The long‐term benefits of organizational resilience through sustainable business practices

Research summary : Prior work on the benefits of business sustainability often applies short‐term causal logic and data analysis. In this article, we argue that the social and the environmental practices (SEPs) associated with business sustainability not only contribute to short‐term outcomes, but also to organizational resilience, which we define as the firm's ability to sense and correct maladaptive tendencies and cope positively with unexpected situations. Because organizational resilience is a latent, path‐dependent construct, we assess it through the long‐term outcomes, including improved financial volatility, sales growth, and survival rates. We tested these hypotheses with data from 121 U.S.‐based matched‐pairs (242 individual firms) over a 15‐year period. We also tested, but did not find support for, the relationship between SEPs and short‐term financial performance. Managerial summary : Most managers look for short‐term financial benefits to justify socially responsible or sustainable practices. In this article, we argue that such practices also help firms become more resilient, which helps them avoid crises and bounce back from shocks. However, it is difficult to measure the avoidance of shocks, so we analyzed long‐term outcomes. We show that firms that adopt responsible social and environmental practices, relative to a carefully matched control group, have lower financial volatility, higher sales growth, and higher chances of survival over a 15‐year period; yet, we were unable to find any differences in short‐term profits. We hope this research provides good reasons for firms to practice sustainability beyond the pursuit of short‐term profits. Copyright © 2015 John Wiley & Sons, Ltd.     

Post-disaster grain supply chain resilience with government aid

Assessing the disruption and resilience of the agricultural grain supply chain is critical to ensure grain supply and stabilize grain price in the final market. This research proposes a quantitative model to analyze how a grain processor regains robustness when supply is disrupted by a natural disaster upstream, and how this disruption affects grain retailers downstream. Two supply chain recovery methods, contingent sourcing and government aid, are considered for grain processor recovery. The results show that (1) a processor prefers timely full recovery, and (2) government aid as an intervention means is indispensable but cannot fully replace the backup supplier.     

Influences on coastal tourism demand and substitution behaviors from climate change impacts and hazard recovery responses

Climate change impacts can negatively affect tourism demand and, subsequently, local economies by disrupting access and altering physical conditions, including those from adaptation and recovery efforts. Research is needed that helps destinations become more climate ready, including studies of decision factors that influence trip-taking behaviors. This paper presents findings from a discrete choice experiment to determine how physical and economic changes could affect visitation behaviors to a vulnerable coastal destination, the Outer Banks region of North Carolina, USA. We embedded our experiment within an on-site visitor survey to reveal thresholds of negative changes to coastal attributes that tourists are willing to tolerate, and also examined tourists’ willingness to substitute their future trips to the region. Transportation-related changes had the highest relative importance among the four selected attributes. The likelihood of three types of spatial substitution, spurred by not being able to access the destination, were consistently related to residency but less consistently related to place meanings, visitation history, and other demographic variables. Study results can inform climate change planning within coastal zones to minimize negative impacts to tourism demand, such as the need to develop creative revenue streams to maintain resilience in communities that rely on occupancy taxes.     

Understanding visitor–resident relations in overtourism: developing resilience for sustainable tourism

While almost all travel destinations seek to increase tourists, less attention is paid to balancing the growth in tourists against consequent visitor–resident irritants, which is essential if the objective is to make tourism more sustainable. Overlooking the carrying capacity of a destination is a common mistake committed when formulating travel visa policies. Overtourism is a term recently used to contextualize this potential hazard to many popular tourist destinations worldwide. One notable case in point is the “multiple-entry permit” policy implemented in Hong Kong which is causing conflicts between mainland Chinese visitors and Hong Kong residents. To investigate the overtourism phenomenon in Hong Kong we develop a hysteresis model. We hypothesized that ceteris paribus, the implementation of a “multiple-entry permit” policy would lead to an overwhelming growth in day-trippers and cause a permanently negative cointegrating relationship with residents’ sentiment. We confirmed our hypothesis by using the bound tests of Autoregressive-Distributed Lag models. Our findings suggest that policymakers should note that the deterioration in visitor–resident relations from overtourism may exhibit a significant hysteresis effect that will persist far beyond the original stimulus. “Developing resilience in tourism” and “exploring sustainable degrowth” are discussed as potential strategies for long-term tourism growth.     

ICT and resilience in times of crisis: evidence from cross-country micro moments data

ABSTRACT

ICT-intensive firms are often found to have a better performance than their non-ICT-intensive counterparts. Along with investing in ICT capital they have to adapt their production and business processes in order to reap the potentials implied by the use of ICT. Are these firms also more resilient in times of crisis? We study this question by exploiting a novel and unique data set from the Micro Moments Database. Covering 12 countries, 7 industries and the period from 2001 to 2010, the data allow us to distinguish between ICT-intensive and non-ICT-intensive firms within industries. We find evidence that indeed during the crisis in 2008 and 2009, ICT-intensive firms were hit less hard with respect to their productivity. This holds in particular for firms from service industries. Moreover, ICT-intensive firms were also more successful in introducing process innovations during that period which could explain their better productivity performance compared to non-ICT intensive firms.     

Information overload and fake news sharing: A transactional stress perspective exploring the mitigating role of consumers’ resilience during COVID-19

The spread of fake news in social networks has become a major concern for various sectors of society, including retail and service providers, some of whom have suffered from decreasing sales due to misinformation consumers shared online. The current COVID-19 crisis has added to the surrounding hysteria, as fake news during crises can heighten negative behavioural responses in consumers, such as irrational panic buying or taking false medical precautionary measures. In fact, driven by the ubiquitous social media landscape, the dissemination of misinformation and the overarching overabundance of information have been major challenges of the pandemic. Given that current research offers little insight into the processes behind the sharing of fake news among consumers and that research on consumer-centred mitigating mechanisms is missing, this study explores the relationship between information overload, fake news sharing, and the overlooked concept of consumers' resilience as a potential shield as viewed through the lens of the current crisis. Structural equation modelling is applied to cross-sectional data from 241 social media users. Drawing from theories of transactional stress and psychological resilience, it is demonstrated that information overload leads to an increased likelihood of fake news sharing by increasing consumers' psychological strain. Furthermore, the study shows that consumers' resilience has the power to mitigate the drastic effects of this negative chain of influence by inhibiting each of the processual components. The results have important implications extending beyond crises. Measures should be taken to enhance consumers’ resilience amidst technology-induced stressors while altering the information environment confronting consumers.     

Business adaptation to climate change: American ski resorts and warmer temperatures

How do firms adapt to the intensity of adverse chronic conditions stemming from the natural environment? We seek to contribute to the debate on whether environmental adversity tends to be positively or negatively related to adaptation. We propose that both diverging perspectives tend to predict part of firms' adaptation to nature adversity intensity. This is because of the interplay between latent counterbalancing mechanisms. First, at mild levels of nature adversity intensity, organizational inertial forces constrain organizations' willingness to adapt. Second, at medium levels of nature adversity intensity, coalition building and internal organizational politics allow managers to deploy adaptation resilience capabilities. Third, at severe levels, growing natural forces eventually impose limits beyond which protective adaptation becomes unviable. Our findings from a 2001 to 2013 analysis of western U.S. ski resorts' adaptation to temperature conditions indicate that firms facing medium levels of nature adversity intensity appear more likely to engage in higher levels of adaptation whereas those experiencing lower and higher intensity show a tendency for lower levels of adaptation, yielding an inverted U‐shaped relationship.     

Exiting from Fragility in Sub‐Saharan Africa: The Role of Fiscal Policies and Fiscal Institutions

This paper studies the role of fiscal policies and institutions in building resilience in sub‐Saharan African countries, focussing on 26 countries that were deemed fragile in the 1990s. We use a probabilistic framework together with GMM estimation to address endogeneity and reverse causality. We find that fiscal institutions and fiscal space, namely the capacity to raise tax revenue and contain current spending, as well as the quality of public expenditure, are significantly and robustly associated with building resilience. Similar conclusions arise from a qualitative study of 7 sub‐Saharan African countries in the sample that built resilience since the 1990s.     

Leveraging the social welfare chain to provide resilience during disaster

Due to the rampant increase in disasters globally, resilience in supply chain and logistics is receiving greater research attention in various parts of the world. This paper considers the role and contribution of social welfare supply chains in providing resilience. This is a causal phenomenon which has been studied through an exploratory research by building a framework from extant literature, a case study on an Indian non-governmental organization and tested through a social network analysis. We show how in the wake of a disaster, these social welfare supply chains become enablers. The paper provides an inkling into how to improve community resilience in times of disaster. Further, we show how these supply chains use social cohesion embedded in the structure to provide efficiency, diversity and adaptability, thereby bringing resilience into the supply system. Another contribution of this study is the use of visualisation and analysis of social media representation tools for social network analysis in operations.     

Assessing a farm's sustainability: insights from resilience thinking

Research on sustainability in agriculture often focuses on reducing the environmental impacts of production systems. However, environmentally friendly production methods may not be sufficient to ensure the long-term economic and social sustainability of a farm. Taking a systems approach to sustainable farming, we turn to resilience thinking with its focus on the interdependence of social and ecological systems. We apply this approach to farming by conceptualizing a farm as being part of a set of systems spanning several spatial scales and including agro-ecological, economic and political-social domains. These subsystems interact and are subjected to their own complex dynamics. Within such a complex adaptive system, farm sustainability can only be achieved through adaptability and change. To be ready for the inevitable periods of turbulent change, a farmer needs to retain diversity and redundancy to ensure adaptability. Resilience is thus more likely to emerge when farmers hone the capacity to transform the farm, when farm production is attuned to the local ecological carrying capacity, and when learning and innovation are targeted outcomes. This article shows how resilience theory applied to farming may provide a more comprehensive route to achieving sustainability and offers rules of thumb as guides to building farm resilience.