Weathering a Crisis: A Multi-Level Analysis of Resilience in Young Ventures

Abstract

In the context of the external disruption presented by the COVID-19 pandemic, we investigate (1) how individual-level resilience and inter-functional coordination relate to organizational resilience and (2) the link between organizational resilience and firm performance. We view organizational resilience as a resource-based capability and draw on insights regarding psychological capital and relational resources to inform our hypotheses. Our hypotheses are tested with a time-lagged, multi-level study of young technology ventures. The results show that when such firms are resilient, they tend to perform significantly better in a crisis. Further, organizational resilience is positively influenced by the individual resilience of top management team members, as well as inter-functional coordination. We discuss implications for theory and practice and suggest avenues for research on resilience in entrepreneurship.

Family Business Resilience: The Importance of Owner-Manager's Relational Resilience in Crisis Response Strategies

“…Therefore, family business resilience is a special type of resilience that reflects "the reservoir of individual and family resources that cushions the family business against disruptions" (Brewton et al, 2010). Additionally, based on a review of the paradigm of resilience in family businesses by Ventura et al (2020), we understand resilience as a multi-level concept, with different organizational levels mutually influencing each other and cumulatively adding up to the overall resilience of the business (Anwar et al, 2021;Lengnick-Hall et al, 2011). Especially in owner-managed businesses, personal resilience in the form of the owner-managers' resilience is particularly important to business survival (Ghobakhloo & Tang, 2013;Herbane, 2019;Kevill et al, 2017).…”

“…This entails positive adjustments made by the firm under adversity, which mainly involve effective coordination and knowledge integration (Lengnick- Hall & Beck, 2005;Williams et al, 2017). These adjustments are positively influenced by relational coordination in the form of effective communication and integration across roles and functions (Anwar et al, 2021). This is specified through the three key domains of resilience: communication, problem solving, and adaptability (Burnard & Bhamra, 2011).…”

Pandemic Depression: COVID-19 and the Mental Health of the Self-Employed

“…Therefore, it may moderate the mental health response of self-employed individuals to the COVID-19 pandemic. In a similar vein, Anwar et al (2021) find a positive relationship between resilience and organizational performance during the COVID-19 pandemic on the firm level. Evidence on resilience in times of crises is important since, if resilience is a mutable trait (for evidence pointing in this direction, see Williams, 2020), this opens up avenues for researchers and policy-makers to learn about factors increasing individual resilience in the face of adversity.…”

“…In the latter approach, resilience is understood as a dynamic process involving an array of both risk and protective factors (Davydov et al, 2010;Kolar, 2011). Notably, Anwar et al (2021) find that firms with higher levels of organizational resilience perform better during the COVID-19 pandemic than firms with lower levels of organizational resilience. 7 Higher resilience may protect self-employed people's mental health and may thus have improved their work performance during the COVID-19 pandemic.…”

“…Anwar et al (2021) measure resilience on the individual level but argue that higher individual-level resilience extrapolates to the organizational level.…”