Sistema de Infracciones y Sanciones Tributarias

Board decisions are critical to the success and failure of a company. To understand the decision-making processes of entrepreneurial venture boards, I set out to understand the relationship between the board’s sensemaking processes and the resultant outcomes by way of decision or indecision:

There are many situations requiring individuals to engage in sensemaking, and we suggest that none is more important than when an entrepreneur experiences business failure (Ucbasaran et al. 2013 196).

Whereas the above refers to sensemaking after the failure event, here I consider sensemaking before the final failure occurs and after adverse deviations from the business plan, attempting to throw light on whether such negative outcomes can be avoided. Any influences on the outcome of the process that lower the chance of failure, including mediation of contested debate and the control of power game initiatives amongst board directors by the Chair, may usefully inform the sensemaking literature, and may assist the practitioner in understanding board dynamics. In this Chapter, I seek to explore how it is that in some ventures the more minor failures are addressed, whereas in others the minor failures accumulate into the terminal failure of the business. I do this by presenting my empirical evidence about all six episodes, then I analyse them via synthesis. How actors sensemake about minor failures and then make decisions is

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clearly an important component of this story which I consider from the empirical data, but inductive observations from the data show that the Chair may have a significant role in directing the board towards decision-making by being influential on the sensemaking process.

6.4.2 Sensemaking episodes and case backgrounds

In total, six episodes were selected where these three companies substantially (as recognised by a majority percentage of the board members) adversely deviated from the warranted business plan.

As already stated in Chapter 3, the decisions that followed each sensemaking episode were varied; two episodes were followed by consensual board decisions (i.e. all board members agreed), two episodes were followed by forced board decisions whereby some board members disagreed or agreed reluctantly to support the board decision, and two were preceded by protracted indecision, resulting in board paralysis and eventual company failure. A summary of each sensemaking episode, its trigger, its length and the final board decision is presented, along with case study narratives are presented in Table 3.2 and Chapter 3 under Methods. I observed power game initiatives in encapsulated sensemaking in Chapter 4 (as represented in Table 6.2 below) and will now consider power as an influence over this sensemaking process in more detail. I use the data in this section to consider whether there is a theme between the dimensions of power, the types of sensemaking, and the outcomes in the form of decisions or indecision.

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Drugtech Pharmadev Medco Medco

Episode 2 Episode 2 Episode 1 Episode 2

Sensebreaking Boards 1 & 2 Boards 1 & 2 Boards 1 & 2 Boards 1 & 2

Sensefreezing Boards 3 & 4 Board 3 Boards 3 & 4 Boards 3 & 4

Senseforcing Boards 5 & 6 Board 4 Board 5 Board 5

Sensehiding Boards >6 Board 5 Board 6 Board 6

(Taken from Chapter 4, Table 4.3) Note: Boards relate to board meetings

Table 6.2: The timing of components of encapsulated sensemaking I use my empirical data to illustrate the relationship between the three dimensions of power as assembled in Lukes (1974) and components of the sensemaking process, not all defined in the extant literature (refer to definitions in Chapter 1 and Glossary). 6.4.3 Data coding

Tables 6.3 and 6.4 display the data coding and structure used in analysing the data for this Chapter. The coding for encapsulated and open sensemaking and information flow linked to power game initiatives is displayed in Chapters 4 and 5. I do not repeat the sensemaking coding, however I do enhance and refine the coding of power, using both quotations from Chapter 4 and quotations not used in Chapter 4. The data is subsequently used in this Chapter to consider relationships between sensemaking and decision-making, the influence of the Chair as both a mediator within the sensemaking process of the board debate and control of power game initiatives. Table 6.3 involves the coding for the decision-making outcome and the mediation skills of the Chair. Table 6.4 shows the data coding to move from power quotations to various phases of sensemaking and the link of these to the power literature as described above. I then use this data to illustrate an important link between decision-making, the mediation skills of the Chair, the type of sensemaking and the use of power games.

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First Order Data Second Order Data

Aggregate Theoretical Dimensions Evidence of protracted discussion in the board room

Indecision / no decision

Decision- making outcomes Avoidance of discussion in and outside the board

room

Statements from various actors that they felt coerced into a particular decision

Forced decision-making Evidence that investors invoked their ownership rights

as a means of pursuing a course of action that was not unanimously agreed

Evidence of open discussion taking place in the board room soon after the adverse deviation

Consensual decision- making Statements from actors that they wanted to work

together to resolve the issue

Statements from actors that they felt the decision- making process was fair open and contributed to by

all that wished to contribute

Statements about the way the Chair is perceived

Observations of the Chair on the direction of

the board Effect of mediation strength of

the Chair Statements about the direction of the company as

observed by others

Statements relating to observations by the Chair that impacts on the company

Statements about the way the Chair acts

Chair activity that affects the direction of

the board Statements about the direction of the company due to

the action of the Chair

Table 6.3: Data coding for decision-making outcomes and mediation strength of the Chair

First order data Second order data Aggregate theoretical

dimensions Use of power by both subgroups to discredit

alternate positions

Lukes first dimension of power

Power Use of power predominantly by the more

powerful investor director group to paralyse

Lukes first and second dimensions of power Use of power solely by the more powerful

investor directors to force their agenda and point of view

Lukes first and second dimensions of power Hiding of facts or pertinent data knowingly

and with an intent to manipulate

Lukes first, second and third dimensions

of power

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6.4.4 Research participants

The study uses the same research participants for all the empirical work, so the narrative on research participants in this section is repeated in all the relevant empirical Chapters for clarification.

The views and experiences of the board members of these three companies were recorded over thirteen years. There were several stakeholder groups: Entrepreneurial managers, investor directors, investors and Chairs that made the environment suitable for sensemaking behaviour, especially given that the subgroups could attempt to gain influence in numbers (Allmendinger & Hackman, 1996). The board members represented several stakeholders, providing the environment to observe the responses of and interactions among individual board members and director groups when presented with adverse deviations from warranted business plans. The board members were observed throughout the lives of the companies and were interviewed during periods of adverse deviations from a business plan that had been agreed by at least one subgroup. They were also interviewed subsequently, either when regrouping to enable a board decision to be made as a unified course of action or when failing to make a board decision, often ending in terminal failure.

6.4.5 Study design

The study of processes such as sensemaking involves observing and interpreting individuals’ and groups of homogeneous actors’ accounts (their understanding of an unfolding story). As is consistent with the rest of this empirical study, this work calls for a qualitative method (Isabella, 1990; Gioia & Thomas, 1996) with the potential to compare situations across similar case studies of comparable organisations. The present study meets these criteria where both retrospective and real-time sensemaking dynamics are followed (Gover & Duxbury, 2012). Semi-structured interviews were used in this study to

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collect and analyse the data. The methodology is the same as that used in Chapters 4 and 5 (sections 4.3 & 5.4).

6.5 Findings and analysis