Doing the homework prior to a pandemic: causation and successful micro and small enterprises

Abstract

PurposeLittle is known about the role causation plays in establishing the necessary conditions for micro and small enterprises (MSEs) to face the first stages of a major crisis. Our study aims to investigate how causation affects their ability to be successful at the onset of widespread calamities.Design/methodology/approachWe examined how 191 Brazilian MSEs utilized causation in managing different aspects of their operating cycle before the COVID-19 pandemic using a combinatory methodology.FindingsCausation is more important than usually supposed for MSEs when facing widespread crises.Research limitations/implicationsOur study did not explore the specific interactions between the intensified use of causation practices and other factors within MSEs that may lead to superior outcomes. The limitations of our data prevented a fully assessment of sales fluctuations of firms and how they responded to the latter stages of the COVID-19 crisis.Practical implicationsOur findings underscore the significance of causation in helping MSEs navigate future crises, emphasizing the enduring value of time-tested management practices. MSE owners and managers should ensure the presence of causation-oriented practices, as these forms the foundation for well-established management principles. This strong foundation equips MSEs to effectively employ effectuation strategies when it is needed.Social implicationsSmall enterprises are the backbone of every economy and play a vital role in economic recovery. Our findings offer valuable insights that can help these enterprises effectively navigate major crises and contribute to economic recovery.Originality/valueThis study is among the first to answer to the call for more research that isolates and investigates granular elements of causation. Additionally, our study is original in that we address the need to consider the temporal dimension of causality.