INTRODUCTION
Business strategy comes with a price. The current economic instability and geopolitical changes lead us to answer the question of whether we are willing to embrace a new business strategic vision oriented toward the company’s own capabilities. The introduction of AI has inevitably led many companies to seek growth opportunities outside their sectors, competing in new sectors and innovating despite the uncertainty and the volatility of the global markets. Business strategy requires us to pay close attention to the current threats, but at the same time, it asks leaders and entrepreneurs to look beyond the curtain of near-term threats.
IN DEPTH
Economic volatility, geopolitical threats, and the introduction of new technologies, are often perceived as dangerous factors for the growth of a business. Nonetheless, tangible results do not come through a conservative business model, but through the understanding that companies need to acquire complementary capabilities and reinvent themselves during difficult times. COVID-19 has shown us that the adaptability of a company to overcome unforeseeable challenges is a crucial element for the company’s survival. Companies that thrived did not merely focus on short-term damage mitigation; they adopted an “adaptation advantage” quickly identifying necessary shifts in operations, such as accelerating digital transformation, pivoting business models, and embracing remote work. Each crisis is unique, posing distinct challenges that require businesses to move beyond standard operating procedures and embrace rapid, tailored adaptation to survive and thrive. While the COVID-19 pandemic forced a shift to remote work and digital transformation, other crises—such as geopolitical conflicts, supply chain failures, or economic recessions—demand different strategic responses. The current crisis is perhaps unprecedented. The United States is actively withdrawing from its traditional role as the primary provider of global leadership, creating a vacuum that is redefining international relations. In addition, the U.S. is not only drifting from, but actively threatening, traditional allies in Europe and Canada, resulting in a “gated globalization”. Examples include threats of acquisition (e.g., Greenland) and demands for shifting NATO defense burdens to European capitals by 2027. The world economy is fracturing into “hard blocks,” with increased use of protectionism, tariffs, and export controls on critical materials. This is leading to “geopolitical fragmentation,” impacting long-term growth and supply chains. It is during these difficult times that companies need to find an opportunity to secure a competitive advantage, to create new opportunities from negative periods. Frequently, and specifically for Small Medium Enterprises (SMEs), survival imposes crisis response strategies that include down-scaling and cost-reduction. SMEs do not have the same financial capacity as big enterprises, and their crisis response strategy is generally based on lower standards of decision-making mechanisms and operational competencies. Nonetheless, each response varies in accordance with the preparedness to face and to adapt to the crisis. SMEs that have gradually adopted learning capabilities during their life cycle, have shown a pattern of managing the risk more successfully. [1] In addition, SMEs that have promoted and implemented learning programs have achieved better organizational effectiveness and performance. Data has also shown that SMEs that tend to be family-run[2] operate through a more moderate and gradual intervention during a crisis. Contrary to large organizations, SMEs that are family run, often rely of a centralized leadership style during crisis that acts quickly to make critical decisions. Decision-making often occurs through informal, frequent, and intense communication among family members, rather than structured board meetings. This allows for quick, trust-based decision making. Nevertheless, the survival of SMEs during crisis also depends on what the government mandates. For instance, companies that receive swift and broad-based economic support from their governments are more likely to recover from an economic crisis. From a managerial standpoint, helping a company to navigate the complexities of an economic crisis is a hard task. The management must be aware of the company’s capabilities and resources and understand whether the crisis requires a short-term analysis or whether the crisis should be seen as an opportunity to grow, investing in new markets, improving efficiency, and adopting innovative strategies to outperform competitors. It is important that in times of crisis, managers look beyond the crisis itself. Managers must be able to build a business strategy based on performance statistics that take into considerations multiple factors of risk such as climate change, economic volatility, and geopolitical changes. Today managers must be able to assess potential risk and move toward a positive mindset that would generate value.
CONCLUSIONS
During times of crisis managers have the hard task to maximize the use of their resources. Many struggles with the urgency of solving issues caused by a financial constraint, insufficient capabilities and the lack of practices that would have prepared the company to face short and long-term crisis. Managers must act as adaptive leaders, reinforcing organizational culture, and adopting strategies that would apply in times of change and uncertainty. In conclusion, companies can survive times of crisis when they have a clear picture of current threats, and at the same time explore strategies that would help the company to thrive in a changing environment.
[1] M. El Idrissi, Y. El Manzani, W.A. Maatalah, Z. Lissaneddine
Organizational crisis preparedness during the COVID-19 pandemic: an investigation of dynamic capabilities and organizational agility roles Int. J. Organ. Anal., 31 (2022), pp. 27-49
[2] Metaxas, I. N., Koulouriotis, D. E., & Emiris, D. (2018). Economic crisis and business excellence: A comparative multi case study assessment. International Journal of Quality and Reliability Management, 35(4), 914–939.
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