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Firms’ need organisational fortitude if they are to successfully overcome multiple crises and adversities, according to new research from emlyon business school.

Organisations are facing an increasing number of crises, and in today’s turbulent world it is only likely that the number of adversities increases further. In the last decade, firms have faced geopolitical challenges, health challenges like the Covid pandemic, and environmental challenges too – all external factors that have caused crises for organisations.

And all firms are continuing to face increased external shocks and adversities, as well as individual challenges and crises too, related directly to the organisation or their specific industry.

The researchers state that in order to create fortitude in an organisation, there are three key components that need to operate together. These are shared values amongst key stakeholders, a resource reserve to fall back on, and the ability to be resolute.

These findings come from research led by Celina Smith, Associate Professor of Entrepreneurship at emlyon business school, alongside colleagues from Università degli Studi di Bergamo, Lancaster University and Zhejiang University, and Stockholm School of Economics and Jönköping University. The researchers wanted to identify the factors that help an organisation to become resilient over time in response to numerous shocks.

To do so, they studied a long-established family firm in the United Kingdom that experienced four major adversities – a factory fire, a major factory flood, enforced relocation, and a global pandemic, in a short timeframe.

The researchers studied the processes that enabled the organisation not only to survive these numerous adversities but also go on to thrive afterwards, identifying their reaction, the proactive changes they made and the pivoting they did to continue to operate. In doing so, they identified three key components needed for the organisation to develop organisational fortitude which ultimately helps firms to build resilience and overcome each adversity.

The first is "resoluteness propensity.”. This can be described as all stakeholders singing off the same hymn sheet, and all having the motivation, determination and desire to do all they can to ensure the firm survives, even if it involves risky choices.

The second is “resource reserves”. This is described as the firm having sufficient resources to deal with the shocks their company faces, whether that be money, materials, knowledge or connections, ensuring these are all ready and available to use when needed, to dig themselves out of a hole.

And the third is “shared values”, which we can describe as everyone in the organisation believing in the same important ideas and principles. They tend to agree on what is right and important for the organization, and thus are able to take active, collective steps to move forward.

“In recent years we’ve seen a huge amount of global external shocks that leave companies fighting to simply survive.” Says Professor Smith. “With these becoming more and more frequent it is vitally important that companies actively build resilience into their business models, to ensure that not only do they overcome these shocks, but they are more prepared in the future to deal with them too”.

The researchers say that these findings offer valuable insights and advice for organisations who are looking to build resilience into their practices, and ensure that they have the key components and capabilities to do so. This is vitally important for modern firms if they want to survive the likely high number of shocks in their lifespan.

If you would like to speak to the researchers or receive the full research paper, please contact Peter Remon at BlueSky Education – +44 (0) 77 235 228 30.

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