The Cognitive Theory of Strategic Sensemaking

Abstract

For a long time strategy research has grounded its theories on the assumptions of traditional economic theories. They have based their research and recommendations on the assumptions that managers observe an objective environment and make rational decisions, at least in the context of their own utility optimization. In the light of these assumptions, their work has focused on developing concepts and recommendations for managers on what strategic actions they should take and analyzed the impact of these decisions on firm performance. Thus, strategy research has addressed the question “what shall managers decide?”. However, their work has widely ignored the question “how do managers decide?”.