A Case Study of Power and Sensemaking in Organizational Change

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“I’ve got the Power” –

A Case Study of Power and Sensemaking in Organizational Change

Carolin J. van de Wint

S2640090

University of Groningen Faculty of Economics and Business

MSc Business Administration - Change Management

Thesis Supervisor: Dr. I. Maris-de Bresser Co-Assessor: Dr. B. C. Mitzinneck

20-06-2019 Word count: 12.505

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Abstract

Organizational change is omnipresent in today’s business world (Armenakis, & Harris, 2009).

Therefore involved individuals are constantly required to engage in sensemaking in an attempt to create new interpretive schemes (Balogun, & Johnson, 2005). Influences on others are exerted via means of sensegiving. As of now it is under-investigated how power and politics influence the dynamic interplay between sensemaking and sensegiving that lead to the creation of new interpretive schemes (Maitlis, & Christianson, 2014). The study investigated this gap via a case study conducted at Handwerkbildungsstätten Coesfeld e.V. By means of twelve interviews power influences on sensemaking and sensegiving processes were investigated in an organizational change project with employees, project managers and consultants. It was found that employees mostly engage in informal ways of sensegiving for instance in informal conversations on the go, whereas project managers and consultants additionally engage in formal means of sensegiving like work orders. High power levels that were mostly established via personal conversations for employees, and that were supplemented for project managers by their formal authority strengthened means of sensegiving. Consultants were found to draw power from being perceived as knowledgeable regarding the change. Ultimately the dynamic interplay lead to the creation of new interpretive schemes that were marked by a “work in progress” attitude and shared by involved groups of actors.

Keywords: Sensemaking, Sensegiving, Power, Interpretive Schemes, Organizational Change

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Introduction

In today’s business world change is omnipresent and unavoidable (Armenakis, & Harris, 2009). Often, organizational changes are established and implemented by internal employees.

However, there is a rising trend towards hiring external consultants (Appelbaum, & Steed, 2005) to help with change. Following, there are not only internal project managers and employees involved in organizational change but also a third party, that is external consultants. These consultants are explicitly hired to facilitate and implement organizational change, which is “a context dependent, unpredictable, non-linear process, in which intended strategies often lead to unintended outcomes” (Balogun, & Johnson, 2005, p.1573).

The extant literature acknowledges that change is a major part of business, however most research deals with single aspects of change projects rather than applying holistic approaches. For instance, a study by Monin et al. (2013) investigated how employees deal with changes implemented in a top-down fashion, not taking into account other organizational stakeholders like consultants. While the unilateral view presides in most research, some researchers have called for research that views change efforts more holistically, and to include all involved parties (e.g. Sonenshein, 2010; Maitlis, 2005) to create better insights into underlying processes. Following the trend of hiring external consultants, these should also be included in research. As of now, it is well established that consultants are major contributors to organizational change due to their experience and expertise (e.g. Laughlin, & Pallot, 1998), yet their interactions with project managers and employees remain under-investigated. The present study includes external consultants following the call for holistic perspectives (e.g.

Sonenshein, 2010; Maitlis, 2005).

Investigations in how employees deal with change at work established that sensemaking, defined as “an active process that involves the interaction of information seeking, meaning ascription, and associated responses” (Ford, Ford, & D’Amelio, 2008, p.363), plays a key role. It supports the formation of new interpretive schemes. Interpretive schemes are shared assumptions determining how organizational members act and conceive the organization they work for (Balogun, & Johnson, 2005), and thus enable employees to deal with changes. Furthermore it was established that managers exert influence on sensemaking processes of employees via sensegiving (Rouleau, 2005; Maitlis, & Lawrence, 2007), that is “attempts to influence others’ understanding of an issue” (Maitlis, 2005, p.21).

However, the extant literature lacks a focus on the dynamics between sensemaking and sensegiving, which are thought to mutually influence each other (Gioia et al., 1994). Several studies acknowledge that the underlying social processes (Eden, 1992), the interaction

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between individuals (Maitlis, 2005), and the reasons about ‘how’ (Greiner, & Bhambri, 1989) remain under-examined. Further, research on sensemaking and sensegiving usually adopts unilateral, not tripartite perspectives. That is, the dynamic interplay between sensemaking and sensegiving of the three involved parties has not received much attention and lacks theoretical understanding. This research therefore aims to address this gap in the literature by focusing on the dynamic interplay and mutual influence between sensemaking and sensegiving of consultants, project managers, and employees during organizational change.

One of the forces suspected to influence the dynamic interplay between sensemaking and sensegiving is power and resulting politics of involved individuals. Power is “the possession of position and/or resources”, compared to politics, which is “the deployment of influence and leverage” (Burnes, 2017, p.249) and is thought of as something that resides between people and is brought to life through reciprocal interactions and relationships to one another (Gergen, 1992). At this point research regarding the influence of power on sensemaking processes is in its infancy. Several authors (Helms Mills, Thurlow, & Mills, 2010; Mashall, & Rollinson, 2004) have criticized research into sensemaking for its lack of considering power relation, which is supported by an extensive literature review on sensemaking by Maitlis and Christianson (2014). Preliminary insights into the influences of power on sensemaking processes were gained from narrative investigations into post-crisis inquiries like the ‘Arms to Iraq Affair’ (Brown, & Jones, 2000), making salient underlying power issues in interpersonal creation of meaning from events and the potential issues that may arise. To address the gap in existing research and following the call of several researchers this study investigates how power influences the dynamic interplay of sensemaking and sensegiving of consultants, project managers, and employees during organizational change.

To this end this study has two research objectives. First, the research aims to understand how sensemaking and sensegiving bring about changes in interpretive schemes.

Second, the investigation seeks to understand how power influences sensemaking and sensegiving practices, thus how it influences the creation of new interpretive schemes. With these objectives the study seeks to answer the research question How do power and politics influence the dynamic interplay between sensemaking and sensegiving of consultants, project managers, and employees during organizational change?

Answering the research question has theoretical and practical value. Filling the research gaps will lead to better theoretical understanding of organizational change processes and advances our understanding of different perspectives of people involved in organizational

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change. This research will shed light on the interpersonal and reciprocal influences involved actors have on each other, guised as sensemaking and sensegiving. As power and politics are a large part of daily business life their influence on sensemaking and sensegiving is mandated to be investigated.

Practical implications of answering the research question include better understanding of involved parties and thus bear the possibility of better change implementation and consequently higher success rates of change. This will be further facilitated by the potential of this study to lead to insights, increasing change agents’ awareness of how they impact others’

sensemaking, and how they are impacted by others’ sensegiving. Raised awareness will lead to a better understanding of how to use these mechanisms to implement change successfully.

Currently many change efforts in companies fail (Legris, & Collerette, 2006) with estimates ranging up to 70% (Beer, & Nohria, 2000), while using up a lot of financial, time and personnel resources. Increasing the number of successful change efforts thus leads to better utilization of resources and will improve the adaptation to fast evolving environments.

The remainder of this text is structured as follows. First a literature review will outline the status quo of the extant literature relating to the relevant concepts – actors in organizational change, sensemaking, sensegiving, and power – of the study. Then, the methodological approach and setting of the research will be elaborated and the change project under investigation introduced. Further, the results of the study will be discussed and conclusions drawn under consideration of the study’s limitations.

Literature Review

Stakeholders in Organizational Change

As pointed out above, organizational change projects generally involve three groups of actors. External consultants are specifically hired to help with organizing and implementing change. Project managers are internally responsible for organizational change. Employees are mainly responsible for carrying out the proposed changes. Following the call of previous research (e.g. Ford et al., 2008; Sonenshein, 2010; Maitlis, 2005), this study adopts a tripartite perspective, providing a holistic view of the involved actors in organizational change.

Following the role of the three groups in organizational change will be elaborated.

External consultants in organizational change. The consulting industry has been described as a “knowledge industry” (Fincham, 1999, p.349). External consultants are hired by organizations planning change for their expertise and experience (Laughlin, & Pallot, 1998) in implementing and facilitating change. The rising trend of hiring external consultants

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(Appelbaum, & Steed, 2005) is mirrored by an increasingly growing industry of consulting businesses (Wood, 1996; Huggins, 2011).

Consultants support organizations in organizational issues spanning from Human Capital, Strategy, Auditing and more. However, all organizational issues have in common that hiring consultants involves change of some sort and varying extent. Importantly, external consultants have been found to be very important for realizing development of and positive results for organizations, inhabiting a position that is relevant in managing processes of change (Massey, & Walker, 1999). However, this positive view of consultants is sharply contrasted by a long-lasting negative image. A defender of the negative view is Willams (1972, p.199), pointing out that “in the booming business of management consultancy there is no shortage of glossily packaged analytical techniques of varying degrees of power and reliability being peddled to ill-informed clients by pushy salesmen”, illustrating the often extreme depictions of consultants as either experts bringing positive alterations to organizations or as charlatans charging overpriced fees (Lapsley, & Oldfield, 2001).

Nevertheless, a positive view of consultants outweighs in the literature. Often the relationship between consultants and clients is described in metaphors. For instance, the relationship is often viewed as a relationship between patient and doctor (Ward, 1993), depicting consultants as “professional helpers” (Clark, & Salaman, 1996a, p.89).

In organizational change consultants are change agents, that is people involved in conducting, identifying the need for and sponsoring the change (Ford et al., 2008), and take on important parts in initiation, management and implementation of change (Caldwell, 2003).

As consultants are external actors they bring a differing perspective compared to internal participants and are mostly excluded from internal traditions, politics and a company’s culture (Lunenburg, 2010). This though bears the consequence that external consultants may also

“lack an understanding of the company’s history, operating procedures, and personnel”

(Lunenburg, 2010, p.1), which is usually compensated by coupling external consultants with internal project managers. This combining of external knowledge and expertise with internal insights is expected to bring about the maximum benefits. In order to bring about change consultants take on a variety of roles spanning from trainer to researcher and consultant (Lunenburg, 2010), use a variety of persuading strategies (Fincham, 1999) and are through their active involvement the main driving force of planned organizational change (Christensen, 2005).

The degree to which a consultant is involved in internal happenings of an organization varies. Research by Kitay and Wright (2004) found that consultants can take on an ‘insider

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role’, that is getting intertwined with and developing potentially long-term connections with the hiring organization, or an ‘outsider role’, that is remaining strictly external to an organization. The authors specify that the two often overlap to a certain extent and that advantages and disadvantages of these roles are dependent on the client’s assignment and needs. Kitay and Wright (2004) further elaborate that issues between the client organization and a consultant may arise when there are varying expectations regarding the requirements to fulfill an assignment. For instance, there is often a differing understanding of how much knowledge over an organization is required for consultants to fulfill an assignment, with contact persons of an organization often not being able or wanting to disclose sensitive information. This points out the relevance of communication between consultants and clients, clarifying their respective roles and expectations of one another to facilitate positive outcomes of change. In this the consultant relies heavily on the project manager to provide truthful information to be able to facilitate successful change throughout the entire lifecycle of change initiatives (Lacey, 1995).

Project managers in organizational change. Project managers, first introduced by Gaddis (1959), take on many responsibilities in organizational change. They are responsible for the change effort as a whole and its implementation, often deciding about “organizational priorities and make(ing) crucial resource allocation decisions” (Saka, 2003, p.480). Saka (2003) established in research focusing on project managers’ perspective of efforts that they are responsible for decision strategies and performance management. Hartley and colleagues (1997) summarized the project manager’s role as one that contours the circumstances for change. Project managers select and hire consultants to help with organizing, planning, and implementing change. They function as the consultant’s contact person and are the intersection between internal and external world, thus the intermediary between stakeholders (Sturdy, & Wright, 2011), including consultant, employees and top management. A major part of the coordinating role of the project manager is to provide consultants with access to relevant information and insights into the company, which is a major factor for the success of the overall change project (Lacey, 1995). Whereas external consultants bring knowledge and expertise on change, project managers are experts on internal politics, processes, and employees of the company.

The project manager frequently inhabits a middle management position. Middle management is characterized to be between top management of a company and its respective employees (Balogun, & Johnson, 2005). Following, project managers are subject to a host of information and differing perspectives of different stakeholders, strongly emphasizing their

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role as mediators between varying perspectives. In organizational change projects the reasoning and decisions leading up to the change may not always be sufficiently clear to employees, because such decisions are often made in the boardroom or initiated by top management (De Ruiter, Blomme, & Schalk, 2016). It is thus the responsibility of project managers to ensure that employees see the need for change and are ready for the changes to come (Buick, Blackman, & Johnson, 2018). The conflicting demands often take a toll on project managers, who are required to not only have processual knowledge and skills, such as planning, organizing, leading, and controlling (Nickels et al., 2010), but more importantly also the interpersonal skills (Hornstein, 2015) to facilitate change. Thus, successful change projects require project managers to possess “intellectual, managerial and emotional competences” (Müller, & Turner, 2010, p.437).

Research by Sturdy and Wright (2011) shows that active clients, that is, project managers, are vital to organizational change success as they are key to the exchange of knowledge beyond a company’s boundaries. As Höner and Mohe (2009, p.299) explain “the formerly prevalent portrait of clients as victims, marionettes or passive consumers of consulting has been extensively revised”. This finding is supported by the view that project managers can be critical clients of consultancy services (Macdonald, 2006), hereby emphasizing the positive effect of project managers’ active involvement in the consultancy process. The shift from a negative image to a positive, active one is further established in findings pointing out that “the portrayal of clients in consulting research has shifted from buyer to victim to partner” (Werr, & Styhre, 2003 in Sturdy, & Wright, 2011).

Employees in organizational change. The role of employees taking part in organizational change has received much research attention (Oreg, Bartunek, Lee, & Do, 2016). Although employees have traditionally been viewed as passive recipients of change (Oreg et al., 2016) it is now understood that they take on a more active role in shaping and initiating organizational change (Bartunek et al., 2006). Porras and Robertson (1992) argued that for organizational change implementation to be successful, employees’ collaboration and active involvement is mandatory. Some even emphasize that employees can be involved to actively engage in change. Others (Grant, & Parker, 2009) take this idea further by pointing out that employees are not just expected to be involved in the implementation of change but that they are also expected by change agents to bring about organizational change themselves, underscoring the focal and active role employees as change recipients play during organizational changes (Oreg et al., 2016). Research has further established that middle managers and top management of a company rely heavily on employees’ support to

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implement organizational change (Huy, Corley, & Kraatz, 2014), which is also relevant for avoiding delays, deviance and failures of planned organizational change (Mantere et al., 2012).

Employees show varying responses to proposed organizational change ranging from commitment (Herscovitch & Meyer, 2002), support (Meyer, Srinivas, Lal, & Topolnytsky, 2007), readiness (Armenakis et al., 2007), to withdrawal (Martin, Jones, & Callan, 2005). As change inherently includes ambiguity and uncertainty about a future post-change organization, this may lead to resistance behaviors. However this often thought-of negative behavior towards change may be elicited by the behaviors of change agents and not be due to negative predispositions regarding transformations in the work life (Ford et al., 2008). The roles and job tasks of employees are often affected by organizational change, increasing feelings of ambiguity and uncertainty, which may lead to higher perceived levels of stress and strain on the employees (Bordia, Hunt, Paulsen, Tourish, & DiFonzo, 2004) and fatigue especially over extended periods of change (e.g. Fugate, Kinicki, & Prussia, 2008).

Change agents can affect a more positive reaction, that is acceptance, commitment or even driving the change, by actively involving employees in planning and implementing change and by treating them properly (Shin et al., 2015). Especially via proper and timely communication can change leaders strongly influence the attitudes and behaviors of employees and expand the necessary alterations of employees’ behavior to the changes (Petrou, Demerouti, & Schaufeli, 2018). This point is further supported by Bordia and colleagues (2004), who explain that proper, that is, sufficient, timely, and useful (Wanberg, &

Banas, 2000), communication improves employees’ adjustment to change. Organizational communication achieves this by two mechanisms. One, it decreases uncertainty as experienced by employees (Bordia et al., 2004) and therefore helps employees to predict future effects of change (Milliken, 1987) and two, it explains the necessity of change (Klein, 1996). Ultimately, organizational communication serves to fulfill the increased need of employees for relevant information (Rousseau, & Tijoriwala, 1998). Importantly, this is not restricted to formal but spans to include informal communication too in increasing the readiness for change (Holt, Armenakis, Field, & Harris, 2007). Other means too can be leveraged to facilitate successful change implementation, including peer and supervisor support, empowerment of employees, and training and education (Tiong, 2005).

In order to achieve this it is imperative for employees to see the need for change (van den Heuvel, Schalk, & van Assen, 2015) and to experiences readiness for change. Employees may be supporters of change “when they feel empowered and in control of their contribution

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to the bigger picture (Greenberger, & Strasser, 1986), and confident in their beliefs about the organization’s ability to handle the change (Griffin, Neal, & Parker, 2007)” (Heyden et al., 2017, p.965). Another key factor that helps employees and other involved actors undergoing organizational change to cope with the demands of change and its consequences is sensemaking. The paper continues to explain sensemaking and its influence on organizational actors’ interpretive schemes.

Sensemaking

Sensemaking enables individuals to deal with unexpected events, specifically with ambiguity and uncertainty by allowing creating rational, rather than emotional accounts of the environment, and subsequently allows individuals to engage in actions (Maitlis, 2005).

Inherently, sensemaking is mostly related to “understanding processes” (Gioia & Chittipeddi, 1991, p.443) a person engages in in an attempt to make sense of his environment. The present study uses the definition of Weick, Sutcliffe, and Obstfeld (2005, p.409), defining sensemaking as “the process of social construction that occurs when discrepant cues interrupt individuals’ ongoing activity and involves the retrospective development of plausible meanings that rationalize what people are doing”.

Sensemaking is an inherently social process (Berger, & Luckmann, 1967) and generally triggered by environmental cues like new laws, which involve uncertainty regarding their meaning or outcomes (Maitlis, & Christianson, 2014). However, as the researchers point out, cues only lead to sensemaking, if the difference between expectations and experience are large and relevant enough to leave (groups of) people wondering regarding how to proceed.

They further elaborate that planned change interventions qualify as such a sensemaking- initiating cues, because they induce large ambiguity and uncertainty. Sensemaking is consequently a process that will take place during organizational change to help organizational actors deal with changing environments, roles, and tasks. While sensemaking is understood as a process that takes place in the interaction between individuals, yet at an individual level, it is important to keep in mind that shared meanings may crystalize during sensemaking processes (Maitlis, 2005).

Several research endeavors (Gioia, & Thomas, 1996; Thomas, Clark, & Gioia, 1993) pointed out that sensemaking is a main activity of top management. Yet, other studies (Prat, 2000; Dutton, & Dukerich, 1991; Gephart, 1993) emphasize that also other organizational stakeholders engage in sensemaking. Research increasingly focuses on how other organizational members, for instance employees, engage in sensemaking during change (Maitlis, & Sonenshein, 2010). It turns out that employees’ sense can differ from the sense

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made by managers of an organization (Bartunek et al., 2006), thus bearing the risk of conflict.

Such differing outcomes of sensemaking arise because organizational stakeholders engage in collective sensemaking from differing personal experiences, backgrounds, positions, and organizational roles (Lockett, Currie, Finn, Martin, & Waring, 2014), emphasizing the existence of differing sensemaking processes for different (groups of) individuals, which may lead to varying interpretations of change (Dawson, & Buchanan, 2005). Sensemaking and its outcomes can therefore be recognized as a foundation to understanding perspectives and behaviors of different organizational actors.

In an organizational context, the change recipients’ interpretations of a proposed change, their interactions with other organizational members, and the respective context seem to be key during sensemaking (Balogun & Johnson, 2005). Importantly, also external individuals may be involved and taken into account in organizational sensemaking practices (Maitlis & Lawrence, 2007), including external consultants hired to facilitate change. In line with the tripartite perspective adopted in the present study external consultants have also been found to engage in sensemaking. Pellegrinelli (2002) explains that a client organization’s members may impact the perception and creation of a consultant’s reality, while others (Buono, 2004) highlight that sensemaking may be useful in illuminating the client-consultant relationship. This highlights the need to consider sensemaking practices of all groups of organizational actors involved in a change endeavor. This sharply contrasts the usual practice in research of adopting a unilateral perspective and focusing on just one group of organizational actors, often employees, ignoring the fact that sensemaking and social interaction with others play a significant role in organizational change (Balogun, & Johnson, 2005).

Interpretive Schemes

Affected by sensemaking are the so-called interpretive schemes, which are “the fundamental shared assumptions that determine the way the members of an organization currently conceive of their organization and their environmental context, and how they act in different situations”

(Balogun, & Johnson, 2005, p.1575). In stable times a certain degree of a shared understanding is required to coordinate activities (Barr, & Huff, 1997). However, interpretive schemes in companies are contested and usually negotiated between several organizational actors (Humphreys, & Brown, 2002). This is especially the case during situations that are not

‘business as usual’, like during strategic organizational change (Mintzberg, & Waters, 1985).

Research by Balogun and Johnson (2004) therefore investigated how individuals’ interpretive

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schemes shift in organizational change efforts, finding that interpretive schemes are subject to influence by others.

When an existing interpretive scheme is no longer working for organizational members they need to engage in the creation of new interpretive schemes (Ranson, Hinings,

& Greenwood, 1980). These will take the previous interpretive scheme’s place; hence schema development follows a pattern of replacement rather than gradual evolvement (Balogun, &

Johnson, 2004). Approaching this from the opposite angle entails that for organizational change to happen fundamental shifts in interpretive schemes need to take place (Sonenshein, 2010), which are commonly achieved via sensemaking and sensegiving practices (Gioia et al.

1994).

Groups (Meyerson, & Martin, 1987) and organizational actors at different hierarchical levels (Smith, 1982) are prone to interpret situations differently. This may be even enhanced when groups experience their interests to be overlooked (Labianca et al., 2000). This points out the potential differences in interpretive schemes of different (groups of) organizational actors, which are relevant to them as a foundation of meaning of everyday activities (Labianca et al., 2000). Labianca, Gray, and Brass (2000) pointed out that the extant literature lacks insights regarding the scope to which interpretive schemes are shared and specifically how they are influenced by social interactions. Interpretive schemes can be influenced substantially by sensegiving, as is elaborated in the following section.

Sensegiving

Sensegiving is one of many sensemaking related concepts (Maitlis & Christianson, 2014). It has been defined to involve “attempting to influence the sensemaking and meaning construction of others toward a preferred redefinition of organizational reality” (Gioia &

Chittipeddi, 1991, p.442). Sensegiving cannot be separated from sensemaking. As researchers point out, sensemaking and sensegiving happen together (Gioia et al., 1994). It is accordingly important to consider both in the present research.

The aim of sensegiving practices is to achieve a ‘cognitive shift’, which is “a change in how an organizational audience views or understands an important element of the organization’s work” (Foldy, Goldman, & Ospina, 2008, p.516). These can be affected by a variety of different means of sensegiving. Illustrations of sensegiving practices include

“contesting a proposal, calling a meeting, explaining a situation, issuing a warning, expressing an opinion, writing a report, justifying a view, promoting a position, gossiping, and taking minutes” (Maitlis, 2005, p.29). Maitlis (2005) further points out that change agents uniquely adopt a minority of sensegiving practices, but that the vast majority of sensegiving practices

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are adopted by various groups of internal and external stakeholders, which could be employees and consultants.

Previous research established that leaders of an organization often engage in sensegiving (Maitlis & Lawrence, 2007). They do so in order to influence the meaning construction and sensemaking of employees, shaping their new interpretive schemes (Balogun, & Johnson, 2005). By employing sensegiving practices change managers are able to shift interpretive schemes into a preferred new direction (Gioia, & Chittipeddi, 1991;

Fleming, 2001). Investigations into change leaders’ sensegiving shows that leaders engage in sensegiving to exert influences on others’ beliefs, attitudes, and perceptions, leading to stronger commitment of employees to organizational goals (Foldy et al., 2008). However, a different stream of research shows, that also other internal and external organizational members engage in sensegiving (Maitlis, & Lawrence, 2007). For instance, research by Dutton and colleagues investigated how top management’s attention is caught by middle managers and how top management is following influenced by these middle managers by means of sensegiving (Dutton & Ashford, 1993; Dutton, Ashford, Wierba, O’Neill, & Hayes, 1997). Concretely, middle managers were found to exert considerable amounts of influence on top management, contrary to the previously prevailing idea regarding the influence direction. This is further supported by findings pointing out that actors at all hierarchical levels in, and even individuals that are not direct members of the organization, will engage with each other and give sense (Maitlis & Christianson, 2014). The rationale behind adopting sensegiving practices may nevertheless vary. Leaders often engage in sensegiving to increase commitment to organizational change (Portoghese et al., 2012) and to further acceptance, energy for change, and enthusiasm, while other stakeholders may do so in order to voice concerns and direct leaders’ attention to arising issues (Maitlis, & Lawrence, 2007).

As Balogun and Johnson (2005) point out, managing change is not about control and directing, but rather about influencing the sensemaking process of organizational members in order to align the various members’ interpretation of a new situation. This points out the significance sensegiving processes ultimately have on the creation of new interpretive schemes (Bartunek, 1984) and in the accomplishment of successful organizational change and is therefore to be taken into consideration in the present research. A tripartite perspective is adopted to capture the sensegiving processes of external consultants, project managers, and employees.

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To achieve shifts in interpretive schemes, sensegiving individuals need to possess enough influence on others. This influence can be understood in terms of power, which is elaborated in the next section.

Power and Politics

Power and politics are large parts of the general business environment. In the past, power, which is “inherently a matter of social dependence, and (it) is achieved through the social coordination of actions around specified definitions” (Gergen, 1992, p.221) has been characterized as something that people at higher levels exert over individuals at lower levels of a hierarchy but this simplistic view has been revised. Central to both ideas, however, is the notion that individuals in an organizational context may have more or less power over others.

Additionally, definitions of politics have highlighted that they constitute means “to obtain one’s preferred outcome in a situation where there is uncertainty or descensus about choices”

(Pfeffer, 1981, p.7), a situation as which organizational change qualifies. This hints at the potential influence power and politics may exercise on sensemaking and sensegiving.

Past research has overlooked that political means and power defines what a group will perceive, how to act and whom to interact with, and the environments that can be enacted collectively (Maitlis, & Christianson, 2014). Yet some research established that a variety of perceptions exist in organizational contexts and investigated the power dynamics that lead to some accounts becoming legitimate, while some “evaporate” (Maitlis, & Sonenshein, 2010, p.571). This shows that power does exert influence on shared narratives as part of organizational sensemaking efforts; however, as Maitlis and Christianson (2014, p.99) state

“the opportunity to advance our understanding of power and sensemaking is still considerable.”

Researchers acknowledge that some individuals are more powerful than others and therefore may have more influence on others’ sensemaking processes (Helms-Mills, Thurlow,

& Mills, 2010) and also more influence on the creation of new interpretive schemes (Ranson et al., 1980). Nevertheless, it is relevant to take into account that more powerful individuals may still be influenced by less powerful individuals (Maitlis, 2005). Even though the

“existing power differentials play an important role” (Maitlis, & Sonenshein, 2010, p.571) in explaining sensemaking in crisis situations, it is relevant to point out that power is importantly also enacted. For less powerful individuals to exert power, it is relevant for them to have influencing skills in their possession, thus equipping them with the required political means to speak up for the narrative of their choice (e.g. Gioia, & Chittipeddi, 1991). Following this, Maitlis and Sonenshein (2010) elaborate that power alone is not sufficient for lower-level

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employees to exert influence but that it is required for them to additionally have such vital political skills.

The sources of power are manifold and vary between different organizational stakeholders (Burnes, 2017). It can be expected that external consultants gain their power from high expertise and knowledge regarding organizational change and their buy-in from senior level management (Scott, & Hascall, 2019), whereas project managers draw their power from their involvement into politics of the firm, their knowledge regarding processes and people and gate-keeper function of information flow, and from the pure fact that they hired the consultant and thus temporarily function as their employer. Employees in turn may take their power from knowledge regarding the exact function they inhabit and from their formal and informal network. This reasoning is in line with previous findings (Marshall, &

Rollinson, 2004) emphasizing that power is intertwined with the possession of knowledge.

The reasoning however extrapolates on these findings by specifying the underlying type of knowledge associated with a given change actor, which may for consultants and project managers be supplemented by the power that comes with their hierarchical position in the stakeholder triangle.

In accordance with varying sources of power it is expected that organizational actors exert their power differently. Huczynski and Buchanan (2001) found that a variety of influencing strategies exist in organizational politics. Summarizing they found that the most common influencing strategies vary depending on the direction the influence takes in the organizational hierarchy. For influencing up or down the hierarchy, rational reason was used most commonly. For influencing co-workers, friendliness was the preferred strategy. To my knowledge no further research exists on the used influencing strategies in the proposed triangle of organizational stakeholders. This topic thus lends itself to further investigation into the means actors use to influence others’ sensemaking and interpretive schemes via sensegiving.

As was pointed out above, some preliminary insights into powers’ influence on sensemaking were gained from research into crisis and post-crisis inquiries (e.g. Brown, &

Jones, 2000). This stream of research clearly shows that sensemaking is indeed influenced by power. The extent to which these insights are transferable to the organizational change context is not sufficiently clear. Even though crisis and change have ambiguity and uncertainty in common (Maitlis, & Sonenshein, 2010), they still vary in the extent and especially felt urgency of the situation. Therefore, direct investigations into influences of

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power on sensemaking and sensegiving in organizational change are required to put theoretical insights forward.

Conceptual Model

The above-elaborated factors can be integrated to span a more-encompassing picture.

Sensemaking and sensegiving have been established to go together (Gioia et al., 1994), just as has been established that consultants, project members and employees are all involved in organizational change (Smith, 2002). It is known that change agents and change recipients influence each other’s sensemaking via sensegiving (Balogun & Johnson, 2005). As the interaction between organizational stakeholders is widely influenced by power and politics it can be argued that also sensemaking and sensegiving practices are influenced by power relations residing between organizational stakeholders. Power could thus ultimately influence the outcome of sensemaking in organizational change, that is, resulting new interpretive schemes. I therefore propose the in Figure 1 visualized relationships between the relevant factors. Consultants, project managers, and employees engage in sensemaking regarding organizational change. In this relationship triangle the three groups mutually influence each other via sensegiving. Power of involved actors is proposed to influence the dynamic interplay between actors’ sensemaking and sensegiving. Ultimately these influences lead to the creation of new interpretive schemes regarding the changed work environment.

Figure 1.: Proposed relationships between the elements of the research. Double arrows represent sensegiving

In order to investigate the extant literature’s gap a case study at Handwerksbildungsstätten Lüdinghausen was conducted. Following, the methodological

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approach this research takes is explained and the organizational setting and change project under investigation are elaborated.

Methodology

To answer the above-stated research question a qualitative case study was conducted.

Qualitative case studies are the method of choice for answering process-oriented “how”

questions focusing “on a contemporary phenomenon within some real-life context” (Yin, 2003, p.1). Specifically, a holistic single-case method was applied.

This is appropriate in this context as the present research aims to expand the limited existing literature (Ozcan, & Eisenhardt, 2009) by investigating and exploring the processes of a typical case (Yin, 2003). The holistic approach is deemed appropriate when the topic under investigation is holistic itself (Yin, 2003), as is the case here, and explained below. The approach is further appropriate as it allows for a broad and in-depth investigation of the dynamics at play by taking into account diverse participants’ perspectives involved in the same change project. I was able to interview managers, consultant, and employees, thus allowing for the highest level of generalizability possible within the narrow scope of this thesis project. Interviewing participants from multiple companies would decrease the level of expressiveness for the perspectives and actions taken by actors.

Research Case

In the beginning of the research project contact to the company was established via my personal network. The research was conducted at Kreishandwerkerschaft Coesfeld (following KHC), a public organization that represents the common interests of independent craftsmen and guild enterprises vis-á-vis politics and economy. They offer several advisory and information services, as well as training opportunities to their clients (Kreishandwerkerschaft Coesfeld, 2018). Data collection took place at KHC-founded association Handwerks- Bildungsttätten e.V. (following HBS), location Lüdinghausen, Germany, which is primarily concerned with pre-vocational trainings for young adults. HBS and KHC have been rather stable both in structure and core personnel for more than 20 years. Due to changes in modern technologies and demographics of their clients the need to modernize and digitalize, but more importantly the need to change internal structures and ways of working was identified, the latter need to change being the case studied here. Interpersonal fights, lack of communication and strong egos marked the situation. The employees of HBS were stuck in “how we do things around here” and the hostile atmosphere lead to a loss of focus on the actual work.

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After personnel changes in leading positions of KHC, including the establishment of the new role “education manager”, the unbearable situation at HBS was recognized and employees judged to be at the root of the interpersonal conflicts were let go. It was however also recognized that the issues were not to be resolved by these actions alone. Therefore a consultant was hired to aid and facilitate HBS’s change. The consulting process started approximately one year before the research was conducted and was ongoing after the research was finalized. All participants were personally known to each other and had worked with one another in workshops and private conversations. This ensures that participants are sufficiently acquainted with other stakeholders while also being familiar with the changes and having the memories still fresh in their mind, compared to a finalized consulting project. As a case with communication and interpersonal issues, as well as restructuring and modernization needs, this company represents a typical case (Yin, 2003), exemplifying the issues many organizations face. Therefore, the change project of HBS was judged appropriate for this research.

Data Collection

To collect the required data semi-structured interviews were conducted. Semi- structured interviews ensure that all topics are equivalently addressed in all interviews, thus providing bias-reducing consistency, while also providing the option to ask probing follow-up questions (Turner, 2010). The content can be more deeply elaborated and unclear answers clarified to provide rich insights. Interviews are valuable as they provide perspectives, opinions, feelings, and attitudes of involved people next to experiences, stories, and insights into social relationships.

In total, 12 interviews of approximately 60 minutes each were conducted in the offices of HBS, covering the three stakeholder groups. Of this, one was a consultant, two were project managers, and nine were employees. The nine participating employees were chosen by availability during the scheduled interview days as some of the total of twelve employees were on vacation. As almost all employees were interviewed selection biases towards employees with positive attitudes towards the change are minimized. As the interviews were conducted in German, the English interview protocols were translated to German and back- translated by two independent experts to ensure the quality and equal meaning of the questions in both languages. To ensure reliability of this study the interview protocol is offered in Appendix 1.

Starting out, the researcher and the interviewee were introduced including an explanation of the interview process, anonymity, confidentiality, and getting written consent

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to participate (see Appendix 2). This was done to overcome respondent bias as power and politics are sensitive topics. The interviews began with general questions regarding the person and corresponding role to ease interviewees into the process. Such factual questions increase the reliability of provided answers because in this way memories are retrieved (Boyce, &

Neale, 2006). An example of this is “Please explain briefly what the organizational change project is about”. The remainder of the interview was structured along the core topics of this investigation, that is, sensemaking, sensegiving, interpretative schemes, and power. Questions were equivalent in content for all stakeholder groups, however phrased differently to accommodate the perspective of a given participant and his role. Example questions for sensemaking and sensegiving are “What were your initial impressions of the change project?”

and “How have you tried to influence how others perceive of the change?” respectively. For interpretative schemes an example question is “Please think back to the time at this company before the change project was initiated. What were your views on the organization before the change process started?”. An example question regarding power is “Where do you see yourself within this organization with regards to influence levels?”.

Next to semi-structured interviews pictures of HBS were taken. These serve as data for the physical manifestations of the location. Also the researcher was provided access to workshop materials. These PowerPoint presentations were used to guide group exercises and employees’ reflection of change. They further served to clarify the official change goal and gain insights into the contents of the workshops. The interviews are however the focus of the investigation, while pictures and workshop materials function to aid understanding of interview contents. Due to data protection and anonymity issues the workshop materials cannot be included in the appendix. Exemplary pictures are added to support statements of the analysis of interviews. By triangulating multiple data sources validity of the research is strengthened (Carter, 2014) and a thorough understanding of the issue under investigation ensured (Salkind, 2010).

Data Analysis

Interviews were recorded using the recording function of a smart phone and following verbatim transcribed. Verbatim transcripts are relevant “as these reflect participants’ emphasis and emotions relating to the issues discussed and as these provide the rich detail that is so valuable in qualitative research” (Hennink, Hutter, & Bailey, 2010, p.211). These transcripts resulted in approximately 101.200 words raw data. Data was coded mostly via inductive, rather than deductive codes, due to limited existing research. Appendix 3 provides the codebook used in this analysis. Examples of deductive codes used are “old interpretive

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schemes” and “new interpretive schemes” (Balogun, & Johnson, 2005). An example of an inductive code used is “calling for support”. Because these inductive codes were derived from the iterative analysis of transcripts they reflect the matters relevant for interviewees, thus providing rich insights into their perceptions of the change.

Following the coding procedure the codes were grouped into categories that reflect patterns that emerged during the analysis. These categories are interpretive schemes, power and politics, and contextual factors. A cross-case analysis was not done as only one consultant was interviewed. Along the lines of the relevant topics of this investigation it was analyzed how individuals engaged in sensemaking and sensegiving and how the creation of new interpretive schemes was influenced by power dynamics during the change project at HBS.

The results of this iterative analysis are elaborated in the following chapter.

Findings

Following the results of coding and analysis are outlined. The chapter starts by elaborating on the previous and current situation at HBS and continues to explain influences within and between different groups of stakeholders. Also contextual factors that emerged during the coding process will be outlined and their influence on sensemaking elaborated.

Participants received the codes KHC for consultant, KHM for project manager, and KHE for employee; the numbers distinguish between participants.

Old and New Interpretive Schemes through Sensemaking and Sensegiving Although the consulting project was ongoing for about one year at the time the research was conducted old interpretive schemes were still prevalent for managers and employees. They describe to what result sensemaking processes had come regarding past work situations, depicting a hostile environment marked by interpersonal conflicts and conflicts between groups of employees, namely pedagogues and craftsmen. One participant explained:

“About two years ago it was recognized, that the work atmosphere is not the best here.

That there were severe communication issues, that differences between craftsmen and pedagogues were coming to light. That there were single individuals that went way beyond the normal way of behavior and demeanor towards colleagues.” (KHM_1)

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Even though these issues still persist to some extent, project managers, employees and consultant recognize with their new interpretive schemes that these issues have changed in a positive way.

“I really have to say that this together, this kind of “we”, this has come more to the fore and eh because, well I only say this reluctantly, but there has been some changes in personnel and really with this change of personnel it really got more quiet here.

And also the acceptance now towards each other, this exchange of information, the flow of information, which did not exist for a very long time, this was really put in motion.” (KHE_3)

This shows that some core issues at the heart of the cultural struggles experienced at HBS changed. However, all participants agreed that more change is required. In this sense participants had a “work in progress” attitude. A participant explained:

“And I think that this, we haven’t reached the end yet, a lot of things could still be improved, there are still many details that could be changed, that could be improved, that we have to work on. But I reckon we are on a good way.” (KHE_3)

Issues that are yet to be worked on particularly concerned the prevailing conflict between professions. Some of the issues leading to this intergroup conflict related to the different understanding of roles and tasks to be accomplished. “And the one approaches work with a different virtue than the other, which probably goes along with the professions.”

(KHE_9). One participant summarized:

“Because the craftsmen are certainly good in their field, they also have sound training I hope. And anyway, I would never presume to teach the participants anything in this domain. But pedagogically, when it comes to targeting, the professional future, or if it is about problematic young people, I would say I have a better idea.” (KHE_6)

Different understandings of roles and tasks in the professions caused the conflicts to prevail and hindered a full shift to new interpretive schemes. This intermediate “work in progress” attitude however shows that shifts were initiated in the desired direction.

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Next to different approaches and role understandings, discrepancies between official hierarchy and unofficial hierarchy influenced the change process and how pedagogues and craftsmen perceived of their roles and tasks. Even though officially both professions are equal, varying factors cause imbalance. These include de facto varying pay, age, work experience, different contract types, different understanding of hierarchy and its relevance, as well as the emphasize on crafts compared to pedagogical work as is signified by the organizations name, which stresses crafts (i.e. Handwerk in German).

“And these colleagues think they are better, they are worth more, they have more authority, because they are the craftsmen who are part of the Kreishandwerkerschaft.

Of course, crafts are taught here and we also stand for crafts, but as a pedagogue I can stand for crafts just like a craftsman.” (KHE_1)

These imbalances hindered change, thus exerting negative influence on employees interpretive schemes, fostering an emphasize on “us versus them”. This is also visible in the local separation of the professions, and in vocabulary distinguishing between the professions alike. As the quote “Especially from the pedagogues, so in the front.” (KHE_2) show cases is it established to talk about the front and back, front being the offices of pedagogues, back being workshops of craftsmen. The data indicates that this hinders employees to move on as the quote “So it is about, I was told that there’s a team, which drifts apart. That there is war, which continues to live on between the professions. Therefore they can’t really move on.”

(KHC_1) shows.

Contrasting this, the consultant worked towards a unified “we” by ensuring that workshop participants were treated equally, and highlighting positive attributes of employees and their responsibilities, thus creating improved mutual understanding between employees and their responsibilities. This is shown in comments like “Well, I was asked to summarize the organizational structure and the responsibilities of each employee. I interviewed my co- workers about this and illustrated everything with little drawings how things work around here.” (KHE_1). With this “we” emphasize the consultant supported desired shifts in interpretive schemes.

Power and Politics in Sensemaking and Sensegiving

The imbalances described above cause power and politics to come to the fore in everyday work life. Depending on which means of influence employees or managers used did it slow or even block change. An example of slowing power play is employees’

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demonstration of dominance. Based on feelings of honor and pride, others were put down to uplift oneself, as exemplified by a quote about a craftsman “Some view this development as a personal defeat and try to strengthen their self-esteem by positioning themselves vis-à-vis the pedagogues.” (KHC_1).

However, power and politics were also used in positive ways to drive change, to work collaboratively with others within and across hierarchical levels and to reach change goals.

For instance, some employees actively called for support across hierarchy, for instance by calling up the education manager; “By approaching the education manager. So by actively demanding conversations.” (KHM_2). By being in close interaction with managers did these employees gain influence and could therefore exert more influence on other employees and managers alike. This was achieved via means of communication like phone and WhatsApp, which were also used to influence and reach co-workers.

The most effective way to use power and politics for employees was however by mutual influencing each other in informal conversations. This took place during quick breaks or short conversations in passing, as a participant explained, “Well, I’d simply say by and large so while having a quick smoke break.” (KHE_8). In these conversations topics like workshops, work tasks, and actions of other colleagues were discussed and opinions shared.

This strategy was also used by project managers and by employees to reach managers besides co-workers. Interestingly, employees used informal conversations also to build alliances. A participant explained: “Well, whether it’s in a smoking break or in a office where we meet for a meeting or whether its on passing, I think that’s what it’s like everywhere. That cliques develop, and to influence each other.” (KHM_1).

With this it became clear that overall good social relationships with others employees and managers are key in influencing others. It became apparent that at HBS mostly pedagogues have good relationships up the hierarchy and within their profession. One participant summarized as a leading source of power “Good contact to management, good interpersonal contact to management.” (KHE_5). These cross-hierarchical positive relationships legitimized power levels of employees and approved their actions, for instance how they execute tasks. This way, pedagogues were able to influence other pedagogues, craftsmen and project managers alike. In comparison, the craftsmen lacked positive social relationships as became clear by the comment:

“A nice example of this is that especially the pedagogues demand conversations again and again and either text me or call me “Do you have time? It could take an hour.”.

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And the craftsmen actually expect you to come to the workshops and present the supervision to them on a silver platter.” (KHM_2).

An additional source of power comes with the authority of a given managerial position and the ability to make strategic personnel decisions. Importantly, large changes were initiated some time before the consultancy project was started. The triggers for a variety of strategic personnel decisions were changes in the top management of KHC, including creating the new role of “education manager” with the authority to hire and fire. After much reflection some employees, causing intergroup fights between professions, were let go. Several employees explained, “These colleagues left, more or less voluntarily. And I think the work atmosphere has much improved since then.” (KHE_6). With these and other strategic personnel decisions the education manager signaled to employees that he is targeting the issues and that there is drive to make a difference. In this the education manager actively gave sense, initiating shifts in employees’ interpretative schemes.

Early on in the tenure of the education manager it was recognized that outside counsel is required to lead change at HBS. This, as well as strategic decisions regarding new hires with abilities and skills judged to drive the wanted change at HBS, who were not yet socialized in the former negative system, once more strengthened power levels of management. Other sensegiving strategies of management were official work instructions, and to exclude some employees that were to soon leave the organization from workshops, thus excluding them from the change. “I know about a future meeting (workshop). But because of the situation that I will be leaving soon I was told that I will not be taking part.”

(KHE_2). By making these decisions management is able to control to a certain degree what opinions, attitudes etc. will be part of the change interventions. Management can hence steer that positive attitudes and motivation driving the change are predominant during workshops, thus enabling shifts in employees’ interpretive schemes in the desired direction.

The education manager also gained influence by guiding with leadership. Prior to the education managers’ hiring, employees were lost without guidance, as the location manager was not leading how employees expected from this role. Here a conflict in role expectations became apparent. While employees looked at this role for guidance, the location manager viewed himself as part of the team and not as a superior. A participant summarized the prevailing notion as “Failure at management level.” (KHE_1). By actively leading via providing structure, offering support, and listening to employees in personal conversations the education manager gained in interpersonal power beyond his formal authority. Interpersonal

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conversations were again the strongest mean for the education manager to influence employees, highlighting that this is an influential sensegiving tool.

In contrast, the consultant drew influence mostly from being viewed as an expert. This positioning vis-à-vis everyone else ensured that workshop participants were open to influence as explained in interviews: “When I met the consultant I was very optimistic, because I estimated that the consultant is someone, who can make a difference.” (KHM_1). Participants recognized that the organization was at a crisis and that change was mandatory, which was signaled by the hiring of the consultant, but also highlighted by the consultant during workshops. The consultants’ ability to analyze the situation and enlightening employees about the severity of issues opened doors for the consultant to make a difference. By means of different individual and team exercises the consultant was able to break the negative spiral, inviting participants to reflect on themselves and the work situation, thus actively steering change in the desired direction. This ultimately influenced new interpretive schemes in significant ways.

Next to the status of an expert, the consultant gained power and influenced others during individual conversations. For instance in individual interviews with employees, and in discussions with project managers regarding the proceeding of the consulting project and strategic personnel decisions. A participant explained:

“So for me its that I’m mostly active in the background in advising the education manager. To have meetings and discuss certain employees… but also discuss some topics with the location manager. Development opportunities, perspectives, general conditions, opportunities for change and certainly also potential for conflicts.”

(KHC_1)

Taken together the consultant was able to influence employees and project managers in group, and individual conversations. This again highlights the high influence level of individual conversations in interactions between all groups of actors leading to the formation of new interpretive schemes.

Overall, project managers and the consultant collaborated to refocus the company on a notion of “we” compared to the dominating “us versus them”. This shifted the focus back to the actual organizational goal of preparing young adults for employment. To this end actions to keep up the momentum of change were deemed relevant. A participant elaborated “And eh this is a point now at which those that are aware of this have to keep working to reach a

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phase in which all employees say, yes we really achieved something.” (KHM_2). This was achieved, for instance, by managers reminding employees of what was discussed during workshops. An interviewee elaborated: “And sometimes I notice that I have to remind some people, and if they don’t remember I can point it out to them, also about how we treat one another.” (KHM_1). Topics of discussion also included reminding of positive attributes of co- workers, reflecting on how conflict is solved constructively, and raising awareness for co- workers’ responsibilities. In combination with leaving behind the past and focusing on the future this reflective process was highly influential in ensuring that change does not stagnate.

This became apparent in comments like “And eh when at the end you see the results, which are only an interim status, because this development is constantly ongoing.” (KHM_2) and

“Either I step in there and say I want to achieve this in these steps or I say it’s like flowing water, I’ll look how we can steer it and where we will end up.” (KHE_8). By recognizing the relevance of continuously putting energy into organizational transformation, inertia is avoided and change driven in the desired direction. This uninterruptedly pushed the formation of new interpretive schemes towards a collegial, friendly work environment and social interaction.

Contextual Factors

Even though contextual factors were not foreseen to play a role, the coding procedure revealed that they have large influence on sensemaking and sensegiving of all organizational actors. As such they can drive the change in the right direction, or, if not managed well, lead to reversal of change with potentially detrimental consequences.

Workload and corresponding stress levels were analyzed to be such a factor. As HBS’s line of business is seasonal in nature there are peaks in workload, leading to strongly fluctuating stress levels. At times with high workload and correspondingly high stress levels, employees likely fall back into old, well-habitualized behavior patterns rather than sticking with newly learned behaviors. As was explained “Now that I’m reflecting on it, this is kind of an announcement, cause the one or other craftsman already announced that everything will be different again when the new participants start.” (KHC_1). This shows that new behaviors are not yet deeply internalized by employees as is also reflected in new interpretive schemes with a “work in progress” attitude.

Another contextual factor exerting influences on employees’ sensemaking is the fact that most contracts are temporary, not permanent. This puts a strain on employees, because after some time they fear unemployment. A participant explained “And eh that is of course for every employee, if he has a temporary contract, extremely straining.” (KHE_3). Although this is regarded normal in the educational sector, it heavily impacts employees’ well-being. KHC

A Case Study of Power and Sensemaking in Organizational Change

“I’ve got the Power” –