Sensemaking for strategic management control : an empirical study of two firms

Abstract: The literature on management control has for some time now argued for an integrated approach between strategy formulation and implementation. This thesis offers a sensemaking approach to understanding how such integrated activities in corporate organizations appear and can be enhanced. Without this understanding of sensemaking it has been argued that managers tend to control their organizations on the basis of qualified guesses or even illusions. ‘Sensemaking researchers’ have often approached their problems with a single perspective on cognition, language, or actions. Often the combination between these perspectives has been limited. This thesis offers a comprehensive dynamic model that combines these perspectives. Two research questions have been addressed: (1) How do actors in organizations make sense of strategic management control elements, (2) What forces influence the sensemaking process in the strategic management control context? The aims of this thesis are to: (1) Contribute to the understanding of sensemaking for strategic management control by providing rich and genuine narratives of these processes; and to (2) Improve the proposed conceptual model by data from the strategic management control context. Two firms have been included in this study. In one of the firms, a new strategic management control approach was developed to comply with a new growth strategy, and in the other firm new elements was added to the existing approach to conforming to new market conditions. The focus in the study has been placed on the sensemaking processes with regard to the elements in the firms’ strategic management control approaches. In sum twenty-two management control elements have been studied in the two firms. During a ten-month-period data was collected by: (1) interviews with 16 managers and employees on three different occasions (in sum 47 interviews), (2) observations from in round numbers 30 meetings, and (3) social network surveys. The data has been interpreted with the support of Perspective Text Analysis, Flexi- and Multigrid Analysis, and Social Network Analysis. The results of the study indicate that there is correspondence between the framework and the data and that the impact of sensemaking is high on strategic management control. Several explored forces have been added to the model. Accordingly, a contribution to the theory of sensemaking for strategic management control is presented in this research report.