Institutions and Sensemaking of Change: Institutional Frame Switching as Sensemaking of Microfinance in a Pakistani Commercial Bank

This paper provides an in-depth look at how broader socioeconomic and cultural context shapes the sensemaking of a microfinance initiative in a Pakistani commercial bank. It urges organizational change leaders to consider the role of informal interpersonal relationships and culturally shaped, and emotionally charged, perceptions of change among the change recipients, beyond the technical considerations of the industry concerned. Instead of just focusing on official interaction and top-down communication, along with creating top-level “guiding coalitions” to manage change, organizational leaders need to be sensitive to informal channels at the lower rungs of the organization to pick emotional reactions of change recipients.

The study contributes to the literature on sensemaking of organizational change by showing how the institutional context, a neglected factor in the literature, impacts sensemaking. The study also contributes to the empirical literature on microfinance by providing an in-depth account of a commercial bank that introduced microfinance as a product line.