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STRATEGIES FOR SUPERIOR PERFORMANCE IN RECESSIONS: PRO OR COUNTER-CYCLICAL?
- Source :
- RAE: Revista de Administração de Empresas, Vol 55, Iss 3, Pp 273-289 (2015)
- Publication Year :
- 2015
- Publisher :
- Fundação Getulio Vargas, Escola de Administração de Empresas de São Paulo, 2015.
-
Abstract
- Recessions are recurring events in which most firms suffer severe impacts while others are less affected or may even prosper. Strategic management has made little progress in understanding such performance differences. In a scenario of decreased demand, intensified competition, and higher uncertainty, most firms try to survive by pro-cyclically cutting costs and investments. But firms could take advantage of undervalued resources in the market to counter-cyclically invest in new business opportunities to overtake competitors. We survey Brazilian firms in various industries about the 2008-2009 recession and analyze data using PLS-SEM. We find that while most firms pro-cyclically reduce costs and investments in recessions, a counter-cyclical strategy of investing in opportunities created by changes in the market enables superior performance. Most successful are firms with a propensity to recognize opportunities, an entrepreneurial orientation to invest, and the flexibility to efficiently implement investments.
- Subjects :
- Recession
cycle
opportunity
entrepreneurship
flexibility
Business
HF5001-6182
Subjects
Details
- Language :
- English, Spanish; Castilian, Portuguese
- ISSN :
- 00347590 and 2178938X
- Volume :
- 55
- Issue :
- 3
- Database :
- Directory of Open Access Journals
- Journal :
- RAE: Revista de Administração de Empresas
- Publication Type :
- Academic Journal
- Accession number :
- edsdoj.f70c2044b3d4edfbff1b47a6404858f
- Document Type :
- article