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Economy-wide crises create major challenges for small and medium enterprises (SMEs). Existing studies emphasize the crucial role of contrasting behavioral strategies, effectuation and causation in SMEs' adaptation to crisis conditions. Yet, prior literature concentrated predominantly on exploring the impact of effectuation and causation on firm performance rather than survival. The authors present and empirically test a theoretical model explaining how behavioral strategies affect SME survival during an economy-wide crisis under different levels of environmental dynamism.

The authors propose a theoretical framework based on the combination of the effectuation literature and the emerging variance-based perspective on entrepreneurial actions. The theoretical model is then tested using a sample of Russian SMEs during a period of economic adversity and recovery (2015–2019).

The empirical results reveal that causation reduces the probability of firm survival in dynamic environments, while effectuation increases the chance of survival irrespective of the state of the environment. In a nutshell, the study provides evidence that the effectuation logic serves a viable way for SMEs to increase the chances of survival through the economic shock and subsequent recovery period.

For the first time in the literature, the authors demonstrate the role of behavioral strategy (effectual and causal) as a crucial antecedent of SME survival in the short and medium term, particularly during an economy-wide downturn. Furthermore, the study demonstrates the power of variability-based theorizing for explaining and predicting the survival/failure implications of entrepreneurial actions.

The paper provides evidence-based managerial advice for preparing the organizations to find successful pathways through crises by priming the managerial decision-making towards either entrepreneurial thinking or resource conservation, and hence cascading the inventive or rigid state of mind through all management levels.

The general review is based on summarizing the peer-reviewed academic studies of organizational decision-making and acting in crisis situations, illustrated using the turnaround cases of Corticeira Amorim (reinventing itself when faced with emerging technological threats) and Kiddiegarten School (adjusting to the pandemic shock of social/human nature)

This study reveals that a set of dimensions in the crisis situation’s cognitive framing determines the firm’s response to adversity, freezing it in a rigid state or unfreezing it to stimulate an organization-wide entrepreneurial search for turnaround strategies. If managers sense having a lack of time to deal with adversity, or a lack of predictability, they become paralyzed with threat-rigidity mechanisms, stubbornly pursuing the established methods of doing business, which often were the cause of crisis in the first place. Hence, in situations requiring an immediate response, the dual threats of urgency and unpredictability become cognitive blinders, preventing organizations from pursuing new opportunities, exposing firms to the risk of being too slow, eroding their competitive advantage and, ultimately, going out of business.

Integrating the insights of three decades prior research of the topic of managerial decision making in crisis situations, this study proposes the novel leadership framework allowing to stimulate entrepreneurial behavior in adverse contexts.

The article identifies the need for an approach beyond merely maintaining competitive advantage. In the eyes of analysts, maintaining the profitable status quo is not an option for creating shareholder value.

This masterclass develops the thesis that a strategist needs a corporate theory of value creation, something that provides ongoing guidance to the selection of positions and a vast array of strategic actions.

Even those who take a dim view of maximizing shareholder value would likely agree that from an enlightened stakeholder perspective management must find new, unexpected ways to grow the firm to be viable in the long term.”

A well-developed corporate theory enables fruitful thought experiments such as, “If my theory accurately describes my world, then when I select this strategic choice, the following will occur.””

The corporate theory of value structures the logic practitioners can use, repeatedly and consistently, to assess an enormous array of possible combinations of resources and activities. The logic enables strategists to define what is special about the options that are likely to create value.

This paper aims to expand the understanding of the design thinking (DT) field and provides evidence that DT as an innovation mindset centered on user/human needs is able to lead enterprises to the development of radical product innovation.

The study is based on an illustrative case analysis of four eras of radical innovations in the watch industry, from the mechanical wristwatches to smartwatches.

The findings from the watch industry substantiate the developed DT triangle framework for designers, managers and executives, enabling the development of radical product innovation.

The study provides evidence for the claim that human-centered approach (rather than design-driven, meaning-changing approach) in DT can successfully lead to radical product innovations. For this, this paper distinguishes between “need” and “meaning” in the DT field and reemphasize the role of creating empathy with users to be able to identify their newly shaped needs. Fulfilling these newly shaped needs would ultimately result in the development of radically new products.

Good companies innovate. In the process, they consider target markets, target customers, new product or service offerings, and the positioning of these relative to competitors. This forms a basic strategy for the innovation. However, the lesson of competitive dynamics today is that innovation effort stops short of its ultimate potential if it does not also embrace the business model possibilities provided by the innovation itself. This short article provides a strategic lens for considering the efficacy and power of a business model for a product or service innovation.

The current paper is grounded in the empirical results of an ongoing longitudinal study (undertaken by the authors team in the U.S., Canada and Ukraine) aimed at exploring the structure, characteristics, evolution, and performance outcomes of organizational business models.

The business model’s key characteristics are customer value (the “effectiveness side” of the equation, i.e., doing right things for customers that the latters are ready to appreciate and pay for, but not always to the focal firm) and business value (the “efficiency side” of the equation, reflecting translation of the customer value into profit). Importantly, our evidence strongly reveals the dynamic nature of the business model construct, implying that the companies evolve in terms of these two dimensions.

The recommendations part of the article is primarily based on the in-depth analysis of the recent history of large companies that were struggling to: sustain customer value, and develop and apply internal product and production platforms to increase operating efficiency, and hence business value. All these firms had either slipped into or were in the danger of slipping into Impostor status, and were seeking ways to regain and sustain their Innovation advantage, often over newer entrants in their respective industries.

Introduction of the Business Model Value Matrix allowing to analyze the current company’s business model; practical recommendations regarding getting to and remaining in the Winner quadrant

The article emphasizes the importance of corporate reputation as a firm’s key intangible asset leading to tangible shareholder benefits, such as increased profit and market evaluation for established companies, or higher growth rate, lower risk and ease access to funding for new ventures. However, the benefits of corporate reputation do not follow automatically; rather, “the reputational rent” is created and appropriated through a proper, deliberately designed business model. We discuss the link of a firm’s corporate reputation and its business model, proposing a typology of approaches for reaping the rewards of corporate reputation.

The study is presented as a conceptual paper with illustrative case examples

For practical purposes, particularly important are two distinct perspectives on corporate reputation: the utilitarian dimension, and the social dimension. The future may turn out to be “either 5-stars or 1-star” world, with Yelp and similar platforms critically disadvantaging the middle-ground of many markets, keeping only top performers and the ones whose business model is insensitive to reputational erosion. This increases the likelihood that the distribution of possible reputation levels will become increasingly bimodal - either high or low, with almost nothing in between - and can be properly mapped on a 2x2 matrix forming the basis of the study.

We introduce the link between a firm’s corporate reputation and its business model, proposing a typology of approaches for reaping the rewards of corporate reputation.

Organizations face challenges in volatile, uncertain, complex and ambiguous (VUCA) environments. It is vital to manage the change’s rate and magnitude in new and different ways to stay competitive. This study focuses on the phenomenon of scenario planning that can help organizations proactively plan for, react and adapt to VUCA forces if and when they occur.

Based on an extensive academic and practitioner literature review, we posit that corporate scenario planning involves eight different practical applications and associated benefits. These include risk identification, assessing uncertainty, organizational learning, options analysis, strategy validation and testing, complex decision-making, strategic nimbleness and innovation. We offer a novel typology and propose a more complete and holistic model of the scenario planning application and its intended outcomes. Mini-case studies from various sectors illustrate the process. The model demonstrates the relationship between different benefit-driven applications - inputs, process and output benefits – and identifies opportunities for further research.

A previous typology study classified “what” and “why” related scenario planning research and literature. However, the why or associated benefits were not broken down at any level of detail, representing a gap in explaining the actual value of this management tool. The current study proposes a novel “why” focused typology of scenario planning benefits based on an extensive literature review. The novel typology adorned several benefits of scenario planning in an integrated model explained using systems theory. These benefits included risk, uncertainty, options analysis, strategic flexibility, complex decision-making, strategy testing and validation, innovation and organizational learning.

First time in the literature, the relationship between input, process and output benefits of scenario planning is explained using systems theory. The novel typology proposed illustrates the practical applications of scenario planning in one complete model.

This paper aims to examine the role strategic problem identification and resolution played in identifying and capturing new sources of competitive advantage as CSL Limited (CSL) transformed itself into the world’s fifth-largest biotechnology company. Historical accounts of superior business growth are usually explained by looking back to identify a firm’s sources of competitive advantage. However, what managers really want to know is how to identify opportunities to create and capture competitive advantage ahead of competitors.

The authors examined CSL’s journey between 1994 and 2019 through a case study approach and the lens of the problem-identification and problem-solving perspective (PSP). The PSP assumes strategic problems act as antecedents to discovering and capturing new sources of competitive advantage. The problems a firm identifies and resolves influences whether or not, in what direction and for whom an organization creates value.

The authors provide examples of the strategic problems CSL identified and how they acted as the catalyst to proactively identify new sources of competitive advantage. The formulated problems helped manager to see in advance what resources, capabilities and governance mechanisms would be required to create and capture value.

Generalizing the lessons learned, the authors propose a business-problem classification framework and portfolio approach to encourage managers to identify, formulate and resolve different types of strategic problems. These problems could motivate firms to tackle problems beyond which they have successfully tackled before and discover new sources of competitive advantage ahead of competitors.

Defines clear steps for growth planning that support answers to the crucial question: How and where are you planning to scale up the business and what talent do you need to implement this?

As the “Business model value matrix” shows, having ‘happy customers’ is only one determinant of a business model’s success. The other essential block of diagnostic questions deals with the current state and prospects of the firm’s growth.

We found that companies that have found ways to keep their business models in a winner’s state can provide clear, evidence-based answers to questions about growth opportunities and risks, while their less successful peers have difficulty addressing the issues. Continuous collecting and analyzing of this information allows successful companies to embrace the strategy-as-learning model of development, built around active learning and proactive adjustment to evolving environment.

To develop a strategy for moving to and sustaining the Winner state, managers must clearly articulate and test a set of hypotheses about the mechanisms of their company’s growth. The first step on this path is related to obtaining a clear view on the factors that underpin the current financial performance.

High-performance cultures make sure that each manager has the clear answers to the questions of value, growth and digitization in order to learn, experiment and implement the company business model agenda. The unproductive cultures, on the other hand, are sustained by managerial teams that usually do not have the answers to these crucial questions, but are very good at political games.

The article introduces the Entrepreneurial Management System (EMS), which delineates a strategic process within an organizational context that is aimed at encouraging and supporting the pursuit of opportunities that have the potential to create value through innovative strategic actions. It is designed to stimulate entrepreneurial thinking and corporate venturing at all levels.

The authors offer an approach to organization-wide continuous innovation that incorporates proven concepts from existing research with lessons learned from the authors’ research analysis and consulting experience in helping large and medium companies across different industries and markets to establish effective entrepreneurial management.

Given the spectre of constant disruption from new technologies or business models, management teams will be judged on how they proactively respond to these challenges by turning them into value-creating opportunities.

Multidisciplinary teams allow employees to become familiar with other domains and see possible solutions, share their problems and ideas and vet their insights with the input of colleagues.

An Entrepreneurial Management System allows a firm to "internalize" the marketplace’s evolutionary processes so that a company can generate, develop and implement ideas that will have value for customers. It should be a clear decision for all of today’s business leaders and investors to have an implementation plan to ensure continuous innovation.