Stay alert, save businesses. Planning for adversity among immigrant entrepreneurs

Abstract

PurposeAgainst the theoretical backdrop of the embeddedness and the resilience literatures, this paper investigates if and how SMEs' planning for adversity affects firms' performance.Design/methodology/approachThe paper develops hypotheses that investigate the link between the risk management of immigrant-led and native-led SMEs and their performance and draw on novel data from a survey on 900 immigrant- and 2,416 native-led SMEs in 5 European cities to test them.FindingsImmigrant-led SMEs are less likely to implement an adversity plan, especially when they are in an enclave sector. However, adversity planning is important to enhance the growth of immigrant-led businesses, even outside a crisis period, and it reduces the performance gap vis-à-vis native-led businesses. Inversely, the positive association between adversity planning and growth in the sample of native entrepreneurs is mainly driven by entrepreneurs who have experienced a severe crisis in the past.Originality/valueThis paper empirically uses planning for adversity as an anticipation stage of organizational resilience and tests it in the context of immigrant and native-led SMEs. Results support the theoretical reasoning that regularly scanning for threats and seeking information beyond the local community equips immigrant-led SMEs with a broader structural network which translates into new organizational capabilities. Furthermore, results contribute to the process-based view of resilience demonstrating that regularly planning for adversity builds a firm's resilience potential, though the effect is contingent on the nationality of the leaders.

A systematic review of infopreneurship’s opportunities and challenges

“…Weitzen (1989) believes that is the best strategy for high-risk situations and execution. Previous research (Campagnolo, 2022; Welter, 2021) found that even when there is no crisis, businesses must plan for adversity in order to grow and perform better.…”

Under external pressure: action pathways when an adverse event forces micro-enterprises to change

“…Research shows that what makes the strategy work is organizational abilities to sufficiently prepare to use this strategy and effectively reuse it at times of other adverse events (Battisti et al, 2019;Corvello et al, 2022). Scholars are thus particularly interested in how both large and smaller organizations prepare for adverse events through crafting response strategies that fit their organizations (Campagnolo et al, 2022) and, particularly, whether and how organizational size and age play a role in strategy development, its adaptation in response to unfolding adversities and its further re-adaptation in times of forthcoming adversities of a similar nature, impact and timespan (Herbane, 2019). Even though smaller organizations are relatively more flexible and, on average, have a higher speed of decision making due to their rather simple organizational structure (Morgan et al, 2020), large organizations have a notable advantage when it comes to both crafting success strategies and further using/ reusing them when adversities strike (Baker and Nelson, 2005;Langevang and Namatovu, 2019).…”

“…, 2022). Scholars are thus particularly interested in how both large and smaller organizations prepare for adverse events through crafting response strategies that fit their organizations (Campagnolo et al. , 2022) and, particularly, whether and how organizational size and age play a role in strategy development, its adaptation in response to unfolding adversities and its further re-adaptation in times of forthcoming adversities of a similar nature, impact and timespan (Herbane, 2019).…”