The intersection between SMEs' business strategies and the phases of unexpected events: a systematic review of the literature

  • Gianluca Pusceddu
  • Ludovica Moi
  • Francesca Cabiddu
Keywords: Crisis management; disaster; recovery; resilience; Covid-19; SMEs; business strategies

Abstract

Framing of the research: Despite the relevance of crisis management for SMEs, existing literature primarily targets large firms, therefore paying less attention to smaller businesses. As a result, the manner in which SMEs transform their business strategies during the specific phases of unexpected events remains an unexplored research topic.

Purpose of the paper: The present conceptual paper aims to develop a framework examining the kind of strategies that may be implemented by small and medium-sized enterprises (SMEs) throughout the different stages of unexpected events.

Methodology: The paper reports a systematic literature review (SLR) to summarize how SMEs react in times of crisis and illustrate core themes in previous research in relation to the phases of crisis prevention, response, and recovery.

Findings: The study develops a circular event framework and illustrates the leading business strategies implemented by SMEs in different moments of unpredicted circumstances: (1) flexible planning, financial resources equipment, proactiveness, and collaboration during the crisis prevention phase; (2) cost minimization and cash flow protection, revenue generation - operations and business model pivoting, stakeholder relationships, and dynamic approaches during the crisis response phase; (3) business model re-configuring, and stakeholder and employee relationships re-establishment, in the crisis recovery phase.

Research limits: The conceptual nature of this work stimulates further theoretical and empirical studies. Future research should empirically test and validate the proposed framework within specific research settings.

Practical implications: The present research represents a useful benchmark for managers and practitioners to better understand what strategies are suitable according to the specific moment of the crisis.

Originality of the paper: This study analyzes the evolution of SMEs’ business strategies in times of crisis from a novel perspective by pointing out the prevention, response, and recovery phases’ circularity.

References

ADEKOLA J., CLELLAND D. (2020), “Two sides of the same coin: Business resilience and community resilience”, Journal of Contingencies and Crisis Management, vol. 28, n. 1, pp. 50-60.

ALBERTI F.G., FERRARIO S., PIZZURNO E. (2018), “Resilience: resources and strategies of SMEs in a new theoretical framework”, International Journal of Learning and Intellectual Capital, vol. 15, n. 2, pp. 165-188.

ALTINAY L., MADANOGLU M., DE VITA G., ARASLI H., EKINCI Y. (2016), “The interface between organizational learning capability, entrepreneurial orientation. and SME growth”, Journal of Small Business Management, vol. 54, n. 3, pp. 871-891.

ANTONIOLI D., MONTRESOR S. (2021), “Innovation persistence in times of crisis: an analysis of Italian firms”, Small Business Economics, vol. 56, pp. 1739–1764.

ASGARY A., ANJUM M.I., AZIMI N. (2012), “Disaster recovery and business continuity after the 2010 flood in Pakistan: Case of small businesses”, International Journal of Disaster Risk Reduction, vol. 2 (December), pp. 46-56.

ATES A., BITITCI U. (2011), “Change process: a key enabler for building resilient SMEs”, International Journal of Production Research, vol. 49, n. 18, pp. 5601-5618.

BAMIATZI V.C., KIRCHMAIER T. (2014), “Strategies for superior performance under adverse conditions: A focus on small and medium-sized high-growth firms”, International Small Business Journal, vol. 32, n. 3, pp. 259-284.

BATTISTI M., DEAKINS D., PERRY M. (2013), “The sustainability of small businesses in recessionary times: Evidence from the strategies of urban and rural small businesses in New Zealand”, International Journal of Entrepreneurial Behavior and Research, vol. 19, n. 1, pp. 72-96.

BATTISTI M., BEYNON M., PICKERNELL D., DEAKINS D. (2019), “Surviving or thriving: The role of learning for the resilient performance of small firms”, Journal of Business Research, vol. 100 (July), pp. 38-50.

BAZERMAN M.H., WATKINS M. (2004), Predictable surprises: The disasters you should have seen coming and how to prevent them, Boston, MA: Harvard Business Press.

BOURLETIDIS K., TRIANTAFYLLOPOULOS Y. (2014), “SMEs Survival in Time of Crisis: Strategies, Tactics and Commercial Success Stories”, Procedia - Social and Behavioral Sciences, vol. 148 (August), pp. 639-644.

BRANICKI L.J., SULLIVAN-TAYLOR B., LIVSCHITZ S.R. (2018), “How entrepreneurial resilience generates resilient SMEs”, International Journal of Entrepreneurial Behaviour and Research, vol. 24, n. 7, pp. 1244-1263.

CASSIA L., DE MASSIS A., PIZZURNO E. (2012), “Strategic innovation and new product development in family firms: an empirically grounded theoretical framework”, International Journal of Entrepreneurial Behaviour and Research, vol. 18, n. 2, pp. 198-232.

CIOPPI M., MUSSO F., PENCARELLI T., SAVELLI E. (2014), “Economic Crisis and SMEs’ Behavior: An Analysis on the Furniture Sector in Italy”, International Journal of Economic Behavior, vol. 4, n. 1, pp. 115-126.

DANESE P., MANFÈ V., ROMANO P. (2018), “A Systematic Literature Review on Recent Lean Research: State-of-the-art and Future Directions”, International Journal of Management Reviews, vol. 20, n. 2, pp. 579-605.

DEMMER W.A., VICKERY S.K., CALANTONE R. (2011), “Engendering resilience in small- and medium-sized enterprises (SMEs): a case study of Demmer Corporation”, International Journal of Production Research, vol. 49, n. 18, pp. 5395-5413.

DENYER D., TRANFIELD D., VAN AKEN J.E. (2008), “Developing design propositions through research synthesis”, Organization Studies, vol. 29, n. 3, pp. 393-413.

DIAS Á., MANUEL E.C., DUTSCHKE G., PEREIRA L.F., PEREIRA L. (2020), “Economic crisis effects on SME dynamic capabilities”, International Journal of Learning and Change in press.

DOERN R. (2016), “Entrepreneurship and Crisis Management: The Experiences of Small Businesses during the London 2011 Riots”, International Small Business Journal, vol. 34, n. 3, pp. 276-302.

DOERN R., WILLIAMS N., VORLEY T. (2019), “Special issue on entrepreneurship and crises: business as usual? An introduction and review of the literature”, Entrepreneurship and Regional Development, vol. 3, n. 5-6, pp. 400-412.

DOLZ C., IBORRA M., SAFÓN V. (2019), “Improving the likelihood of SME survival during financial and economic crises: The importance of TMTs and family ownership for ambidexterity”, BRQ Business Research Quarterly, vol. 22, n. 2, pp. 119-136.

DOZ Y.L., KOSONEN M. (2008), Fast strategy: How strategic agility will help you stay ahead of the game, Pearson Education.

EDVARDSSON I.R., TEITSDÓTTIR U.D. (2015), “Outsourcing and financial crisis: Evidence from Icelandic service SMEs”, Employee Relations, vol. 37, n. 1, pp. 30-47.

EGGERS F., KRAUS S. (2011), “Growing young SMEs in hard economic times: The impact of entrepreneurial and customer orientations-a qualitative study from Silicon Valley”, Journal of Small Business and Entrepreneurship, vol. 24, n. 1, pp. 99-111.

ELLIOTT D., HARRIS K., BARON S. (2005), “Crisis Management and Services Marketing”, Journal of Services Marketing, vol. 19, n. 5, pp. 336-345.

EASTERBY-SMITH M., THORPE R. JACKSON P. (2012), Management Research, 4th edn. London: Sage.

FAIRLIE R. (2020), “The impact of COVID-19 on small business owners: Evidence from the first three months after widespread social distancing restrictions”, Journal of Economic and Management Strategy, vol. 29, n. 4, pp. 727-740.

FALLINI A. (2017), “Le cause della crisi d’ impresa. Analisi dei fattori di crisi delle grandi imprese in Amministrazione Straordinaria”, Sinergie - Italian Journal of Management, vol. 35, n. 103, pp. 319-342.

FINK S. (1986), Crisis Management: Planning for the Inevitable, AMACON, New York.

GIANNACOUROU M., KANTARAKI M., CHRISTOPOULOU V. (2015), “The Perception of Crisis by Greek SMEs and its Impact on Managerial Practices”, Procedia - Social and Behavioral Sciences, vol. 175 (February), pp. 546-551.

GUNASEKARAN A., RAI B.K., GRIFFIN M. (2011), “Resilience and competitiveness of small and medium size enterprises: an empirical research”, International Journal of Production Research, vol. 49, n. 18, pp. 5489-5509.

HA S., CHILDS M., KIM Y.K., FAIRHURST A. (2020), “After the Fire: An Assessment of Small Business Preparedness and Recovery in Gatlinburg, Tennessee”, International Journal of Hospitality and Tourism Administration, pp. 1-26.

HALE J.E., DULEK R.E., HALE D.P. (2005), “Crisis Response Communication Challenges: Building Theory from Qualitative Data”, Journal of Business Communications, vol. 42, n. 2, pp. 112- 134.

HAMPEL C.E., TRACEY P., WEBER K. (2020), “The Art of the Pivot: How New Ventures Manage Identification Relationships with Stakeholders as They Change Direction”, Academy of Management Journal, vol. 63, n. 2, pp. 440-471.

HERBANE B. (2010), “Small business research: Time for a crisis-based view”, International Small Business Journal, vol. 28, n.1, pp. 43-64.

HERBANE B. (2019), “Rethinking organizational resilience and strategic renewal in SMEs”, Entrepreneurship and Regional Development, vol. 31, n. 5-6, pp. 476-495.

HERMANN C.F. (1963), “Some consequences of crisis which limit the viability of organizations”, Administrative Science Quarterly, vol. 8, n. 1, pp. 61-82.

HILLS A. (1998), “Seduced by recovery: The consequences of misunderstanding disaster”, Journal of Contingencies and Crisis Management, vol. 6, n. 3, pp. 162-170.

HONG P., HUANG C., LI B. (2012), “Crisis management for SMEs: Insights from a multiple-case study”, International Journal of Business Excellence, vol. 5, n. 5, pp. 535-553.

IBORRA M., SAFÓN V., DOLZ C. (2019), “What explains resilience of SMEs? Ambidexterity capability and strategic consistency”, Long Range Planning in press.

ISMAIL H.A., SHARIFI H., POOLTON J. (2011), “The role of agile strategic capabilities in achieving resilience in manufacturing-based small companies”, International Journal of Production Research, vol. 49, n. 18, pp. 5469-5487.

JOHANSEN K. (2020), “Challenges for Manufacturers when Customers are Locked Down - Is it Possible to be Prepared?”, Journal of Applied Economics and Business Research, vol. 10, n. 2, pp. 54-58.

KOTTIKA E., ÖZSOMER A., RYDÉN P., THEODORAKIS I.G., KAMINAKIS K., KOTTIKAS K., STATHAKOPOULOS V. (2020), “We survived this! What managers could learn from SMEs who successfully navigated the Greek economic crisis”, Industrial Marketing Management, vol. 88 (June), pp. 352-365.

KRAUS S., MOOG P., SCHLEPPHORST S., RAICH M. (2013), “Crisis and Turnaround Management in SMEs: A Qualitative-Empirical Investigation of 30 Companies”, International Journal of Entrepreneurial Venturing, vol. 5, n. 4, pp. 406-430.

KRAUS S., RIGTERING J.P.C., HUGHES M., HOSMAN V. (2012), “Entrepreneurial orientation and the business performance of SMEs: a quantitative study from the Netherlands”, Review of Managerial Science, vol. 6, n. 2, pp. 161-182.

KUCKERTZ A., BRÄNDLE L., GAUDIG A., HINDERER S., REYES C.A.M., PROCHOTTA A., STEINBRINK K.M., BERGER E.S.C. (2020), “Startups in times of crisis - A rapid response to the COVID-19 pandemic”, Journal of Business Venturing Insights, vol. 13 (June), pp. 1-13.

LADO N., DUQUE L.C., ALVAREZ BASSI D. (2013), “Current Marketing Practices and Market Orientation in the Context of an Emerging Economy: The Case of Uruguay”, Journal of Small Business Management, vol. 51, n. 4, pp. 602-616.

LASKOVAIA A., MARINO L., SHIROKOVA G., WALES W. (2019), “Expect the unexpected: examining the shaping role of entrepreneurial orientation on causal and effectual decision-making logic during economic crisis”, Entrepreneurship and Regional Development, vol. 31, n. 5-6, pp. 456-475.

LE NGUYEN H., KOCK S. (2011), “Managing SMEs’ survival from financial crisis in a transition economy: A Chaos Theory approach”, Journal of General Management, vol. 37, n. 1, pp. 31-45.

MACPHERSON A., HERBANE B., JONES O. (2015), “Developing dynamic capabilities through resource accretion: expanding the entrepreneurial solution space”, Entrepreneurship and Regional Development, vol. 27, n. 5-6, pp. 259-291.

MADRID-GUIJARRO A., GARCÍA-PÉREZ-DE-LEMA D., VAN AUKEN H. (2013), “An Investigation of Spanish SME Innovation during Different Economic Conditions”, Journal of Small Business Management, vol. 51, n. 4, pp. 578-601.

MAYR S., LIXL D. (2019), “Restructuring in SMEs - A multiple case study analysis”, Journal of Small Business Strategy, vol. 29, n. 1, pp. 78-91.

MAYR S., MITTER C., AICHMAYR A. (2017), “Corporate Crisis and Sustainable Reorganization: Evidence from Bankrupt Austrian SMEs”, Journal of Small Business Management, vol. 55, n. 1, pp. 108-127.

MENDOZA R., LAU A., CASTILLEJOS M. (2018), “Can SMEs survive natural disasters? Eva Marie Arts and Crafts versus Typhoon Yolanda”, International Journal of Disaster Risk Reduction, vol. 31 (October), pp. 938-952.

MIHALACHE M., MIHALACHE O.R. (2015), “A decisional framework of offshoring: integrating insights from 25 years of research to provide direction for future”, Decision Sciences, vol. 47, n. 6, pp. 1103–1149.

MITROFF I.I. (1988), “Crisis management: cutting through the confusion”, Sloan Management Review, vol. 29, n. 2, pp. 15-20.

MOI L., CABIDDU F. (2020), “L’impatto del lockdown nel business-to-business: il caso italiano”, Sinergie-SIMA Conference Proceedings, p. 477.

MONEVA-ABADÍA J.M., GALLARDO-VÁZQUEZ D., SÁNCHEZ-HERNÁNDEZ M.I. (2019), “Corporate Social Responsibility as a Strategic Opportunity for Small Firms during Economic Crises”, Journal of Small Business Management, vol. 57, pp. 172-199.

MORRISH S.C., JONES R. (2020), “Post-disaster business recovery: An entrepreneurial marketing perspective”, Journal of Business Research, vol. 113 (May), pp. 83-92.

MULLAYMERI K., BIZMPIROULAS A., LOZNALIEVA O., ROTSIOS K. (2015), “The internationalization of wine SMEs in the midst of the economic crisis: pilot case studies from Greece, Albania & FYROM”, Sinergie - Italian Journal of Management, vol. 33, n. 97, pp. 199-210.

NAIDOO V. (2010), “Firm survival through a crisis: The influence of market orientation, marketing innovation and business strategy”, Industrial Marketing Management, vol. 39, n. 8, pp. 1311-1320.

NOLAN C.T., GARAVAN T.N. (2016), “Human Resource Development in SMEs: A Systematic Review of the Literature. International”, Journal of Management Reviews, vol. 18, pp. 85-107.

OGAWA K., TANAKA T. (2013), “The global financial crisis and small- and medium-sized enterprises in Japan: how did they cope with the crisis?”, Small Business Economics, vol. 41, n. 2, pp. 401-417.

OSIYEVSKYY O., SHIROKOVA G., RITALA P. (2020), “Exploration and exploitation in crisis environment: Implications for level and variability of firm performance”, Journal of Business Research, vol. 114 (June), pp. 227-239.

PAL R., ANDERSSON R., TORSTENSSON H. (2012), “Organisational resilience through crisis strategic planning: A study of Swedish textile SMEs in financial crises of 2007-2011”, International Journal of Decision Sciences, Risk and Management, vol. 4, n. 3-4, pp. 314-341.

PAL R., WESTERLIND R., TORSTENSSON H. (2013), “Exploring the resilience development process by implementing the crisis strategic planning framework: A Swedish textile SME perspective”, International Journal of Decision Sciences, Risk and Management, vol. 5, n. 1, pp. 1-34.

PAL R., TORSTENSSON H., MATTILA H. (2014), “Antecedents of organizational resilience in economic crises-an empirical study of Swedish textile and clothing SMEs”, International Journal of Production Economics, 147(Part B), pp. 410-428.

PARKER H., AMEEN K. (2018), “The role of resilience capabilities in shaping how firms respond to disruptions”, Journal of Business Research, vol. 88 (July), pp. 535-541.

PAUCHANT T., MITROFF I. (1992), Transforming the Crisis-Prone Organization: Preventing individual, organizational and environmental tragedies, Jossey-Bass, San Francisco.

PEARSON C.M., CLAIR J.A. (1998), “Reframing crisis management”, Academy of Management Review, vol. 23, n. 1, pp. 59-76.

PEARSON C.M., MITROFF I.I. (1993), “From crisis prone to crisis prepared: a framework for crisis management”, Academy of Management Executive, vol. 7, n. 1, pp. 48-59.

PLECHERO M. (2018), “Fuori dalla crisi: la capacità competitiva delle imprese del distretto della meccatronica vicentina”, Sinergie - Italian Journal of Management, vol. 36, n. 107, pp. 139-157.

PUSCEDDU G., MOI L., CABIDDU F. (2021a), “Small Business Strategies during the different stages of unexpected events”, Academy of Management Proceedings, vol. 2021, n. 1, pp. 13474.

PUSCEDDU G., MOI L., CABIDDU F. (2021b), “Tourist experience in the post-covid era: new perspectives”, 24th Excellence in Services International Conference, pp. 1-17.

QUARANTELLI E.L. (1988), “Disaster crisis management: A summary of research findings”, Journal of Management Studies, vol. 25, n. 4, pp. 373-385.

ROUX-DUFORT C. (2007), “Is crisis management (only) a management of exceptions?” Journal of Contingencies and Crisis Management, vol. 15, n. 2, pp. 105-114.

RUNYAN R.C. (2006), “Small business in the face of crisis: Identifying barriers to recovery from a natural disaster”, Journal of Contingencies and Crisis Management, vol. 14, n. 1, pp. 12-26.

SHAFI M., LIU J., REN W. (2020), “Impact of COVID-19 Pandemic on micro, small, and medium-sized Enterprises operating in Pakistan”, Research in Globalization, vol. 2.

SMALLBONE D., DEAKINS D., BATTISTI M., KITCHING J. (2012), “Small business responses to a major economic downturn: Empirical perspectives from New Zealand and the United Kingdom”, International Small Business Journal, vol. 30, n. 7, pp. 754-777.

SMITH D. (1990), “Beyond Contingency Planning; Towards a Model of Crisis Management”, Industrial Crisis Quarterly, vol. 4, n. 4, pp. 263-276.

SMITH D., SIPIKA C. (1993), “Back from the Brink: Post-crisis Management”, Long Range Planning, vol. 26, n. 1, pp. 28-38.

THORGREN S., WILLIAMS T.A. (2020), “Staying alive during an unfolding crisis: How SMEs ward off impending disaster”, Journal of Venturing Insights, vol. 14 (November), pp. 1-11.

THORPE R., HOLT R., MACPHERSON A., PITTAWAY L. (2005), “Using knowledge within small and medium-sized firms: a systematic review of the evidence”, International Journal of Management Review, vol. 7, n. 4, pp. 257-281.

THUN J.H., DRÜKE M., HOENIG D. (2011), “Managing uncertainty-an empirical analysis of supply chain risk management in small and medium sized enterprises”, International Journal of Production Research, vol. 49, n. 18, pp. 5511-5525.

TOGNAZZO A., GUBITTA P., FAVARON S.D. (2016), “Does slack always affect resilience? A study of quasi-medium-sized Italian firms”, Entrepreneurship and Regional Development, vol. 28 n. 9-10, pp. 768-790.

TRANFIELD D., DENYER D., SMART P. (2003), “Towards a methodology for developing evidence-informed management knowledge by means of systematic review”, British Journal of Management, vol. 14, pp. 207-222.

TSILIKA T., KAKOURIS A., APOSTOLOPOULOS N., DERMATIS Z. (2020), “Entrepreneurial bricolage in the aftermath of a shock. Insights from Greek SMEs”, Journal of Small Business and Entrepreneurship, vol. 32, n. 6, pp. 1-18.

VARGO J., SEVILLE E. (2011), “Crisis strategic planning for SMEs: Finding the silver lining”, International Journal of Production Research, vol. 49, n. 18, pp. 5619-5635.

WANG C.L., CHUGH H. (2014), “Entrepreneurial learning: past research and future challenges”, International Journal of Management Reviews, vol. 16, n. 1, pp. 24-61.

WEBER Y., TARBA S.Y. (2014), “Strategic agility: A state of the art”, California Management Review, vol. 56, n. 3, pp. 5-12.

WEICK K.E., SUTCLIFFE K.M., OBSTFELD D. (1999), “Organizing for high reliability: Processes of collective mindfulness”, in Staw B.M., Sutton R.I. (Eds.) Research in organizational behavior, pp. 81-123. Greenwich, CT: JAI Press.

WILLIAMS T.A., GRUBER D.A., SUTCLIFFE K.M., SHEPHERD D.A., ZHAO E.Y. (2017), “Organizational Response to Adversity: Fusing Crisis Management and Resilience Research Streams”, Academy of Management Annals, vol. 11, n. 2, pp. 733-769.

WRIGLEY C., BUCOLO S., STRAKER K. (2016), “Designing new business models: blue sky thinking and testing”, Journal of Business Strategy, vol. 37, n. 5, pp. 22-31.

Published
2022-08-31