The Role of Strategic Actions in Organizational Schema Change

Recent research suggests that actions linked to the implementation of a new strategy can provide top managers with powerful cues to induce a shift in institutionalized, cognitive schemes. Yet, little attention has been paid to the role of actions linked to the resolution of external threats, such as lawsuits or
environmental crises. Based on an in-depth study of weekly all-user letters issued in the course of ABB's turnaround from 2002 to 2004, I find that the CEO mobilizes the company's engagement in a lawsuit to moderate organization members' intense emotions and thereby facilitate strategic change under distress. This study adds to the extant literature on managerial sensegiving during strategic change by highlighting the equivocal role of actions in times of crisis.