Explaining Differences in Firms’ Responses to Environmental Change: TMT Psychological Ownership, Differences in Sensemaking, and the Mode of Strategic Responses
SHANG Hangbiao，LI Weining，HUANG Peilun
1. Northeast Forestry University, Harbin,China; 2. South China University of Technology, Guangzhou, China
Abstract：Drawing on a case study based on two firms’ five processes of sensemaking, it is theorized that there are two distinct sensemaking processes: “problem-solving” and “self-enhancing”. Firms’ strategic responses may be dynamic matching with the environment in problem-solving sensemaking process, and the self-enhancing sensemaking process may lead to strategic path dependence. Then we find that TMT psychological ownership influence sensemaking mode. Firms would engage in self-enhancing mode sensemaking process when TMT psychological ownership is high, and engage in problem-solving mode sensemaking process when TMT psychological ownership is low. We develop a theoretical model involving psychological ownership, differences in sensemaking, and the mode of strategic responses to explain how firms’ responses to environmental change. These insights into the behavior mechanisms of strategic responses help explaining the practices and conditions that produce organizational inertia and change when environment changes.
2016, Vol. 13 
