SMEs and exogenous shocks: A conceptual literature review and forward research agenda

Abstract

Economic crises, natural disasters, armed conflict and infectious disease outbreaks, amongst others, present interlinked challenges for small businesses and have generated a recent wealth of research across varied fields. Therefore, this article outlines an analytical lens suggesting how SMEs experience shocks and crises that focuses on the interlinked nature of (i) the business, (ii) the shock and (iii) the response within a given context. We thematically draw out key trends, knowledge gaps and tensions and highlight promising research and engagement avenues for future scholarship and practice. We contextualise (i) how small businesses are distinct from large firms in how they experience shock and crisis events; (ii) how different types of crises impact small business; (iii) how shocks and crises shape SME-specific responses and (iv) how the COVID-19 pandemic as a ‘novel exogenous shock’ influences all of the above. We conclude by emphasising emerging knowledge avenues for future small business, shock and crisis research.

Entrepreneurial experimentation in business model dynamics: Current understanding and future opportunities

“…Crises compromise the viability of the business models of both established firms and new ventures (Miklian & Hoelscher, 2021 ; Newman et al, 2022 ) and require them to formulate swift responses (Pearson & Clair, 1998 ) by recombining the resources they have at hand to face the rising uncertainty (Klein, 2020 ; Rindova & Kotha, 2001 ). Crises can occur both as events, leading to sudden impacts and consequences for the viability of the business, or as longer, sometimes endogenous, development processes that take place within and across firms (Williams et al, 2017 ).…”

The role of dynamic capabilities and strategic agility of B2B high-tech small and medium-sized enterprises during COVID-19 pandemic: Exploratory case studies from Finland

“…As events such as Hurricane Katrina in 2005, financial crises in 2008, the Earthquake in China in 2008, the Haiti Earthquake of 2010, the London riots of 2011, Tsunami of 2011 revealed ( Herbane, 2019 ; Runyan, 2006 ; Sardana & Dasanayaka, 2013 ), B2B SMEs are particularly vulnerable to crises and shocks. The limited access to finance, business contraction, supply-demand disruption, and physical movement restrictions are exemplary consequences of exogenous shocks ( Miklian & Hoelscher, 2021 ). Despite the severity of exogenous shocks (i.e., earthquakes, hurricanes, floods), their consequences were faced by B2B SMEs in a specific country or region ( Gunessee & Subramanian, 2020 ).…”

Innovative Technologies and Small-Medium Sized Enterprises in Times of Crisis

“…For example, job losses and major health concerns during the pandemic led consumers to use various technologies when shopping for products and services offered by SMEs in different industries (Donthu & Gustafsson, 2020). While most of the pandemic restrictions have been lifted in 2022 in most countries, the effects of this major exogenous shock on consumer behaviour, specifically the young generation of consumers (Generation Z), and interactions with SMEs are expected to last for a long time (Ameen et al, 2022a;Miklian & Hoelscher, 2022). In addition, customers' expectations of businesses have changed amid the pandemic.…”