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Sensemaking and sensegiving as predicting organizational crisis

Author

Listed:
  • Galit Klein

    (Ariel University)

  • Eyal Eckhaus

    (Ariel University)

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.

Suggested Citation

  • Galit Klein & Eyal Eckhaus, 2017. "Sensemaking and sensegiving as predicting organizational crisis," Risk Management, Palgrave Macmillan, vol. 19(3), pages 225-244, August.
    • Handle: RePEc:pal:risman:v:19:y:2017:i:3:d:10.1057_s41283-017-0019-7
    DOI: 10.1057/s41283-017-0019-7
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    References listed on IDEAS

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    Cited by:

    1. Klein, Galit & Shtudiner, Zeev & Zwilling, Moti, 2021. "Uncovering gender bias in attitudes towards financial advisors," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 257-273.
    2. Eyal Eckhaus & Nitza Davidovitch, 2019. "How do Academic Faculty Members Perceive the Effect of Teaching Surveys Completed by Students on Appointment and Promotion Processes at Academic Institutions? A Case Study," International Journal of Higher Education, Sciedu Press, vol. 8(1), pages 171-171, February.

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