Making Sense of Risk—A Sociological Perspective on the Management of Risk

This article describes how risk has been conceptualized in the business and organizational literature through four distinct transformations: from the techno‐scientific perspective to the cognitive, the social‐cultural, and, finally, to the constructionist perspective. Each domain conceptualizes risk in different ways, as organizations have found it difficult to understand and mitigate using the risk management tools available. Conceptualizing risk as sensemaking becomes relevant due to the complexity of information available to the risk manager, and, coupled with time constraints, this means that risk managers increasingly rely on making sense of possible threats rather than on the accuracy of the information received. This shift presents four contributions to the current literature. First, it suggests that the role of risk management is shifting from being technical in nature to being about risk sensemaking, where the manager engages with the social and physical environment with the aim of acquiring cues that could indicate how future events will unfold. Second, a sensemaking perspective implies a shift in the use of risk management systems from being “containers” of knowledge about past risk events to lending legitimacy to the plausibility of the success of future decisions. Third, the role of the risk manager in managing individual risks changes and becomes one of managing everything using the social networks and systems available as indicators of future risk events. Finally, the risk manager and the systems he or she relies upon are regarded as a source of risk in themselves as both act as gatekeepers for organizational risk decision making.     

The Effectiveness of Risk Management: An Analysis of Project Risk Planning Across Industries and Countries

This article examines the effectiveness of current risk management practices to reduce project risk using a multinational, multi‐industry study across different scenarios and cultures. A survey was administered to 701 project managers, and their supervisors, in seven industries and three diverse countries (New Zealand, Israel, and Japan), in multiple languages during the 2002–2007 period. Results of this study show that project context—industry and country where a project is executed—significantly impacts perceived levels of project risk, and the intensity of risk management processes. Our findings also suggest that risk management moderates the relationship between risk level and project success. Specifically, we found that even moderate levels of risk management planning are sufficient to reduce the negative effect risk levels have on project success.     

Green Human Resource Management: A Review and Research Agenda*

The paper makes a case for the integration of the largely separate literatures of environmental management (EM) and human resource management (HRM) research. The paper categorizes the existing literature on the basis of Ability–Motivation–Opportunity (AMO) theory, revealing the role that Green human resource management (GHRM) processes play in people‐management practice. The contributions of the paper lie in drawing together the extant literature in the area, mapping the terrain of the field, identifying some gaps in the existing literature and suggesting some potentially fruitful future research agendas. The findings of the review suggest that understanding of how GHRM practices influence employee motivation to become involved in environmental activities lags behind that of how organizations develop Green abilities and provide employees with opportunities to be involved in EM organizational efforts. Organizations are not using the full range of GHRM practices, and this may limit their effectiveness in efforts to improve EM.     

Sensemaking in crisis situations: Drawing insights from epic war novels

Soldiers operate under conditions of extreme uncertainty and danger, in which sensemaking is both crucial and challenging. A grounded theory analysis of four epic war novels by veterans (Tolstoy, Remarque, Heller, O’Brien) provides insights into soldiers' sensemaking in combat. The findings are of theoretical and methodological relevance. Theoretically, this article contributes to sensemaking theory by identifying alternative sensemaking pathways besides the traditional enactment-selection-retention model. Additionally, while existing literature suggests that sensemaking failures result in organizational breakdown, this study shows that personnel may continue to do their work in the (fictional) belief that other organizational members can still make sense of the situation. Finally, methodologically, this article introduces grounded theory as a systematic approach to analyzing novels in contrast to current heterogeneous uses of literary fiction in organization and management studies.     

Organizational sensemaking: A systematic review and a co-evolutionary model

Over the last 30 years, a massive body of literature has been generated for explaining how individuals and groups make/give sense to their experiences in organizations. Reviews on sensemaking have been produced, but they did not update the original Weickian sensemaking model – strongly based on the Darwinian principles – according to the occurred developments. To fill this gap, a Systematic Literature Review (SLR) of 402 contributions on organizational sensemaking has been conducted; sample articles have been interpreted according to a renewed evolutionary lens: co-evolution. This study offers an updated and holistic revisitation of the original sensemaking model and proposes a co-evolutionary framework of organizational sensemaking. In particular, it identifies four new and two evolved properties that compose the sensemaking phenomena, emotional schemata as the new unit of analysis for sensemaking studies, and specifies the individual and collective sensemaking processes.     

Distributed sensemaking in network risk analysis

This article responds to the call advancing risk science as an independent research field, by introducing a conceptual model for risk analysis based on distributed sensemaking. Significant advances in recent decades have expanded the use of risk analysis to almost every organization globally. Continued improvements have been made to our understanding of risk, placing a wide range of contexts under organizational control. This article argues that four dimensions are central in how organizations make sense of uncertainty in their context and hence do risk analysis: the activities the organization engages in, their sensory systems, the role and competence of individuals, and the ability to coordinate information through organizational structures. The structure enables insight into the decision-making process and the dimensions contributing to how organizations perceive risks and uncertainty in a given context. Three examples from the Arctic context illustrate the network risk analysis model's practical application and how it will expose weaknesses in these organizations’ risk analysis and decision-making processes. Finally, the article discusses sensemaking in network risk analysis and how such an approach supports organizations’ ability to perceive, collect, process, and decide on changes in context.     

A ‘No Blame’ Approach to Organizational Learning

In high‐reliability organizations (HROs) even minor errors can seriously hinder the very existence of the firm and the safety of employees and customers. Field studies have shown that HROs encourage the reporting of errors and near misses, exploiting these incidents to improve their operative processes. In this paper, we describe this practice as a ‘no blame’ approach to error management, and link it to learning theory, showing how no blame practices can enhance organizational learning. By taking a cognitive perspective of organizations, we draw on existing contributions and on a set of empirical case studies to discuss the characteristics of no blame practices, and their applicability in traditional, non‐HROs. Our findings show that, in exploiting information from error‐reporting, no blame practices are beneficial in environments where learning and reliability issues are particularly relevant. Empirical evidence suggests that a no blame approach can be extremely constructive for organizations that want to enhance their learning processes. We conclude that a no blame approach is a valuable way to achieve an organization that has flexibility and variability. However, no blame practices imply a set of organizational issues and costs that pose significant challenges to firms operating in non‐high‐reliability settings. The findings from our study contribute to the literature on HROs and organizational learning.     

The Management of Workplace Conflict: Contrasting Pathways in the HRM Literature

This paper reviews the human resource management literature on the management of workplace conflict. It suggests that workplace conflict is commonly viewed in the literature as a symptom of management failure: the notion that conflict may be intrinsic to the nature of work because employees and managers have hard‐to‐reconcile competing interests is given short‐shrift. At the same time, the paper identifies important differences in the literature, which the authors call ‘pathways’, about the best methods to manage problems at the workplace. It is argued that four contrasting pathways can be detected in the literature with regard to how organizations approach workplace conflict management practices. Each pathway is examined fully and their respective strengths and weaknesses are assessed.     

Organizational Sensemaking About Risk Controls: The Case of Offshore Hydrocarbons Production

In the same way that individuals’ risk perceptions can influence how they behave toward risks, how organizational members make sense of risk controls is an important influence on how they apply and maintain such controls. In this article, we describe an analysis of sensemaking about the control of risk in offshore hydrocarbons production, an industry that continues to produce disasters of societal significance. A field study of 80 interviews was conducted in five offshore oil and gas companies and the agency that regulates them. The interviews were analyzed using qualitative template analysis. This provided a categorization of the many ways of acting through which informants made sense of the risk control task, and indicated that the organizations placed substantially different emphases on different ways of acting. Nevertheless, this sensemaking fell into two broad classes: that which tended to limit or be pessimistic about organizational controls, and that which tended to extend or be optimistic about organizational controls. All the participating organizations collectively placed a balanced emphasis on these two classes. We argue that this balanced sensemaking is an adaptation rather than a deliberate choice, but that it is an important element of controlling risk in its own right.     

Systems of organizational sensemaking for sustained product innovation

We map out the systems of sensemaking people use to link market and technology knowledge into new products, in innovative versus non-innovative organizations. Systems of sensemaking are organized “webs of meaning” that govern the knowledge people make sense of, and the sense they make. Innovative sensemaking systems link more knowledge because they: (1) frame linking as hands-on practices of value creation; and (2) loosely couple three tensions between tacit and articulated knowledge across organizational levels to draw in, exploit, and recreate knowledge for innovation. We contrast sensemaking systems in innovative versus non-innovative organizations, and draw implications for theory and practice.     

Risk management in plant investment decisions: risk typology,dimensions and process

Abstract

Managing risk associated with plant location decisions is a growing concern as companies seek to reassure investors about the robustness of their strategies. However, little attention has been paid to the systematic evaluation of risk associated with new plants. This paper investigates risk management practices in plant investment decisions through detailed case investigations in a cross section of industrial businesses at different levels of maturity in order to observe current practices, identify common principles and to synthesis systematic approaches to risk management. It identifies key risk categories and dimensions of risk management, building on three key bodies of literature – global manufacturing, investment and risk management     

Changing Leadership and Gender in Public Sector Organizations

The aim of this paper is to examine the ways in which leadership at middle management level in the public realm is gendered. This is attempted largely through a consideration of academic literature, supported by some empirical findings from a research investigation into higher education and social work in Sweden and England and a review of literature that reveals varying types of leadership characterized as masculinist. Taking the position that context shapes social relationships and subject positions, and provides opportunities as well as constraints, we consider leadership in the public sector under the sway of new public management, framed by neo‐liberalism and the valorization of competition, self‐interested instrumentality, uncertainty and risk, operationalized in public sector organizations through performative regimes. It is argued that while some women and men are willing participants in the new regimes, others are antagonistic or ambivalent, finding themselves mired in neo‐bureaucratic processes of surveillance and control, often stuck in occupational cul‐de‐sacs. It is contended that neo‐liberalism and new public management are associated with masculinist forms of rationality that elevate individual winners and losers and divert attention from collective issues of gender. Rather than focus on gendered styles of leadership it is suggested that it is more important to look at their gendered performance and effects.     

Discovering and Managing Interdependence with Customer‐Entrepreneurs

Research on inter‐organizational relationships has largely focused on the interdependence between formal organizations. In recent years, firms have encountered a new logic in which interdependent parties are not formal organizations but platform‐based ‘customer‐entrepreneurs’ that create value through illegal means. Drawing on a 5‐year‐long qualitative study, we examine how firms recognize and instantiate this new logic and, consequently, respond to their interdependencies with customer‐entrepreneurs. Viewed through the lens of institutional logic, we find that, with the benefit of hindsight, firms recognize the existence of the logic of customer entrepreneurship, which triggers organizational sensemaking that is made up of three elements: interpretation of legitimacy compatibility; interpretation of efficiency compatibility; and integration of stakeholder perspectives. This sensemaking results in either a determined account concluding on the compatibility calculus in a top‐down manner, or an open‐ended account avoiding the construction of a resolute, synthesized view. A determined account leads to a defiance strategy, by which firms attempt to remove the source of interdependencies with customer‐entrepreneurs, whereas an open‐ended account guides firms to espouse a decoupling strategy, whereby firms covertly resort to efficiency maximization enabled by the interdependence. Our results offer implications for the research on inter‐organizational relationships and institutional logic.     

Double Trouble: Sibling Rivalry and Twin Organizations in the 2008 Credit Crisis

The purpose of this paper is to introduce and explore the novel idea of highly similar ‘twin organizations’. Drawing on psychoanalytic theory in his formulation, the author argues that the closeness of organizational identities in twin organizations may lead to increased rivalry, narcissism and a tendency for greater risk‐taking and vulnerability. Four of the biggest casualties of the 2008 credit crisis – two UK banks (HBOS and RBS) and two large US financial institutions (Fannie Mae and Freddie Mac) – are used to illustrate this conceptual development. The contribution of this paper is fivefold. First, this paper contributes the theoretical innovation of the idea of twin organizations to the organization studies literature. Second, it casts a fresh light on four of the organizations that got most deeply into trouble in the credit crisis. Third, it contributes to other areas of organizational scholarship, specifically the theory of risk and the theory of organizational identity. Fourth, this paper acts as a warning by identifying similar phenomena in the ongoing Eurozone crisis, and fifth, it contributes to the understanding of risk‐management practice and organizational consultancy.     

Boardroom Operational and Financial Control: an Insider View*

This study examines the control processes and their dynamics at the board level of two non‐profit organizations with a view to penetrating and exploring directors' control orientations, discourse and decisions in their holistic context. In comparison with the predominantly survey‐ and interview‐based prior research on board‐level control, this study offers a distinctly processual view through its employment of a longitudinal complete member researcher participant observer methodology. Three primary themes of boardroom control focus are identified and analysed. These are control reporting, director's control orientation and the board's budgetary control approach. Directors' strategic orientation is found to be the primary driver of their exercise of control, with reporting systems and routine monitoring emerging as adjuncts to their primary strategic control focus. Strategy‐triggered control activity exhibits itself largely via directors' cost–benefit and risk management analyses communally developed in the course of board meeting exchanges.     

ISO 9001 and ISO 14001: Towards a Research Agenda on Management System Standards*

Management system standards, also called meta‐standards, have been adopted by an increasing number of organizations across the world. Although these management system standards are based on the same type of management principles and institutional arrangements, the literature remains scattered, with diverse studies focused on specific standards and published in various journals. The main objective of this paper is to analyse the academic research on meta‐standards through an integrative review intended to shed light on the main conclusions and substantial advances made in this area. This integrative review focuses more specifically on the two main meta‐standards which have been adopted by more than 1.3 million organizations worldwide: ISO 14001 and ISO 9001. The paper contributes insights into the main streams of the literature and current knowledge gaps to be addressed in future research on the various issues related to meta‐standards: global governance, diffusion processes, motivations, benefits of adoption and impacts on performance, internalization, integration, consultancy and auditing.     

Strategic Renewal: Past Research,Theoretical Tensions and Future Challenges

Strategic renewal has become a prominent theme in a variety of organization and management research domains in recent years. It refers to the process that allows organizations to alter their path dependence by transforming their strategic intent and capabilities. With contributions from an increasing range of theoretical perspectives and research contexts, the strategic renewal literature has become fragmented and lacks common definitions and conceptual clarity, which prevent cross‐fertilization and harm further development. This study systematically reviews the various literature streams on strategic renewal to provide a more integrative perspective. The authors identify three key theoretical tensions at the heart of strategic renewal research, namely learning vs. resource, induced vs. autonomous, and co‐alignment vs. co‐creation. By exploring these key tensions, the authors define strategic renewal's conceptual core, identify gaps in the past literature, and provide guidance for future research.     

One Agency's Use of Risk Assessment and Risk Communication1

Few organizations have the courage to evaluate their own use of risk assessment (identifying hazards and estimating their probability and magnitude) and risk communication (interacting with internal and external stakeholder groups about risks). The USDA Animal and Plant Health Inspection Service (APHIS) wants to enhance its overall risk analysis process for managing a wide range of risks to animals, plants, and human health. We gathered survey data for a baseline of APHIS professionals’ understanding and use of risk assessment and risk communication. APHIS professionals spend a surprisingly large share of their time communicating about risks. They perceive that risk estimates influence decisions, but that risk estimates should have more influence. Respondents reported little opposition to APHIS risk management decisions, and little use of channels such as USDA Extension Service for disseminating risk messages. Substantial variance across responses is explained mostly by differences in the roles of the 11 work units (now 10) within the agency. Location also contributes to the variance. Demographic variables seem less important.     

Do Human Resource Practices Enhance Organizational Commitment in SMEs with Low Employee Satisfaction?

This paper considers a large matched employee–employer data set to estimate a model of organizational commitment. In particular, it focuses on the role of firm size and management formality to explain organizational commitment in British small and medium‐sized enterprises (SMEs) with high and low levels of employee satisfaction. It is shown that size ‘in itself’ can explain differences in organizational commitment, and that organizational commitment tends to be higher in organizations with high employee satisfaction compared with organizations of similar size with low employee satisfaction. Crucially, the results suggest that formal human resource (HR) practices can be used as important tools to increase commitment and thus, potentially, effort and performance within underperforming SMEs with low employee satisfaction. However, formal HR practices commonly used by large firms may be unnecessary in SMEs which benefit from high employee satisfaction and positive employment relations within a context of informality.     

Drawing on the Map: An Exploration of Strategic Sensemaking/Giving Practices using Visual Representations

In this paper we explain how practitioners perform strategic sensemaking with visual representations. Here, we identify four modes of strategic sensemaking/giving: content‐generating, process‐generating, process‐ingraining and content‐ingraining. While each of these modes supports strategic sensemaking/giving by focusing practitioners’ work on specific issues, they also divert practitioners from focusing on key aspects of strategy making. We conceptualize these limitations as ‘blind spots’. As a result, strategic sensemaking appears fragmented and can lead to breakdowns in sensemaking. However, the flexibility of visual representations facilitates strategic sensemaking by allowing practitioners to switch from one mode to another. These findings improve our understanding of the strategic sensemaking/giving practices that are associated with the use of visual representation.