Sensing the Next Game Changer: Organizational Architecture, Cognition and Adaptation to Environmental Change

Sensing the Next Game Changer: Organizational Architecture, Cognition and Adaptation to Environmental Change

August 2019Working Paper No. 3692

This study builds a theory of collective sensemaking in the face of environmental change. Our arguments build upon a well-known observation about the division of labor, which typically turns organizations into “nearly decomposable” systems of interdependencies among workers. We argue that these systems pose significant challenges to collective sensemaking in times of change, as they enable change to cause ripple effects throughout an entire working process even when it appears to affect isolated clusters of tasks. These ripple effects are unlikely to be perceived by the members of an organization, because nearly decomposable systems exacerbate the cognitive tendency of individuals to focus on recognizable objects at the expense of the links among them. We test our theory using micro-level behavioral data in professional video-gaming (“eSports”). In line with our predictions, results suggest that eSports teams reacted to exogenous game updates by adapting local choices but failing to adapt system-level behaviors. We also show evidence that mutual adjustment among all team members was more effective than centralized authority in mitigating this tendency. Our study contributes to linking cognitive and structural explanations for the challenges of collective sensemaking, and to better understanding the mechanisms which limit individual agency in facilitating organizational adaptation.