Rethinking organizational resilience and strategic renewal in SMEs

ABSTRACT

Building on work that associates organizational resilience with crisis recovery and strategic renewal, I examine how small- and medium-sized enterprises (SMEs) vary in the formalisation of activities intended to achieve strategic growth and activities to enhance resilience against acute operational interruptions. Drawing on data from 265 SMEs in the United Kingdom, the main argument of this paper is that variations in formalisation activities reflect differences in firm location, personal networks, the influence of external crisis events, and entrepreneurs’ attitudes towards the prevention of crises. The resulting typology identifies four clusters: Attentive Interventionists, Light Planners, Rooted Strategists and Reliant Neighbours. These findings contrast with prior theorizations of firms as either resilient or vulnerable and further illuminate our understanding of SME resilience and how this is shaped by historical, developmental and strategic factors. The study further develops associations between resilience and social capital, examines how locational choices generate a proximity premium, and develops a growth-survival-maturity perspective on SME resilience. Data reveals an interplay between an ensemble of entrepreneurial activities and decisions about planning, networks, learning, and location. Thus, the study offers a rethinking of prior theorizations about organizational resilience and strategic renewal.

KEYWORDS:

• Organizational resilience
• social capital
• SMEs
• business continuity
• entrepreneurship
• cluster analysis

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. This is not to suggest that organizations are vulnerable per se in the absence of formalised resilience activities such as crisis management planning, BCM, training etc. Rather, the study of organic and emergent resilience could not be adequately studied without a longitudinal approach (see for instance Macpherson, Herbane, and Jones 2015).

2. Prior to the data collection in late 2014, the UK had encountered severe winter weather (early 2013), pluvial, fluvial, coastal, and underground flooding (throughout 2013), high profile data breaches within the National Health Service and eBay (2014). The UK economy had recovered beyond the level of Gross Domestic Product at the time of the 2008 global financial crisis. It is not thought that at the time of the data collection a single crisis event dominated the news media in the UK and could thus be considered to materially influence respondents’ responses to questions.