Making Sense of The Environment : The Effect of Entrepreneur's Sensemaking and Sensegiving on Firm Knowledge Creation Capability

Despite the widely recognized importance of knowledge creation as a critical resource for sustainable competitive advantage, there is a dearth of theoretical and empirical research examining how an entrepreneur's sensemaking and sensegiving influence knowledge creation capability, which is critical to achieve firm performance and competitive advantages. Drawing from previous research, this research investigates how new knowledge is created in organizations and how the process is related to entrepreneurs. In addition, building on the upper echelons theory with sensemaking theory, this research proposes that entrepreneur's sensemaking positively influences knowledge creation capability. Further, this research suggests that entrepreneur's sensegiving interacts with sensemaking, and this interaction helps firms to realize knowledge creation by making employees actively and voluntarily participate in the knowledge creation process, positively impacting firm performance. Theoretical and practical implications, limitations of this study, and directions for future research are also discussed.