Strategic Responses of SMEs to Crisis Environment: The Role of Organizational Identity

Abstract

Global socio-economic shocks, such as the COVID-19 pandemic, create a stiff environment that endangers the existence of SMEs. In this study, the concept of organizational identity is used as a possible explanatory factor of the strategic choice made by SMEs to respond to crisis. We employ a longitudinal multiple case study design to extract rich data from interviews conducted during twenty-month period with nine Russian SMEs in order to identify whether varying types of organizational identity serve as facilitators or deterrents of organizational adaptation. Our qualitative findings suggest that: a) firms with utilitarian organizational identity choose proactive strategic responses; b) companies with normative organizational identity implement reactive strategic responses; c) enterprises with dual organizational identity adopt a sequential approach to strategic responses. Furthermore, the underlying mechanism behind these relationships anchors in the different types of intellectual capital.