Management Practices and Firm Adaptiveness during an External Shock: the Case of COVID-19

Abstract

What determines firm adaptiveness in the face of an external shock? This thesis aims to answer this question by considering the case of COVID-19. Firms faced many challenges during the pandemic, with some thriving and others less so. This difference in adaptiveness raises the question why some companies can successfully weather unexpected shocks and others cannot. Firm adaptiveness in the face of crises is a frequently-studied academic subject and scholars from both strategic management and economics have made valuable contributions. Few studies, however, exist that integrate these fields. The academic significance of this thesis lies in the integration of these two previously distinct literatures, both of which offer valuable perspectives on firm adaptiveness, but often operate in isolation. This thesis draws on studies in strategic management and economics to answer the main research question and presents findings useful to practitioners, policy-makers and scholars by answering several sub-questions: what firm-level variables, taken from the strategic management and organizational economics literature, contribute to firm adaptiveness in the face of an external shock? What precise mechanism links these variables to firm-level outcome measures? And what can policymakers do to make sure that policies they draw up during an external shock are effective and contribute to firm performance?