Italian entrepreneurial decision-making under lockdown: the path to resilience

Abstract

Purpose This study addresses current research gaps by integrating resilience literature with crisis management theories, focussing on SMEs. Specifically, the authors examine how the entrepreneurial decision-making process, via the interplay of causation and effectuation logic, impacts a firm's ability to respond to unpredictable events. This paper aims to present an investigation that seeks to unearth the potentially complex interplay between causation and effectuation logic in fostering organisational resilience, particularly in the face of unprecedented disruptions such as the COVID-19 pandemic. Design/methodology/approach This study includes the responses of 80 Italian entrepreneurs operating in the hospitality sector. The paper deployed a joint analysis through a partial least squares structural equation modelling technique (PLS-SEM) and a necessary condition analysis (NCA) to assess how the decision-making logics impact the entrepreneurs' decision when reacting to the pandemic. Findings The findings show that how entrepreneurs make decisions influence how they react to the crisis. Causation was found as a direct cause of resilience and preparedness, and effectuation was a direct cause of resilience and agility. Moreover, causation indirectly caused resilience through preparedness, and effectuation indirectly caused resilience through agility. Finally, both preparedness and agility are direct causes of resilience. Practical implications This research generated insights into why and how some SMEs respond more effectively to uncertainty than others. It provides actionable strategies that business owners and managers can employ to enhance their ability to withstand and recover from crises. Originality/value This study's originality and novelty lie in its empirical investigation of the roles of causation and effectuation logic in entrepreneurial decision-making and, consequently, their influence on SME resilience. Focused on the Italian hospitality sector, it provides unique insights into resilience strategies under severe, real-world conditions, contributing to theoretical development and practical applications in crisis management.

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