The Effect of Team Composition on Strategic Sensemaking

Description

Top management teams constantly need to deal with changes in their environment, for instance changing customer demand, social environments, or supplier situations. They try to understand how these changes can affect their organization and adapt their organizational strategy. But teams differ in the ways they make sense of their environment and accordingly in the decisions they make and the success they have. Tanja Prinzessin zu Waldeck analyzes the effects of the composition of top management teams on their strategic sensemaking process. Based on the results of ten case studies, she shows that the diversity of experiences of team members supports the team to pick up strategically relevant environmental changes early and to develop a wide range of strategic alternatives. The author also indicates that the diversity of a team does not affect the speed with which teams come up with strategic decisions, but that speed appears to be influenced more by the personalities, leadership style, and culture in a top management team. Furthermore, she implies that family and state-controlled businesses are more likely to experience problems in their team composition than public ones.