Sensemaking , Knowledge Creation , and Decision Making Organizational Knowing as Emergent Strategy

This chapter introduces the perspective of strategy as the outcome of organizational sensemaking, knowledge creating, and decision making. The first three sections examine the processes by which an organization constructs meaning, creates knowledge, and makes decisions that drive patterns of action. The ensuing sections show how the three processes are interconnected to form cycles of learning and adaptation. Through these cycles, the organization traces out a growth trajectory that defines its strategic position. An organization processes information to make sense of its environment, to create new knowledge, and to make decisions (Choo 1998). Sensemaking constructs the shared meanings that define the organization's purpose and frame the perception of problems or opportunities that the organization needs to work on. Problems and opportunities become occasions for creating knowledge and making decisions. An organization possesses three types of knowledge: tacit knowledge in the experience and expertise of individuals; explicit knowledge codified as artifacts, rules, and routines; and cultural knowledge held as assumptions, beliefs, and values. The creation of new knowledge involves the conversion, sharing, and combination of all three types of knowledge. The results of knowledge creation are innovations or extensions of organizational capabilities. Whereas new knowledge represents a potential for action, decision making transforms this potential into a commitment to act. Decision making is structured by rules and routines and guided by preferences that are based on interpretations of organizational purpose and priorities. Where new capabilities or innovations become available, they introduce new alternatives as well as new uncertainties. Decision making, then, selects courses of action that are expected to perform well given the understanding of goals and the conditions of uncertainty. Thus, the capacity to develop organizational knowledge is distributed over a network of information processes and participants. Rather than being centrally controlled and coordinated, the capacity to develop knowledge emerges from the complex, unpredictable patchwork of processes in which participants enact and negotiate their own mean-