Rising Every Time We Fall: Organizational Fortitude and Response to Adversities

Abstract

The role of organizational resilience enabling firms to respond to adversity and survive has become ever more critical in the wake of an increasingly unpredictable external environment. Yet, while we understand the importance of resilience in responding to a major adversity, we have little appreciation for how firms are affected and react when facing multiple adversities over time, or how multilevel factors might impose on this process. These are crucial issues given that adversities are not necessarily single, isolated, or infrequent episodes. By studying a long-established family firm in the United Kingdom that experienced four major adversities, we identify the process that enabled it not only to survive but also to thrive. In this qualitative study, we introduce the notion of organizational fortitude to describe the approach that a firm develops to cope with the challenges of multiple unexpected adversities and highlight how multilevel factors combine to foster organizational fortitude.

Resilience in Family Businesses: A Systematic Literature Review

“…Referred to as "social capital" in the context of family business resilience (Nahapiet & Ghoshal, 1998;Stasa & Machek, 2022), the endowment of relational capability can be described as the reservoir of goodwill and robust relationships between family members and their external stakeholders, enabling them to facilitate actions and create value across generations (for a recent review on social capital, see Stasa & Machek, 2022). Social capital arises from history, trust, respect, loyalty, and altruism between family members, employees, and external stakeholders (Hammouda & Basly, 2020;Rodriguez et al, 2013;Smith et al, 2023) and can hence be seen as a consequence of family businesses' focus on long-term orientation and family values. 3 Studies on family business resilience have shown that family businesses with strong social capital are more likely to receive support from stakeholders (e.g., government, banks, and families) during difficult times, such as payment facilities or extended credit terms (Mahto et al, 2022).…”

“…In sum, most former approaches focus on inherent attributes, rather than emphasizing dynamic processes (Luthar et al, 2000), which involve learning from crises and adapting positively (Beech et al, 2020). Recent research, however, supports a process view, recognizing resilience within a temporal context that includes reaction to adverse stimuli and subsequent coping efforts (Azouz et al, 2022; Smith et al, 2023). Furthermore, a definition that underlines the significance of different stakeholders, including the family, individuals (e.g., owner or owner-manager), and the organization itself is needed because family businesses often have intricate interdependencies among these units of analysis.…”

“…Long-term orientation has been named the “key differentiator” (Moreno-Menéndez et al, 2022, p. 430) that distinguishes resilience in family firms from that in non-family organizations. Family businesses exhibit a unique sense of responsibility toward past and subsequent generations, perceiving the business as a cherished heirloom that demands carrying the burden of preserving it for future generations (Smith et al, 2023). This long-term orientation is substantiated by various theoretical foundations that explain family businesses’ behavior and strategic decision-making (Davis et al, 1997; Le Breton-Miller & Miller, 2009).…”

Upgrading adaptation: How digital transformation promotes organizational resilience

“…In the third phase of organizational resilience, the intended postcrisis outcome can be a return to a state of normalcy or perhaps even a chance to bounce back better for facing competition-driven adversity (Smith et al, 2023).…”

“…this study revealed how strategic entrepreneurship research can advance a uniquely organizational understanding of resilience. Scholars increasingly recognize that measuring firm-level outcomes ex-post has resulted in disjointed theorizing about organizational resilience (Boin & van Eeten, 2013;Lengnick-Hall et al, 2011;Smith et al, 2023).…”