Organizational resilience and sustainability: The role of investors in organizational crisis periods

Abstract

Organizational resilience and sustainability are two phenomena that are becoming increasingly important in a complex, dynamic, and challenging business environment. Organizational resilience, defined as an organization's ability to withstand, adapt to, and recover from crises without compromising its fundamental functions and operations, is enveloped in a continuous and dynamic process involving multiple factors, resources, capabilities, and agents. In this context, organizations require resources and support from external agents to implement their resilient capabilities in the face of crises, with investors becoming key allies during such times. Moreover, the relationship between organizational resilience and sustainability is positioned as a critical aspect in the current organizational environment. The practices and sustainable commitment of an organization impact investor engagement, and therefore their support and complicity during crises. Understanding the real world as a set of interconnected systems at various levels within a hierarchical structure, sustainability is considered a phenomenon developed at a macro-systemic level, requiring a holistic perspective that encompasses economic, social, and environmental aspects across all systems at every level of the hierarchical structure. In this vein, achieving macro-level sustainability necessitates moving away from traditional organizational designs focused solely on maximizing profits and process efficiency, towards more flexible, adaptable organizational designs that allow for a better understanding of reality as a suitable combination of various factors and components. The research conducted in this doctoral thesis is grounded in Resource Dependence Theory, Legitimacy Theory, Hierarchy Theory, and systemic thinking. Two of the three studies have performed empirical analyses, combining various analytical methodologies (different types of regression, mediation analysis, and moderation models), yielding significant findings on the impact of investor characteristics and commitment on organizational resilience. More specifically, how investors with particular characteristics (geographic diversity, capital concentration, and patience) contribute additional and necessary resources to prevent future relapses in organizational crises. Additionally, the impact of reinforcing sustainable commitment and legitimate practices by the organization during times of crisis on investor commitment to expedite the organization's recovery process after a crisis has been highlighted. The final work in this thesis is a theoretical piece that sheds light on the distinctive features of organizational design focused on efficiency, with high standardization, specialization, and a tightly coupled system, and organizational design based on resilient principles, with greater flexibility, functional diversity, and a loosely coupled system. Furthermore, drawing on Hierarchy Theory, it distinguishes sustainability as a system at a macro level, and organizational designs as systems at lower levels within a hierarchical structure, exploring influences across different hierarchical levels: the influence of higher levels, such as a stable or dynamic organizational environment, on organizational design, and the influence of organizational designs on global sustainability. Therefore, while a stable environment is optimal for efficient organizational designs, resilient organizational designs operate better in dynamic environments. Consequently, given the current dynamism of the real world, achieving sustainability at a macro level requires greater flexibility and adaptability, translating into a heightened focus on resilience at lower system levels. In conclusion, the comprehensive analysis of the literature conducted in this doctoral thesis and the empirical evidence highlight that the role of investors is crucial in developing and implementing organizational resilience, not only during times of crisis but also subsequently to (1) expedite the recovery process, and (2) prevent future relapses. This study makes significant contributions to the literature on business management, organizational resilience, and the various theories involved in this work. Moreover, sustainability is becoming increasingly relevant in the business arena, and this thesis provides important implications for how to contribute to its development and achievement at a global level. Therefore, this thesis offers valuable insights that enable academics, practitioners, and regulators to understand the influence of investor characteristics and sustainable commitment on organizational resilience, as well as the influence of decisions made at lower levels of analysis (e.g., an organization) on outcomes at higher levels of analysis (e.g., global sustainability), and vice versa.