| Author: | Abbasi, Reza |
| Title: | Resilience of micro, small, and medium-sized enterprises (MSMEs) in times of crisis and uncertainty : the role of managers’ decision-making logic |
| Advisors: | Weber, Karin (SHTM) |
| Degree: | Ph.D. |
| Year: | 2024 |
| Subject: | Small business -- Management Decision-making Organizational change Entrepreneurship Hong Kong Polytechnic University -- Dissertations |
| Department: | School of Hotel and Tourism Management |
| Pages: | xiv, 304 pages : color illustrations |
| Language: | English |
| Abstract: | Organizational resilience plays a crucial role in the sustainability and success of Micro, Small, and Medium Enterprises (MSMEs), particularly during crises with dynamic and uncertain business environments. Managers and owners of MSMEs, as key decision-makers, have significant influence over the resilience of MSMEs. Their Decision-Making Logic (DML) (effectuation and causation) contributes to the capacity of the organization to adapt to changing environments. Despite previous scholarships, there is still limited understanding of how the decision-making logic of managers can influence their MSMEs resilience and what factors can influence the adoption of effectuation or causation during crises. Comprising of two phases, an exploratory sequential design was employed to address three main issues in this study, centering on 1) the direct and indirect impacts of effectual/causal DML on MSME resilience, 2) the antecedents of the adoption of effectual/causal DML, and 3) the moderation of impacts of antecedents on the adoption of effectual/causal DML. This study has four objectives, namely to: 1) articulate and test the effect of effectual and causal DML on MSME resilience during a prolonged crisis, 2) identify potential mediators and test their effects on the relationship between DMLs and MSME resilience, 3) identify and test the impacts of key individual, organizational and environmental-level antecedents on the adoption of effectual and causal DML during a prolonged crisis, and 4) identify potential moderators and examine their effect on the relationship between organizational and environmental level antecedents and effectual/causal DML. The unit of analysis was managers/owners of MSME restaurants in Hong Kong SAR. In Study 1, eight restaurant managers in Hong Kong were interviewed with the aim to gain insights into managers' experiences and their business responses during a crisis. The findings of in-depth interviews not only provided initial support for the use of effectual/causal DML by managers, but also resulted in the identification of entrepreneurial bricolage behavior, business pre-crisis performance and perceived government support as three additional antecedents that may influence the adoption of DMLs by managers. In addition, entrepreneurial self-efficacy was found to be a personal level characteristic of managers which may moderate the effects of organizational and environmental-level antecedents on the adoption of effectual/causal DML. Ultimately, the findings from interviews were used to finalize the proposed conceptual model guiding this study. In Study 2, a self-administered survey was employed. A quantitative analysis was performed using data from a sample of 312 managers of MSME restaurants in Hong Kong. The aim of study 2 was to examine 1) the direct and indirect impacts of effectual/causal DML on organizational resilience in MSMEs, 2) the indirect impacts of effectual/causal DML on organizational resilience in MSMEs though organizational resourcefulness and organizational agility, and 3) the antecedents of the adoption of effectual/causal DML at individual (psychological resilience and entrepreneurial bricolage behavior), organizational (perceived employee resilience and business pre-crisis performance) and environmental (perceived environmental uncertainty and perceived government support) levels while considering entrepreneurial self-efficacy as moderator variable. A pilot test was conducted before the main survey. Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed to analyze the final conceptual model and hypothesized relationships. A rigorous analysis was performed, with the path coefficient analysis confirming that only effectuation had a direct positive impact on organizational resilience. When considering indirect effects, both effectuation and causation had a positive impact on organizational resilience through organizational agility. However, neither effectuation nor causation exhibited indirect impacts on organizational resilience when organizational resourcefulness was considered as a mediator. Regarding antecedents of the adoption of DMLs, entrepreneurial bricolage behavior, perceived employee resilience, business pre-crisis performance, state uncertainty, effect uncertainty, and perceived government support play a significant role in the adoption of effectuation. On the other hand, entrepreneurial bricolage behavior, effect uncertainty, and perceived government support had significant effects on the adoption of causation. Results relating to moderating effects revealed that entrepreneurial self-efficacy only moderates two proposed relationships: (1) it strengthened the positive relationship between perceived employee resilience and the adoption of effectuation and (2) it weakened the positive relationship between perceived state uncertainty and the adoption of effectuation. This study makes several theoretical contributions: (1) Drawing on Upper Echelons Theory, this study extends effectuation theory by proposing organizational resilience as a novel outcome for effectual DML in MSMEs and (2) introducing organizational agility as a mediating factor to explain the relationship between DMLs and organizational resilience, and (3) drawing on Social Cognitive Theory, it advances the understanding of the effects of multi-level antecedents on the adoption of effectuation and causation during crises. Furthermore, the findings have practical implications. Managers of MSMEs should consider DMLs in training and development programs, while governments and policymakers should facilitate resilience of MSMEs by providing sufficient support, and various recovery assistance programs during crises. |
| Rights: | All rights reserved |
| Access: | open access |
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