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This study aims at developing an understanding of action pathways when adverse events force micro-enterprises to change their operations.

This qualitative study draws upon empirical data collected from entrepreneurs facing the same adverse event—the COVID-19 pandemic—to build theory on different types of actions that micro-enterprises take and what leads up to these actions.

The findings suggest three types of action pathways. The first pathway is set off by losses stretched out over time and generates open-ended actions. The second pathway is set off by immediate losses and generates survival-oriented actions. The third pathway is set off by potential long-term losses and generates developmental-oriented actions.

This study offers novel insights into action pathways in response to adverse events, heterogeneity of such actions and processes that precede the choice of actions. It also expands the existing literature by showcasing actual actions instead of desired actions, which have already been extensively studied.