Resilience through operational flexibility for crisis response: an international investigation of firm responses during COVID-19

Abstract

PurposeCrisis response has emerged as a salient concern for firms in the onset of COVID-19. While research suggests that resilience is critical during such disruptions, there remains a need to examine how firms build resilience during evolving situations. This study focuses on resiliency created through operational flexibility and examines how firms developed resiliency to COVID-19 through an adaptation of three technology-based levers of flexibility: change in a firm's product and service offerings, the channel it uses for sales and the location of a firm's workforce.Design/methodology/approachThis study uses a unique cross-sectional dataset generated from a survey administered by a reputable financial institution, from March 20 to June 20, during the inception of COVID crisis. This study uses ordinary least squares to analyze data from 6,076 firms across 20 countries.FindingsResults indicate that flexibility through a combination of a change in a firm's product and service offerings, with movement to selling through a digital channel, had a positive impact on firm sales. However, flexibility through a combination of change in product and service offerings with workforce location changes had negative impacts. Robustness analysis indicates that negative impacts worsen in countries with higher digitization and in manufacturing and retail firms as compared to service firms, indicating the inflexibility of physical goods–based business models. Results highlight dimensions through which technology-based flexibility can take place and the benefits of flexibility on firm performance.Originality/valueThis study provides managerial insights into technology-based operational flexibility mechanisms that can be employed for building performance resilience during unexpected disruptions. Research findings inform firms facing supply chain challenges and inflation pressures of business today.