Organisational sensemaking, outside-in entrepreneurial marketing capability, and effectual problem setting

Purpose How an entrepreneurial organisation sets the problem space determines the future venturing mode. However, the factors that contribute to differences in problem space are still not well-developed. Based on sensemaking theory, this study explores the influence mechanism and boundary conditions of organisational sensemaking on effectual problem setting. Design/methodology/approach The study is based on survey data from 162 entrepreneurial organisations in China. Hierarchical regression is used for analysing the data and testing the hypotheses. Findings Organisational sensemaking has a negative effect on effectual problem setting and a positive impact on outside-in entrepreneurial marketing capability; outside-in entrepreneurial marketing capability has a negative effect on effectual problem setting; outside-in entrepreneurial marketing capability plays a partially mediating role in the relationship between organisational sensemaking and effectual problem setting. Organisational size negatively moderates the relationship between organisational sensemaking and outside-in entrepreneurial marketing capability. It also negatively moderates the indirect effect of organisational sensemaking on effectual problem setting through outside-in entrepreneurial marketing capability. Originality/value First, this study contributes to the research on effectual problem setting by introducing organisational sensemaking as an antecedent. Second, this study extends the literature on organisational sensemaking by showing how organisational sensemaking affects entrepreneurial uncertainty, instead of treating uncertainty as an exogenous shock. Third, this study introduced the outside-in entrepreneurial marketing capability to reveal the mediating mechanism between organisational sensemaking and effectual problem setting.