Strategic sensemaking under persistent institutional ambiguity: maintaining plausibility in fragmented regulatory environments

Purpose This study examines how actors engage in strategic sensemaking when institutional ambiguity persists rather than diminishes over time. While strategic management research typically assumes that strategic action occurs in environments that remain sufficiently interpretable for future-oriented judgment and sensemaking research often treats ambiguity as a temporary disruption requiring interpretive resolution, less is known about how strategic action is sustained when institutional signals remain fragmented, contradictory, and persistently ambiguous. This study addresses this gap by examining strategic sensemaking in a context of digitally mediated investment participation in Sri Lanka. Design/methodology/approach The study adopts a qualitative interpretive research design based on semi-structured interviews with ten individuals who participated in online pyramid schemes in Sri Lanka during a period of economic instability and fragmented regulatory oversight. Interviews were conducted primarily in Sinhala, translated into English, and analyzed using an inductive, process-oriented thematic approach to examine evolving interpretive patterns and strategic sensemaking processes. Findings The findings show that strategic action under persistent institutional ambiguity is sustained through four interconnected interpretive mechanisms: legitimacy construction, actionable plausibility maintenance, adaptive ambiguity management, and temporal recalibration. Rather than resolving ambiguity, actors rely on social trust, symbolic legitimacy cues, experiential validation, selective interpretation and iterative temporal adjustment to sustain future-oriented action in the absence of stable institutional certainty. Originality/value This study extends strategic management scholarship by showing that strategic action may emerge even when institutional environments remain persistently ambiguous rather than sufficiently interpretable. It contributes to sensemaking theory by shifting attention from episodic ambiguity toward ambiguity as a structurally embedded condition, and extends institutional void research by explaining how fragmented institutional environments reshape the interpretive foundations of strategic judgment.