The only used responses given directly by the CEOs. All of this gives the impression of a study of excellent design, with all possible control. The authors are able to cite several precedents for using only the very top management level as the informant, and justify it by stating that the CEO is invariably the most knowledgeable person regarding the hospital’s strategic position, and the person most responsible for taking strategic decisions about the hospital’s future. Of the questionnaires sent out, 210 responded. Of these, only 154 responses were judged suitable for inclusion in the study. Some were rejected because not all necessary data was responsible, others because the respondent was not the CEO, and others because the questionnaire was left incomplete, or because the respondent had made clear that the scenarios given were not relevant to this organization. The scenarios used asked a series of questions regarding scanning and interpretation, and were extremely well-researched, having been put together in consultation with health care executives, hospital strategic plans and scholarly articles on the subject. The analysis of the data was thorough, with a variety of appropriate statistical tools used to measure the effects of variables, including t-tests and multivariate regression analyses. Discussion and Conclusion The results of the study clearly indicate that there are links between sensemaking process and organization performance, proving the hypothesis of the study, and justifying its conceptual framework. The authors could easily state that ‘high information use strongly influences strategic interpretation’ (p.258). Most significantly, a clear practical application for this research has been established in this paper. Despite the risky nature of strategic change, those top managers who were willing to increase the services they offered brought greater success to their organizations, with such hospitals performing better on the three measures of occupancy, profitability and admissions. The authors were able to conclude that ‘associations between external scanning behaviors and interpretations of controllability serve as sensemaking antecedents to strategic actions, which are in turn associated with effective organization performance’ (p.259). There can be little quarrel with the authors’ conclusion that the data presented in this paper justifies further research on the topic. Their own thoughts on the fruitful direction of future research are particularly pertinent. These include a focus on the possible effect of the personal characteristics of decision-makers, and the structure of top management, on sensemaking processes. Given the level of scholarship presented in the paper currently under review, these authors are clearly eminently qualified to conduct this research, and so extend the field further. References As noted above, the authors presented a literature review which functions as an excellent and comprehensive summary of the current state of the field. Their full bibliography matched this, and constitutes a complete collection of the most influential papers in this area of study. Read More