Organizational Resilience to Supply Chain Risks During the COVID‐19 Pandemic

Abstract

This paper aims to establish a link between aggregate organizational resilience capabilities and managerial risk perception aspects during a major global crisis. We argue that a multi‐theory perspective, dynamic capability at an organizational level and enactment theory at a managerial level allow us to better understand how the sensemaking process within managerial risk perception assists organizational resilience. We draw from in‐depth interviews with 40 managers across the UK's food industry, which has been able to display resilience during the pandemic. In sensing supply chain risks (SCRs), managers within both authority‐based and consensus‐based organizational structures utilize risk‐capture heuristics and enact actions related to effective communications, albeit at different information costs. In seizing, we found that managers adhere to distinct heuristics that are idiosyncratic to their organizational structures. Through limited horizontal communication channels, authority‐based structures adhere to rudimentary how‐to heuristics, whereas consensus‐based structures use obtainable how‐to heuristics. We contribute to the organizational resilience and dynamic capabilities literature by identifying assessment as an additional step prior to transforming, which depicts a retention process to inform future judgements. Our study presents a novel framework of organizational resilience to SCRs during equivocal environments, by providing a nuanced understanding of the construction of dynamic capabilities through sensemaking.