Sense Making in Organizations Analysis Report (Assessment)

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Sense making is one of the most important processes in modern organizations which supports and directs organizational performance. At any level, the less a firm’s managers know about the causal structure of a problem, the more difficult it is to solve it. Managers need tools to transform ill-defined problems into better defined problems. Sense making is often seen as “a part of experimental learning in which organizations and individuals make sense of their experience and mobility behavior” (Choo 1998, p. 77). Initially, managers communicate strategy-design problems. In addition, managers can tackle any properly diagnosed problem, no matter how difficult it may be. Sensing means understanding and prediction of environmental and business changes. Sense making is seen as “belonging to a larger process of organizational adaptation that also indicates scanning the environment” (Choo 1998, p. 77). This requires environmental scanning and analysis which, coupled together, can bring a firm’s learning up to speed with its pursuit of world-class performance and managerial decision quality. Sense making is extremely important for organizations, because to improve their decision quality, they should become more aware of their assumptions, including assumptions about the way strategic variables are affected by and cause changes in other variables over time. The resulting confrontation between devil’s advocates and proponents of a particular system structure that causes a dynamic behavior pattern becomes a learning experience. Institutional learning opportunities abound when rational confrontation becomes lively in a team because of an analytical approach.

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Sense making is a process “grounded in identity constructions”, it is retrospective, it is enactive of sensible environments, social and ongoing; it is focused on bad by extracted cues, driven by plausibility rather than accuracy (Choo 1998, p. 78). To encourage and to make learning an integral part of management technology, mangers must lift their sights from the short term. To design strategy, they must learn to search for and to identify patterns of change over time. To practice strategy design and to act proactively, we should replace our transaction-driven calculus with scenario analysis. Learning is not a luxury; it is how firms create their own future. Creating the organizational capability of and ambiance for learning will lead to a truly sustainable advantage (Robbins, 2002).

Organizations can use different processes of sense making in order to reach their strategic aims and goals. Primarily, sense making is seen as “enactment, selection and retention” (Choo 1998, p. 83). The mind-set of planning and the emerging understanding in the management speed up institutional learning. The transition required can change the rules that managers live by. To learn from experience, managers must first learn how to filter the product of observation and to extract coherent information from it. Sense making can be seen as belief and action driven processes. “Belief driven processes as those in which groups of people negotiate meaning around an initial set of sufficiently clear and plausible cures” (Choo 1998, p. 89). Belief driven processes involve arguing and expecting. Action-driven processes are ”those in which groups of people grow webs of meaning around their actions, commitment and manipulations by creating and modifying cognitive structures that give significance to these behaviors” (Choo 1998, p. 90). These processes are committing and manipulating. To enable implementation, managers can add value through better design for quality, speed of delivery, and jobs; labor relations, training, and staff support; and outsourcing, supplier and customer relations. A firm’s top managers must coordinate the way the firm senses its environment and in a way that makes sense to all involved. Constituents at the lower levels of the corporate hierarchy are now free to read the organizational environment. Their job is to capture, filter, and interpret environmental change signals (Robbins, 2002).

Value is created through shared meaning and communication. At this stage, Choo distinguishes shared cognition and communication behaviors. This is how they create new information necessary for strategy design and implementation. In so doing, they generate knowledge and a new long-lasting capability of dealing with change, both internal and external. Managers at every level can now contribute to this sense-making function. Planning is emerging from this context. It has an overriding goal and an underlying mind-set to meet that goal. The overriding goal is to improve the way managers think, learn, and reason about strategy design. This may sound too ambitious (Robbins, 2002). The transformation is most difficult when attention is fixed on the next quarter instead of the next decade. Changes in the global business environment call for a major change in the way managers think about it. Scenario-driven planning can help managers view change as an opportunity instead of a threat. In this way, they can realize their full potential, their power to create a firm’s future. With this mind-set, the improvement journey follows a surprisingly well-defined path, allowing the clearing away of obstacles so that strategy implementation becomes simple, efficient, and powerful (Schien, 1996).

The culture of the organization and diversity demands new ways of communication and meaning sharing. The problem is that: ‘sharing meaning on groups is based on a common set of beliefs and values” (Choo 1998, p. 97). Cultural and religious differences create a conflict in meaning and values shared by different employees. Corporate leaders should install organizational processes that can help them understand how the environment might be changing and what the effect of likely consequences will be. Otherwise, despite their current strengths, business firms are unlikely to be able to meet the challenges of the emerging high-technology and deregulated global economy. Predicting a world in which technology and collective and competitive patterns change at an unprecedented rate is hard enough. Moving ahead of it is simply larger than the extended talents and resources that are now available in any of the world’s leading firms (Schien, 1996). No matter how artfully concealed, an incomplete understanding of a firm’s strategic situation will prevent subordinates from helping their leaders lead. In turn, the leaders will not be able to guide or to protect their subordinates. Low cognizance of the nature and structure of a firm’s strategic situation leads to power loss. The informational base of power breaks off, and its moral foundation becomes shaky. In order to manage cultural differences, organizations introduce multiperspective approaches and strategies. The perspective are consensus, consistency, clarity and metaphors

In order to meet challenges and demands of sense making processes, organizations invest in IT and training. IT helps to reduce stress and ambiguity, solve ill-structured problems and perceive uncertainties. Organizations will hire processionals from different spheres emotionally and psychologically stable. This approach reflects the overriding goal of scenario-driven planning: to create the necessary conceptual framework for filtering the product of observation and extracting coherent information out of it, to be ready to better learn from experience. Having gathered experience on the job and in strategy design, the line manager can then rise above the ceiling of daily pains and its attendant information overload. Organizations will purchase technology-driven and innovative products. Changes in the fundamentals, surprises, and discontinuities can all be perceived as very threatening, destabilizing, and costly. In addition to having a central theme that involves their potential users early on, scenarios must be anchored into a methodologically sound and productive approach to strategy design. Often, the results are strategic flexibility and greater adaptability.

References

  1. Choo, Ch. Ch. (1998). The Knowing Organizations. The management of Ambiguity. Organizations as sense making communities. Oxford University Press, USA.
  2. Robbins, S. (2002). Organizational Behavior. Pearson Higher.
  3. Schien, E. H. (1996). Organizational Culture and Leadership. Jossey-Bass
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