Creating a shared understanding of a strategic change – The role of top managers: Case Finavia

Abstract

To ensure effective strategy implementation organizational members must have a shared understanding of the strategic priorities. The increased levels of decentralization and organizational complexity have resulted in a widened gap between top management and lower-level employees, making it challenging to integrate the new strategy into the multiple and divergent meanings of the organizational members. The study seeks to contribute to the literature by enhancing the understanding of how is a shared understanding of the strategic change enabled or challenged by top managers' sensemaking and sensegiving during a crisis.

The study is conducted as a qualitative case study, and the phenomenon is investigated in the context of the Finnish airport company Finavia. The research data is gathered through unstructured interviews and the data analysis is made using the Gioia methodology.

The findings of the study show that top managers’ sensemaking and sensegiving can enable, challenge, or act as a barrier in creating a shared understanding of strategic change. Top managers’ sensemaking enables creating a shared understanding when it triggers them to engage in sensegiving and oppositely challenges creating the shared understanding when it acts in an opposite way. The study find that top managers' sensegiving challenges creating a shared understanding when it lacks continuity and is not addressed to the whole organization. Finally, top managers' sensemaking and sensegiving act as barriers in creating a shared understanding when there is no consensus on the strategic priorities and message.

The main theoretical contribution of the study is that it confirmed that in top- down management, the role of top managers sensemaking and sensegiving is crucial in creating a shared understanding of the strategic change in response to a crisis and, consequently, ensuring a successful strategy execution and rebuild coordinated action across a multi-level organization. Finally, the study has several practical implications, the most crucial one being that creating a shared understanding of strategic change starts with a shared understanding of strategic priorities and message among top managers.