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Dealing with surprise attacks: decomposing ERM as a dynamic capability to handle crises

Vishnu Chandar Venkatesh (Strategic Management, Management Development Institute Gurgaon, Gurugram, India)
Meeta Dasgupta (Strategic Management, Management Development Institute Gurgaon, Gurugram, India)
Anupama Prashar (Operations Management, Management Development Institute Gurgaon, Gurugram, India)
Torben Juul Andersen (Department of International Economics, Government and Business, Copenhagen Business School, Frederiksberg, Denmark)

Journal of Small Business and Enterprise Development

ISSN: 1462-6004

Article publication date: 12 April 2021

Issue publication date: 23 June 2021

Abstract

Purpose

Turbulent hypercompetitive market conditions make small and medium enterprises (SMEs) vulnerable to abrupt crises caused by unexpected competitor moves. In these situations, enterprise risk management (ERM) can serve as a dynamic capability (DC) to overcome the impending crisis and improve SMEs' survival rates. To explore this capacity, which has only been vaguely addressed in prior research, we conduct an exploratory, abductive study to update the extant (ERM and DC) literature with empirical evidence from expert interviews.

Design/methodology/approach

We conduct an exploratory, abductive study using empirical evidence from expert interviews.

Findings

Our findings reveal ERM as a second-order DC in the micro-foundational components of competitive intelligence gathering, alliance building and integrative capabilities. We find that competitive intensity and government policy moderate the effects of these foundational capabilities. Finally, our study proposes a survivability model that provides new valuable knowledge of ERM as a DC for SMEs to deal with competition-driven crises.

Originality/value

This research survivability model shows how ERM as DC can facilitate the survivability of SMEs against competitive surprises. Although restricted to crises arising out of competitive surprises, this study provides valuable knowledge to the literature on what type of DCs are useful for specific situations. The study findings not only extended Teece's (2007) DCs framework to competitive crises but also placed it within a hierarchy of capabilities. The research findings indicate that an ERM culture in SMEs promote the growth and development of sensing, seizing and reconfiguring capabilities, vital for tiding competitive crises.

Keywords

Citation

Venkatesh, V.C., Dasgupta, M., Prashar, A. and Andersen, T.J. (2021), "Dealing with surprise attacks: decomposing ERM as a dynamic capability to handle crises", Journal of Small Business and Enterprise Development, Vol. 28 No. 4, pp. 515-536. https://doi.org/10.1108/JSBED-09-2020-0342

Publisher

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Emerald Publishing Limited

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