This longitudinal, qualitative study examined “sensemaking” during an imposed shift from hierarchical to decentralized organization. We identified a “replacement” pattern of schema development in which middle managers moved from shared through clustered sensemaking, to shared but differentiated sensemaking. Our findings provide evidence that different change processes lead to different patterns of schema development. Further, they highlight the socially negotiated nature of schema change and the significance of middle managers’ lateral social interactions in shaping change in the absence of senior management.