BUSI7280 · Managing In A Global Context
Decision-Making and Sensemaking
Classical management imagined a manager who knows everything and optimises. The real one works with partial information, finite attention, and a deadline. This theme holds three lenses on the same act — decide: the rational model is the textbook ideal (optimise on complete information); bounded rationality (Simon) is what people actually do (satisfice — search until an option is good enough, then stop); and intuition is the fast, pattern-based shortcut of the expert. Each is distorted by predictable biases (anchoring, confirmation, availability, overconfidence, escalation of commitment), each with a de-biasing move. When an event is novel, ambiguous or expectation-violating, managers switch to sensemaking (Weick): the ongoing, retrospective construction of a plausible story through a loop of enactment → selection → retention — where action comes first. The exam rewards naming which problem a scenario actually presents: a defined choice (decide) or a confusing situation (make sense).
What this chapter covers
- 015.1 Process vs content (Chon & Sitkin) — the discipline move
- 02Three models: rational · bounded · intuitive
- 03The bias menu — and the de-biasing move for each
- 04Sensemaking (Weick): enactment → selection → retention
- 05The seven properties — plausibility over accuracy; retrospective
- 06The four 'sense-' verbs (giving / breaking / hiding / exchanging)
Worked example: which decision model — and which property?
- +1(a) It is bounded rationality (Simon): the manager satisfices — takes a good-enough option rather than searching for the optimum — which is the rational response to limited information, time and attention.
- +2(b) Reframed as sensemaking, it most directly illustrates plausibility over accuracy: sensemaking seeks a workable story that keeps action moving, not the perfectly true one.
- +1(b) Why: proving the scare's cause would cost time the running line can't spare; a good-enough grip lets coordinated action continue and be revised as cues arrive.
- +1(c) The trap: calling satisficing a failure rather than the rational response to limits — or saying sensemaking seeks accuracy. Both lose marks.
Key terms
- Bounded rationality
- Simon's account of real decision-making: with limited information, cognition and time, managers satisfice — search until an option is good enough, then stop — rather than optimise. It is not a flaw to scold but the rational response to real limits; you optimise only when the cost of more search is below the value of a better option.
- Satisficing
- Satisfy + suffice. Choosing the first option that meets an acceptability threshold instead of exhaustively finding the best. It is the defining behaviour of bounded rationality and, contrary to a common trap, is usually the rational move — not laziness.
- Sensemaking
- Weick's account of how managers handle a novel, ambiguous or expectation-violating event: the ongoing, retrospective development of plausible images that rationalise what people are doing. The deep move is that action comes first — you act, see what your action stirs up, and read meaning back out. It asks “what situation am I in?”, where decision-making asks “which option?”
- Enactment → selection → retention
- The sensemaking loop. Enactment: people act and thereby create part of the environment they then face. Selection: from the noise they impose one plausible interpretation that lets work continue. Retention: that story is stored as identity and as cues for next time, feeding the next enactment. The loop never cleanly starts or stops.
- Plausibility over accuracy
- The most-tested sensemaking property: sensemaking does not seek the true picture, only a workable one that keeps action going. Paired with retrospective (meaning is made looking backward at what was already done), it is what separates sensemaking from a rational model that gathers all facts before acting.
Decision-Making and Sensemaking FAQ
What's the difference between decision-making and sensemaking?
Decision-making asks “which option?” and presumes a defined situation; sensemaking asks “what situation am I in?” and presumes confusion. In a crisis you do sensemaking before a decision is even well-posed. The exam rewards naming which problem the scenario actually presents — reserve rational/bounded/intuitive for stems with a defined choice, and default to sensemaking for surprises.
Is satisficing a failure?
No — this is a costly trap. Bounded rationality is the rational response to real limits on information, time and attention. You optimise only when the value of a better option exceeds the cost of more search, and usually it doesn't. Calling satisficing a flaw misreads Simon.
Does sensemaking try to find the accurate cause before acting?
No. Sensemaking is retrospective and plausibility-driven: action comes first, and a good-enough, workable story beats waiting for certainty. A stem describing managers who “gathered all the facts to find the accurate cause before acting” is describing a rational model, not sensemaking.
What are the 'sense-' verbs and which do leaders mostly use?
Sense-giving = influencing others' sensemaking; sense-breaking = questioning assumptions to force a re-frame; sense-hiding = silencing alternative readings; sense-exchanging = negotiating organisational identity. In a crisis leaders mostly do sense-giving — a calm, plausible holding story and a single source of truth that restore coordination before certainty arrives.
Exam move
Hold the through-line: when the situation is defined and stable, decide (rational / bounded / intuitive) and guard against bias; when it is ambiguous and expectation-violating, switch to sensemaking — act, then read meaning back. Memorise the one-line discriminators (rational optimises on complete info; bounded satisfices on limited info; intuitive pattern-matches on expertise; sensemaking makes the situation itself, retrospective and plausibility-driven), and the bias menu as model → bias → fix. Avoid the four mark-killers: stopping at “self-aware = effective” without process + target; calling satisficing a failure; saying sensemaking seeks accuracy; treating sensemaking as prospective planning. If the stem is a crisis or surprise, default to sensemaking + NAER — walk the loop citing at least three of the seven properties on the scenario's facts, then recommend a sense-giving action.
