Int. J.

Production Economics 147 (2014) 410–428

Contents lists available at ScienceDirect

Int. J. Production Economics

journal homepage: www.elsevier.com/locate/ijpe

Antecedents of organizational resilience in economic crises—an

empirical study of Swedish textile and clothing SMEs
Rudrajeet Pal a,b,n, Håkan Torstensson a,1, Heikki Mattila a,b,2
a
The Swedish School of Textiles, University of Borås, Bryggaregatan 17, SE-50190, Borås, Sweden
b
Department of Material Science, Tampere University of Technology, P.O. Box 589, FIN-33101, Tampere, Finland

art ic l e i nf o a b s t r a c t

Article history: Economic recessions have created challenges for small and medium-sized enterprises (SMEs) and
Received 22 May 2012 contributed to disruptions requiring them to be resilient. At times of economic crises, SMEs face major
Accepted 27 February 2013 threats to their financial performance and ultimately to their survival. The average number of Swedish
Available online 15 March 2013
textile and clothing (T&C) firms that went bankrupt during the recent crisis (2007–09) escalated twofold
Keywords: compared to the average over 2000–10. Following the 1990s economic crisis nearly 12 per cent of the
Resilience T&C companies went bankrupt in 1994–95. The structural industrial statistics also plummeted in these
Crisis crisis years, aggravating many internal problems in SMEs as a ripple effect.
Small and medium-sized enterprise This study concentrates on the constraints faced by Swedish textile-related SMEs, primarily during
SME
the economic crises of the past two decades (1990–93 and end 2007–09), and identifying the
Textile and clothing
antecedents and their different degrees of influence on economic resilience. It also deepens the
Sweden
understanding of the underlying patterns in the antecedents, observed in SMEs, favouring or inhibiting
resilience due to their significance or deficit, respectively.
The paper adopts an exploratory research conducted in two phases, first through a survey and
followed by a series of interviews, responded by eight Swedish T&C SMEs. Annual reports provide a
detailed account of the financial performances of these firms. A conceptual resilience framework was
developed earlier, based on a review of extant literature.
Findings provide insight on how the responding firms considered resourcefulness, viz. cash flow and
investment finance, relational networks and material assets, along with ‘dynamic competitiveness’
through strategic and operational flexibility to be key enablers of resilience and financial performance,
mostly through generation of profitability, cash flow/liquidity and sales turnover. Responses also
highlighted the indirect influence of the ‘soft’ learning and cultural aspects like attentive leadership
and collectiveness on economic resilience, considered tacit and ingrained in small or medium-sized
family businesses. Additional process initiatives, in particular growth and continuity strategies, were also
emergent patterns to properly utilize and direct the antecedents for resilience development. These are
beneficial for firms to understand the key areas, in which to invest for developing resilient business
models.
& 2013 Elsevier B.V. All rights reserved.

1. Introduction particularly vulnerable to failures in both continuous shifts and

The recent economic recessions and global trade conditions
have created challenges for many Western economies and their
embedded industries, particularly to the small and medium-sized
enterprises3 (SMEs). According to Acs et al. (1990), SMEs are
n
Corresponding author at: The Swedish School of Textiles, University of Borås,
Bryggaregatan 17, SE-50190, Borås, Sweden. Tel.: þ46 704 294 791;
fax: þ46 33 435 40 09.
E-mail addresses: rudrajeet.pal@hb.se (R. Pal),
hakan.torstensson@hb.se (H. Torstensson), heikki.r.mattila@tut.fi (H. Mattila).
1
Fax: þ46 33 435 4009.
2
Fax: þ358 3 3115 2955.
3
The European Commission (2011) definition of SMEs is used as enterprises
with headcount lesser than 250 or turnover≤€ 50 million or balance sheet total≤€
unpredictable events. They are susceptible to financial fluctuations
(i.e. cash flow), legislation, supply network relationships (i.e.
power issues), changing customer requirements and demands
and even collapsing of national financial systems (as it happened
recently in Greece) (Bhamra and Dani, 2011).
The Scandinavian market, however, has been somewhat stable
with stagnant growth rates though the main export market has
fallen during the recent global credit crunch since 2007–08 (Keay,
2012). There has not been any particular evidence showing the
effect has been more pronounced in case of the textile-related
(footnote continued)
43 million (http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-
definition/index_en.htm, 14.02.2012).

0925-5273/$ - see front matter & 2013 Elsevier B.V. All rights reserved.
http://dx.doi.org/10.1016/j.ijpe.2013.02.031
 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428
Fig. 1. Bankruptcy statistics of Swedish textile and clothing firms (1993–2010).
sectors, but it is noticeable from Swedish central statistics that the
average number of Swedish textile and clothing (T&C) firms that
went bankrupt during the recent crisis (2007–09) escalated two-
fold, compared to the average over 2000–10 (cf. Fig. 1—adapted
from SCB database statistics). The 1990s economic crisis was the
toughest in the Swedish context, with nearly 12 per cent of the
T&C firms going bankrupt in 1994–95. It was also evident that
most of these firms were small with less than 50 employees.4
The structural industrial statistics also plummeted in these
crisis years. For example, during the global credit crunch (2007–
09) the textile and wearing apparel industries made massive losses
(from a profit of 419 mSEK in 2006 to losses of 387, 223 and 155
mSEK, respectively, 2007 onwards) (adapted from SCB database
statistics).5 Other indicators, like the net turnover and total assets,
also reduced by 19.4 per cent and 8 per cent, respectively, though
no substantial dip was observed in other structural indicators.
During the 1990–93 crisis the repercussion was worse as the total
operating revenues and value addition for the industries declined
by 24 per cent and 20.4 per cent, respectively, though it picked up
again in 1994 but did not reach the level before the crisis until
1997.5
It is thus evident that the Swedish textile-related SMEs faced
major threats to their financial performance and ultimately to
their survival at times of economic crises, and thus economic
resilience has become a prerequisite to be fostered in such firms in
order to be successful.
In this context, the central objective of the paper is to identify
the nature of problems and constraints faced by Swedish textile
related SMEs, primarily during the economic crises of the past two
decades (mainly 1990–93 and end 2007–09) as well as the
antecedents and the differential degree of influence they exhibit
on economic resilience. The study also deepens the understanding
of the underlying patterns favouring or inhibiting resilience in
such firms.
2. Framework for antecedents of SME resilience
Small- and medium-sized enterprises are highly vulnerable to
times of crisis, then being affected by the cascading and aggravat-
ing effects of several related problems and constraints, especially
4
Only 2 firms, with number of employees 450 were bankrupt in 1995 and
2008 and 1 each in 2000 and 2001.
5
Statistiska Centralbyrån (http://www.ssd.scb.se/databaser/makro/start.asp,
27.02.2012).
411
regarding financial and human resources (Vargo and Seville, 2011).
As Thun et al. (2011) asserted, SMEs usually face conditions of
weaker cash flow and less equity reserves; they lack resources and
are overloaded with short-termism, thus, lack the necessary skills
to pursue long-term strategies to drive resilience (Ates and Bititci,
2011; Wesson and De Figueiredo, 2001). However, due to their
relative small size, they are flexible, and as Salavou et al. (2004)
assert, market- and learning-oriented SMEs tend to be more
innovative and resilient. The relative strength of SMEs is argued
to be characterized by flexibility, adaptability and innovation
(Vossen, 1998), instrumental in fostering resilience, although they
have varying resource constraints. Previous research has found
that SMEs generally lack resources and capabilities (Herbane,
2010; Vossen, 1998), hence attempt to build resilience through
strategic and operational readiness or rapidity (Ismail et al., 2006;
Sheffi, 2007; Sullivan-Taylor and Branicki, 2011), positive adjust-
ments (Weick et al., 1999) or knowledge creation. Resilience of
SMEs requires knowledge retention through flexible workforce,
strategic thinking, and top management support (Levy et al.,
2003), although it has been argued there that SMEs lack knowl-
edge retention. However, SMEs need to improve both their access
to finance and their individual competitiveness for optimizing
their most common constraints, hence, balance their soft and hard
assets (Beer and Nohria, 2000; McElroy, 1996) to develop win-win
solutions (Gunasekaran et al., 2011).
The following section highlights three broad assets, in general
required by firms to bolster resilience. They are resourcefulness,
like finances, materials, people (social assets) etc., competitiveness
(flexibility, networking, robustness and redundancy) and ‘learning
and cultural’ aspects (cf. Fig. 2).
2.1. ‘Resourcefulness’ and resilience
Resource constraint is considered to be a key inhibitor of SME
resilience, while its availability can be a potential enabler as well
(Sullivan-Taylor and Branicki, 2011). From this perspective, a
recent study described that SMEs mainly lack resources like
control, cash and compressed time to respond (Herbane, 2010).
Similarly, Vossen (1998) and Van Gils (2005) described SMEs to be
suffering from resource constraints predominantly material
(related to economies of scale and scope), financial (cash flow
and investment finance) and technological resources, while
Ghobadian and Gallear (1997) highlighted how this leads to
success or failure of SMEs. Wesson and De Figueiredo (2001)
pointed at a similar lack of long-term resources in SMEs, as they
are overloaded with short-term cash and payment problems,
412 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428
Fig. 2. Theoretical framework.
setting them apart from larger organizations. Another key aspect,
found in research, is the lack of external support and synergy
effects for SMEs, which is essential for increased competitiveness
(Fassoulsa, 2006; Ghobadian and Gallear, 1997). Moreover, SMEs
have started outsourcing and market diversification, which high-
lights the need to integrate more information technology and
information systems for significant SME resilience.
Overall, in the present paper five categories of resources
(material/systems, finance, social, network, and goodwill) are
highlighted, along the lines of Freeman (2004) emphasizing
resources as (i) wealth as cash and other assets, (ii) systems:
internal coordination, processes and technical expertise, (iii)
human resources: people with requisite skills, and (iv) network
connections and relationships with stakeholders; essential con-
tributors to superior organizational performance, hence resilience.
These five categories and their relationship to resilience devel-
opment are briefly described as follows:
a. Material resources and resilience—Material assets, like stock of
raw materials, work in progress or finished goods as inventory,
used strategically can help to overcome immediate problems of
disruption. Building-up such a system with safety stocks needs
organizational planning to attain internal efficiency to cushion
every part of an organization (Sheffi, 2007).
b. Financial resources and resilience—Mobility and deposits of the
financial assets are other important resources to create a
critical asset stock (Gittell et al., 2006). A large capital base
acts as a buffer or shock absorber and prevents the impacts of
crisis, along with immediate access to adequate insurance
coverage.
c. Social resources and resilience—Freeman (2004) emphasized the
essence of human resources, or people with requisite skills, as a
critical contributor to superior organizational performance.
Teamwork and enhanced trust among the employees are
essential to distinguish organizations having the potential to
bounce back from plausible disruptions by their ability to
develop an internal risk management culture and collaborate
and communicate proactively (Sheffi, 2007).
d. Network resources and resilience—Collaborative inter-
organizational relationships (IORs) through mergers and acqui-
sitions, strategic alliances or outsourcing help to transfer and
exchange uniquely complementary sets of knowledge
resources and relationships (Leiblein, 2011; Lippman and
Rumelt, 2003), accounting for correct alignment of the organi-
zation, both along the value chain and to the environmental
conditions. This is indispensable in order to reduce and spread
risks and manage market turbulences through appropriate
strategies, enterprise culture and relationship (Sheffi, 2007).
Networked organizational structures offer greater agility and
adaptability by maintaining countless secured relationships
with quality stakeholders (suppliers, customers, financers
etc.) thus intertwining integrally to organizational success
patterns (Leiblein, 2011; Starr et al., 2003). Such strategic
choices yield fullest utilization of slack resources, sharing of
risks and also provides financial reserves and bargaining power
to firms for organizational growth (Li et al., 2011).
e. Intangible resources and resilience—Building a deep social fabric
of goodwill, inter-personal relationships and brand is also
evident to lay a foundation for developing contextual resilience
(Adler and Kwon, 2002; Lengnick-Hall and Beck, 2005) by
developing deep pockets of intangible resources acting as a
mask to temporarily protect the organization from tightly-
coupled situations (Perrow, 1984).
A unifying resource-based view (RBV) framework justifies how
an organization's competitive advantage can be achieved through
possession of various assets and resources (financial, physical,
human, technological, organizational and reputational) (Grant,
1991a,b) for resilience development.
2.2. ‘Dynamic competitiveness’ and resilience
Effective deployment of heterogeneous slack resources results
in development and reconfiguration of core competencies in firms
(Eisenhardt and Martin, 2000; Grant, 1991a,b; Prahalad and
Hamel, 1990), like long-term flexibility, redundancy and robust
responses (Sheffi, 2007) fostering competitive advantages, and it is
instrumental in reducing or absorbing market turbulence
(Lengnick-Hall and Beck, 2005). Such dynamic capability develop-
ment is important for response activation in crises, as proposed by
Burnard and Bhamra (2011) as a key determinant of organizational
flexibility (Hatum and Pettigrew, 2006) or ‘adaptive capacity’
 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428
needed for developing resilience. Rice and Caniato (2003) stressed
the common approach of firms using reactive instruments, like
flexibility and redundancy, to build resilient supply chains.
Here four categories are in focus, viz. (a) flexibility,
(b) redundancy, (c) robustness, and (d) networking and their
relationship to resilience development, briefly as follows:
a. Flexibility and resilience—In case of SMEs, strategic flexibility
appears to be, predominantly in the form of rapid decision-
making, rapid and effective internal communications, capacity
for fast learning and the ability to quickly adapt routines and
strategies (Vossen, 1998). Such flexible and adaptable beha-
vioral characteristics prove to be key enablers of SME resilience.
In a similar study, rapidity in decision-making and inter-
organizational relationship emerged to be key enablers of
SME potential for timeliness and agility to demonstrate resi-
lience capabilities (Sullivan-Taylor and Branicki, 2011). Such
flexible and rapid decision-making criteria were also pointed
out by Vargo and Seville (2011) as a means to yield crisis
strategic readiness. On the other hand, Sheffi (2007), Sheffi and
Rice (2005) and Peck (2006) addressed the role of operational
and structural flexibility in firms for building resilience, but
mostly in large firms. Resilience can be built in firms through
operational flexibility, like by building inter-operable standar-
dized materials and processes, effective lean management,
closeness of operations to demand via postponement, building
efficiency through training programs, seamless integration of
processes, concurrent engineering techniques, shortened lead
times etc. (Peck, 2006; Sheffi, 2007). From the resilience
engineering perspective, flexibility and agility emphasize the
ability of the system to respond to unexpected situations and
restructure rapidly by developing adaptive capacity (Hale and
Heijer, 2006; Westrum, 2006; Woods, 2006). However, in a
study by Thun et al. (2011), such preventive instruments (on-
time delivery, strategic supplier development, improved track-
ing etc.) rendering operational flexibility were found to be
minimal in case of SMEs, due to resource constraints.
b. Redundancy and resilience—Another mechanism for achieving
resilience in firms is by building redundancy of resources, such
as unused capacity, multiple sourcing etc. (Sheffi and Rice,
2005). Sheffi (2007) and Sheffi and Rice (2005) have empha-
sized creation of redundancies for building resiliency, mostly in
case of large firms, though Thun et al. (2011) have shown how
small firms can also thrive on developing redundancy-based
reactive instruments for dealing with crises. However,
Dangayach and Deshmukh (2001) have shown how redun-
dancy building can be an essential precursor for resilience
development in case of non-family firms, but not for small
family-owned ones as they are expected to have the disadvan-
tages of inadequate technological capabilities, lack of financial
strength and infrastructure. This highlights the trade-off in
balancing the cost of redundancy and generating long-term
economic benefits as an antecedent of resilience (Linnenluecke
and Griffiths, 2010).
c. Robustness and resilience—Organizational robustness is another
imperative element to achieve resilience by resisting disrup-
tions and building reliability (Mangan et al., 2008). Christopher
and Rutherford (2004) suggested that robust organizations
have a culture of quality awareness and ‘lean thinking’, while
Tang (2006) stated that they are effective in deploying con-
tingency plans and resources when facing disruptions. This
enhances the organization's ability to develop internal quality
control on variability and lean processes, thus, adding a great
degree of resilience through stabilized processes, reduced
supply chain variability and low inventory levels (Christopher
and Rutherford, 2004). Total quality management (TQM)
413
suggests building of robustness through quality managed lean
processes and continuous improvements (CI) to control and
manage disruptions to a great extent, particularly researched in
case of large organizations (Dean, 2010). Ismail et al. (2011)
asserted that robustness is one of the key necessities to develop
SME operational agility, apart from responsiveness and pro-
activeness to develop consistent quality in products and pro-
cesses. In SMEs' customized environment, this calls for imple-
mentation of quality management frameworks and models for
continuous improvement (CI), as proposed by Kumar et al.
(2011) and other related researches.
d. Networking and resilience—Building networks and knowledge
integration for considerable conceptual slackness in tightly-
coupled situations assert the development of long-term resi-
lience (Schulman, 1993). Such organizational networking and
connectivity not only reduce the risks of crises but at the same
time result in creation of deep interpersonal skills and relation-
ships at the social level (Coutu, 2002). As highlighted by
Sullivan-Taylor and Branicki (2011), increased inter-
organizational relationships enable rapid implementation of
decisions in SMEs, develop supply dependencies and also
trusted relationship with financial institutions. Similarly,
Demmer et al. (2011) also highlighted the need of ‘executing
renewal’ in SMEs through incorporation of customers in value
chains, externalizing innovations through M&As, alliances etc.
for engendering resilience, as proposed by Reinmoeller and
Baardwijk (2005) for large firms. At the intra-organizational
level, this also adds to the possibilities of reducing ‘silo
mentalities’ and complexities, leading to higher visibility and
trust (Ireland et al., 2002), within the organization.
2.3. ‘Learning and culture’ and resilience
In an organizational setting, resilience merit is hinged to
various softer, less tangible aspects of an organization such as its
culture, leadership and vision (Seville et al., 2006). Resilience is
thus enhanced through development of specialized knowledge of
individuals and also collectively in an organization to respond
effectively to unfamiliar or challenging situations. Barton and
Christianson (2006) underline the need to learn more about these
organizational- and people-oriented soft processes to create resi-
lience, while McElroy (1996) and Beer and Nohria (2000) mention
the role of soft aspects, viz. people, motivation, communication,
building coalition and training etc., to be pivotal in building
resilient firms through a change process. Some previous organiza-
tional learning theories, from various perspectives, articulate
common traits or behavioral patterns in organizations promulgat-
ing two central themes, viz. (i) collective awareness and learning,
and (ii) change of organizational structure in response to change in
environment (Appelbaum and Gallagher, 2000) (adaptation).
Senge (1990) and (Edmondson and Moingeon, 1998) have popu-
larized this newly-conceived concept of organizations for adapta-
tion to the changing environment. On the other hand, group/team
learning reveals equivalent dynamics for developing organiza-
tional motivation, efficacy and skills and degrees of positive
adjustment for mastering new situations (Sutcliffe and Vogus,
2003). This generates a sense of positive adaptation in the
organization (Bunderson and Sutcliffe, 2002; Edmondson, 1999).
Thus ‘learning and cultural’ aspects, in general, play a pivotal
role in enabling organizational resilience, perhaps to a higher
degree in case of SMEs.
In the present study these aspects have been clustered into
three vital enablers, viz. (a) leadership and top management
decision-making, (b) collectiveness and sense-making, and
(c) employee wellbeing.
414 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428
a. ‘Leadership and top management decision-making’ and resilience
—In a study, Vossen (1998) described small firms having
relative advantages (over large ones) in terms of rapid deci-
sion-making, capacity for fast learning and rapid internal
communications making them learning-oriented for enabling
resilience. Decision-making to a large extent in SMEs is
subjected to the role of a powerful and decisive CEO, supported
by a powerful top management team (Bourgeois and
Eisenhardt, 1988). Though crisis times can lead to organiza-
tional retrenchment and assertion of an authoritarian manage-
ment style in SMEs, due to high proprietary rights of manager-
owners (Jones, 2003; Rainnie, 1989); entrepreneurial leader-
ship through higher qualifications and experience can, on the
other hand, instil adoption of more knowledge creation and
innovation in the firm (Jones and Crompton, 2009).In many
cases the effect of large-scale economic crises on SMEs can be
significantly diminished through resilient leadership
(McManus et al., 2008; Mitroff et al., 1992; Penrose, 2000). In
several cases, such inspiring, yet realistic leadership, supported
by an able top management team, proves to be crucial in
corporate turnarounds after the crises (Seville et al., 2006).
b. ‘Collectiveness and sense-making’ and resilience—Leadership dur-
ing crises is much more than decision-making (Vargo and
Seville, 2011). It includes the assurance of optimism among
employees, setting out a clear sense of vision and also ascribing
sense-making (Weick et al., 1999) yielding collectiveness. Such
relevant mechanisms for promoting cognitive resilience
(Lengnick-Hall and Beck, 2005, 2009) at the organizational
level are argued to be accumulating knowledge, collective
efficacy and shared belief, essential for developing coordinative
and interactive dynamics (Bandura, 1998). Such strong collec-
tive identity leads to constructive organizational sense-making
(Weick, 1993, 1995), through positive perception of experi-
ences, emotions, realism (Coutu, 2002) and tolerance, to steer
the organization through crises. Operationally, such learning
capabilities and mindfulness align the organization not only
structurally and strategically but also cognitively towards the
demands of the crises for building resilience (Weick and
Sutcliffe, 2007).
c. ‘Employee wellbeing’ and resilience—Role of employee account-
ability and sense of ownership, along with continuous
improvement through knowledge sharing, learning and right
mind-set are essential for organizations to build resilience and,
hence, long-term performance (Keller and Price, 2011). In sum,
working together effectively across the company leads to a
sense of cognitive wellbeing through alignment of the organi-
zational values, corporate culture, shared vision and responsi-
bilities (ideational foundation) for promoting adaptive learning
capabilities (Boisot and Child, 1999; Chakravarthy, 1982).
However, contrary findings are supported by some notable
researches like Gray (2002), Ates and Bititci (2011) etc., who
highlight that the SMEs are more likely to be owner-centric
(especially the family-owned ones), relying more on informal
routines and focus on day-to-day operations rather than on
long-term growth. This consequently gives evidence that SMEs
fail to embed changes into organizational culture for long-term
sustainability but rather emphasize on short-termism and fire-
fighting approaches (Ates and Bititci, 2011).
2.4. Framework diagram
Following the above discussion, based on extant literature on
SME resilience, the key antecedents or enablers of resilience have
been clustered as shown in Fig. 2.
The model has been in accordance to the general way to study
any complex phenomenon and its effects based on consciously
unraveling the antecedents and processes conceptualizing the
phenomenon; as proposed by Davidsson et al. (2007) in case of
studying small firm growths. In the present study, the antecedents
have been clustered into three broad categories viz. (a) assets and
resourcefulness, (b) dynamic capabilities, and (c) learning and
culture. However, an investigation of the process and pathway
adopted for building resilience is beyond the scope of the paper
and is left open for future research, even though they are in this
paper categorized as ‘other process initiatives’.
3. Methodology
3.1. Case selection and data collection
Case selection was via theoretical sampling (Flick, 2009; Glaser
and Strauss, 1967). Earlier in the project, annual reports (mainly
income statements and balance sheets) of 20 Swedish firms
(selected via theoretical sampling) were studied for twenty-one
years (1989–2010) to make their Z-score transition profiles for
characterizing economic resilience in terms of business ‘health’
(cf. (Pal et al., 2011) for details). Data collection, in this study, was
done in two phases. In phase 1 a survey was conducted between
November 2011 and January 2012, where eight firms were
respondents among these twenty, qualifying them for next phase
of interview to get more in-depth knowledge on the issue. All the
firms were Swedish textile-related SMEs and family-owned
through most of the time in their history.
The survey questionnaire in phase 1 was based on a deductive
theoretical framework, as shown in Fig. 2. It was categorized into
four sections aimed at finding out the major challenges faced
during crises and to what extent the responding firms regarded
the influence of the three major resilience antecedents (cf. Fig. 2)
to affect their economic resilience. The predominant nature of the
question was ‘how do you relate the significance or lack […] to the
economic transition profile […]’? The questionnaire was translated
from English to Swedish and then mailed to the companies for
higher comprehensibility. All the respondents were owner-
managing director of the firms. The survey was customized in a
way, as each of the companies was provided with a project
description and brief analysis and an explanation of its 20-year
Z-score transition profile. Following the survey, an acknowledg-
ment and research findings synopsis were e-mailed/mailed to
each of the respondents, and they were asked to participate in a
short face-to-face interview.
Each interview, of phase 2, lasted between 45 and 90 min and
with a combination of both focused and semi-structured form of
questions (Flick, 2009). The aim of the interview was to have a
clear understanding of the survey responses made in phase 1. For
this purpose all the companies were emailed a scanned copy of
their survey responses. Some of the interview questions were
aimed at identifying directly the reasons (emerged out of the
survey results) behind their Z-score transition profile and its
contributing ratios (focussed), while some were more open in
nature (semi-standardized). All the interviews were conducted in
English and at the respondents' premises.
3.2. Data analysis method
The data analysis followed thematic coding, as the procedure
was derived from the research question, and thus a defined
deductive framework (Flick, 2009). First, the survey results were
analyzed using descriptive statistical techniques suited to the
research objective (cf. Table 2). The closed nature of the survey
 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428 415

Table 1
Case companies—Business description, business ‘health’ and economic resilience.

Case* Business type Business Health in terms of Z-score Economic

Notations: H—Healthy, U—Unhealthy, C—Catastrophic resilience

1990–93 2007–09 1990– 2007–

93 09

U Mostly H
1  Manufacturer of 1.43–2.58 (unhealthy) between 1989–95, due to low liquidity  3.03–3.06 (healthy) between 2007–08, due to No No
safety and ratio, retained earnings and poor EBIT increasing solvency ratio
occupational  2.21–2.39 (unhealthy) between 2009–10, mainly due
footwear to declining EBIT

2  Sewer of air-bag Mostly H Partly H

fabrics  Average 2.98 (healthy most years) between 1990–95 due  Healthy range of 2.98–3.42, except 2008 (2.08) due Yes Partly
 Women-wear to consistent turnover and other Z-score components to falling liquidity ratio and poor EBIT
brand marketer

U Mostly H
3  Designer and  2.16–2.56 (unhealthy) between 1990–94 due to poor  Over 3 (healthy) due to increasing solvency ratio No Yes
manufacturer of profitability and leverage ratios (Most of the Z-score components were good)
shirts and jackets  Gradual recovery since 1995 (2.97 owing to growing
turnover-ratio)

U Mostly H
4  Textile  2.13–2.67 (unhealthy) between 1990–94 due to poor  Healthy range since 2003 (2.93–3.57), due to high No Yes
machinery profitability, leverage and solvency ratios and declining capital-turnover and solvency, except 2009 (2.65)
 Clothing labels liquidity ratio (declining working capital) due to lowered turnover and profitability ratios and
and transfers  Recovery in 1995 (3.07) due to increasing turnover ratio reduced liquidity ratio
 Printing
solutions

U Mostly U
5  Weaver of  1.27–2.66 (unhealthy) between 1990–93 due to low  1.89–2.39 (unhealthy) between 2007–09 due to poor No No
upholstery profitability, solvency and leverage ratios profitability ratio and negative liquidity ratio
fabrics  Fast recovery in 1994–95 owing to high sales (turnover
ratio) and solvency ratio (increase in equity)

U Mostly H
6  Manufacturer of  1.51–2.07 (unhealthy) between 1990–95 due to declining  0.87–1.61(unhealthy/catastrophic) between 2007–10 No No
leather jackets sales-turnover and poor profitability and leverage ratios due to negative EBIT, declining sales-turnover and
 Overall ‘unhealthy’ (1989–2010) leverage ratio (retained earnings)

U Fully U
7  Weaver of  0.64–1.01 (catastrophic) between 1990–92 due to negative  2.14–2.63 (unhealthy and declining) between 2007– No No
upholstery liquidity ratio and poor profitability (Infact all the Z-score 10 due to poor EBIT, declining net sales (hence
fabrics components were poor) turnover ratio) and declining solvency ratio
 Recovery in 1993 (3.17) due to high net sales

U Mostly H
8  Manufacturer of  Unhealthy Z-scores owing to lower turnover ratio along  2.91–3.55 (healthy) between 2007–10 due to good No Yes
women with poor profitability and leverage ratios (except '92, '94) solvency and turnover ratios
underwear

n
All cases are Swedish SMEs and family-owned for substantial time in their long history. All numbers denoted are Z-score values.

questionnaire allowed the respondents to answer either ‘signifi-
cantly’, ‘moderately’ or ‘poorly’ to each question. The scoring
system used in Table 2 along the three categories of resilience
antecedents was obtained by counting the frequency of response
options. The most frequent option is also marked with a (n) while
the last column indicates the frequency of total responses among
all the responding firms (cf. Table 2). This was followed by a short
description of each case in terms of their economic resilience
expressed by Altman's Z-score6 (cf. Table 1; for more details about
6
Altman's Z-score is generally used to predict bankruptcy potential by
categorizing business as ‘safe’, ‘unsafe’ or ‘distress’ to measure financial success.
the coding see Pal et al. (2011). A deepening analysis is
provided through interpretation of the interviews having been
digitally recorded and transcribed. The coding paradigm suggested
by Strauss (1987), pp. 27–28) was used as follows: first, a
short description of each case was produced and modified along
the coding process, second, each of the cases was analyzed
individually and finally, a cross-case analysis was made to
(footnote continued)
It includes criteria of economic viability based on profitability, solvency, liquidity,
leverage and activity. Thus it considers factors like working capital, total assets,
retained earnings, profitability, net worth or shareholder's equity, total liabilities
and total sales.
416 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428

Table 2
Case-based aggregate scoring.

Firms Case 1 Case 2 Case 3 Case 4 Case 5 Case 6 Case 7 Case 8 Σ

responses

‘Resourcefulness’ factors
2007–09
Significantly 9* 8* 6* 4 4 11* 4 0 46*
a ¼ 4, b ¼ 2, c ¼ 2, a ¼ 3, b ¼ 2, c ¼ 2, a ¼ 2, b ¼ 2, c ¼ 1, a ¼ 1, b ¼ 1, c ¼ 1, b ¼ 2, d ¼ 1, e ¼ 1 a ¼ 3, b ¼ 3, c ¼ 2, d ¼ 2, a ¼ 2, b ¼ 1, c ¼ 1

e¼1 d¼1 e¼1 e¼1 e¼1

Moderately 3 0 5 8* 7* 2a ¼ 2 11* 4 40
a ¼ 2, d ¼ 1 a ¼ 2, c ¼ 1, d ¼ 2 a ¼ 4, b ¼ 1, c ¼ 1, a ¼ 5, c ¼ 2 a ¼ 5, b ¼ 2, c ¼ 1, d ¼ 2, b ¼ 3, d ¼ 2

d¼2 e¼1

Poorly 2 6 4 3 4 2 0 11* 32
a ¼ 1, b ¼ 1 a ¼ 4, b ¼ 1, e ¼ 1 a ¼ 3, b ¼ 1 a ¼ 2, b ¼ 1 a ¼ 2, b ¼ 1, d ¼ 1 a¼2 a ¼ 7, c ¼ 2, d ¼ 1, e ¼ 1

1990–93
Significantly 3 5 3 5 2 7* 0 0 25
b ¼ 2, e ¼ 1 a ¼ 3, c ¼ 2 b ¼ 2, e ¼ 1 a ¼ 1, b ¼ 2, c ¼ 1, a ¼ 1, d ¼ 1 a ¼ 2, b ¼ 1, c ¼ 2, d ¼ 1,

e¼1 e¼1

Moderately 8* 1 7* 7* 9* 6 14* 6 58*

a ¼ 5, c ¼ 2, d ¼ 1 b¼1 a ¼ 4, c ¼ 1, d ¼ 2 a ¼ 4, c ¼ 1, d ¼ 2 a ¼ 4, b ¼ 2, c ¼ 2, a ¼ 4, b ¼ 1, d ¼ 1 a ¼ 7, b ¼ 3, c ¼ 2, d ¼ 1, a ¼ 2, b ¼ 3, d ¼ 1

e¼1 e¼1

Poorly 3 8* 5 3 4 2 1 9* 35
a ¼ 2, b ¼ 1 a ¼ 4, b ¼ 2, d ¼ 1, a ¼ 3, b ¼ 1, c ¼ 1 a ¼ 2, b ¼ 1 a ¼ 2, b ¼ 1, d ¼ 1 a ¼ 1, b ¼ 1 d¼1 a ¼ 5, c ¼ 2, d ¼ 1,

e¼1 e¼1

‘Dynamic competitiveness’ factors

2007–09
Significantly 7* 8* 3 3 3 8* 6 0 38
f ¼ 3, g ¼ 1, h ¼ 1, f ¼ 3, h ¼ 1, i ¼ 4 f ¼ 2, i ¼ 1 f¼3 f¼3 f ¼ 5, i ¼ 3 f ¼ 2, h ¼ 1, i ¼ 3

i¼2

Moderately 6 1 5 6* 4 2 8* 1 33
f ¼ 2, g ¼ 2, i ¼ 2 f¼1 f ¼ 2, g ¼ 1, i ¼ 2 f ¼ 1, g ¼ 1, h ¼ 1, h ¼ 1, i ¼ 3 g¼1 i¼1 f ¼ 3, g ¼ 3, i ¼ 2 h¼1

i¼3

Poorly 1 5 6* 5 7* 4 0 13* 41*

i¼2 f ¼ 1, g ¼ 3, h ¼ 0, f ¼ 1, g ¼ 2, h ¼ 1, f ¼ 1, g ¼ 2, i ¼ 2 f ¼ 2, g ¼ 3, i ¼ 2 g ¼ 2, h ¼ 1, i ¼ 1 f ¼ 5, g ¼ 3, i ¼ 5

i¼1 i¼2

1990–93
Significantly 0 7*f ¼ 2, h ¼ 1, i ¼ 4
1f ¼ 1 3f ¼ 3 4f ¼ 3, i¼1
8*f ¼ 5, i¼3
0 0 23
Moderately 11* 2 6 6* 3 2 14* 6 50*
f ¼ 4, g ¼ 3, i ¼ 4 f¼2 f ¼ 2, g ¼ 1, i ¼ 3 f ¼ 1, g ¼ 1, h ¼ 1, h ¼ 1, i ¼ 2 g ¼ 1, i ¼ 1 f ¼ 5, g ¼ 3, h ¼ 1, i ¼ 5 f ¼ 5, h ¼ 1

i¼3

Poorly 3 5 7* 5 7* 4 0 8* 39
f ¼ 1, h ¼ 1, i ¼ 1 f ¼ 1, g ¼ 3, i ¼ 1 f ¼ 2, g ¼ 2, h ¼ 1, f ¼ 1, g ¼ 2, i ¼ 2 f ¼ 2, g ¼ 3, i ¼ 2 g ¼ 2, h ¼ 1, i ¼ 1 g ¼ 3, i ¼ 5

i¼2

‘Learning and cultural’ factors

2007–09
Significantly 6* 7* 9* 6* 2 8* 6* 0 44*
j ¼ 3, k ¼ 1.5, l ¼ 1.5 j ¼ 2, k ¼ 3, l ¼ 2 j ¼ 5, k ¼ 3, l ¼ 1 j ¼ 3, k ¼ 2, l ¼ 1 k ¼ 1, l ¼ 1 j ¼ 4, k ¼ 2, l ¼ 2 j ¼ 3, k ¼ 2, l ¼ 1

Moderately 4 3 1 4 4* 2 3 0 21
j ¼ 2, k ¼ 2 j¼3 l¼1 j ¼ 2, k ¼ 1, l ¼ 1 j ¼ 2, k ¼ 1, l ¼ 1 j ¼ 1, k ¼ 1 j ¼ 1, k ¼ 1, l ¼ 1

*j ¼ 3, k ¼ 1 j¼1 *j ¼ 5, k ¼ 3, l ¼ 2
Poorly 0 0 0 0 4 0 1 10 15
1990–93
Significantly 2 7* 3 6* 1 8* 6* 0 33*
j ¼ 3, k ¼ 1, l ¼ 1 j ¼ 2, k ¼ 3, l ¼ 2 k ¼ 2, l ¼ 1 j ¼ 3, k ¼ 2, l ¼ 1 k¼1 j ¼ 4, k ¼ 2, l ¼ 2 j ¼ 3, k ¼ 2, l ¼ 1

Moderately 5* 2 6* 4 5* 2 3 1 28
j ¼ 3, k ¼ 1, l ¼ 1 j¼2 j ¼ 4, k ¼ , l ¼ 1 j ¼ 2, k ¼ 1, l ¼ 1 j ¼ 2, k ¼ 1, l ¼ 2 j ¼ 1, k ¼ 1 j ¼ 1, k ¼ 1, l ¼ 1 j¼1

*
Poorly 3 1 1 0 4 0 1 9 19
j ¼ 2, k ¼ 1 j¼1 j¼1 j ¼ 3, k ¼ 1 j¼1 j ¼ 4, k ¼ 3, l ¼ 2

a¼ Material/systems assets, b ¼Financial assets, c ¼ Social assets, d ¼Network assets, e¼ Intangible assets, f ¼Flexibility, g ¼Redundancy, h ¼ Robustness, i¼ Networking,
j¼ collectiveness and sense-making, k ¼ employee wellbeing, l ¼ leadership and top-management decision-making.
n
Most frequent response.

identify and describe the emergent pattern in the antecedents and
how their inhibition or facilitation influences economic resilience.
The validity and reliability of the present study is secured as
follows: (a) construct validity—is demonstrated by the derivation of
a deductive resilience framework from extant literature review of
conceptual underpinnings, by the use of multiple sources of
evidence (surveys and interviews) for data triangulation and also
by reviewing the interview drafts along the thematic coding
procedure (Yin, 2009); (b) internal validity—is also justified con-
sidering the pattern matching of general findings from the survey
and the interviews according to the model to synthesize an
emergent pattern and also support rival explanations highlighting
the influence of process initiatives and exogenous factors (Yin,
2009); (c) external validity—is also expected to be consistent
considering the generalizability of the resilience framework for
application in case of any environmental turbulence and in any
time-spatiality (Yin, 2009) for most Swedish textile-related SMEs,
though this is beyond the scope of the present research; and
finally (d) reliability—is moderate as by using the same framework
protocol authors reached at conflicting revelations about the
influence of ‘learning and cultural’ aspects on SME resilience,
though the rest of the results were commensurable.
 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428
4. Case companies—business type and economic resilience
Fig. 3 below shows the ‘Z-score transition profiles’ of all the
case companies over the studied period (1989–2010). The Z-score
transition profile of each case company is obtained by plotting its
Z-score values over the years 1989 to 2010, and classifying them as
either ‘healthy’, ‘unhealthy’ or ‘catastrophic’.
Further interpretation of the Z-score transition profiles in terms
of business ‘health’ over the crisis periods, and hence their
economic resilience, has been enlisted in Table 1, along with the
business description of each case firm. For further details about
the methodology, see Pal et al. (2011).
5. Findings
The results of survey questions, how the firms considered the
significance or lack of ‘resourcefulness’, ‘dynamic competitiveness’
and ‘learning and culture’ to be important in influencing their
economic performances during crises are described below.
5.1. ‘Resourcefulness’ factors and economic resilience
The responding firms considered reliable information support
along with innovative operations and technologies to be the most
essential factors among material/systems resources, affecting their
economic resilience profile during the recent credit crunch. Back
in 1990s crisis, innovation was considered to be an essential
precursor for yielding better economic performance, hence, resi-
lience. The other material assets had moderate influence in
effecting performance during the crises. However, financial
resources, mainly in the form of cash flow and liquidity, along
with proper budgetary control and strong financial reserves were
considered to be the most significant factors to keep firms buoyant
amidst the recent global crisis, while proving to be moderately
influential in the 1990s crisis. Brand reputation and goodwill with
the customers, suppliers and bankers were also considered inevi-
table factors influencing sound business health in such periods.
Social resources (as employees) and relational networks and
partnerships with suppliers and other members in the value chain
Fig. 3. Z-score transition profiles (1989–2010).
417
were also considered to be moderately important in influencing
economic performance during the crises.
Inter-firm differences in responses were noticeably observed as
firms 1, 2 and 6 mostly considered resources to be significantly
important to influence their economic resilience, particularly in
the recent crisis, while case company 8 was the only firm to reflect
on poor correlation between ‘resourcefulness’ and economic
resilience. The rest of the responding firms mostly revealed
moderate to strong relational evidence between the asset/resource
factors and their economic resilience. However in the 1990s crisis,
only case 6 revealed a strong influence of resources on resilience
development (cf. Table 2).
5.2. ‘Dynamic competitiveness’ factors and economic resilience
The second antecedent of resilience is ‘dynamic competitive-
ness’ categorized into long-term flexibility (operational and stra-
tegic), redundancy, robust responses and networks along the value
chain. The responding firms considered these ‘dynamic competi-
tiveness’ aspects to be less influential in affecting their economic
resilience during the two crises periods, except operational and
strategic flexibilities, deemed to bear high degree of correlation for
bolstering resilience.
Flexible internal processes, and in particular flexible decision-
making and customer-centricity were adjudged to be strong
enablers of positive economic performance, hence, resilience in
the recent credit crunch. During the 1990s crisis, the responding
firms still considered market intelligence and customer centricity
to be strong enablers of resilient performances. However, redun-
dancy in terms of parallel processes, multi-channel distributions
and alternate suppliers and strategies were deemed to be poorly
influencing firms to combat economic disruptions (in both the
crises) and so were value chain networking and investments into
other supply chain members. Intra-organizational collaboration in
decision-making was, however, deemed to be moderately impor-
tant in handling performance measures.
Inter-firm responses showed that most of the companies
exhibited poor to moderate relationships for redundancy and
robustness to foster economic resilience. Particularly case compa-
nies 3-5 and 8 considered dynamic competitiveness to be poor in
influencing their economic resilience in both crises. However,
418 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428

companies 1, 2 and 6 rated it to be strongly to moderately
influential in effecting their economic performances. It was
evident that the firms considered organizational flexibility (both
operational and strategic) to be the only influencing competitive-
ness factor enabling resilient performances in both crises, how-
ever, except firm 8 (cf. Table 2).
5.3. ‘Learning and cultural’ factors and economic resilience
The third antecedent of resilience highlighted in the research
framework is broadly classified as ‘learning and cultural’ factors
categorized into (i) collectiveness and sense-making, (ii) employee
wellbeing, and (iii) leadership and role of top management.
The responding firms considered valuable and attentive leader-
ship, along with employee wellbeing through higher accountabil-
ity and respect, to be the core of ‘learning and culture’, influencing
healthy economic performances through resilience amidst crises.
Overall, collectiveness and organizational sense-making were
considered to have strong to moderate influence on economic
resilience in the recent times, particularly group/team learning
and sense of purpose and trust (among employees). However,
these factors were not considered very influential in supporting
resilience during the 1990s crisis, except trustworthiness of the
employees.
Inter-firm cases showed similar relationship between ‘learning
and cultural’ factors and economic performances for most of the
companies. Particularly, case companies 2, 3 and 6 considered the
influence of this aspect on economic resilience to be very high
during the recent crisis, while firms 1, 4 and 7 adjudged it to be
moderately influencing the firm’s resilience development. Simi-
larly, during the 1990s economic crisis companies 2, 4, 6 and
7 considered ‘learning and cultural’ factors to be strongly to
moderately influential in dealing with the crisis. On the other
hand, firm 8 consistently reported insignificance of this aspect as
an essential antecedent for fostering better economic perfor-
mances, hence resilience in crisis times (cf. Table 2).
Cross-case analysis of the survey findings (cf. Table 2) can be
assimilated as follows:
‘Resourcefulness’ was asserted to have a strong degree of
correlation with the ‘Z-score transition profile’ influencing eco-
nomic resilience in the recent credit crunch, while having
moderate correlation in the 1990s crisis. ‘Dynamic competitive-
ness’ of firms exhibited a moderate to poor correlation with the
‘Z-score transition profile’, thus proving to offer a lesser degree of
causation in bolstering economic resilience. ‘Learning and cultural’
factors exhibited a significantly strong correlation with the ‘Z-
score transition profile’ of the studied firms amid the economic
crisis of 2007–09 but a moderate degree of correlation in the
1990s crisis.
Table 3 is an outcome of the analyses of Table 2, asserting the
differential degree of influence by the antecedents the firms
considered in bolstering their economic resilience, and Table 1,
identifying the business ‘health’ of the firms in terms of their
Z-score transition profiles during the crises.
For example, case firm 1 considered all its antecedents to have
significant correlation in affecting its poor economic resilience
amidst the recent crisis (2007–09), thus, suggesting lack of these
antecedents. While in the 1990s crisis, the firm's lack of economic
resilience could be attributed moderately to the lack of these
antecedents, signifying the effect of other factors as well. While for
case firm 6, its poor economic resilience amidst both the crises
was significantly correlated to all the antecedents, thus signifying
considerable lack of these factors. The case-wise relationship that
emerged out in the study was as follows:
To have a deepened understanding of these antecedents
favouring or inhibiting resilience development in Swedish
textile-related SMEs, first a case-wise and then a cross-case
analysis was made of the interviews. Results of the interviews
are reported in appendices 1 and 2 and favor understanding of the
antecedents, the significance or lack of which subsequently
bolstered or inhibited economic resilience.
5.4. Interview findings and Z-score transition profile analysis
Along the process of finding out the emergent pattern among
the antecedents facilitating or inhibiting economic resilience
development, authors have related the interview findings (cf.
Appendices 1 and 2) to firms' Z-score transition performance.
Firm 1's lack of resilience arose out of cash flow problems and
loss of investments along with effects of currency devaluation
resulting in lower liquidity, leverage and profitability ratios,
amidst 1990s crisis. Firm 3's lack of resilience was an outcome of

Table 3
Identifying the degree of relation between economic resilience and its enablers.

Resourcefulness (R) Learning and Culture (LC) Dynamic Competitiveness (DC)

2007–09 1990–93 2007–09 1990–93 2007–09 1990–93

Case 1 (↗) (-) (↗) (-) (↗) (-)

R-−Res R-−Res LC-−Res LC-−Res DC-−Res DC-−Res
Case 2 (↗) (-) (↗) (↗) (↗) (↗)
R-~Res R- þRes LC-~Res LC- þRes DC-~Res DC- þ Res
Case 3 (↗) (-) (↗) (-) (↘) (↘)
R- þRes R-−Res LC- þRes LC-−Res DC- þ Res DC-−Res
Case 4 (-) (-) (↗) (↗) (-) (↘)
R- þRes R-−Res LC- þRes LC-−Res DC- þ Res DC-−Res
Case 5 (-) (-) (-) (-) (↘) (↘)
R-−Res R-−Res LC-−Res LC-−Res DC-−Res DC-−Res
Case 6 (↗) (↗) (↗) (↗) (↗) (↗)
R-−Res R-−Res LC-−Res LC-−Res DC-−Res DC-−Res
Case 7 (-) (-) (↗) (↗) (↗) (-)
R-−Res R-−Res LC-−Res LC-−Res DC-−Res DC-−Res
Case 8 (↘) (↘) (↘) (↘) (↘) (↘)
R- þRes R-−Res LC- þRes LC-−Res DC- þ Res DC-−Res

Symbols in parentheses () represent degree of correlation.

↗: Significant/High correlation, -: Moderate correlation, ↘: Low/Poor correlation.
Symbol in front of ‘Res’ represent resilience of the firm in terms of Z-score transition profile analysis, cf. (Pal et al., 2011).
þ : Significant/High, ~: Moderate, −: Low/Poor.
 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428 419

lack of finance and cash flow along with lower manufacturing and
decision-making flexibilities resulting primarily in volume and
margin ramp down, forcing a dip in the profitability and leverage
ratios as well. Lack of proper market penetration and marketing
strategies further aggravated the sales decrease. For firm 4,
however, the lack of economic resilience was considerably due
to lowering of most of the Z-score components owing to cash flow
and investment problems in the 1990s. Firm 5 showed constrained
cash liquidity and lack of proper networking followed by lack of
proper growth strategies which led to lower profitability, solvency
and leverage ratios while for firm 6 the declining turnover,
profitability and leverage ratios could mostly be attributed to
problems in setting up good relational networks with suppliers,
banks and customers. Lack of operational flexibility and structural
changes inherent to the leather goods industry were also critical
reasons behind firm 6's poor Z-score components. On the other
hand, factors critical to lack of resilience in firm 7 was losing of
orders due to price competition, incorrect product positioning and
production knowledge, hence, driving down most of the Z-score
components while for firm 8 the poor profitability and leverage
ratios were considerably due to increase in costs of production,
lack of production flexibility and other strategic initiatives like lack
of market development and penetration. The only firm (firm 2)
which showed economic resilience in the 1990s crisis maintained
a stable financial situation and flexible production and decision-
making to redefine its business model, resulting in a secured and
‘healthy’ Z-score.
Amidst the recent global credit crunch, firm 1 showed poor
profitability ratio due to poor sales and lack of finance and asset
management along with lack of flexibility in operations resulting in
high finished goods stock. However, firms 2–4 and 8 mainly showed
high solvency ratio and capital-turnover due to good financial
reserves, good relational networks with suppliers, customer base
and banks along with optimum flexibility to keep on making profits
amidst recessionary trends. These firms also followed right market
and product related growth initiatives for optimum diversification
and consolidation. However, firms 5–7s' poor Z-score components
(mainly poor profitability and sales-turnover ratios) were consider-
ably because of similar reasons as prominent in the 1990s viz. lack
of finance and cash flow, lack of relational networks and lack of
flexibility at all levels. Lack of fast decision-making for adjusting to
the recessionary trends along with the ability to reduce stocks
resulted in huge losses during the crisis. These firms also lacked a
proper product portfolio development and growth strategy
initiatives.
6. Discussion: explanation of evident patterns
Several key patterns are emergent through the data analysis
following the survey and detailed interviews. Within the organi-
zational resilience framework prescribed here, the key enablers or
antecedents have been identified that were considered essential
by the owner-managers of the SMEs in bolstering resilience in
crises. Table 4, herein, simplifies these patterns, observed and
analyzed through the matching of the theoretical frame and the
interview empirics, in generating proper explanation to the
correlation outcome of the survey.
6.1. Financial resources: cash flow and investment finance
Cash flow in firms emerged to be of significant influence, as
purported by the owner-managers, along with investment finance,
in facilitating or inhibiting resilience at crises in some way or the
other, as also highlighted by Vossen (1998) and Van Gils (2005).
Cash flow constraint arising out of too much borrowing of
foreign currency during the 1990s, followed by the sudden
Swedish currency devaluation in 1992, affected the liquidity ratios
(in firms 1 and 5), while rising costs of production and overheads
also affected cash reserves in many ways (in firm 8). A decrease in
sales turnover due to volume and margin ramp-down and a
decrease in customer base and low price competition in the
1990s also inhibited firms' cash flow affecting the leverage ratios
(in firms 3, 6 and 7). Cash flow problems due to a sudden shift

Table 4
Pattern recognition from case study observations.

Relation Resilience Firms Inference/Reasons*

Resourcefulness (R)
2007–09 ↗, - ↗, - 2–4 Considerable cash flow, investment finance, relational networks and asset management
↗ ↘ 1, 6 Lack of cash flow and investment finance, workforce lay-off
↘ ↗ 8 Insignificant contribution (except good bank relationships)
- ↘ 5, 7 Moderate influence of lack of relational networks with suppliers and financing
1990–93 ↗, - ↘ 1–7 except 2 Lack of cash flow and investment finance
↘ ↘ 8 Insignificant contribution (except lack of financial reserve)
↘ ↗ 2 Other predominant antecedents

Learning and Culture (LC)

2007–09 ↗, - ↗, - 2–4 Good leadership, employee collectiveness (except in 2)
↘ ↗ 8 Insignificant contribution
↗, - ↘ 1, 5–7 Lack of sufficient evidence (except lack of formal leadership observed in 5 and 7)
1990–93 ↗, - ↘ 1–7 except 2 Lack of sufficient evidence (except lack of leadership and employee collectiveness in 3, 5, 7)
↗ ↗ 2 Lack of evidence
↘ ↘ 8 Insignificant contribution

Dynamic Competitiveness (DC)

2007–09 -, ↗ ↗, - 2, 4 Significant strategic and operational flexibilities
↗ ↘ 1, 6–7 Lack of strategic and operational flexibilities
↘ ↗ 3, 8 Insignificant contribution (except operational flexibility in 8)
↘ ↘ 5 Insignificant contribution
1990–93 ↗, - ↘ 1, 6–7 Mainly lack of strategic and operational flexibilities
↘ ↘ 3–5, 8 Insignificant contribution (except lack of strategic flexibility)
↗ ↗ 2 Considerable strategic and operational flexibilities

Relations: ↗: Significant/High correlation, -: Moderate correlation, ↘: Low/Poor correlation.

Resilience: ↗: Significant/High, -: Moderate, ↘: Low/Poor.
n
cf. Appendix 1 and 2 for details.
420 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428
from supplier's credit to cash payment scheme (in firm 6) or
sudden postponement of installation orders from customers (in
firm 4) were among other reasons.
Along with this, mostly an investment finance constraint is
evident in firms, due to wrong business ventures, bankruptcies of
group subsidiaries or newly made investments in acquisitions and
new product development (NPD), thus limiting their financial
reserve during quick crisis recovery (evident in firms 1 and 4 as
they suffered from considerable losses in the 1990s crisis, thus
showing decrease in leverage ratios as the crisis recovery process
was financed by utilizing retained earnings). Such investment
finance problems are aggravated by lack of proper credit support
from banks as highlighted by Sullivan-Taylor and Branicki (2011)
(evident in firms 5 and 6), while good bank support may lead to
better liquidity and leverage ratios (evident in firms 2, 3, 4 and 8).
6.2. Relational networks
Freeman (2004) analyzed how close relationships in working
with the suppliers, customers and marketing partners to get more
order volumes were essential antecedents of resilience develop-
ment. Such a pattern was observable amidst the recent credit
crunch as key antecedents of resilience development (in firms
3 and 4), contributing to the development of capital-turnover ratio.
On the other hand, lack of external support seems a potential
resilience inhibitor, particularly for SMEs (Fassoulsa, 2006). This
considerably increases the supply chain vulnerability during crisis
(as observed in firms 3, 5 and 6 during the 1990s crisis, as they faced
a lot of problems owing to their diminishing supplier and customer
base). The analysis emphasized several factors contributing to the
shrinking supply and customer relational networks of SMEs, as
highlighted by the owner-managers, like ‘consolidation of suppliers
into few large ones’, ‘lack of alternate high-quality suppliers’,
‘restricted customer base due to low-price competition’ etc.
6.3. Material assets
Current asset problems, aggravated by price hikes along with
huge stock lots, due to a sudden decrease in orders, are common
during crisis. Such constraints were evident during the recent
credit crunch (in firms 1, 5, 6 and 7), in terms of excess raw
material stocks or sometimes shortage of supply or huge storage of
finished goods. They were considered to be potential inhibitors of
resilience development, as it compelled the firms to depreciate
their stock values and think of consolidated internal restructuring
for higher efficiency planning. This considerably affects the profit-
ability, sales-turnover and leverage ratios.
6.4. Strategic flexibility
Strategic flexibility in terms of decision-making is a critical
aspect in small firms (Vargo and Seville, 2011). Such flexible
strategic planning lay in devising rolling long-term plans to
maintain necessary readiness even during crises and supported
by oligarchic decision-making, unlike most family firms run
through monocratic leadership (Gunasekaran et al., 2011) (evident
in firm 4). Such strategic flexibilities are also essential to devise
changes in organizational design/business model by delocalizing
production completely or shifting product core from fashion
clothing to industrial products etc. (as was evident in firm 2 soon
after the 1990s crisis). Vargo and Seville (2011) also highlighted
how the lack of a proper crisis strategic planning, mainly due to
slack resource constraints, was also deemed to be a key inhibitor
to resilient functioning in small firms (evident in firms 5, 6 and 8).
Overall, strategic flexibility can be critical for growth aspects in
firms related to capital-turnover increase.
6.5. Operational flexibility
Even though Sheffi (2007) and other authors have emphasized
the role of operational and structural flexibility only in case of
large firms for building resilience, it seemed to be quite an
emergent resilience building theme in SMEs as well. The recent
study highlighted the role of structural flexibility in determining
the make-buy decisions in case of small manufacturing firms
(evident in firms 2, 4 and 8) for contributing considerably towards
resilience development by increasing profitability and cash flow.
Such control over one's own manufacturing pipeline results in
lower lead-time and inventory management advantages as well.
However, lower flexibility in inventory management by handling
raw materials or finished goods inventory (evident in firms 1 and
6), lower flexibility in manufacturing or make-buy decisions
(evident in firms 3 and 8 – in the 1990s crisis) also resulted in a
lack of resilience by affecting profitability and liquidity, in line with
Thun et al. (2011) highlighting the lack of preventive instruments
in SMEs in tackling supply chain risks.
6.6. Continuous improvements
Quality issues maintained through continuous improvement
were a key antecedent to resilience (in firm 2) to cater to the
requirements of its large automotive sector customers. The
responding firm applied efficient small batch manufacturing to
improve the production efficiency, reduce lead times and be
sufficiently lean, thus enhance operational agility, also highlighted
by Ismail et al. (2011) and Kumar et al. (2011) as a necessity to
maintain quality criteria for resilience development in case
of SMEs.
6.7. Learning and cultural aspects
The survey emphasized a strong degree of correlation for this
‘soft’ antecedent in bolstering resilience, as also shown by Vargo
and Seville (2011). Even though a majority of the owner-managers,
when questioned for this study, accepted such strong relation-
ships, they could not justify how it could inhibit or facilitate
resilience in economic crises. This vacuum and non-specificity in
justifying the strong influence to empirically support the extant
research can be attributed to some reasons. Firstly, the owner-
managers considered employee collectiveness, know-how and
well-being to be very much ingrained or obvious in case of small
firms, as also found by Acquaah et al. (2011). So whether in crisis
periods or not, these soft values are considerably high in small
firms and do not directly facilitate economic resilience develop-
ment, unlike in large organizations. A complementary considera-
tion is the degree of informality existing in small firms' visions and
knowledge, which tends to make these learning and cultural
aspects very tacit (Ates and Bititci, 2011). Secondly, such ‘soft’
aspects do not facilitate economic resilience directly. Moreover,
authors perceive such learning or cultural aspects to be long-term
in augmenting firm performance and not crisis dependent, where
small firms mostly rely on short-termism. However, some of the
respondent firms (3, 5 and 7) considered lack of ‘cross-functional
training for developing working teams’, ‘silo organizational struc-
ture’, and lack of ‘formal education’ to be inhibiting resilience
development during the crisis of the 90s. The role of leadership
and management decision-making were influential factors in
facilitating resilience during the recent crunch (evident in firms
3 and 4), in line with findings by McManus et al. (2008) and Seville
et al. (2006) Firms like those could break-away from the ‘com-
mand and control culture’ (Ates and Bititci, 2011) generally
prevalent in small family firms, and became more entrepreneurial
and open, and showed better economic resilience.
 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428
6.8. Additional factors engendering resilience
The research also surfaced out a set of factors not considered
in the initial survey as antecedent to resilience development. In
fact these factors cannot be clustered as ‘contents’ enabling
resilience but as the process of deploying these ‘contents’/ante-
cedents for developing a constant ‘growth/business continuity’
initiative in the firms. These factors or processes (growth process)
are indicated to be strategic and operational initiatives (Ismail
et al., 2011) of a firm in effectively deploying their antecedents, as
also prescribed by Penrose (1959) and Davidsson et al. (2007).
This answers more towards ‘how’ resilience is developed
(through ‘strategic and operational’ process initiatives) rather
than ‘what’ is essential for it (antecedents). This conforms to the
requirement of developing firm initiatives for organic growth
(along the Ansoff matrix: market penetration, market develop-
ment, extending process capability, or market diversification
(Ansoff, 1957)) or inorganic growth (through merger and acquisi-
tions (M&A) or take-overs) or simply survival in crises (business
continuity planning).
In reality the responding firms did not consider having
contingency planning in their firms, as it deviates the firm's
limited resources and assets. Lack of a proper product portfolio
structuring seemed to be a common problem in small firms,
aggravated in the crises when sales-turnover and customer base
decrease, resulting in improper market penetration or product/
capability development strategies (evident in firms 1, 3, 6, 7 and
8 during the 1990s and in firms 5 and 6 during the recent credit
crunch). Most of the owner-managers responded saying, ‘lack of
proper positioning along the product pyramid’ and ‘low-price
competitions’ to be the key reasons for this. Firms (2, 3 and 4)
able to diversify into new product segments/labels and achieve
cost effectiveness through right make-buy trade-off dealt with
the crisis better.
Market development and diversification strategies through
innovative product launches and additional sales channels to enter
new markets or customer base (evident in firms 2, 3 and 4 in the
recent crisis) are also critical contributors towards economic
resilience.
M&As were indicated by Penrose (1959) to be less observable in
case of small firms owing to their resource constraint, though
volume growth for high-growth firms does lead to such growth
modes as well. Such trends were noticeable in most of the studied
manufacturing firms (1, 2, 3, 4 and 8) through delocalization of
production to be more cost-effective, though firm 1 could not
capitalize on its venture due to some exogenous reasons.
Finally, exogenous factors like ‘foreign exchange fluctuation’
and ‘low-price competition’ also emerged as predominant macro-
inhibitors of resilience development in the recent credit crunch,
while ‘SEK devaluation’ and ‘change in basic textile industry
structure from make-to-buy’ were more deliberating factors in
the 1990s crisis.
7. Conclusion: implications and further research
A major conclusion that emanates from this research is how
firms can develop their resilience potential by tuning their
strategic assets and capabilities (available antecedents of resili-
ence). For the Swedish SMEs the key among them are: (a)
investment finance and cash flow, (b) material assets and net-
working, (c) strategic and operational flexibility, and (d) attentive
leadership.
These evident patterns are revealed through the discussion
above. Financial reserves and their mobility enhanced invest-
ment opportunities for the resilient responding firms through
421
sufficient growth perspectives (along product and market
developments), while firms that showed financial constraints
succumbed to the crises effects, showing bad financial perfor-
mance. This is supported by close relationships in the value
chain for the resilient responding firms to continue getting
considerable order bookings from the customers and for price
negotiations with suppliers. Such profitable inter-organizational
relationships (IOR) also ensured easy access to raw material
assets at competitive price, as discussed above. Next, flexibility
in strategic decision-making was evident in resilient firms for
proper crisis strategic planning, complemented by flexibility in
manufacturing and distribution to get cost and lead time
advantages over competitors. For the manufacturing firms,
economic resilience through production effectiveness also
demanded proper execution of lean management and contin-
uous improvement (CI) approaches. Overall, the resilient
respondents were able to efficiently utilize their slack financial
and material assets through better relational networking,
higher flexibility and continuous improvement (CI) to develop
resilient economic performance in crises, steered attentively
through realistic leadership and decision-making.
Practical implications of the research findings to the business
practitioners are manifold. First, Swedish textile SMEs can have an
understanding of the underlying factors/antecedents and their
differential effects, bolstering resilience for successful performance
amidst crises. Particularly this unfolds great possibility for firms to
devise resilient solutions based on their financial and material
asset availability, enhanced by higher flexibility, continuous
improvement in efficiency and networking by developing IORs,
for dealing with future economic crises, like the double-dip
recession or Euro-zone crisis.
Second, firms can have a clearer understanding of ‘where’ and
‘how’ to invest to develop their unique response repertoire in crisis
periods, essential for building strategic readiness, and utilize the
slack resources for resilience building (Ismail et al., 2011). This can
eventually have a strong impact on a firm's resilience by addres-
sing a range of crisis-related problems.
From the academic perspective, first, there is little empirical
research investigating the different effects of various organiza-
tional capabilities, unifying resource-based view, dynamic cap-
abilities and organizational learning to explore their relationship
in crisis situations to support resilience development. This paper
conceptualizes such a framework for validation. Furthermore, it
investigates empirically, in the context of global economic crises,
how resilience development is favoured or inhibited by the
significance or lack of antecedents, respectively.
However, considering the diversity and inherent complexity in
the topic of resilience for success/survival of firms there are some
limitations of the present study mainly related to: (a) its narrow
economic crisis context for Swedish textile SMEs i.e. lesser
possibility of generalizability over diverse environmental turbu-
lences, as the study was confined to a homogeneous environ-
mental context (two economic crises) for a particular sector
(textile and related) and location (Sweden), (b) that the study
mainly highlights the effects of the internal building blocks of
resilience of a firm, while the external inhibitors or facilitators like
globalization or industrial changes and policies are not detailed
separately in the survey part, (c) that the study does not capture
the interactive (or moderated) effects of each antecedent on
economic resilience of the firms, in orchestration with other
antecedents as control variables; (d) that the study only highlights
the ‘contents’ of building resilience rather than the strategic
process of growth or continuity to achieve it. However, the
theoretical framework of the paper is universal for testing and
application in case of any type of environmental turbulence and in
any time-spatiality.
422 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428

Table A1
Emergent pattern in the key antecedents during 1990s crisis.

Antecedents Other process initiatives Exogenous factors

Case 1 Inhibitors
Lacked economic Resource and asset problems
resilience  Escalation of foreign currency loan
amount incurred for infrastructural
and capacity development due to
SEK devaluationa
 Heavy loss incurred in the potential
recovery years following crisis (due
to investments in a sister concern)c
 Lack of ability to hold back declining capacity of  SEK devaluationo
volume and market share due to higher price
pressure due to delocalization of production and
entry of foreign competitors
 Lack of defined growth strategies and
adjustments in product pyramidl(i, ii)

Case 2 Facilitators  Knowledge of their core assets and strengths in

Showed some economic Resource and asset production to redefine business model and
resilience through  Stable financial situation of the organizational design by delocalizing production
W-shaped recovery family owing to considerable and shifting product core from fashion clothing to
retained earningsa industrial product
Competitiveness
 Flexible production and logistics
with near-by manufacturing in
Sweden, Finland and Portugalg
 Flexible decision-making related to
the need to change the business
model and organizational designf

 Declining customer base and low-price  SEK devaluationo (in September 1992)
competition requiring more stringent market
penetration strategiesl(i)

Case 3 Inhibitors  Lacking market penetrationl(i) strategy owing to  Incredible hike in wages and production
Lacked economic Resource and asset problems stringent low-price competition owing to cost forcing outsourcing of productionm
resilience  Reduced financial leverage due to outsourcing trends  Devaluation of currency (SEK)o
volume and margin ramp-downb  Lack of marketing skills
 Reduced number of suppliersd
Learning and culture problems
 Lack of cross-functional structure,
hence flexible manufacturingg,j,k
 Lack of long-term shared vision of
the employees instigating more
self-centred silo structure and
mentalityk
Competitiveness problems
 Challenging strategic decision-
making owing to both volume and
margin related problemsf

Case 4 Inhibitors  Devaluation of the Swedish currencyo

Lacked economic  Heavy investment incurred in  Collapse of Soviet Union, the company's
resilience developing new product (in 1991- biggest marketn
92) reducing cash flowc
 Bankruptcy of the packaging
division of one of the group's
subsidiaryc
 Fairly new acquisition of business
subsidiaries increasing liabilities
without reaping profits initiallyc

Case 5 Inhibitors  Lack of defined growth strategies in the firm's  SEK devaluationo considered to be most
Lacked economic Resource and asset problems ‘developmental’ stage under new ownership influential in driving the profits and
resilience  Constrained cash liquidity due to surplused by crisis effects leverage down
too much borrowing of foreign  Market problems resulting in loss of big
exchangea customers and order-volumen
 Diminishing number of yarn
suppliers in the European marketd
 Lack of bank supportd
Learning and culture problems
 Lack of experienced and attentive
leadership in the crisis time
considering the change into new
ownership since 1990i
 Lack of cross-functional training for
developing working teams and
employeesj,k
 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428 423

Table A1 (continued )

Antecedents Other process initiatives Exogenous factors

Competitiveness problems
 Lack of contingency plansf

Case 6 Inhibitors  Lack of defined growth strategies in terms of  Change in retail structure (closure of
Lacked economic Resource and asset problems product portfoliol(i, ii) or market diversificationl(iv) special leather retailers) for Swedish
resilience  Relational problems with banks for  Organizational inertia resulting in a ‘order leather sector due to start of anti-fur
financingd volume-asset stock’ mismatch campaigns and high costsm
 Losing order volumeb  Loss of market in Russia which was more
High raw material stockse than 50% earliern
 Lack of partnerships and supplier
problemsd
Competitiveness problems
 Problems in dealing with raw
material stocks due to lack of
flexibility in operationg
 Customer’s order-volume
depreciation affecting sales-
turnoverb
 Declining number of customers and
suppliersd

Case 7 Inhibitors  Lack of growth strategies along marketsl(iii, iv)

Lacked economic Resource and asset problems and product portfoliol(i, ii)

resilience  Losing order volumeb

 Loss of big customers in the home
textile sector due to low-price
competitiond
 Lack of high-design profile in the
organizatione
Learning and culture problems
 Lack of formal production related
educationj,k

Case 8 Inhibitors  Lack of market developmentl(ii) resulting in  Low-price competitionm

Lacked economic Resource and asset problems shrinking customer base due to their shift from
resilience  High overhead and fixed cost of private label model to own label model
productiona  Increased cost structure lacking market
Competitiveness problems penetration strategiesl(i)
 Lack of production flexibility due to
own manufacturing and increasing
cost structureg
 Lack of alternate crisis strategiesf

a
Financial reserve/Cash flow.
b
Sales decrease.
c
Loss in investment.
d
Networking with bank, suppliers, customers and other value chain members.
e
Material assets (FGI, raw material etc.), social assets (employees etc.), intangible assets (brand image).
f
Strategic flexibility as quick, effective decision-making, contingency planning etc.
g
Operational flexibility (in logistics etc.) and structural flexibility (make-buy decisions).hRobustness: quality development and improvement.
i
Leadership and top management role.
j
Employee well-being.
k
Collectiveness in organization.
l
Ansoff's growth strategy.
i. Market penetration
ii. Market development
iii. Product development
iv. Diversification.
m
Change in industry structure.
n
Market problems.
o
Problem related to currency devaluation, exchange rates etc.

Thus certain future research directions are left open. This can be Appendix A
related to either understanding the process of utilizing the available
antecedents along a process of generating firms' crisis response See Table A1.
repertoire, following pattern identification along the strategic and
operational modes executed by firms, or it can be quantitative works
related to investigation of combined effects of the antecedents in Appendix B
enabling resilience, or a comparative evaluation of resilience ante-
cedents and their different effects for large corporations and SMEs. See Table B1.
424 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428

Table B1
Emergent pattern in the key antecedents during 2007–09 crisis.

Antecedents Other process initiatives Exogenous factors

Case 1 Inhibitors
Lacked economic Resource and asset problems  Lack of restructuring of product pyramid and  Increased relative strength of
resilience  Cash flow problema with lesser bank focused growth strategiesl(i, ii)
manufacturing country's currencyo
financingd  Low-cost import penetrationm
 Increased finished stock for capacity  Underdeveloped market for functional
running and wage payment forcing to product portfolio
compromise through workforce lay-offe
 Occasional raw material supply
fluctuationse
Competitiveness problems
 Lack of operational flexibility owing to
delocalized production and high FGI
stockg

Case 2 Facilitators
Showed some Resource and asset  Market penetrationl(i) through increase cost
economic  Good financial reservea effectiveness (ramping down production in
resilience through  No problem in financing initial project Portugal while ramping up in Tunisia having
V-shaped recovery start-ups through bank loansa,d nearly one-third cost)
 Increased finished stock for capacitye  New product diversification strategyl(iii, iv) within
Competitiveness new sector
 Continuous improvements (CI) in  New customer base development in the European
production efficiency with more efficient automotive sectorl(ii, iv)
small batch manufacturingh
 Long-term decision-makingf

Inhibitors
Resource and asset problems
 Restricted customer base (80% sales to  Delocalization of production in the
one big automotive customer)d automotive industrym
 Lesser flexibility in supplier selection
process due to costly and longer
validation processd

Case 3 Facilitators
Showed Resource and asset  Product portfolio diversification into knitwear,
significant  No cash flow problemsa shoes etc.l(iii)
economic  Good relation with bank to pay invoices  Delocalize production to Estonia by acquiring
resilience on-timea,d manufacturing firm for cost minimizationl(i)
 Development of unified brand image  Development of own label through launch of sub-
with 80% under own labele labelsl(i)
Learning and culture
 Closer relationship with employeesk
 Higher responsibility of employees in
decision making, higher education and
knowledge level and some job trainingj,k
 Role of Chairman in decision-making
during crisisi
Competitiveness
 Work close to the customer for getting
more order volume with deeper
relationshipd

Case 4 Facilitators
Showed good  Financial reserve generated through sale  Market diversification with innovative product
economic of few owned subsidiaries augmenting launches in several business divisionsl(ii, iv)

resilience equity and also using retained earningsa  Delocalized production and warehousingl(i)
through  Good earnings generated by labels and
V-shaped printing businessesa
recovery  Launch of innovative products for new
marketse
Learning and culture
 Entrepreneurial leadership with
administrative top management
supporti
 Fairly autonomous functioning and
decision-making of the subsidiariesf,i
Rolling plansf
Resource and asset Competitiveness
 Operational flexibility in all business
divisions through efficient logistics and
multiple distribution centersg
 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428 425

Table B1 (continued )

Antecedents Other process initiatives Exogenous factors

 New cooperation agreements with

marketing partners and agenciesd
Inhibitors
Resource and asset problems
 Postponement of customer orders and
installations for industrial goods
resulting in building up of stocke and
reducing cash flowa
 Short-term cost effectiveness and loss of
expertise through employee lay-offe,j

Case 5 Inhibitors
Lacked economic Resource and asset problems  Firm already in a declining phase since the IT crisis  Low-price competitionm
resilience  Inflexibility at the supplier side due to of 2000 due to declining customer order volume
lack of alternate suppliers (only one for and change in their buying strategy (lack of
yarn dyeing)d market/customer penetration or diversification)l(ii,
 Reduced slack resources aimed at iv)

creating a more tighter, cost-effective

organizatione
 Declining customer order volume since
2000s IT crisis and change in their
buying strategyd
Learning and culture problems
 Lack of formal leadership-related
education for top managementi
Retrenchment of 4 peoplee,j
Competitiveness problems
 Lack of contingency plansf

Case 6 Inhibitors
Lacked economic Resource and asset problems  Lack of defined market penetration initiatives in  Poor winter in 2008
resilience  Hard to work with banks related to cash finding newer retail formats for sellingl(i)  Change in retail structure (closure of
issuesd  Need for leather cluster development for export special leather retailers) for Swedish
 Supplier terms of payment problems increase leather sector due to start of anti-fur
related to dealing invoiced campaigns and high costsm
 Depreciation of the internal raw material
stock value to match the reduced
turnovera,e
 Cash flow problem due to sudden shift
in supplier's credit to cash payment
scheme affecting retained earningsa
Competitiveness problems
 Lack of flexibility to reduce stockg
 Lack of rapid decision-making and
contingency planningf

Case 7 Inhibitors
Lacked economic Resource and asset problems  Not yet operationalized their market development  High SEK to US Dollar and Euro exchange
resilience  Decrease in order volume and margin strategy of finding newer customersl(i, ii) in the rates affecting exports earningo
due to increasing raw material costs and public transportation sector and offering them
loss of couple of big customers outside newer products with the right pricing strategy
Swedenb
 Rapid ramping down of current assets
like raw material stockse
Learning and culture problems
 Lack of long-term vision for reflecting on
declining sales turnover in the
organization (more short-term day-top-
day problem solving)f,i

Case 8 Facilitators
Significant Resource and asset  Shift from make to buy decision Inhibitors
economic  Consolidated internal restructuring to  More investments in marketing and other  Low-price competitionm
resilience reduce overhead and fixed costs (by strategic issues like adjusting the product  Shrinking customer base due to their shift
outsourcing production capacity)e pyramid/portfoliol(i, iii) from private label to own labelsm
 Good bank loan agreementa,d
Competitiveness
 Agility through reduced delivery lead-
timeg

c
Loss in investment.
n
Market problems.
426 R. Pal et al. / Int. J. Production Economics 147 (2014) 410–428

a
Financial reserve/Cash flow.
b
Sales decrease.
d
Networking with bank, suppliers, customers and other value chain members.
e
Material assets (FGI, raw material etc.), social assets (employees etc.), intangible assets (brand image).
f
Strategic flexibility as quick, effective decision-making, contingency planning etc.
g
Operational flexibility (in logistics etc.) and structural flexibility (make-buy decisions).
h
Robustness: quality development and improvement.
i
Leadership and top management role.
j
Employee well-being.
k
Collectiveness in organization
l
Ansoff's growth strategy
i. Market penetration
ii. Market development
iii. Product development
iv. Diversification
m
Change in industry structure.
o
Problem related to currency devaluation, exchange rates etc.

Appendix C. Pertinent extract from Survey questionnaire
1. How do you relate the significance or lack of the following
learning and cultural factors to the economic transition profile
of your company in recent global credit crunch and 90s
economic crisis? (Significantly/Moderately/Poorly)
- Collective awareness & group/team learning
- High shared values/sentiment/vision/knowledge
- Sense of purpose & Passion for work (among employees)
- Valuable and attentive leadership
- Respect for the employees
- Employee accountability for organization's reliability
- Clear beliefs, values and actions conveyed by top manage-
ment to all employees
- Diversities (job rotation, retraining)
- Reduced departmental silos
- Trust among employees
2. How do you relate the significance or lack of the following
factors to the economic transition profile of your company in
recent global credit crunch and 90s economic crisis? (Signifi-
cantly/Moderately/Poorly)
Material/Systems resourcefulness:
- Excess capacity (materials, FGI, labor) to match
demand surges
- Inventory management system
- Centralized distribution centre
- Reliable and up-to-date information transfer
- Innovative operations, processes or technologies
- Electronic Data Interchange (EDI) system
- Back-up of utilities
Financial resourcefulness:
- Cash flow and liquidity
- Insurance coverage for facilities, equipment, goods and
personnel
- Financial reserves, budgetary control and less debt
Social resourcefulness:
- Employees with wide variety of skills beyond own jobs
- Employees have specialized skill and expertise to act
Network resourcefulness:
- Strong support of network and partnerships with
suppliers etc.
- Alternate suppliers/Suppliers with multiple skills
Intangible resourcefulness:
- Brand reputation and good will
3. How do you relate the significance or lack of the following
factors to the economic transition profile of your company in
recent global credit crunch and 90s economic crisis? (Signifi-
cantly/Moderately/Poorly)
Flexibility:
- Quick reallocation of orders to alternate suppliers (when
required)
- Flexible and fast transportation and logistics
- Flexible internal processes and operations with regular
monitoring
- Flexible decision-making and contingency plans
- Demand-drivenness (Market intelligence and customer
centricity)
Redundancy:
- Parallel processes/manufacturing facilities etc.
- Multi-channel distribution or retailing facility
- Alternate strategies and decision making ability
Robustness:
- Followed lean management principles (like Six Sigma, ISO
9000 etc.)
Networking:
- Interaction with other supply chain members
- High transparency in information flow among the supply
chain members
- Interaction (among departments) within the organization
- Investments in supplier's or customer's operations and risk
sharing
- Collaborative decision making
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