Sense-Making of Accounting Data as a Technique of Organizational Diagnosis

Planning is a process of inquiry. Inquiry can be enhanced if different views-of-the-world are used to inform each other. In an exploratory field study, a sense-making exercise was used in the initial, goal definition stage of planning. Its use is antithetical because sense-making denies that management action is based on preconceived goals or objectives. Instead, sense-making assumes management action is a continuous, equivocal stream of experience that can only be understood (or made sense of) when it is viewed in retrospect.

Accounting reports were prepared to describe a fictitious, but plausible future scenario for an organization. A number of alternative future directions that the organization could have followed—different kinds of organization it could have become—were used as a basis for creating the accounting reports. The management group then imagined themselves even further out into the future, looking back over the accounting data. They tried to understand what they had done during this period, why they had done it, and how they felt about having done it.

The impact of this exercise on the managers' cognitive and emotional experience and their commitment to use the method in other decisions suggest that sense-making can enhance the group process of inquiry during the initial stages of planning.