Strategic Entrepreneurship in Russia during Economic Crisis

Abstract

T his paper aims to explore the relationship between different components of strategic entrepreneurship (particularly, entrepreneurial mindset, innovation, managing resources strategically, and competitive advantage) and SME performance during the economic crisis. To test the theoretical model, we utilize data collected through a survey of Russian SMEs during the period of economic crisis and subsequent stagnation in 2015-2016. The findings Кeywords: strategic entrepreneurship; innovation; entrepreneurial mindset; managing resources strategically; competitive advantage; small and medium enterprise; performance; economic crisis; Russia. suggest that the entrepreneurial component of strategic entrepreneurship is positively related to SME performance during the economic crisis; moreover, a significant negative link was found between SME performance of firms outside the Central Federal Region and an interaction term of Entrepreneurial Component and Competitive Advantage that suggests the need to choose only one type of action and not to perform both simultaneously.

Exploration and exploitation in crisis environment: Implications for level and variability of firm performance

“…Therefore, the probability of failure among such firms is typically much higher, in comparison with larger, wellestablished firms (Davidsson & Gordon, 2016). On the other hand, in the resilience view, SMEs are more flexible, closer to the market and their customers, and, therefore, less negatively affected by an economic downturn (Beliaeva et al, 2020;Latham, 2009;Shirokova et al, 2019;Smallbone et al, 2012). These two views correspond with the views in the organizational decline literature, which have contrasted between organizational decline as a catalyst or inhibitor for adaptation and innovation (McKinley et al, 2014;Sarkar & Osiyevskyy, 2018).…”

“…In sum, most studies reflect a long tradition of interest in the external environment and the ability of organizations to adapt. Several recent studies suggest that while firms, in general, tend to reduce innovative strategies under economic crises, adopting innovative and proactive behavior can help firms to overcome the crisis and improve their innovation performance as well as turnover recovery (Ahn, Mortara, & Minshall, 2018;Archibugi et al, 2013;Beliaeva et al, 2020;Laskovaia et al, 2019;Shirokova et al, 2019). However, we did not find any studies that would investigate the exploration/exploitation-firm performance relationship particularly under conditions of major exogenous shocks.…”

“…Changes in organizational performance, especially performance decline (Cameron, Sutton, & Whetten, 1988;Weitzel & Jonsson, 1989;Zammuto & Cameron, 1985), have an impact on managerial behaviors, particularly in the situation of economic adversity or external threat (Battisti et al, 2019;Chattopadhyay, Glick, & Huber, 2001;Shirokova, Ivvonen, & Gafforova, 2019;Shirokova, Osiyevskyy, Laskovaia, & MahdaviMazdeh, 2020). A well-developed literature on strategic adaptation suggests threat perception can be considered as a catalyst for a strategic response (e.g., Gilbert, 2005;Laskovaia, Marino, Shirokova, & Wales, 2019).…”

“…The performance implications of such strategic behaviors depend on the firm's operating environment and in crisis contexts, defensive strategies can protect firm survival (Håkonsson, Klaas, & Carroll, 2013). However, a number of studies have observed that threat can also be an antecedent of the more proactive strategic behaviors that enable firms to overcome inertia (Beliaeva, Shirokova, Wales, & Gafforova, 2020;Laskovaia et al, 2019;McKinley et al, 2014;Shirokova et al, 2019Shirokova et al, , 2020.…”

“…More formally, in this study, we operationalize firm-specific crisis severity as a drop in revenues of the firm during the crisis, which creates important contingency implications for how well the potential strategies the firms employ fit the context of the economic crisis. Moreover, while an economic downturn presents dangers to firm performance and survival, it also may create opportunities to capitalize on (Archibugi et al, 2013;Ahn et al, 2018;Beliaeva et al, 2020;Shirokova et al, 2019). Firms may respond to an economic crisis by either proactively addressing the environmental changes through bold, radical initiatives (employing explorative actions) or initiating internal adjustment actions aimed at incremental and reliable adaptation to the environmental pressures (adopting exploitative actions).…”