Business adaptation to climate change: American ski resorts and warmer temperatures

Abstract

AbstractHow do firms adapt to the intensity of adverse chronic conditions stemming from the natural environment? We seek to contribute to the debate on whether environmental adversity tends to be positively or negatively related to adaptation. We propose that both diverging perspectives tend to predict part of firms' adaptation to nature adversity intensity. This is because of the interplay between latent counterbalancing mechanisms. First, at mild levels of nature adversity intensity, organizational inertial forces constrain organizations' willingness to adapt. Second, at medium levels of nature adversity intensity, coalition building and internal organizational politics allow managers to deploy adaptation resilience capabilities. Third, at severe levels, growing natural forces eventually impose limits beyond which protective adaptation becomes unviable. Our findings from a 2001 to 2013 analysis of western U.S. ski resorts' adaptation to temperature conditions indicate that firms facing medium levels of nature adversity intensity appear more likely to engage in higher levels of adaptation whereas those experiencing lower and higher intensity show a tendency for lower levels of adaptation, yielding an inverted U‐shaped relationship.