Sensemaking and sensegiving as predicting organizational crisis

Galit Klein, Eyal Eckhaus

Research output: Contribution to journalArticlepeer-review

21 Scopus citations

Abstract

The current study examined crisis management and the signals that indicate its appearance. Based on cognitive and social psychology theories, we explored how senior and non-senior employees engage in sensemaking and sensegiving activities prior to and during crisis. Based on natural language processing, we analyzed a database of 86,643 emails sent by Enron employees before Enron declared bankruptcy and after the bankruptcy event. Our findings showed that employees could sense the impending crisis and applied informal scanning methods in an attempt at sensemaking of their unstable reality. In parallel, managers used sensegiving by deploying more positive confidence words in their emails. This tendency escalated after the crisis broke out. We explain this increase as the need to resolve feelings of cognitive dissonance related to their identity and reality. Our findings suggest both theoretical and practical contributions for the survival of organizations.

Original languageEnglish
Pages (from-to)225-244
Number of pages20
JournalRisk Management
Volume19
Issue number3
DOIs
StatePublished - 1 Aug 2017

Keywords

  • Crisis management
  • Enron
  • Natural language processing (NLP)
  • Sensegiving
  • Sensemaking

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