A contingent value of bricolage strategy on SMEs’ organizational resilience: lessons from the COVID-19 pandemic

The COVID-19 pandemic severely impacted SMEs globally, causing supply chain disruptions, reduced demand, and increased costs. SMEs, already vulnerable due to limited resources and unstructured management, faced a heightened risk of failure. Organizational resilience (OR), defined as the ability to maintain and renew operations during adversity, became crucial. While various crisis management strategies exist, a flexible, adaptive approach is particularly relevant for SMEs. The study proposes that bricolage, a strategy involving creative resource combination, can enhance SMEs' OR. However, the effectiveness of bricolage may depend on factors like government support and business process innovation. The research question focuses on identifying factors influencing the effectiveness of bricolage for SMEs' OR during crises, proposing a theoretical framework where government support and business process innovation moderate the bricolage-resilience relationship.

Existing literature highlights various crisis management strategies for enhancing OR, including entrepreneurial initiatives, strategic decision-making, contingency planning, communication, and collaborative partnerships. However, these studies often analyze individual actions in isolation, neglecting the multifaceted nature of SME crisis responses. The concept of bricolage offers a framework for understanding SMEs' adaptable and innovative crisis responses, leveraging available resources creatively. Research emphasizes the importance of resource flexibility and adaptation for long-term success, especially in innovation activities, given their vital role in productivity and growth. Previous research also shows that government support plays a significant role in SME resilience during crises, including financial and operational aid. While the positive link between bricolage and resilience is suggested, the conditional nature of this relationship requires further exploration. The study thus seeks to investigate the factors that moderate this relationship.

The study uses data from 3179 responses in the Korean Innovation Survey (KIS) 2021, focusing on South Korean service SMEs. The sample selection criteria included establishment before 2018, more than 10 full-time employees, and at least three years of operation by 2020. A stratified and systematic sampling method was employed. SMEs with no variation in the dependent variable (organizational resilience) were excluded to ensure robust regression results. The final sample consists of 3179 SMEs with complete responses. Organizational resilience was operationalized based on whether firms maintained or expanded their innovation activities during the pandemic (coded as 1) or dropped or deferred them (coded as 0). Bricolage strategy was measured by the number of managerial actions taken to address pandemic challenges. Government support (financial and operational) was assessed using a five-point Likert scale, averaging the scores for each type of support. Business process innovation was measured by the number of different types of innovations undertaken. Control variables included firm size, export intensity, listed firm status, new venture status, clustering firm status, and industry. Logistic regression was used to test the hypotheses, reporting odds ratios as effect size estimates. Mean-centering was applied to interaction terms to mitigate multicollinearity.

Model 1, including only control variables, showed that firm size, new venture status, and listed firm status positively influenced OR. Model 2 supported H1, demonstrating a positive relationship between bricolage strategy and OR (odds ratio = 1.761, p < 0.01). Model 3 tested H2 concerning government financial support. While financial support independently enhanced OR (odds ratio = 1.797, p < 0.01), it negatively moderated the bricolage-resilience relationship (odds ratio = 0.592, p < 0.01). This indicates that financial aid may substitute for bricolage efforts. Model 4 showed that government operational support positively impacted OR (odds ratio = 3.130, p < 0.01), but its interaction with bricolage was not significant. Model 5 examined H3 concerning business process innovation. Business process innovation independently strongly enhanced OR (odds ratio = 124.640, p < 0.01), but its interaction with bricolage negatively affected OR (odds ratio = 0.545, p < 0.1), suggesting potential resource conflicts between bricolage and comprehensive innovation. Figures 2 and 3 visually illustrate these interaction effects.

The findings extend crisis management literature by demonstrating the value of bricolage for SME resilience but also highlight the contingency of this relationship. Government financial support appears to substitute for bricolage, potentially diminishing the need for self-reliant strategies. In contrast, operational support enhances resilience without negatively impacting the effectiveness of bricolage. The negative interaction between bricolage and business process innovation suggests a potential resource trade-off. SMEs might benefit from prioritizing bricolage in the short term for survival and focusing on innovation when resources are more abundant. The study distinguishes between the externally reactive nature of OR and the internally proactive nature of business process innovation, emphasizing the importance of resource orchestration in crisis management. The results offer more generalizable insights for service SMEs compared to previous studies focusing on specific industries.

This study contributes to understanding SME resilience during crises by demonstrating the positive impact of bricolage strategies while acknowledging the moderating roles of government support and business process innovation. SMEs should adopt bricolage for short-term survival but carefully consider the allocation of resources for innovation. Policymakers should focus on operational support to complement bricolage efforts rather than relying solely on financial aid. Future research could explore non-linear relationships between bricolage and resilience, address endogeneity issues, and incorporate a process-based view of OR.

The study assumes linear relationships between variables, which might not fully capture the complexity of the phenomenon. Endogeneity issues due to the use of cross-sectional data limit causal inference. Future research should employ alternative methods, such as experiments, to address these limitations. A more nuanced understanding of the interaction between bricolage and business process innovation is needed. The study’s focus on Korean SMEs may limit the generalizability of findings to other contexts.