Change and sensemaking: organizational identities evolution and causal maps. A case study of M&A in the banking industry

The aim of this paper is to explain how the social process of sensemaking can be supported adopting causal maps. Even if the opportunity and the possibility to manage organizational identity during the post-acquisition integration has been argued by previous papers, the evolution of organizational identity remains a social process that takes place during the interaction among people. In fact, an acquisition creates conditions in which differences among identities are emphasized. This social process is based on sensemaking, that can be defined as the capability to link daily activities with large patterns. The effectiveness of such a process within an organization depends on the presence of “common points” across cognitive maps of knowledge that each employee develops. After an acquisition these “common points” decrease because of a higher ambiguity. A managerial response that is based on clear communication and coherent managers’ behaviour can reduce this ambiguity and improve sensemaking effectiveness. Based on a case study of a M&A in the European banking industry, we argue that after an M&A, a managerial response that clarifies organizational identity perception, enhancing weaker relationships, improves the effectiveness of sensemaking process reducing the ambiguity in multiple identities. People from the acquired bank were requested to elaborate a casual map of organizational identity before and after the acquisition. Then common points on maps were measured and a “trend of ambiguity” has been calculated. This paper illustrate how it is possible to describe the initiatives that the acquiring bank used during integration process by using cognitive map and network measurements; similarly, the effects on the level of effectiveness of sensemaking have been calculated. We also described how the acquired bank could measure and monitor the level of comprehension of corporate strategy. In doing that, the bank can clarify strategic issues related to organizational identity that shows a weak level of comprehension. In addition, this paper has three main outcomes. First, we explain why the evolution of organizational identity is a social process based on sensemaking and how appropriate managerial responses must be monitored and supported at social level in order to be effective. Second, it clarifies how cognitive maps can be a managerial tool to achieve that result. Cognitive maps allow representing the expected organizational identity in a form closer to the mental representation that people build about the new reality. Third, it shows that sensemaking process can be measured in terms of effectiveness using network measurements. These results can be interesting for both academic and practitioners. More in details, managers dealing with acquisition could adopt casual maps in order to facilitate sensemaking process and measuring effectiveness of their integration strategy.