Risk responses strategies of companies belonging to manufacturing clusters in Puerto Rico

Abstract

PurposeThis paper discloses the risk management response strategies and the perceived effectiveness of the strategies employed by companies operating within manufacturing clusters in Puerto Rico from 2016 until 2020, the second year of the coronavirus disease 2019 (COVID-19) pandemic.Design/methodology/approachThe research design consists of questionnaire-based survey responses from companies belonging to manufacturing clusters, followed by semi-structured interviews and secondary sources of information.FindingsThe results reveal the risk responses used to manage specific risk types. Albeit respondents' dependency on an assortment of company-centric and cluster-bound risk response strategies, the perception is that the former is more effective when adequate local sources are available and the latter when the cluster has strong interconnectedness among the cluster's members.Research limitations/implicationsFurthermore, there is a generalized belief that long-term cluster-bound strategies are required to complement individual companies' overall risk management strategies.Originality/valueThis paper demonstrated that due to the volatility, uncertainty, complexity and ambiguity (VUCA) nature of the Caribbean region, mixed risk management might result in better and more favorable long-term performance.