Personal characteristics of small business owners and their strategic change behavior during the COVID-19 pandemic

Abstract

Purpose This study aims to present and test a model of small business owners’ adaptation during the COVID-19 pandemic, through the lenses of the resource-based view of the firm, upper echelon theory (UET) and positive psychology. Specifically, it examined the relationships between personal characteristics and strategic pivot behavior in a sample of small business owners during a peak period of the crisis in Israel. Design/methodology/approach A sample (N = 202) of small business owners provided information on their business and demographics, and responded to questionnaires assessing their personality (Big Five personality traits), emotional intelligence (EI) and reported the extent to which they implemented strategic changes during the pandemic. These changes were categorized as “positive” (e.g. shifting to new markets, adding partners or investors) or “negative’ (e.g. letting employees go). Findings The results partially support an association between personality traits and “positive” strategic change behavior, mediated by EI. Research limitations/implications The results suggest that business owners' personality traits, and chief among them – EI may play a key role in enabling flexibility when dealing with a long-term crisis or threat. However, market and legislative differences between markets may limit the generalizability to other sectors or countries. Originality/value To the best of the authors’ knowledge, this study is among the first to address small businesses’ COVID-19-related challenges from a personal-resource perspective by applying a theoretical lens integrating the RBV of the firm, UET and positive psychology. The findings provide a better understanding of the ways in which business owners’ personal resources account for business pivot behavior in times of crisis.