The central research question of this thesis is: How can firms build capabilities in resilience? Resilience is an ability to adapt to and grow from adversity. The research question points to adversity being both ubiquitous and varying in intensity over time among organizations. Firms will inevitably encounter adversity and either thrive or succumb. Notwithstanding those circumstances when severe adversity besets firms, the best course of action may appear as abandoning the cause. Yet giving up does not build future resilience. Firms inexperienced with adversity can panic in the face of decline and adopt random ad hoc responses, which may do more harm than good. So, resilience to adversity seems important, ubiquitous and unavoidable for firms and so a rich area for theory and skill building.
Turnaround literature offers useful insights into organizational decline and skill-building for resilience but does not incorporate the unique insights that emerge from combining both resilience and capabilities-based views. Turnaround literature can inform as to how to manage an episode of serious decline but fails to show how firms can build this into a capability; a capability that embeds the learning from decline into organizational decisions and actions that can be called upon in future episodes. Moreover, a resilience perspective calls for viewing recovery from adversity, not just as returning to homeostasis but instead encourages growth from adversity. Such growth can involve adopting an entrepreneurial opportunity-forming mindset that uses adverse experiences to inform strategic renewal. Here, the inquiry intersects with dynamic capabilities, which aim to reconfigure firms in the face of change.
This thesis combines these two concepts – resilience and dynamic capabilities – to shed light on how firms go about building capabilities in resilience that may enable them to use adversity to assist in forming strategic opportunities. In studying resilience, the impact of adversity on capabilities occurred in different empirical contexts. This research project was privileged to follow a firm over a nine-year period where the thesis author was one of the principal directors. This firm experienced three separate episodes of near-death collapse within this period. Using an engaged scholarship methodology, the research was performed by a team of academics and practitioners where the author was both primary researcher and informed participant practitioner. This team used these various perspectives to co-produce knowledge about managing collapse. A careful focus was the ‘dance’ between objectivity of some members of the team and the subjectivity of the practitioners involved. Rich theory emerged through the deliberate arbitrage of these various perspectives. The research thus pursued a theory-building agenda, motivated to understand how firms build capabilities in resilience.
This focus on organizational resilience is expanded in the introduction as Chapter 1, outlining the scope of the research project. Chapter 2 follows as a conceptual work aiming to firmly ground foundational assumptions about the nature of resilience across four key disciplines of psychology, ecology, engineering and management science. The guiding research question is: what are the conceptual foundations for a resilience-based approach to organizations? This multi-disciplinary review of the resilience construct revealed that its conceptualization for management considerably lags other disciplines, particularly when compared to psychology. The comparatively impoverished nature of research into organizational resilience motivated the quest for a deeper understanding of its conceptual foundations. The key contribution is the enunciation of a set of robust assumptions about resilience, which seek to overcome the frailties that plague existing usages of the concept in management science. A theoretical model of organizational resilience oriented towards positive adaptive growth is developed based on these assumptions, providing a conceptual foundation for subsequent chapters with inductive theory-building.
Chapter 3 then presents the major empirical study of the thesis. This paper asks the question: what capabilities are required to survive firm collapse? The key contribution is a theoretical model detailing how the focal firm learnt to become resilient, in the form of a heuristics-based dynamic capability. This capability set identifies strategic, resource and communication heuristics enhancing resilience across four inflection points which emerged during the firm’s collapse.
Chapter 4 then examines the engaged scholarship method, as it developed throughout the research. While this implementation of engaged scholarship is to some extent an unorthodox methodology, this chapter asks: how can academic and practitioner engagement encourage new real-time knowledge? The use of this method yielded a rigorous framework for building new theory in deep, privileged contexts, provided real time assistance in resolving the stressed conditions being faced by the focal firm. The key contribution is enunciation of a process of delve-test-innovate-unlock as underpinning how engaged scholarship enabled improved research skills.
Chapter 5 represents the translation of key empirical and conceptual findings for a practitioner audience. It describes how managers may misperceive experiences of collapse, leading to panic and exacerbated consequences. The term ‘collapse trap’ highlights key features for practicing managers seeking to build capabilities in resilience, addressing the research question: how can organizations remain capable when their capabilities are gone? The key contribution is the dissection of key managerial pathology associated with collapse and associated remedies. The thesis concludes with Chapter 6 providing a synthesis of the work to yield an integrated model for building organizational resilience, highlighting the contributions made to the dynamic capabilities view and the role of heuristics when strategy, resources and routines collapse.