Navigating crises: The role of digital adoption and innovation environment in enhancing organizational resilience

Abstract

Systemic crises, encompassing economic recessions, technological disruptions, pandemics, and geopolitical conflicts, constitute a recurring feature of the business landscape rather than an aberration. Such crises expose vulnerabilities that undermine operational continuity, performance, and organizational growth, with particularly salient implications for entrepreneurial firms. However, the capacity to respond to these adverse conditions is far from uniform, varying considerably according to resource endowments and stage of organizational maturity. In this context, studies argue that digital adoption represents a critical factor for enhancing resilience, although its effectiveness is contingent upon its interplay with firms’ internal capabilities. Accordingly, this study investigates the configurational pathways through which Chinese entrepreneurial firms attain organizational resilience amid systemic crises, with particular emphasis on the role of digital adoption in this process. Therefore, we employed fuzzy set qualitative comparative analysis (fsQCA), a method particularly suited to identifying causal configurations that explain complex organizational outcomes. We analyzed data of 1936 firms drawn from the Enterprise Survey for Innovation and Entrepreneurship in China (ESIEC), which collects information from firms that continued operating during crises, making the sample particularly well-suited to identify the strategies that enabled survival and resilience. The results showed that organizational adaptation combined with flexible human resource strategies was consistently associated with greater resilience. Digital adoption enhanced resilience when integrated with pre-existing organizational capabilities and regional innovation environments; however, it was not a universal requirement. Service firms and manufacturing firms followed distinct resilience pathways, and the effectiveness of digital adoption depended on the sector and innovation context in which firms operate. Static and dynamic resilience emerged as complementary strategies rather than mutually exclusive alternatives, offering executives and policymakers a nuanced roadmap for building organizational resilience in times of crisis.