Abstract
Purpose
This study aims at developing an understanding of action pathways when adverse events force micro-enterprises to change their operations.
Design/methodology/approach
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.
Findings
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.
Originality/value
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.
Keywords
Citation
Veksler, A. and Thorgren, S. (2023), "Under external pressure: action pathways when an adverse event forces micro-enterprises to change", International Journal of Entrepreneurial Behavior & Research, Vol. 29 No. 11, pp. 1-24. https://doi.org/10.1108/IJEBR-08-2022-0700
Publisher
:Emerald Publishing Limited
Copyright © 2023, Alina Veksler and Sara Thorgren
License
Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode
Introduction
Adverse events—unfortunate circumstances or events that bring substantial hardship and loss of resources (Shepherd et al., 2020)—hamper entrepreneurs' ability to operate and develop their businesses mainly due to a sudden resource shortage, loss of customers and overall instability and uncertainty in both society and the business world (Doern, 2016; Shepherd et al., 2020). Research has paid particular attention to investigating and outlining different success strategies for dealing with adversities (Bundy et al., 2017; Manolova et al., 2020) as well as ways for how to effectively prepare to use these strategies in the face of adversity (Battisti et al., 2019; Corvello et al., 2022). Examples of examined adverse events include riots (Doern, 2016), wars and conflicts (Langevang and Namatovu, 2019), refugee crises (Shepherd et al., 2020), natural disasters (Martinelli et al., 2018), economic and social downturns (Smallbone et al., 2012) and more recently the COVID-19 pandemic (Corvello et al., 2022; Kuckertz et al., 2020; Thorgren and Williams, 2020). While much of the research attention has been devoted to extreme events (e.g. wars, conflicts and natural disasters) there is limited theory on actions taken when entrepreneurs are faced with other types of adverse events where basic needs are not threatened, but where the event puts external pressure on the business to alter the way it used to operate. Moreover, little is known about the potential heterogeneity of entrepreneurs' actions in response to such events.
Micro-enterprises (i.e. companies with up to nine employees) are, due to limited economic buffers (Thorgren and Williams, 2020), likely to be significantly affected when an adverse event strikes. Hence, it is relevant to develop theory both on how entrepreneurs in micro-enterprises act in the face of an adverse event and to provide insight into the potential heterogeneity of actions across entrepreneurs. Therefore, the examined research question in this study is: How do entrepreneurs in micro-enterprises respond to an adverse event that puts pressure on businesses to alter the way they used to operate? Such examination would not only advance entrepreneurship theory, it would also be of practical relevance for assisting policy makers, business support organizations and partner companies with a more complete understanding of what actions to expect when an adverse event requires business changes but without specifying what those changes should entail.
The research question is examined by analyzing qualitative data collected during the first year of the COVID-19 pandemic. The findings of this study explain three action pathways: (1) open-ended, (2) survival-oriented and (3) developmental-oriented. This study advances the understanding of responses to adverse events by explaining how each pathway is affected by the timing of losses, sensemaking of the situation and adjustments to one's regulatory focus.
Theoretical background
When adversities strike and disrupt the usual order of operations, businesses simply cannot afford to leave the changes unaddressed, or they risk losing either their market share or, under the worst-case scenario, their business entirely (Sommer and Pearson, 2007). Existing research investigated a broad range of different adverse events—those spawning their key phases across varying time frames, affecting different spheres and groups, as well as having short- or long-term effects (Roux-Dufort and Lalonde, 2013)—and actions taken by individuals and/or organizations in response to the unfolding circumstances (McMullen and Shepherd, 2006). By retrospectively investigating a combination of actions and outcomes, an ample number of studies intended to craft what can be referred to as a “success formula”: strategies that led organizations to win (or lose, if wrongly implemented) the battle with adverse events (Laufer and Coombs, 2006).
Extant research suggests that there are three key components that comprise the “success formula.” As a first step, organizations typically engage in sensemaking activities. That is, they take time to analyze the unfolding event and, especially, its effects on different spheres of life, most commonly financial (Bundy and Pfarrer, 2015; Strike and Rerup, 2016). Once this assessment is completed, a second step is taken—creating a short-term crisis plan (Bundy et al., 2017; Sommer and Pearson, 2007). Available resources are reallocated with the purpose of maximizing the use of what is available at hand and restraining from spending money on acquiring additional resources (Baker and Nelson, 2005). As a third and final step, organizations evaluate the effects of actions performed thus far and, if necessary, consider adjusting future actions to obtain a more desirable outcome (Manolova et al., 2020; Stam et al., 2018). For example, the desire could be to stay afloat or even grow the business despite the hardships (Fares et al., 2022; Kraus et al., 2020).
The aforementioned “success formula” is a significant part of the overall ability to respond to adverse events in a way that is favorable to organizations yet is not its sole part. Research shows that what makes the strategy work is organizational abilities to sufficiently prepare to use this strategy and effectively reuse it at times of other adverse events (Battisti et al., 2019; Corvello et al., 2022). Scholars are thus particularly interested in how both large and smaller organizations prepare for adverse events through crafting response strategies that fit their organizations (Campagnolo et al., 2022) and, particularly, whether and how organizational size and age play a role in strategy development, its adaptation in response to unfolding adversities and its further re-adaptation in times of forthcoming adversities of a similar nature, impact and timespan (Herbane, 2019). Even though smaller organizations are relatively more flexible and, on average, have a higher speed of decision making due to their rather simple organizational structure (Morgan et al., 2020), large organizations have a notable advantage when it comes to both crafting success strategies and further using/reusing them when adversities strike (Baker and Nelson, 2005; Langevang and Namatovu, 2019). This mainly happens due to large organizations possessing a broad variety of resources—financial, human and else (Ghosal and Ye, 2015). For example, in a large organization employees bring broad experiences, including those related to dealing with adverse events (Ali, 2014). Research focused on organizational age has examined whether a business has better chances at succeeding with crafting a successful response strategy, preparing to use it and eventually reusing the strategy when somewhat similar adversities arise (Hampel et al., 2020). Quite expectedly, these businesses that are in operation for a longer period of time, meaning that they already have some experience of facing and dealing with adverse events, are, in general, more equipped to withstand another adverse event in contrast to those businesses that are new to the market and are rather inexperienced with understanding adverse events (their impact on different business operations) and responding to them in a strategic way (Pearson and Clair, 1998).
Notwithstanding this growing knowledge on success strategies, ways to effectively prepare for adverse events and different determinant factors for successful/unsuccessful organizational responses (Corvello et al., 2022; Eggers and Francis Park, 2018), there is still limited theory on how organizations respond to adverse events. As most of the scholarly focus so far has been on response outcomes that either bring businesses to the pre-adversity state or, in some cases, even help with growing it further, we still know very little about how organizations respond to adverse events and especially among micro-enterprises where the organizational actions to a large extent are decided and executed by individual entrepreneurs. The aim of this study is to tie into these knowledge gaps by studying different (not alike), actual (not desired) and current (not retrospective) actions by entrepreneurs in micro-enterprises.
Methods
To examine the research question, it was ideal to draw upon data on entrepreneurs running micro-enterprises affected by the COVID-19 pandemic. The entrepreneurs were all located in Sweden, which correlates with numerous other studies on this topic where enterprises operate in Western developed economies. This sampling makes the findings of this study particularly relevant to compare and contrast with existing knowledge to advance theory building. The authors approached 107 micro-enterprises in Sweden that had expressed that they were being affected by the pandemic. The authors then asked these entrepreneurs whether they were willing to be followed in their business journey. A total of 27 entrepreneurs (16 women and 11 men) agreed to participate in this study. The most common industries in which they were operating were tourism, consultancy (including education, training, coaching) and retail (mainly selling locally produced or designed products). The businesses had an average of three employees.
The data was collected in two phases over an 8-month period. Of the 27 entrepreneurs initially interviewed, semi-structured follow-up interviews were carried out with 23 entrepreneurs. As primary guidance for the data analysis, the authors followed the grounded theory techniques and procedures set forth by Strauss and Corbin (1998). In doing so, the collected data was interpreted along with recurrent literature reviews at all stages of the analysis. Figure 1 provides an overview of the process for data collection and analysis. Table 1 summarizes data sources and ways for how they were used in this study. A descriptive overview of the 23 entrepreneurs upon which the authors build their model is presented in Table 2.
Findings
The following section outlines the findings, including a description of the three pathways that explain heterogeneity across entrepreneurs' actions in response to an adverse event. Pathway I resulted in open-ended actions, Pathway II resulted in survival-oriented actions and Pathway III in developmental-oriented actions. The pathways are illustrated in Figure 2.
Pathway I: From losses stretched out over time to open-ended actions
Timing of the loss: stretched out over time
Entrepreneurs on Pathway I experienced revenue-related loss(es) stretched out over a longer period after the initial virus outbreak in Sweden. That is, their revenue-related losses were not significant from one day to another. Rather, the successive waves throughout the pandemic became influential for their experience of loss. This extended loss was primarily a consequence of various restrictions introduced or revised over time. For example, a gym owner explained how her hopes of seeing membership renewals being dashed due the extended restrictions following high virus cases:
Now, [during a new wave of high virus cases], this is a really, really, really bad time for us right now, because we have lost over 1 MSEK in income from last January to this January … It will get worse and worse because no one is renewing their memberships. So, the cards that expired in January [customers will not renew]. And then you have cards expiring in February, [which customers will not renew either]. And then comes the summertime when no one is buying memberships because they workout outdoors. (#4)
Similarly, another entrepreneur explained the process of loss of customers and especially, losing-gaining-losing them several times throughout the pandemic: “We had a nice flow of bookings from the international market [from time to time]… Our facilities have been fully booked and totally empty three times [during different waves] of the pandemic” (#8). Variations like these meant that the losses became difficult to predict. As one entrepreneur described, because she was initially hoping that things would quickly go back to normal, she kept an employee for too long (#5). When better times did not come, their finances suffered over a long stretch because the salary costs were not compensated by subsequent increases in sales.
Sensemaking: eagerness
For entrepreneurs on Pathway I, eagerness, referring to the understanding of the adverse event as a unique chance to explore business opportunities, characterized the process of making sense of the pandemic and its effects. That is, even though most of them felt that the pandemic would have a negative impact both on the world and their business, they perceived that now could be the right time to explore and exploit opportunities previously thought of, but so far not at all or only partially realized. They stayed curious, especially in terms of what they could do in their business and where it would lead them in the future. One entrepreneur exemplified this eagerness when explaining how the market changed during the pandemic: “We wanted to reach out to the Swedish market before the pandemic, [which we did not do previously]” (#8). It was already the entrepreneur's goal to grow their targeting of the Swedish market; therefore, when adversity hit, it became natural to build on these earlier ideas. Another entrepreneur (#11) explained that for a long time she had fantasized about being able to work from Spain. Now, because so much can be done online, she saw the new normal as an opportunity to pursue this dream: “Now I can be all over the world and work [from there]. It is perfect.” The adverse event had nudged these entrepreneurs into new territory: “Never in my life [would I have thought to work with customers over the internet], but now I do it every day” (#11). In contrast to entrepreneurs on Pathway II and Pathway III, entrepreneurs on Pathway I understood the adverse event primarily as an exciting chance to explore business opportunities. While they did not see that they had to react decisively, it sparked excitement for exploring opportunities associated with the new circumstances.
Regulatory focus adjustment: minor
Given the eagerness that colored how entrepreneurs made sense of the adverse event and the extended loss, the analysis suggested that this constituted an environmental stimulus that evoked an adjustment—albeit minor—of the entrepreneurs' regulatory focus. Those who had a promotion focus kept this focus and those who were prevention focused remained prevention focused. The minor adjustment captured alterations to the entrepreneurs' central points of attraction, attention, or activity, but they were still within the same categorical focus. It was not particularly clear to the entrepreneurs what actions would be necessary, but they knew that something needed to change to address the situation with extended losses. As one entrepreneur explained: “We just have to be ready for a lot of scenarios, a lot of different scenarios” (#8). The entrepreneurs felt the need to try out different options and, especially, accept requests that they would not have accepted before. The following entrepreneur explained how he had said yes to any request following a three-month period of being out of work, temporarily shifting the regulatory focus towards more prevention-oriented:
My main focus [in the autumn] was all about getting all the jobs that I could get because I was totally out of work or projects for [several months]—May, June and July. When August and September came, I said yes to any requests [in comparison to being rather picky before]. I took all I could have [just to overcome that period]. (#23)
Likewise, another entrepreneur exemplified how he shifted toward a more prevention-oriented focus due to the adverse event and was now doing everything to ensure customer safety:
Before the pandemic, we didn’t have one thought about [the strategy we are currently using]. Of course, we [took care of the safety] but not in the same way. We were packing up the classroom with more people and a lot closer. So definitely, we changed our way of thinking in March last year [when the pandemic started]. (#19)
What is more, another entrepreneur stated that he temporarily shifted his regulatory focus toward more prevention-orientation, while maintaining his promotion focus where possible:
Before the pandemic, we had a nice flow of bookings from the international market … [But once the pandemic started], we really had to cut costs [as bookings started to be canceled]. [While doing that,] we are also opening new accommodation facilities [and] finalizing the renovation. At the same time, of course, [we are temporarily] building the opportunities with the Swedish market [as the international market is currently on hold]. So, we built two scenarios [- cutting costs where possible and developing our business at the same time]. (#8)
The entrepreneurs on this pathway shared that a shift in focus was a consequence of the pandemic. Importantly, the adjustments to the regulatory focus are considered minor because they reflected shifts such as temporarily changing the market (in this case, from international to national), but not significant shifts in goal-orientation, such as changing a desire for expansion to cutting all possible expenses.
Actions: open-ended
Entrepreneurs on Pathway I engaged in open-ended actions. That is, the actions they launched during the study period were more about exploring than about achieving a fixed goal. Guided by the revenue-losses stretched out over a longer period, eagerness around the opportunities arising from the pandemic and minor adjustments to their regulatory focus, these entrepreneurs mainly engaged in a back-and-forth process of trying different actions in hopes of finding what would work for their business. While this has some similarities with what is known from the literature on effectuation, in a sense that entrepreneurs are trying different available options (Shirokova et al., 2020), this engagement in open-ended actions in a context of losses stretched over time is novel. The analysis suggests that when losses are stretched out over time this enables entrepreneurs to engage in open-ended actions. In this study, the authors vividly see these open-ended actions in how entrepreneurs cut some (less important) expenses and invested some of their available resources in different possibilities. One entrepreneur explained how she was trying to perform different actions:
We say in Sweden that you have to put on the brake, but you also have to accelerate. I think you have to do both. We tried to reduce the salaries, but we also did things that cost us money. So, I think we did a little bit of both. (#4)
Similarly, another entrepreneur exemplified how cutting costs made other expenses possible: “We closed the physical shop [a few times during this year and were investing resources in the web shop]” (#5). To these entrepreneurs, the orientation in actions was more associated with a means (for example, web shop development) than to a specific goal. Whereas some entrepreneurs were going back-and-forth between cutting expenses and investing, others were alternating between opening or closing their points of sale, that is, their different shops.
Although these shifts in resource allocation were made, they were not characterized by deep commitment. As one entrepreneur explained, changes had been made, but they did not intend to commit strongly to them in the long run: “[We worked mainly with the international market]. Now we work more with the Swedish market for different shorter seasons in summer and some parts of the winter. Focus will come back on international markets [once the pandemic is over]” (#8). Another entrepreneur explained how changes have been beneficial but rather been a temporary means of operating the business:
[It was a huge step for us to keep the staff and receive financial support from the government for that]. It was a huge step because then we didn’t have to worry about it in the short term [and specifically about whether to keep staff or not] … [This financial support] has been very good for us because it hasn’t been a hard landing for us [when the pandemic started]. (#23)
Many remarked that, if not the pandemic, they probably would not have tried different actions, which became timely due to the circumstances. Several entrepreneurs mentioned that the undertaken actions had brought them this far, but if the current conditions would continue much longer, they would not be able to keep afloat. Table 3 offers additional illustrative quotes for the concepts constituting Pathway I.
Pathway II: From immediate losses to survival-oriented actions
Timing of the loss: immediate
Entrepreneurs on Pathway II experienced immediate revenue-related loss(es). Specifically, the virus outbreak in Sweden caused an immediate crisis that posed a threat to business survival. An entrepreneur explained the challenge of being thrown from a thriving business to fighting for survival in one week: “The biggest challenge is that, in one week in March last year [that is, 2020], all the bookings were gone and it takes time, a while, before you all find something else to do” (#2). Due to various lockdowns and restrictions, the entrepreneurs' businesses were significantly affected right from the beginning of the pandemic, as this entrepreneur’s story illustrates:
[In the beginning of the pandemic] everything happened with various lockdowns and restrictions. We lost those remaining bookings for March and April over Easter. And also, every single booking that we had for the winter went as well. A couple of them we’ve carried over to the following winter … but most of them just disappeared. The interest in demand is still there. But while there’s all the restrictions and quarantine rules and things like that and just so much uncertainty, it’s quite tricky for people to commit to making any bookings. We do have a few people who’ve come back in and are now starting to book, but it’s all on the understanding that if something happens with the coronavirus and that restricts their travel, then they can just drop out at any point. (#16)
At the beginning of the pandemic, everything was surrounded by high levels of uncertainty, which in turn caused numerous disruptions. It is evident why certain businesses and industries were immediately affected, for example, by people canceling their bookings and/or participation.
Sensemaking: defense
For entrepreneurs on Pathway II, the process of making sense of the pandemic and its effects was characterized by defense, referring to the understanding of the adverse event as something that must be fought. They felt that the pandemic was beyond their control and presented a threat to the existence of their company. Their understanding was that for them there were no opportunities that came out of the pandemic. For example, they made conclusions such as: “the pandemic didn't bring any opportunities” (#14) and “the pandemic has not brought any opportunities for our business” (#16). Some entrepreneurs explained that even if there might be some potential opportunities arising from the pandemic, their exploitation was limited due to the shortage of resources and prioritization of actions: “you can't exploit them [potential opportunities] because you don't have the money. You need to be very careful with all the investments right now” (#2).
Regulatory focus adjustment: major
Given the threat perception that colored how they made sense of the adverse event and the immediate losses, this constituted an environmental stimulus that evoked a shift in the entrepreneurs' temporary state of regulatory focus. The adjustment was major in that there were comprehensive alterations to the entrepreneurs' current central points of attraction, attention, or activity. Specifically, entrepreneurs' previously promotion focus was completely replaced by a prevention focus. In fact, they felt there was no other choice; otherwise, they would not survive. They felt unable to alter the current state of affairs due to restrictions and high levels of uncertainty about the course of events. One entrepreneur explained the situation this way:
[There might be new restrictions coming in] and you have to think again about how we can handle this situation. Right now, I am not sure about tomorrow. There will also be new rules coming in and you are not allowed to have information in advance. (#15)
Furthermore, for some there was an inability to handle the situation even when the restrictions were established and “unknown” turned into “known” circumstances: “You can't change a room [where we have our sessions with customers] very much [based on the new restrictions that limit the number of people able to gather per square meter]” (#15). The entrepreneurs expressed feeling handcuffed, felt the situation was out of their control (#16) and that there was not much to do, as this entrepreneur in the tourism industry explained: “People don't want to travel. They don't want to travel at all” (#2). The entrepreneurs saw no other way forward than to change their focus. In contrast to the minor shift in focus among the entrepreneurs on Pathway I, the shift among the entrepreneurs on Pathway II was found to be major in that they shifted towards one single goal: to survive.
Actions: survival-oriented
The shifts in actions in this pathway were characterized by a survival goal orientation. Guided by their immediate losses, perceptions of the pandemic as a threat and major adjustment to their regulatory focus, entrepreneurs engaged in survival-oriented actions. When comparing this finding with the existing literature, certain abilities can be seen – namely, resilience, bricolage and resourcefulness – that, by being continuously improved by entrepreneurs, can assist them with outlining actions that, in turn, increase the chances of business survival (Doern, 2016; Hadjielias et al., 2022; Langevang and Namatovu, 2019; Michaelis et al., 2022). The key difference between these conclusions and the findings of this study lies in processes that precede actions. If in aforementioned studies entrepreneurs were developing these abilities over time, usually as a result of some adversity that happened in the past and triggered a need for such development, actions in this study were informed by processes that happened within a particular adverse event. Hence, entrepreneurs represented in this paper felt they had no other choice but to engage in actions to survive. As one entrepreneur who offered dog-sled tours explained: “It's just too much responsibility to have [so many] dogs … The worst situation for us would be to not have money for dog food anymore” (#14). Such responsibilities made it crucial to quickly compensate for the immediate loss of income. For example, one entrepreneur stated: “[The primary goal during the past several months] has been to not sink, stay afloat” (#15), while another said, “[the greatest challenge] is to stay afloat until November 2021 … Our goal is just to have any kind of income to make it to the next winter” (#14). Similarly, another entrepreneur explained:
[The primary goal during the past several months] has been to keep afloat, keep covering the costs that we have and then try and be as ready as we can for when people can feel confident enough to start booking holidays and flights and things … So, the plan is just to survive until things are better again. (#16)
In contrast to entrepreneurs on Pathway I, all investments were stalled. An entrepreneur explained how their actions had shifted; instead of taking risks in order to grow the company, they decided to take actions considered safer:
We are definitely not investing, we are also cutting the cost and saving where we can … We are playing as safe as we can, we are not taking any risks in expanding or these kinds of things … Before the pandemic we were investing more in the company, to constantly raise the standard of our products. (#14)
Because of the uncertainty surrounding the pandemic and its implications, another entrepreneur explained the need to preserve the resources they had: “[The focus has been to] not spend too much money, because you… never know what would happen in the next step” (#15). The entrepreneurs described how they acted in order to survive the challenges presented while upholding their responsibilities: “We tried to hold all the money… to make sure that we would be able to handle this situation” (#15).
Although the entrepreneurs' regulatory focus was significantly altered, their companies' offerings were not and the entrepreneurs showed no strong desire for impending change to the company. The following entrepreneur described this: “[We have not developed any new products, nor have we adjusted the existing ones]. We quite like the program that we have” (#16). However, even though actions such as cost reduction helped them stay afloat, these actions did not lead to significant development. Table 4 offers additional illustrative quotes for the concepts constituting Pathway II.
Pathway III: From potential long-term losses to developmental-oriented actions
Timing of the loss: potentially long-term
Entrepreneurs on Pathway III imagined scenarios of future negative revenue related loss(es). That is, their revenue-related losses were not significant from one day to another in the initial stages of the pandemic (as they were among the entrepreneurs on Pathway I). Neither were they experiencing extended loss due to the successive waves of the pandemic (as entrepreneurs on Pathway II did). Rather, they were doing quite well financially during the first months following the virus outbreak, partly due to state-funded support programs. They imagined, however, that over the long term, there was a great risk that their business would suffer great losses due to the pandemic. As one entrepreneur (#1) explained, the present financial situation was manageable, yet she imagined great future losses if the business could not cultivate customer relationships for a longer period. Entrepreneurs in this pathway were determined to not depend solely on state support. They emphasized that even though it is frustrating to not know when they would get the promised support, there was an opportunity to move forward: “It's really frustrating [because] I don't know how much and when I get the money [from the government]… [But the pandemic created an opportunity] to think in another way [than what we did before]” (#22).
Sensemaking: perspective taking
For entrepreneurs Pathway III, the process of making sense of the pandemic and its effects was characterized by perspective taking, referring to entrepreneurs' understanding of the adverse event as something that could be either an opportunity or a threat, depending on the point of view taken. They were seeing both positive and negative sides arising from the pandemic, meaning that it was neither black nor white. At first, entrepreneurs explained how they primarily reflected upon the challenges the pandemic created. Quite quickly, however, they understood that the situation also brought opportunities for their business. Although a much more benign situation than only seeing the negative sides of the pandemic, this also made the situation more complex. As one entrepreneur explained, the complexity became a challenge in itself: “There are so many small parts that when combined have made it difficult, I think” (#7). Similarly, another entrepreneur said: “The pandemic really makes you question everything … [But my primary goal has been to] keep my spirit up. Encourage people to keep going and keep encouraging myself too” (#17). At the same time, they expressed that to some extent being an entrepreneur means that one is always dealing with uncertainty: “Even before the pandemic, you actually never knew. Everything is just dreams or guesses or hopes or worries … You can actually change. [I] keep believing in myself and keep going [at] things that I really believe in” (#24). During the pandemic uncertainty was even associated with positive affect: “It's very exciting, because you don't know what is going to happen” (#1). That is, for entrepreneurs on Pathway III the pandemic did not only bring opportunities or only devastation. Rather they understood the pandemic as a new and uncertain situation that they would most likely be negatively affected eventually, but something they could also capitalize upon in one way or another.
Regulatory focus adjustment: intensification
Given the perspective-taking that colored how they made sense of the adverse event and the potential long-term losses, this constituted an environmental stimulus that evoked a shift in the entrepreneurs' temporary state of regulatory focus. As a result, their regulatory focus intensified. The current focus was deemed the most beneficial during the pandemic and the entrepreneurs expanded or deepened their central points of attraction, attention, or activity. One entrepreneur exemplified how her focus was deepened or channelized due to a significant shortage of possibilities (fewer “doors” were open) and, as a result, the need to allocate resources to pursue the remaining possibilities (“open doors”) that were not closed by the pandemic:
I am very much driven by passion, so I always strive to do things that give me purpose and that make me happy. Before the pandemic, I could have had all of these visions and thoughts and ideas of things that I wanted to do and the road was just like a thousand possibilities. Every door was open. And now with the pandemic, it’s like I still have these ideas, but the road is very narrow and there’s not a lot of doors that are open and I can’t control it. I can’t affect it because there are so many other things around that keep the door closed. So, I have to channelize and be like, okay, what is a good opportunity now? What can be done or can’t be done? What do I have to save for later? So, it’s a lot more like that. (#24)
Similarly, another entrepreneur highlighted how she deepened her current focus in that her decisions and actions became less spontaneous and more thoughtful:
I think it’s less spontaneous decisions [now]. I have made more thoughtful decisions since the pandemic [started]. Because before, I was more like, ‘Okay, this sounds interesting. I want to invest. I want to see what the team can give to me.’ But now I’m more thoughtful of where I put my money, what do I do with my time and energy and resources. So, more thoughtful now, less spontaneous. (#17)
Actions: developmental-oriented
The shift in actions in Pathway III was characterized by changes oriented toward achieving business development. Guided by imagined future revenue losses, viewing the pandemic both as a potential challenge and threat and intensified regulatory focus, entrepreneurs engaged in changes aimed at one or a few select developmental goals. In contrast to other pathways, entrepreneurs on Pathway III were determined to pursue their deepened or expanded focus through investments in business development, whereas the other entrepreneurs had an open-ended orientation with less deep commitment (Pathway I) or were focused on survival and not development (Pathway II). Notwithstanding the fact that the existing literature considers an aspect of having a long-term vision within the approaches such as causation and self-efficacy (Reymen et al., 2015), which have time-related parallel with both potential long-term losses and sensemaking colored by perspective taking, the literature does not have a good explanation for why entrepreneurs choose developmental-oriented actions in a response to adverse event. In contrast to that, this study provides an explanation for why such actions are chosen entrepreneurs. The following is an illustrative quote by one entrepreneur who explained how even though it was vital to cut expenses at the beginning of the pandemic, she retained the same goal orientation while performing actions that would lead toward business development:
For two months [since the pandemic started], I worked with cutting costs. And when I was done with that I started to focus on the development and the investments and other things. During April-May, I worked very, very hard to cut costs and stop the bleeding. And as soon as that was done, we refinanced the company and invested in the market and in change. (#13)
Another entrepreneur shared a similar idea of how he focused on minimizing unnecessary costs at the beginning of the pandemic but performed subsequent actions throughout the pandemic to pursue developing the business:
[If you look in the short term, you need to] be careful, still do whatever you can with marketing and product development. Be careful with bigger investments. In the long term [around summer 2022], we’re going to increase a lot. (#25)
Given restrictions due to the pandemic, it was common that business development included the new circumstances the pandemic created, but aligned with a goal of developing the business to be competitive beyond the pandemic's immediate phases and the state-funded support programs:
For the moment we update products. We update them to be more for Scandinavian clients or guests … We try to find what attracts people more in Sweden than other countries around us. It’s pretty difficult when you are used to working with a special kind of client and then suddenly you need to make a twist [and develop toward a new market]… (#3)
He continued elaborating on the fact that he wanted to continue with this strategy even after the pandemic was under control:
We have thought about new products, new cooperation … It’s really nice that we have more connection with our Swedish markets. We had already connected with the Swedish market, Swedish people coming but now we have even more. And we have two new collaborations with really interesting Swedish companies that mostly worked abroad before with tours, but have now decided to have a Swedish market, so they contacted us in this area to work with us here and its well-known companies. So, for us, we hope it’s going to continue even after the pandemic. (#3)
Entrepreneur #13 shared a similar evaluation of actions and concluded that the pandemic pushed them to engage in much-needed business development:
The pandemic has driven everything to the edge that makes us, as business owners and as managers of the company, make hard decisions, which is good … We made a huge investment in 2010 [when we started the business] and since then it has not been very successful. Everything has been pretty much the same since then. And now we are starting to do things … I think that this is a big change that the pandemic has helped us to get into. (#13)
Furthermore, another entrepreneur even concluded that if not for the pandemic, most probably, a new product would not have been launched: “I don't think I would have [launched a new product] if it weren't for the pandemic. So, there's been a lot of things going on that are new and that I'm very happy and proud about” (#24). Table 5 offers additional illustrative quotes for the concepts constituting Pathway III.
Discussion
By drawing on data from the first year of the COVID-19 pandemic, the findings offer insights into how entrepreneurs running micro-enterprises act in the face of an adverse event that forces businesses to alter the way they used to operate.
Implications for theory
This study makes several contributions to theory. First, the findings demonstrate the importance of the time element—that is, timing of the events in an unfolding process—for understanding actions in response to adverse events. By taking a process perspective, the authors show when and how different types of losses experienced by businesses as a result of the adverse event, influence the nature of actions, implying the pathway entrepreneurs choose and continue to follow. In the present study it was not surprising that entrepreneurs whose businesses were most immediately affected by an adverse event (Pathway II), made sense of the event as a threat (for example, Doern, 2021; Powell and Baker, 2014) or engaged in survival-oriented actions (for example, Arslan et al., 2022; Crick et al., 2021; Shepherd et al., 2020). It is surprising though that they engaged primarily in preventing loss, mainly by frugally managing resources rather than maximizing gains, not only in the early phases of the pandemic, but also many months after the adverse event began. This finding is rather unexpected as it contradicts the way entrepreneurs are commonly portrayed in the literature as those who engage in opportunity exploration and exploitation under both favorable and unfavorable conditions (for example, Shepherd et al., 2020; Shepherd and Williams, 2014). It is evident that by better understanding the nature of actions in response to adverse events—through inclusion of the time element—this does not only advance understanding of entrepreneurs' actions, it also suggests that it would be useful for future research to investigate whether similar (or different) patterns can be seen in response to adverse events of varying nature and duration. Moreover, the findings of this study expand scholarly understanding in relation to the importance of the time element for explaining heterogeneity across entrepreneurs' actions under the conditions of a forced change. While other studies investigated the time element in relation to the severity of the current situation posed by an adverse event (Doern, 2016), the findings of this study suggest that not only current difficulties inform further actions but also those difficulties experienced over time and even those predicted to happen in the future.
Second, whereas prior research has paid close attention to actionable success strategies for dealing with adversities (Bundy et al., 2017; Manolova et al., 2020) and ways to effectively prepare to use these strategies in the face of adversity (Battisti et al., 2019; Corvello et al., 2022), the model developed in this study illustrates a broad range of different actions, irrespective of their eventual outcome for businesses. By focusing on what entrepreneurs actually do when faced with an adverse event—and not prescriptions for what they should do—we enrich existing theory on entrepreneurs, their actions and different processes that precede the choice of actions. The model showcases three distinct types of actions—open-ended, survival-oriented and developmental-oriented—which further our understanding of the “what” and “how” around actions beyond the primary interest in “successful formula”. This insight is particularly relevant to entrepreneurship literature as it serves the purpose of reinforcing the importance of maintaining an inclusive perspective towards a variety of entrepreneurs' actions in both current and future research, while refraining from centering around extensively studied action outcomes, where success and ability to effectively repeat successful strategy are of sole interest.
Implications for practice
For policy makers, business support organizations and even partner companies, the findings of this study provide a more comprehensive picture of how entrepreneurs act in the face of adverse events and why such actions end up being chosen and enacted. Contrary to a common understanding that micro-enterprises share similar actions in the face of adversity, this study highlights the heterogeneity of actions. By being aware of different pathways entrepreneurs can follow when acting in response to adverse events, the aforementioned stakeholders can provide more timely and adequate support that would, in turn, assist entrepreneurs with overcoming challenges posed by adverse events. Considering how vital micro-enterprises are for both local and national contexts, finding ways to better understand and support them in times of adverse events is crucial for economic and social prosperity.
For entrepreneurs running micro-enterprises, the proposed model can help see the broad range of losses that can result from an adverse event, but also the way adverse events and actions can be broadly interpreted. That is, the model offers a broader set of options for how an adverse event can be viewed and managed. While this can broaden the extent of how entrepreneurs respond to adverse events, it also suggests that entrepreneurs should be careful how they assess their losses; indeed, their response can have a great impact on what actions in which they engage. Ultimately, by enacting the model from top to bottom, entrepreneurs can determine which pathway would be the most realistic, desired, and, to the contrary, undesired scenario for their business. By reflecting upon and discussing the model, the authors believe entrepreneurs would be better equipped to respond to adverse events in a relatively clear-headed way.
Limitations and directions for future research
While this study offers valuable contributions, it is not without limitations. First, the empirical data was collected on micro-enterprises in various industries, which may have influenced the responses of entrepreneurs to the adverse event. This diversity of responses could be considered as a unique feature of the study, allowing the authors to develop theory about the heterogeneity of responses to adverse events. In future research, it could be valuable to examine the range of responses within different industries in more depth. Second, the empirical data was collected through semi-structured phone interviews. While these interviews may not be as comprehensive as in-person interviews, which allow researchers to observe the context in which responses are given, phone interviews were the only viable option given the restrictions on in-person interactions caused by the adverse event being studied (i.e. the COVID-19 pandemic). However, it should be noted that phone interviews can still provide valuable insights and are a useful means of data collection.
The findings of this research point to several potential areas for further investigation. First, the findings of this study suggest that there may be benefits to expanding the focus of research beyond successful outcomes and the factors that contribute to them. Instead, by also considering responses that may result in less successful outcomes or even failure, future research can develop a more comprehensive and inclusive understanding of how micro-enterprises respond to adverse events. This shift in focus could provide valuable insights into effective strategies for navigating such situations. Second, as the model offers insights into responses to adversity and adverse events without the selection bias that comes from only studying those that have successfully navigated a difficult phase in their venturing, future research can further expand theory on responses to adverse events by building on the findings of this study. This study did not follow actions to the point where they resulted in a specific outcome (e.g. staying afloat or bankruptcy), thus future research could explore the utility of the different pathways by examining their ultimate outcomes. Such examinations may provide valuable insights into the effectiveness of different pathways. Third, future research examining responses of enterprises of different sizes, not only those among micro-enterprises, would be valuable for advancing theory in this area. Finally, to further develop the findings of this study, the authors suggest that two theoretical perspectives may be useful to consider: threat-rigidity and absorptive capacity. The threat-rigidity thesis (Staw et al., 1981) proposes that organizations can sometimes frame imminent change as a threat and thus enact a rigid response. Future research could examine whether this perspective can help to explain and predict the actions of entrepreneurs running micro-enterprises when faced with an adverse event that puts pressure on their businesses to alter their operations. The concept of absorptive capacity (Cohen and Levinthal, 1989, 1990), which denotes individual/organizational ability to recognize, assimilate and utilize knowledge, could be relevant in examining the heterogeneity of entrepreneurs' responses to adverse events. By considering these perspectives, future research may be able to further advance understanding of how entrepreneurs in micro-enterprises respond to adverse events that require them to adapt their operations.
Conclusion
By drawing upon qualitative empirical data collected from entrepreneurs running micro-enterprises, the authors built a theoretical model with three types of pathways that entrepreneurs may take on in response to adverse events. Through studying entrepreneurs' actual responses to adverse events, this study adds another dimension to the existing literature by showcasing authentic responses irrespective of business outcomes (successful or unsuccessful). This novel knowledge on real action pathways is valuable for both academia and industry: for academia because it emphasizes the importance of shifting research focus towards a more inclusive one; for industry because the produced knowledge is critical when crafting relevant and timely support initiatives, especially for micro-enterprises which in many countries constitute a vast majority of ventures.
Figures
Description of data
| Data types | Use in analysis |
|---|---|
| Primary data | |
| 27 initial semi-structured interviews with participating entrepreneurs | Provided insight into entrepreneurs' experiences of the unfolding adverse event: impact on entrepreneurs' business operations and immediate actions |
| 23 follow-up semi-structured interviews with participating entrepreneurs | Provided insight into entrepreneurs' experiences of the ongoing adverse event: challenges and opportunities, evaluation of performed actions, reflections on the regulatory focus adjustments, future goals and associated challenges |
| Secondary data | |
| Website material from 27 of the participating businesses | Enriched the understanding of entrepreneurs' businesses, their regulatory focus (promotion or prevention) prior to the adverse event, as well as some of the actions being taken |
| Communication in social media by 24 of the participating businesses (for example, LinkedIn, Facebook and Instagram) | Exposed participating entrepreneurs' perspectives on the adverse event, but also how business's actions evolved over time |
| 300 media articles in which some of the participating businesses were mentioned | Enriched the understanding of the participating businesses before the adverse event (and to some extent what impact the adverse event had), as well as the actions in which they engaged |
| More than 1,000 articles in Swedish media on the situation and outcomes of the pandemic | Furthered the understanding of the adverse event (COVID-19), the chronology of related events, their impact on entrepreneurs and actions entrepreneurs generally undertook in response to the adverse event |
| Two surveys about the effects of the pandemic on micro-enterprises in the selected region, carried out by the local chambers of commerce | Enriched the understanding of the hardships the adverse event generally created for entrepreneurs in the region |
Participant overview
| ID # | Type of business | Company's age | Number of employees | Entrepreneur's gender | Entrepreneur's age | Regulatory focus shift | Dominant regulatory focus during study |
|---|---|---|---|---|---|---|---|
| Pathway 1: Open-ended actions | |||||||
| 4 | Fitness | 20 | 10 | F | 53 | Minor | Prevention |
| 5 | Retail/Tourism | 14 | 1 | F | 57 | Minor | Promotion |
| 8 | Tourism/Media/Entertainment | 15 | 5 | M | 49 | Minor | Promotion |
| 9 | Advertising | 11 | 7 | M | 58 | Minor | Promotion |
| 11 | Consulting/Education | 7 | 1 | F | 50 | Minor | Prevention |
| 18 | Media | 15 | 3 | M | 61 | Minor | Promotion |
| 19 | Education/Professional services | 2 | 2 | M | 61 | Minor | Prevention |
| 23 | Technology/Engineering | 2 | 1 | M | 53 | Minor | Prevention |
| Pathway 2: Survival-oriented actions | |||||||
| 2 | Tourism/Entertainment | 4 | 1 | F | 59 | Major | Prevention |
| 14 | Tourism/Accommodation/Entertainment | 11 | 3 | F | 42 | Major | Prevention |
| 15 | Education/Professional services | 5 | 1 | F | 54 | Major | Prevention |
| 16 | Tourism/Accommodation/Entertainment | 3 | 2 | M | 53 | Major | Prevention |
| Pathway 3: Developmental-oriented actions | |||||||
| 1 | Art and Design | 5 | 1 | F | 49 | Intensification | Promotion |
| 3 | Tourism | 4 | 2 | M | 40 | Intensification | Prevention |
| 6 | Consulting/Professional services | 10 | 2 | M | 62 | Intensification | Promotion |
| 7 | Accessories | 3 | 2 | F | 40 | Intensification | Prevention |
| 10 | Theater performances/Professional services | 11 | 1 | F | 47 | Intensification | Promotion |
| 12 | Wholesale/B2B | 24 | 8 | F | 28 | Intensification | Promotion |
| 13 | Tourism/Accommodation/Restaurant/Entertainment | 11 | 4 | F | 58 | Intensification | Promotion |
| 17 | Consulting/Professional services | 8 | 1 | F | 32 | Intensification | Promotion |
| 20 | Consulting/Professional services | 15 | 4 | F | 48 | Intensification | Promotion |
| 21 | Food production/Restaurant/Retail | 6 | 1 | F | 54 | Intensification | Promotion |
| 22 | Fitness | 7 | 1 | F | 52 | Intensification | Prevention |
| 24 | Professional services/Media/Events/Fitness | 2 | 1 | F | 30 | Intensification | Promotion |
| 25 | Tourism/Entertainment | 21 | 2 | M | 48 | Intensification | Promotion |
| 26 | Tourism/Accommodation/Entertainment | 34 | 3 | M | 52 | Intensification | Promotion |
| 27 | Tourism/Entertainment | 28 | 2 | M | 50 | Intensification | Prevention |
Pathway I: descriptions and examples
| Pathway I: From losses stretched out over time to open-ended actions | ||
|---|---|---|
| Label | Description | Example |
| Timing of the loss: Stretched out over time | The experience of revenue related loss(es) stretched out over an extended period of time | “[I think the challenge consisted of] two parts: economical and mental health of people who work here. I think it was the first two months when it was kind of a shock. We had to think about changing the way of giving classes, doing those online classes and making sure that everyone [follows safety instructions]. And then during summer, we felt a bit of relief. Little bit back to normal. Usually, summertime is the worst season for us because people prefer to train outside and don't buy membership because of that. Then when the autumn came, everything felt a little bit better. Maybe in September we could see a small number of people coming back, but then the second wave came. It was very dark, very black [time] … We had to start doing things that we were not employed for. Everyone has to clean and take responsibilities in areas where we usually don't because we had to say no to the cleaning company and things like that. So, the challenge was to make us feel engaged and to give [our employees] some energy, when we didn't have any energy ourselves.” (#4) |
| “When other companies in the region, my customers, have cancelled my services, I was waiting [for them to come back soon]. I have heard nothing from them yet [even after half a year since the pandemic started to spread in Sweden].” (#11) | ||
| Sensemaking: Eagerness | Understanding the adverse event as an exciting chance to explore and exploit business opportunities | “[There are] a lot of opportunities [during] the pandemic.” (#8) |
| “Naturally, there will be a lot of opportunities [due to the pandemic]. What I am seeing as a director is that the world of media is changing very, very quickly today.” (#18) | ||
| “We are [using the pandemic for] learning [how] to be more flexible and listen to our customers.” (#23) | ||
| “Our strategy is more like the glass is half full, not half empty.” (#4) | ||
| Regulatory focus adjustment: Minor | Limited alterations of the entrepreneur's current central points of attraction, attention, or activity | “[Since the pandemic started], I worked a bit at my husbands' company. I started to get better with the internet [to be able to work online]… I started to study and take some classes.” (#11) |
| “We only had the training in-person before. And that was one of the struggles that we had when COVID-19 came in. People did not want to go to training facilities, or they did not want to meet. And so, we had troubles in the beginning of the pandemic and we saw that the only thing that we could do was to try to offer, to see if people did want to have the education from home. And that was one of the things that we actually did.” (#19) | ||
| Actions: Open-ended | Engagement in actions without a fixed goal | “We have transferred a little bit more to online web education … We'll never go back to normal again, because, of course, we have developed and we learned something and that is good for our customers.” (#19) |
| We [were supposed/planning to] have our annual meeting with our customers and of course we couldn't have it [due to restrictions]. Then, we decided to have it in a digital format, on distance and I think it's more efficient [this way]. I don't know [but] it gives us more opportunities to approach our customers.” (#23) | ||
Pathway II: descriptions and examples
| Pathway II: From immediate losses to survival-oriented actions | ||
|---|---|---|
| Label | Description | Example |
| Timing of the loss: Immediate | The experience of immediate and significant revenue related loss(es) | “[We] got the message about the pandemic and one week later, everything, all the bookings were canceled by the customer. So, it has been a tough period for me.” (#2) |
| “Actually [the effects of the pandemic] came really sudden for us because all the people showed up until the middle of March and then suddenly… it was canceled all at once.” (#14) | ||
| “Everyone shut it down. You weren't allowed to visit them. You weren't allowed to have lunch with them or even all the lunch places shut it down and everything. So, it was difficult to get in contact with people and discuss what, how can we help you and how can we make the best of this situation? This was tough.” (#15) | ||
| Sensemaking: Defense | Understanding the adverse event as something that must be fought | “You still have salaries that you need to pay … So, what can you do? You just have to accept it, even if you don't like it because it affects my own business very much, of course, because you still have to pay taxes. I have a car; a minibus and I have to pay for it.” (#2) |
| “We haven't [developed any new services or products] because we don't have customers … There is no point for us to offer [our services] if there is nobody … It helped us a lot to [shorten the contracts for staff and apply for government support], thus we are still surviving.” (#14) | ||
| Regulatory focus adjustment: Major | Comprehensive alterations of the entrepreneur's current central points of attraction, attention, or activity | “It's almost, in some ways in the real world, we can't control what happens in the next three months or six months. But if, at least we can make sure we're well prepared for beyond that when things do start to … When travel picks up again. I considered looking for a different job to get some extra money coming in.” (#16) |
| “I don't want to lose the money, so I've been [very safe]. I wanted to be safe so that I can survive this part, I don't want to spend my money. It's not so easy to spend all your money when [there are no customers], for example. I want to be safe so that I can [use them later instead]. In the meantime, I can do something else, [have some side job].” (#2) | ||
| Actions: Survival-oriented | Engagement in actions oriented towards business survival | “The structure of our company doesn't really give any options for different things than tourism actually. But we started instead of just offering travels, we wanted to offer courses for people … This sustainability program [was] relatively cheap if you don't contact experts. So, we did all the work with Googling and this ourselves, which just meant that it costs a lot of time, but very little money …” (#14) |
| “[I have not adjusted our offer in any way during this time.] I still have the same activities … [We have not developed any new services or products]. [Mainly because] we don't have any customers.” (#2) | ||
| “We have established a couple of contacts in different countries [which we did not target prior to the pandemic]. Although there still aren't any confirmed bookings [coming from this new cooperation], there might be.” (#16) | ||
Pathway III: descriptions and examples
| Pathway III: From potential long-term losses to developmental-oriented actions | ||
|---|---|---|
| Label | Description | Example |
| Timing of the loss: Potentially long-term | The imagination of future negative revenue related loss(es) | “And for the moment I think, how should I get money from the company? What should I produce? What people want to buy in my art … That's in the plan that I [have now, just after summer]. I also have to think about it, I cannot only do what I think is fun.” (#1) [When I plan for the future], I focus on further away than the pandemic.” (#13) |
| “We are still on the same level as 2019 today … Our difficult part, we have said that all the time, but our difficult period will be the autumn 2021 or autumn 2022. That would be our bottleneck … This winter, we will lose maybe 50%, maybe more of the income … Then after this winter and the economy will probably be bad in Europe. People will be unemployed, so the number of people who can travel will go down. Then autumn ‘22 could be bad, because then we start needing new sleds.” (#27) | ||
| “It was quite easy to see that this pandemic would affect us over a long-term period, more than a couple of months … Now we're looking at the upcoming winter, which is very hard to predict anything about.” (#26) | ||
| “We actually had a good quarter two, quarter three and quarter four last year. All autumn was pretty much normal, not quite, but normally when it comes to money anyway. But we are pushing now up to Christmas and then we've got the third wave or not, I don't know, but we can see a sharp decrease in new work coming in.” (#20) | ||
| Sensemaking: Perspective taking | Understanding the adverse event as something that could be either an opportunity or a threat, depending on the point of view taken | “The pandemic has given us time to reevaluate how we work … It has helped us a lot to find a better balance and better understand how we can make a bigger difference in society with our offers.” (#6) |
| “When you get a challenge,… you get forced to have new ideas on what to do and that is sometimes pretty good actually.” (#3) | ||
| “When the pandemic came in March, I felt sad and low and frustrated for maybe four weeks, three or four weeks. But after that, I felt this was a chance for me to rest. To do some [recovery and reflection]. What do I think is meaningful for me? What do I want to do more of and less of? I hope this will lead to something good.” (#10) | ||
| “We have had a learning perspective in the team the whole time and being on, how should I describe it? Trying to seize opportunities.” (#20) | ||
| Regulatory focus adjustment: Intensification | Expansion and deepening of the entrepreneur's current central points of attraction, attention, or activity | “We've been playing very hard to win and that's still the aim.” (#20) |
| “We've actually come so far in our startup journey that we are right now pitching to investors. Because we need to get more capital in order to take the next big steps … And with the large sort of angel investor or someone that can come into our company, both with their own capital, but also their knowledge and retail experience … It's been good for us because we have had to [modify] our strategy … both in terms of sales channels, that we are pushing much more towards our own web shops, more direct to consumer purchasing.” (#7) | ||
| “We have used more money on marketing this year than before and it's just to, what I'm saying? Build our name.” (#12) | ||
| Actions: Developmental-oriented | Engagement in actions oriented towards achieving business development | “So, the plan is to scale up things, in my case work fewer hours with customers and do more strategic planning, develop products and educate other consultants [to deliver the product/service]… I have tried this new idea, which is a very, very good model.” (#6) |
| “I have invested lots of money in different projects and ideas for the whole year. Because this is a great time to reach out to new markets.” (#17) | ||
| “We also changed bookings, so people could feel comfortable booking. So, like, two weeks before departure of a tour, for example, they could cancel the booking and get all the money back, which is a risk for us, but it's also a risk that people don't book. So, it's better for us. Our idea was that it’s better for us that people can cancel their booking pretty close to departure, than people who don't book at all.” (#3) | ||
| “The Corona situation made us put more pressure into development.” (#26) | ||
| “We've been developing our services. We've been setting new goals. We are in the process of getting a new website done … [We have introduced] some new products and some that we had planned to have, we finally got around to developing.” (#20) | ||
| “[We are introducing new products or adjusting the existing ones] all the time. We're working with three new products now.” (#25) | ||
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Acknowledgements
We are grateful to the entrepreneurs who generously shared their thoughts and experiences on operating and developing their businesses during the Covid-19 pandemic. This study was funded by the Kamprad Family Foundation, through the NorrlandsNavet research center.
Corresponding author
About the authors
Alina Veksler is a doctoral candidate in Entrepreneurship and Innovation at Luleå University of Technology, Sweden. Her research focuses on actions and decisions underlying development in small- and medium-sized enterprises.
Sara Thorgren is a professor of Entrepreneurship and Innovation at Luleå University of Technology, Sweden. Her current interests include how individuals (entrepreneurs and employees) as well as businesses deal with and act upon new opportunities of reinvention and development.