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An organizational crisis can threaten firm survival, making crisis management a strategically critical issue for organizations. Sense-making is a cognitive mechanism that allows action to continue amid the chaos of a crisis. Sense-making may inform crisis management theory and practice by providing methods to improve comprehension when a crisis appears unmanageable and provide direction on how to take control of a crisis that appears uncontrollable. This paper is an initial effort in developing a model of managing crises in sense-making terms. The 2014 General Motors ignition switch crisis, when GM recalled almost 2.6 million vehicles, is used to illustrate sensemaking's role in crisis management. Managerial and research implications are discussed.
INTRODUCTION
A crisis is a fast-moving, perilous journey. Crises have uncertain causes and effects, and an event is denoted by those involved in the crisis not knowing how to navigate through and out (Pearson and Mitroff, 1993). Organizational crises can threaten firm survival, making crisis management strategically critical (Preble, 1997). The high level of ambiguity that envelops crises suggests an opportunity may exist to inform crisis management with insights from research on sensemaking. Sense-making is a cognitive mechanism that allows action to continue amid chaos (Weick, Obstfeld, and Sutcliffe, 2005; Weick, 1993). The central thesis of this paper is that sense-making can inform crisis management theory and practice by providing methods to improve comprehension during a crisis and provide direction on how to take control of a crisis that appears uncontrollable.
This paper is an initial effort in developing a model of managing crises in sense-making terms. This paper uses the 2014 crisis faced by General Motors (GM) as the automaker recalled almost 2.6 million vehicles because of ignition switch issues (Harris & Sherman, 2017). The GM crisis details are used to examine how sense-making shaped action and inaction at GM. Practical and research implications and future directions are also offered, along with conclusions and suggestions for future research.
CRISIS MANAGEMENT
An organizational crisis is "a fluid, unstable, dynamic situation" (Fink, 2002: 20). Some organizational crises develop quickly and some emerge after a long gestation period (Hambrick & D'Aveni, 1988). An organizational crisis has been defined as:
".. .a low probability, high impact event that threatens the viability of the organization and is characterized...