Antecedents of Resilience: an Investigation into Bharat Forge.
| Author | Salwan, Prashant |
Introduction
Firms operating in the 21st century are vulnerable to many disruptive changes. They should develop resilience to perform well in the turbulent environment (McCann et al., 2009). Firms that are operating across the nations are vulnerable to detrimental effects of many disruptions. They are prone to adverse effects of sudden disruptive changes that can stem from natural calamities, economic crisis, political crisis, and attacks by terrorists and so on. They require resilience to alleviate these adverse effects of disruptions and to get back to stable position. Boin & Eeten (2013) argue that resilience helps firms to bounce back from the damages done by the disruptions to a stable state. Further, "resilience offers the promise of an intuitively plausible, attractive and seemingly attainable strategy to prepare for and deal with various types of adversity" (Boin & Eeten, 2013:430). Albeit resilience is an important capability for the survival of firms, what are the antecedents of resilience remains a festering problem in practice and research. Bhamra et al. (2011) also advocated the need for further research on resilience as it is essential for firms to recover from various disruptions.
In the past few decades, the world has witnessed many disruptions like 9/11 World Trade Center attack by terrorists, the tsunami in Asia in 2004, and hurricanes etc. In the future also, there will be some unanticipated catastrophes (Rose, 2007) which cannot be controlled by firms. What they can do is recover as early as possible from these kinds of shocks. Especially, India and China are good destinations to offshore the services and manufacturing activities respectively. Multinational enterprises are also expanding their business activities in emerging countries like India and China to exploit the low cost of services in these countries. At the same time, they are also vulnerable to disruptions in countries like China and India and they all require resilience to manage uncertainties (Fiksel, 2015). Hence, exploring the antecedents of resilience by investigating a firm from an emerging economy like India is essential.
Background
Resilience concept is popular across many fields like ecology, metallurgy, psychology, supply chain management, safety engineering, and strategic management. Albeit contexts are different, resilience refers to the ability of an element or system to get back stable condition after a disruption (Bhamra et al., 2011) which means that resilience is the capacity to regain the stability after the effects of a disruption. In his seminal paper "Resilience and Stability of Ecological Systems", Holling, (1973:498) defines resilience as the ability of a system to adapt changes and persist. Resilience refers to the firm's ability to recover and regaining the position while there are unexpected and detrimental changes in the environment (Arsovski et al., 2010). Haimes (2009) defines resilience as "the ability of a system to absorb external stresses; or as a system capability to create foresight, to recognize, to anticipate, and to defend against the changing shape of risk before adverse consequences occur; or the inherent ability and adaptive responses of systems that enable them to avoid potential losses. Resilience is the result of a system (i) preventing adverse consequences, (ii) minimizing adverse consequences, and (iii) recovering quickly from adverse consequences." Further, Lee et al. (2013:29) define resilience as "a multidimensional, socio-technical phenomenon that addresses how people, as individuals or groups, manage uncertainty." Across all these definitions alleviating the adverse effects of changes and recovering from adverse conditions are common. Hence, we define resilience as the capability of a firm to alleviate the adverse effects of disruptions and bouncing back from a crisis situation as quickly as possible.
Since resilience is significant for firms to recover from disruptive conditions it will be a good contribution if we explore the antecedents of resilience which further offers implications for the organizations to develop resilience. Many of the studies, so far focused on resilience, discussed the importance of resilience for firms to deal with uncertainties or disruptions, supply chain resilience, measuring resilience, economic resilience, and manufacturing resilience and so on. Only a few studies (Demmer et al., 2011; Pal et al., 2014; Scholten et al, 2014) have addressed the issue of antecedents of resilience. There is also a need for conducting real-world research on resilience (Bhamra et al, 2011). We further want to explore the antecedents of resilience and provide implications for organizations. This study contributes at least in three ways. First, it explores the antecedents of resilience by investigating into an emerging multinational company Bharat Forge, India. Albeit emerged from the developing economy, Bharat Forge is the second largest forging company in the world. From its inception, it has been developing many practices so as to adapt to the changes and to respond to the disruptions in the turbulent environment. Second, our study gives more support to the extant literature on antecedents of resilience. Firms operating in developing economies are suffering from poor institutional frameworks and inefficient market. For these firms, developing resilience is a real challenge. It is interesting to study a firm developing antecedents of resilience even in the presence of poor institutional frameworks and inefficient market. Third, by exploring the antecedents of resilience we provide implications for firms to develop resilience.
Strategic Agility
Resilient organizations are agile in nature. Cognitive, behavioral and contextual resiliencies' interaction helps the firm to develop resilience capacity. Firm's core values, vision, mission and risk mitigating mechanisms and problem-solving abilities and sense-making abilities constitute cognitive resilience. Behavioral resilience helps firms to learn from past experiences and use new routines through investing resources. Contextual resilience is the collaborative response to environmental complexities (Arsovski et al., 2010). We can summarize these as the firm's ability to sense environmental changes and responding to them quickly would lead to resilience.
Doz and Kosonen (2008; 2010) argue that strategic agility helps firms to sense rapid changes and responding to them quickly. The literature says that resilience is not corresponding to quick changes but unexpected changes which are highly uncertain and detrimental to the firm. Hall and Beck (2009:2) argue that "an organization's resilience capacity captures its ability to take situation-specific, robust, and transformative actions when confronted with unexpected and powerful events that have the potential to jeopardize an organization's long-term survival. Strategic agility is a complex, varied construct that can take...
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