Rethinking crisis management for unexpected events at SMEs Investigation of Swedish SMEs crisis management in comparison with the RESPIRE model Bachelor Thesis in Technology Management and Economics SARA HALLESIUS EBBA HÖRNFELDT KAJSA JUNGBJER JOSEFINE NYVALL JENNIFER STEVRELL JULIA TINGHALL DEPARTMENT OF TECHNOLOGY MANAGEMENT AND ECONOMICS DIVISION OF SUPPLY AND OPERATIONS MANAGEMENT CHALMERS UNIVERSITY OF TECHNOLOGY Gothenburg, Sweden 2024 www.chalmers.se Bachelor Thesis TEKX18-24-13 Bachelor Thesis TEKX18-24-13 Rethinking crisis management for unexpected events at SMEs Investigation of Swedish SMEs crisis management in comparison with the RESPIRE model Pånyttänkande av krishantering för oväntade händelser för SMEs Undersökning av krishantering i jämförelse med RESPIRE-modellen för svenska SMEs SARA HALLESIUS EBBA HÖRNFELDT KAJSA JUNGBJER JOSEFINE NYVALL JENNIFER STEVRELL JULIA TINGHALL Department of technology management and economics Division of Supply and Operations Management Bachelor Thesis TEKX18-24-13 Chalmers University of Technology Gothenburg, Sweden 2024 Rethinking crisis management for unexpected events at SMEs Examining Swedish SMEs crisis management in comparison with the RESPIRE model SARA HALLESIUS EBBA HÖRNFELDT KAJSA JUNGBJER JOSEFINE NYVALL JENNIFER STEVRELL JULIA TINGHALL © SARA HALLESIUS, 2024. © EBBA HÖRNFELDT, 2024. © KAJSA JUNGBJER, 2024. © JOSEFINE NYVALL, 2024. © JENNIFER STEVRELL, 2024. © JULIA TINGHALL, 2024. Supervisors: Ala Arvidsson, Division of Supply and Operations Management Martin Kurdve, Division of Supply and Operations Management and RISE Examiner: Martin Löwstedt, Innovation and R&D Management Bachelor Thesis 2024 Department of technology management and economics Division of Supply and Operations Management Bachelor Thesis TEKX18-24-13 Chalmers University of Technology SE-412 96 Gothenburg Telephone +46 31 772 1000 Typeset in LATEX, template by Kyriaki Antoniadou-Plytaria Printed by Chalmers Reproservice Gothenburg, Sweden 2024 iv Rethinking crisis management for unexpected events at SMEs Investigation of Swedish SMEs crisis management in comparison with the RESPIRE model SARA HALLESIUS EBBA HÖRNFELDT KAJSA JUNGBJER JOSEFINE NYVALL JENNIFER STEVRELL JULIA TINGHALL Department of Technology Management and Economics Chalmers University of Technology Summary The COVID-19 pandemic impacted society worldwide, spanning national and global companies. As it reached the manufacturing sector, uncertainties abounded. Demand, delivery, supply chains, and transportation un- derwent significant shifts. This highlights the critical importance of crisis management. Currently, many companies lack specific tools and comprehensive understanding of crisis management and its consequences. To extract generalized insights into their operational approaches and additionally defining and delineating the consequences of crisis management, can facilitate broader application and dissemination of knowledge across companies through an examination and characterization of companies’ crisis management strategies. The aim of this study is therefore to examine Small and Medium- sized Enterprises (SMEs) proactiveness during crisis management, and explore whether there is a potentially more effective way to prepare for a crisis and improve their crisis management. It will also present ways to elevate their resilience and flexibility for future unexpected events that significantly affects their operations. The thesis consist of a literature study and an interview study, as well as an analysis on the complied in- formation. The applied research approach was predominantly deductive in nature. The systematic literature study provided a theoretical understanding and a deeper knowledge about different business management perspectives, concepts, and approaches. Hence, the literature explains the importance of, how to evaluate, and assessment within crisis management, business continuity management and resilience management. The perspectives is fulfilled with insight in implemented measures due to COVID-19 and other crises. A further addition to the literature is the considerations of environmental sustainability in crisis management. The lit- erature was complemented with twelve interviews of CEOs in Swedish SMEs in the manufacturing sectors steel, plastic, wood, and electronics. The interview data was transcribed and sorted within a research model for analysis; RESPIRE and the three phases preparation, response, and recovery. The interviews together with the literature provides answers of the research questions to fulfill the aim. The outcome of this study is that the crisis management differ among Swedish SMEs within the same sector. Companies are proactive with known crises but less so with the unexpected. Some use methods to forecast future events, but more effective approaches are needed. Improving business continuity involves reviewing internal and external connections, integrated into daily operations. With better analysis of the surrounding heightens awareness of changes and risks. Leveraging past crisis management models aids in addressing new challenges and external support like the RESPIRE model complements internal strategies. With continuous focus on business continuity, it enhances the flexibility with clear plans for various scenarios. Thus, faster, more precise decisions can be made. Emphasizing a solution-oriented mindset fosters responsiveness and may result in competitive advantages. This can be achieved with the help of a scenario-based training and gained knowledge from other companies refine preparedness. Keywords: Small- and medium-sized enterprises (SMEs), manufacturing, crisis management, COVID-19 Note: The report is written in English. Sammanfattning COVID-19 pandemin påverkade samhället samt de nationella och globala företag världen över. När det nådde tillverkningssektorn florerade osäkerheten för företagen. Efterfrågan, leverans, leveranskedjor och trans- porter genomgick betydande förändringar vilket understryker den avgörande betydelsen av krishantering. För närvarande saknar många företag specifika verktyg och övergripande förståelse för krishantering och dess kon- sekvenser. Att utvinna generaliserade insikter i deras operativa tillvägagångssätt och dessutom definiera och avgränsa konsekvenserna av krishantering, kan underlättas av en bredare tillämpning och spridning av kunskap mellan företag, samt genom en granskning och karakterisering av företags krishanteringsstrategier. Syftet med denna studie är därför att undersöka Små- och Medelstora företags (SMEs) proaktivitet under krishantering, och undersöka om det finns ett potentiellt mer effektivt sätt att förbereda sig för en kris och förbättra sin krishantering. Den kommer också att presentera sätt att höja deras motståndskraft och flexibilitet för framtida oväntade händelser som avsevärt påverkar deras verksamhet. Uppsatsen består av en litteraturstudie och en intervjustudie samt en analys av den erhållna informationen. Den tillämpade forskningsansatsen var övervägande deduktiv till sin natur. Den systematiska litteraturstu- dien gav en teoretisk förståelse och en djupare kunskap om olika företagsledningsperspektiv, koncept och förhållningssätt. Därför förklarar litteraturen vikten av hur man utvärderar och bedömer inom krishanter- ing, affärskontinuitetshantering och resilienshantering. Perspektiven tillgodoses med insikt i genomförda åtgärder till följd av COVID-19 och andra kriser. Ytterligare ett tillägg till litteraturen är förhållningssätten till miljömässig hållbarhet i krishantering. Litteraturen kompletterades med tolv intervjuer av vd:ar i SMEs inom tillverkningssektorerna stål, plast, trä och elektronik. Intervjudata transkriberades och sorterades inom en forskningsmodell för analys; RESPIRE och de tre faserna förberedelse, respons och återhämtning. Intervjuerna tillsammans med litteraturen ger svar på forskningsfrågorna för att uppfylla syftet. Resultatet av denna studie är att krishanteringen skiljer sig åt mellan svenska små och medelstora företag inom samma sektor. Företag är proaktiva med kända kriser men mindre med det oväntade. Vissa använder metoder för att förutsäga framtida händelser, men effektivare tillvägagångssätt behövs. Att förbättra kontinuiteten i verksamheten innebär att se över interna och externa kopplingar, integrerade i den dagliga verksamheten. Med bättre analys av omgivningen ökar medvetenheten om förändringar och risker. Att utnyttja tidigare krishanter- ingsmodeller hjälper till att hantera nya utmaningar och externt stöd som RESPIRE-modellen kompletterar interna strategier. Med kontinuerligt fokus på affärskontinuitet ökar det flexibiliteten med tydliga planer för olika scenarier. Därmed kan snabbare och mer exakta beslut fattas. Att betona ett lösningsorienterat tankesätt främjar lyhördhet och kan ge konkurrensfördelar. Detta kan uppnås med hjälp av en scenariobaserad utbildning och inhämtad kunskap från andra företag förfinar beredskapen. Nyckelord: Small- and medium-sized enterprises (SMEs), tillverkning, krishantering, COVID-19 Notera: Rapporten är skriven på engelska. Contents 1 Introduction 1 1.1 RESPIRE - a theoretical model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2 Problem analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.3 Aim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.4 Research questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.5 Delimitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2 Method 5 2.1 Research approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.2 Data collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.2.1 Literature study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.2.2 Interview method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.2.3 Method for processing and analyzing data . . . . . . . . . . . . . . . . . . . . . . . . 9 2.3 Discussion of literature sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2.4 Discussion of interview method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3 Literature findings 12 3.1 Crisis management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.1.1 Crisis perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.1.2 The concept of crisis management . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.1.3 Linear and cyclic approach on crisis management . . . . . . . . . . . . . . . . . . . . 13 3.1.4 Approaching early warning signs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3.1.5 Crisis response and learning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3.1.6 Unexpected events and SME crisis management approach . . . . . . . . . . . . . . . 16 3.1.7 Evaluating the crisis and performance . . . . . . . . . . . . . . . . . . . . . . . . . . 16 3.2 Business continuity management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 3.2.1 Risk assessment concerning known and unexpected events . . . . . . . . . . . . . . . 18 3.2.2 Product realization process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 3.3 Resilience management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 3.3.1 Supply chain resilience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 3.4 Business practices during COVID-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 3.4.1 Technological integration and advancement . . . . . . . . . . . . . . . . . . . . . . . 20 3.4.2 Business management and innovation . . . . . . . . . . . . . . . . . . . . . . . . . . 21 3.5 Environmental sustainability during a crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4 Interview findings and analysis 23 4.1 Compiled interview responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4.1.1 Have the company encountered any interruption in operations during the time period 2019-2023? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4.1.2 Was there any Crisis Management in place before the crisis occurred? . . . . . . . . . 25 4.1.3 Was there any early warning signals? . . . . . . . . . . . . . . . . . . . . . . . . . . 25 4.1.4 Did the company have any strategy or policy about identifying early warning signals? 25 4.1.5 Was there any strategy or plan to manage the crisis? How did it go to follow that strategy? 26 4.1.6 Did the change remain after the crisis? . . . . . . . . . . . . . . . . . . . . . . . . . . 28 4.1.7 What was the biggest risks companies believe can negatively affect them? . . . . . . . 29 4.1.8 What were the thoughts on crisis management after going through crises? . . . . . . . 30 4.1.9 What were the thoughts on IT security, how did they work with it? . . . . . . . . . . . 30 4.1.10 Was environmental sustainability considered into the management of the crises? . . . 30 5 Discussion 32 5.1 RESPIRE model and Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 5.1.1 Crisis preparedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 5.1.2 Assessment of "early warnings" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 5.2 RESPIRE model and Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 5.2.1 Acute crisis situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 5.2.2 Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 5.3 RESPIRE model and Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 5.3.1 Industrialization and ramping up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 5.3.2 New normal condition in production . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 5.4 Challenges, needs and opportunities faced by SMEs during COVID-19 . . . . . . . . . . . . . 40 5.5 Discussion of the RESPIRE model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 5.6 Regarding the sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 5.7 Environmental sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 6 Conclusions and recommendations 45 6.1 Suggestion on further research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 References 46 Appendix 49 A Pre-distrubuted Interview Questions 49 B Flowchart of the Interviews 50 Preface This Bachelor thesis was written during the spring of 2024 at the Supply and Operations Management division in the Technology Management and Economics department at Chalmers University of Technology. The thesis was carried out by six students specializing in Mechanical Engineering and Global Systems Engineering. We would like to thank our supervisor Martin Kurdve, RISE, Research Institutes of Sweden, Materials & Production division, for guidance through the entire work process. We also want to thank Ala Arvidsson, Chalmers University of Technology, Technology Management and Economics, Supply and Operations Man- agement and Research Institutes of Sweden, RISE, for the opportunity to do this bachelor thesis. We are grateful to have had the chance to gather experience and knowledge in the subject as well as guidance during the course of the work. Lastly, a big thank you to the participating companies and representatives. The explained experiences and perspectives have been helpful and interesting to discover. 1 Introduction Cyber incidents and business interruption are two of the most important global business risks for companies (Allianz Commercial, 2024). Cyber-attacks include, among other things, data breaches, malware attacks, and IT disruption. Business interruption includes supply chain disruption and refers to when an organization can’t operate or experiences challenges with the supply chain due to an event. Business interruption is linked to many of the crises that have occurred in the last five years. The COVID-19 pandemic spread to Sweden at the beginning of 2020 and affected both individuals as well as companies. The pandemic resulted in supply chain disruptions around the entire world which in turn led to a global shortage of components and raw materials, such as semiconductors and silicone. The war between Russia and Ukraine that broke out in 2022 has also contributed to business interruptions and supply chain distribution. The energy crisis became a consequence of the war when Russia cut gas suppliers to Europe and several countries had to deal with major economic challenges. During the last five years, other crises regarding supply chain disruptions have occurred in the geographical area around the Red Sea. For instance, hijacker attacks on vessels have forced container ships between Asia and Europe to take an alternative transport route. Another crisis in this area occurred when the container ship Ever Given was wedged across the Suez Canal and blocked the maritime trade route for several days in 2021 (BBC, 2021). Both these events have reduced traffic through the Suez Canal which is considered as an important trade route, as well as the shortest, between Asia and Europe. Instead, ships were transported around Africa, which led to longer delivery times and higher costs (International Monetary Fund (IMF), 2024). In 2022 the Swedish market of business consisted of over 1 million companies, where over 90% were classified as SMEs. SMEs stand for Small and Medium-sized enterprises and are defined as those with a maximum of 249 employees. A medium-sized enterprise consists of 50-249 employees, a small enterprise consists of 10-49 employees, a micro-enterprise consists of less than 10 employees, and finally the sole proprietorship. In 2022 about 65% of the job market for private enterprises consisted of SMEs. Between the years of 1993 to 2019, 82% of all newly created jobs were created by SMEs (Svenskt Näringsliv, n.d.). SMEs have a significant impact on the Swedish market and are responsible for creating a substantial amount of job opportunities. The gap between the share of companies classified as SMEs on the Swedish market and the share of jobs on the market is derived from the fact that the number of SMEs does not coincide with the number of jobs, since the companies are small in nature. The company size also affects their risk management, as they are more preoccupied with their day-to-day operations rather than assessing external risks and the big picture, according to a survey made by Allianz, Allianz Commercial (2024). According to CFI Education Inc. (n.d.), risk management is the process of identifying, assessing, control- ling, and lastly reviewing risks through a business perspective. A risk consult at Allianz Commercial states in a report that small companies tend to be exposed to risks. This is due to a lack of time and resources. SMEs also have a higher tendency to be dependent on one single customer or one single supplier and there- fore run a higher risk of supply chain disruption affecting the operations. The survey mentioned consists of 1729 small and medium-sized enterprises and reports the biggest risks companies are facing according to the businesses themselves and risk consultants, among others. The biggest risks identified in the report are cyber-attacks, natural disasters, supply chain disruptions, and macroeconomic developments. according to the survey, SMEs are increasing their resilience regarding cyber-attacks by outsourcing services. Outsourc- ing and third-party involvement are not an uncommon factor in crisis management (Allianz Commercial, 2024). A risk management certification helps companies to identify opportunities and threats, as well as effective help during allocations and resource appliance. ISO-certification is a type of third party involvement since a third party examines and asses the company’s operations to certify them. An ISO-certification indicates that a company has met international standards; quality, environment, and working environment. ISO-9001 is a foundational framework within quality management systems that refers to an organization’s implementation of business processes and training of employees. The processes and training are implemented to strive for quality products and services focusing on continuous improvement. ISO-14001 is a certification within environmental management systems that provides a framework focusing on environmental performance improvements. The certification helps organizations to reduce their environmental impact, with usage and waste management (In- ternational Organization for Standardization (ISO), n.d.). 1 Another common third party involvement during the COVID-19 pandemic was when the Swedish govern- ment issued temporary grants and changes in the law to support the companies. As mentioned above, the COVID-19 resulted in hardships for many companies. According to Ekholm et al. (2022), the four main supports distributed by the Swedish government during 2020 due to the COVID-19 pandemic are the temporary reduction of social security contributions, short-time work allowance, reorientation support and rental sup- port. Overall, the support was aimed at facilitating maintained relationships between employers, employees, companies, suppliers, landlords, tenants, borrowers, and creditors. Nevertheless, the external pressure that normally drives innovation and development can be inhibited due to extensive direct support without counter- compensation from the companies. Finally, it is assessed in the report that governmental support has been an important measure in preventing the reduction of Swedish labor and Swedish companies in the market. An indication of the positive result is the rapid decline in the number of bankruptcies following the implementation of support measures despite the deepening crisis throughout May 2020. 1.1 RESPIRE - a theoretical model This thesis is a part of the research collaboration project RESPIRE. The RESPIRE project aims to contribute to a more enhanced crisis management approach for SMEs during crises and unexpected events (Vinnova, 2022). The project has developed a model to examine actions taken and decisions made, operating in the realm of crisis management. The model is also used to examine how well SMEs adapt to crises. The blueprint model takes both company-specific events and external events into consideration. A company-specific event can be a disruption in the supply chain or a loss of an impotent customer among others. An external event is specified in the model as a pandemic, cyber-attack, economic crisis, or climate event. Further in this report, the model is solely referred to as the RESPIRE model. The RESPIRE model consists of six steps, separated into three different main phases Preparation, Response and Recovery, see Figure 1. The phases are each divided into two steps. The first phase, Preparation, consists of step zero and step one. Step zero is regarding crisis preparation and refers to the assessments and plans done as a preventive measure. Step one is when the company receives indications of an impending crisis in the near future. It is during this step a window of opportunity becomes available. The following step, step two, is the first reaction to the crisis and the beginning of phase two, Response. During step three the company adjusts its day-to-day operations and implements extraordinary measures. The last phase of the RESPIRE model is the Recovery phase. During the fourth stage, the companies start to industrialize and ramp up production. It is during this stage the companies start to scale up production towards either a new level or back to the old one. In the fifth stage, a new normal condition is reached, and the companies can begin an evaluation and feedback process to prepare further. Figure 1: RESPIRE-model the initial blueprint to crisis management in production. 2 1.2 Problem analysis At the moment, many companies are missing concrete tools including general and theoretical knowledge of crisis management and the subsequent consequences. To analyze crisis management, the aim has been divided into partial study purposes and aims. By defining the challenges, needs and opportunities SMEs face when encountering unexpected events, sim- ilarities and differences between the SMEs and their crisis management can be analyzed. By defining and characterizing the consequences following crisis management, the material can also be applied further and bring general knowledge to the companies and RESPIRE. The purpose of characterizing the consequences of a crisis is to gain insight into the companies’ way of working. This information is an important part of theorizing crisis management, to give tools to companies, RISE, and other RESPIRE-project partners. If links between the corporate crisis management of the companies and the RESPIRE model can be estab- lished, the RESPIRE model’s utility can be confirmed. Established links also confirm the RESPIRE model’s roots in reality and result in increased areas of usage and applicability. Investigating the links themselves, and concluding, is an important step in developing the model. By potentially comparing the RESPIRE model with other models visualizing crisis management, the RESPIRE model’s utility is further investigated. A comparison between different models and the companies’ actual crisis management strategies will give insight into developing the model. This investigation can bring knowledge regarding whether the model is missing something, is superfluous in any way, or can be developed and changed in any other way. Through investigating whether insights can be found from comparing various industries and companies, the goal is to generate general knowledge, as well as sector-specific theories, that can be applied to better assist companies in crisis management. By exploring which parts of the crisis management that differ and which parts that stay the same depending on sectors and industries, the model can be developed regarding sector-specific management. Mainly similarities and differences in the crisis management of sectors can be identified, to develop the model. Exploring the consideration of the environment in crisis management decisions aims to reveal the companies’ attitudes and values towards the environment in crises. The exploration also aims to reveal if environmental consciousness affects the companies’ crisis management and outcome. Further, this insight can be used in future reports to explore if there exists a will to consider the environment and if environmental values are possible to incorporate into crisis management. To summarize, by investigating and characterizing the companies’ crisis management strategies the goal is to generalize and gain insight into the companies’ way of working. This information will then be compared to the RESPIRE model and additional literature, to find similarities and differences as well as material used to develop the RESPIRE model. This will hopefully contribute with concrete tools including general and theoretical knowledge of crisis management and the subsequent consequences. 1.3 Aim The purpose of this report is to examine SMEs proactiveness during crisis management and explore whether there’s a potentially more effective way to prepare for a crisis and improve their crisis management. It will also attempt to present ways to elevate their resilience and flexibility for future unexpected events that significantly affect their operations. 1.4 Research questions To investigate the mentioned problem and to fulfil the aim, following research questions are used: RQ1: What conclusions can be drawn by defining the challenges, needs and opportunities SMEs face when encountering unexpected events? 3 RQ2a: Is it possible to draw connections between the companies corporate crisis management, the RESPIRE model and possible additional crisis management theories? If possible, what connections can be drawn? RQ2b: Can conclusions be drawn by comparing the crisis management strategies of companies within the same sector? If so, what conclusions can be drawn? RQ3: Is the environment taken into account when choosing crisis management approach? To answer the research questions stated in the introduction, the RESPIRE model, additional crisis management frameworks, and material from the interviews will be used. 1.5 Delimitations The thesis’s time frame required that delimitations were made to focus on the primary goals of the project. This thesis is limited to study exclusively SMEs within the manufacturing industry. The studied companies and interview objects act within four sectors of the manufacturing industry, plastic, steel, wood, and electronics. By comparing different manufacturing sectors a deeper understanding of similarities and differences between industries is achieved. The time aspect of the study was limited to a span of five years, from 2019 to 2023, inclusively. This implies that only crisis management actions during this period were taken into account. Due to the delimited period presented above, only companies that were established before 2019 were included. This is because the main crisis in this study, the COVID-19 outbreak occurred in 2019, and for the companies’ crisis management to be compared fairly, it was considered significant that the companies were active during and before this period. Furthermore, sustainability wasn’t considered to be the main focus of this study and therefore, the companies’ sustainability reports were not reviewed and analyzed. Still, one question regarding excursively environmental sustainability was included among the interview questions. The question is included to determine whether environmental sustainability was taken into account when implementing crisis management, as well as during a crisis. The only sustainability perspective analyzed in this thesis is environmental. 4 2 Method This section includes the research approach and work process of the project. The work process contains research methods for data collection and how the data will be analyzed and processed by using the RESPIRE model. 2.1 Research approach To fulfill the purpose of this thesis, the work process was characterized by collecting data in the form of inter- views and a systematic literature study. The problems being investigated were based on complex circumstances, actions taken during these situations, and different approaches to the best practices. According to Olsson and Sörensson (2021), the qualitative research approach is suitable when the researcher, to collect a holistic under- standing of a certain event, strives to gain as much knowledge as possible. Therefore, the research approach applied was qualitative. This approach was applied due to the complexity of the thesis and the characteristics described above. The aim was to generate objective associations and explore causality between parameters. To remain unbiased, the research approach applied, had an intention of being of positivistic nature. Positivism claims that knowledge is built by gathering facts and information in an objective way (Bell et al., 2022). Due to the qualitative nature of the entire study, a positivistic approach was applied to objectively explore common themes and characteristics. However, since the information regarding the companies and their crisis management was qualitative, a qualitative approach was applied. This is a favorable method when there is a large amount of information in every unit of analysis. A qualitative method is also convenient when the information has different dimensions and possible categories, and the way of collecting data is done by doing an interview (Wallén, 1996). Therefore, the applied research approach cannot be stated to completely coincide with the research theory of positivism, still, this was an underlying intent. Furthermore, the research method applied during the literature study is inductive. An inductive method implies that a new theory can be generated from data that is systematically collected (Dubois & Gadde, 2002). The literature study aimed to provide information about topics of interest, which is stated below in the section regarding the method used in the literature study. The research approach applied during the interview phase is considered to be a qualitative research method. As stated previously by (Wallén, 1996), the data and information collected by interviews can be interpreted as qualitative data, and therefore a qualitative research approach was applied. When discussing the literature in contrast to the interview findings, a deductive approach was applied, the flowchart can be seen in Figure 2. According to (Dubois & Gadde, 2002) a deductive method approach is described as an approach where theory is tested against reality by using preexisting literature, to gain insight and later present propositions of changes to new literature. This was applied during the analysis stage where the RESPIRE model was placed in comparison with the information gathered from the interviews. Figure 2: Flowchart of combining literature and interviews. 5 2.2 Data collection The data collection phase did consist of a literature review and several interviews, connected through an analysis. The data collection consisted of three main phases, literature study, interviews, and analysis. Primary and secondary data did be collected through a literature review. This data served as the theoretical framework and partly as a foundation for the empirical framework. The theoretical data brought information on the subject, concepts and complement the RESPIRE model. The empirical material consists of interviews from relevant companies in selected industries and did result in an understanding of crisis management. 2.2.1 Literature study A literature review was done by collecting data from various, relevant and reliable scientific sources to get a foundation for the report. Initially, a keyword search was completed within the defined subject area: crisis management. Also, crucial concepts, terminology, and synonyms found in the thesis proposal were used in the search to obtain the maximum number of search results (Chalmers Library, n.d.). The problem with keyword searches, however, was that bad search phrases by the user caused an unmanageable amount of irrelevant results. That was why it was crucial to specify as much as possible. The databases used in the research for literature were Scopus and Google Scholar. The search was made within the article title, abstract, keywords and the results were sorted by cited by (highest). In some cases, date (newest) were used to find current/ up-to-date articles and reports. A list of the used keywords, number of articles, number of read titles, number of read abstracts, and number of used articles is shown in Table 1. The used sources in some cases overlap with several keywords and therefore they may be represented more than once in the last column. Table 1: List of the keywords, number of results, read titles, read abstracts, and used articles. A quality assessment was carried out, where the articles obtained from the search were assessed based on their relevance. Initially, 5-50 titles were read and those without connection to the defined subject area were sorted out. Then the first 3-15 abstracts of the articles were reviewed. They were considered relevant if they contained the concepts according to the keywords. A few sources were involuntarily excluded due to lack of access. As a part of the data collection, upstream investigations are made to refer to knowledge gained through the investigation of references used in an interesting article. This approach was used three times in this study. 6 2.2.2 Interview method The last part of the second phase was the interview phase. Interviewing is a flexible and adaptive method that is commonly used for qualitative research (Bell et al., 2022). The interview process included the actions of deciding the aim of the interviews, delimitating the study by deciding requirements for the interview objects, formulating interview questions, contacting relevant interview objects, conducting the interviews, and tran- scribing the interviews. The interview study aimed to gain insight into the SMEs’ approach to crisis management. As well as finding practical actions taken by the companies to gain resilience and flexibility. Another goal of the interview study was to determine subjective data such as the companies’ size, age, revenue, sector, if they worked B2B, if they produced towards stock or made to order, and the export- and import share. Another parameter of interest was if the companies acted within a concern. The interviews were also anticipated to contribute information to be used to explore causality and connections between the companies including different manufacturing sectors. The manufacturing sectors studied in this thesis were plastic, electronics, wood, and steel. The requirements were set up to limit the study, as well as to contribute towards the companies’ compa- rability. A requirement made was that all companies had to be classified as SMEs, and therefore have an employee count below 250. A requirement was set up to find companies who acted during the COVID-19 pandemic. All interview objects also had to act within Sweden and align with one of the four manufacturing sectors studied, to contribute towards the aim of the interview study. It was determined that a company’s affiliation with a larger concern was of interest. Therefore both companies that were a part of a concern, and companies that were not, was included in the study. To gain a holistic perspective from the interviews and the companies’ actions during a crisis, the ideal interviewee was determined to be a person in a leadership position. This was motivated by the fact that to acquire knowledge of the entire company’s operation, someone with comprehensive knowledge of the company had to be interviewed. By interviewing people in the same positions of the companies the interviews could be better compared to each other. The companies asked for an interview were chosen through a comprehensive internet search through mem- ber lists of branch organizations, a list of registered companies in production-rich municipalities, and thought databases of registered companies. The database used to find potential interview objects was Business Retriever. When searching through the database, filters matching the requirements mentioned above were applied. The companies of interest were contacted via e-mail. Out of the 98 companies asked, twelve agreed to participate in an interview. Eight of the companies asked had female CEOs, which compared to about 8%. Out of the interviews held, 100% of the companies had male CEOs. All of the interviewees were people in a leadership position, such as CEOs. Out of the twelve companies interviewed, four were in the manufacturing sector of steel, two acted within the wood sector, two were categorized as electronic manufacturing companies and lastly, four of the companies acted within the plastics sector. A table of the interviewed companies and their parameters is presented below, see Table 2. Table 2: Table of the parameters of the interviewed companies. Company Year of establishme nt Revenue 2022 (million SEK) No. Employees Industry Koncern A 2001 30 50< Manufacturing - Steel Yes B 2016 10 50-100 Manufacturing - Wood Yes C 1970 1 020 100> Manufacturing - Electronics Yes D 1946 40 50< Manufacturing - Wood No E 1987 60 50< Manufacturing - Steel No F 1985 60 50< Manufacturing - Electronics Yes G 1989 170 50-100 Manufacturing - Steel No H 1948 660 100> Manufacturing - Plastic Yes I 1986 140 50-100 Manufacturing - Steel No J 1967 130 50< Manufacturing - Plastic Yes K 1972 70 50< Manufacturing - Plastic No L 1972 70 50< Manufacturing - Plastic Yes 7 Before the interviews the twelve companies were contacted and questions were pre-distributed. The pre- distributed questions were sent out with the intent of preparing the companies for the type of questions asked during the interviews. The pre-distributed questions can be found in Appendix A. After the pre-distribution of some of the interview questions, the interviews were conducted. Since the companies’ approaches and reactions towards crises and interruptions in production were interpreted as qualitative data, semi-structural interviews with the companies were conducted. The aim of the interviews was, among already mentioned objectives, to gather information about the com- panies’ crisis management approach, the crises they have met, and eventual production interruption. In the opinion of Catherine Cassell in (Cassell, 2015), a structured interview is optimal when the aim is to gather in- formation. However, when conducting qualitative research there are two main types of interviews, unstructured interviewing and semi-structured interview. To gather information and handle qualitative data, semi-structured interviews were conducted. The semi-structured interviews contained standardized questions to leave room for the companies to elaborate. Since the interviews had a clear aim and goal toward what information was deemed useful, the interviews can be described as distinctive. Cassell (2015) divides the distinctive interview methods further into event-based interviews, comparative interviews, narrative interviews, and biographical interviews. The difference in the interview constructions is the interview’s aim. Since the aim was to investigate specific events and crises an event-based interview was well fitted. A narrative aim was to investigate the intervie- wees’ own experiences of an organizational phenomenon through the communication that took place in the workplace. Therefore, when interviewing the companies about the events occurring, an event-based interview was conducted. However, when asking regarding the companies’ choices and approaches a narrative interview method was used. The interviews were, as mentioned above, conducted as semi-structural interviews. The interviews started with general questions regarding the subjective information of companies. Information such as company size, clients, and export and import distribution. Continuing, the questions asked regarded potential crises and pro- duction interruptions the company faced including follow-up questions such as eventual strategy implemented. The questions therefore had a high level of structure but a low level of standardized close-ended questions, to make it possible for interview objects to answer freely and give answers that match the asked question. When the interviews were conducted, it was considered important that the answers had a high validity. This means that the answers are answered according to the question to be used in the analysis (Olsson & Sörensen, 2021). To discover nuances and distinctions, the interviews were be held in Swedish. Due to the aim of later comparing the interviews to the semi-structured interview, the companies were asked the same questions, but were left room for elaboration and their reflections. Due to this goal, the questions concerning crisis management were formulated as open-ended and a flowchart were used, see Appendix B. The question regarding what the companies perceive as crisis management was asked with the intent of broadening the companies’ view of a crisis, with the hope of smaller interruptions being mentioned as well. The second question was presented to determine what crisis events, both external and internal, affected the com- panies’ operations during the years studied. This was followed by questions regarding crisis management and warning signals, which were asked to procure information regarding the first and second steps of the RESPIRE model. The questions were posed to reveal any policies, concrete crisis management, general awareness of crisis management, or something in between. When asking if the companies’ competitors experienced the same crises, the aim was to investigate if any connections could be drawn between sectors as well as investigating common external events affecting SMEs. The strategy question was asked with the intent of uncovering the companies’ strategies during the crisis, and how they related to the strategy. The intent also included find- ing data corresponding to the third stage of the RESPIRE model, response. The question was also posed to gather information about concrete strategies and actions during the crisis experienced. The question following had an overlapping intent of gathering information regarding concrete actions, as well as if said actions remained. When asking about remained changes the aim was to acquire insight in reference to the last step of the RESPIRE model, feedback. Subsequently the question regarding strategy, a question concerning perceived risks was asked. The aim was to acquire the most perceived risks the companies faced, and if the risks perceived 8 as biggest changed during the crisis. The next question concerned the companies’ attitudes towards environ- mental prioritization during crisis management. This question was followed by a question about the companies’ current thoughts regarding crisis management, after getting through a crisis. The aim was to determine the companies’ awareness and attitude towards crisis management, and if anything changed after a crisis. This was followed by a question concerning changes made to increase resilience. The goal was to examine eventual changes both regarding resilience, but also guidelines and if any resources were needed. The interviews ended with a question about taking help from a third party. This question was asked to acquire information about possible help such as government support. Before the interviews began, the interviewees were asked for permission to record. Each recording was transcribed by using a transcribe function in Microsoft Teams and Microsoft Word. These transcription tools were favorable because they enhanced the possibility of including the entire conversation from the meeting in the interview material. 2.2.3 Method for processing and analyzing data The third main phase of the project was the analysis. During this activity, the data gathered from the literature review and the interviews were analyzed, both separately and in comparison with each other. Firstly, the infor- mation gathered from investigating the RESPIRE model and similar management strategy models and theories was analyzed. The analysis method used in the analysis of the literature material was mainly inductive since the information was gathered and general themes isolated (Graneheim et al., 2017). The research approach did include deductive perspectives as well since some concepts from the RESPIRE model were researched. The information gathered through the literature study was later used as a comparing agent during the comparison between the RESPIRE model and the interview answers. Secondly, the information gathered through the interviews was analyzed mainly through a deductive per- spective. The interviews were transcribed verbatim, this was done, according to Corden et al. (2006), to ensure that no information was lost in the transcription and to provide helpful context. After the transcription, the data gathered through interviews were reviewed. During this process, the companies’ way of working was characterized and sorted. The analysis method used was deductive content analysis. The deductive analysis method’s goal was to identify common themes and categories within the data. Since the categories’ differences, similarities, challenges, needs, and opportunities were predetermined before the analysis phase the method fulfilled the criteria of the deductive analysis method according to Graneheim et al. (2017). The answers were sorted after the questions asked and answers given and later compared with one another. But when comparing the sorted answers with each other a more induced approach was applied, to find similarities. Similarities both directly connected to the RESPIRE model, but concepts without a clear connection towards the model were sought out as well. This was done to discover common themes without excluding information that might be not found by only taking the RESPIRE model into perspective. Thirdly, the analysis method used during the compiled analysis was considered primarily deductive. The deductive approach was present due to the use of the predetermined categories from the RESPIRE model (Graneheim et al., 2017). The analysis method concerning the models and crisis management was predomi- nantly comparative with a grounded theory approach. (Strauss & Corbin, 1997). The comparative method was used to develop a sense of the similarities and differences between different already existing crisis management strategies, the applied actions by the companies during a crisis, and the RESPIRE model. However, since a part of the literature review and data collection stage was to gather quantitative data, such as company size and revenue, a quantitative analysis method was carried out as well. More specifically, a descriptive research method and a correlation research method. The descriptive research method aimed to describe the current status of a predetermined and identified parameter, such as the existence of warning sign policies. The correlation research method was used to determine a potential relationship between variables (Winston Salem State Uni- versity, n.d.). Variables such as company sector and import- and export distribution. The aim was to determine possible patterns between the companies and the outcomes. When questioning and analyzing the companies, the goal was to gain insight into the companies’ operations and determine if there were, e.g. any common crises the companies had encountered. As mentioned was the research approach applied to the interview analysis 9 predominately deductive in nature. The deductive approach was used when formulating the questions, as they were formulated with the RESPIRE model in mind. The deductive approach was also applied when sorting the companies’ actions into the RESPIRE model since pre-determined categories existed. The interviews, in combination with the literature, were analyzed with the intent of finding differences and similarities including defining challenges, needs, and opportunities. As mentioned, the last step in analyzing the data was to compare the qualitative data with the literature. The goal, besides finding causality, is to develop the RESPIRE model. The analytical method used was a comparative analysis with a grounded theory approach and was applied due to the aim of identifying sim- ilarities and differences and generating theoretical knowledge (Glaser & Strauss, 2017). The analysis was done deductively, with a predetermined framework and research questions. The comparative analysis was used was used to develop the model, therefore a grounded theory approach was appropriate, according to Khan (2014). The central analysis approach in this thesis was the meso-perspective, which focused on companies and actions taken on an organizational level. The analysis units, used in the thesis, were the SMEs in Sweden. The SMEs were mainly analyzed through a meso-perspective since the organizations and their actions were in focus. The system that has been analyzed was made up of individuals who worked within the SMEs, the SMEs themselves, and the SMEs sorted into different industries. The perspective used most frequently was a meso-perspective. As mentioned above, the organizations and their action were analyzed. In addition, a macro-perspective was applied when analyzing the companies as a part of a whole industry. 2.3 Discussion of literature sources The sources used in the literature study were exclusively from databases such as Scopus and Google Scholar. The majority of the sources stemmed from the Scopus database which consists of peer-reviewed literature such as scientific journals, books, and conference proceedings. The authors used in the article are published in journals such as the Journal of Business Research, the International Journal of Business and Management and International Small Business Journal. Some of the sources were published through universities such as The Oxford University Press and the University of York. As mentioned, the sources were sorted through the filter most cited. A cited source indicated that the source had been cited by others, in their publications. A high level of citations could also indicate the popularity of the search word. As previously mentioned, the sources were used to present and showcase the concept of crisis management, which is considered relevant to the aim of the thesis and the research questions. The aim was to conclude the RESPIRE model, the companies’ actions, and the other crisis management theories. In the literature study, several crisis management theories were presented. The topic of crisis management was relevant before the COVID-19 pandemic, but it started to play a bigger role in businesses day- to day operations after going through the pandemic. Many of the sources are recent and the mean value of the years of punishment is 2015. As previously stated, many of the sources were recently published which correlated to the uprising relevance and interest in the subject of crisis management. 2.4 Discussion of interview method The interviewees did have some common characteristics, which helped during the analysis since it made them compatible. Characteristics such as all being SMEs and all operating within Sweden were favorable when comparing the companies. However, since only companies operating within Sweden were interviewed the results may not be well applied elsewhere. As mentioned in the introduction, the Swedish Government granted economic help to companies during the pandemic, this governmental help was not the same everywhere. The number of interviews held, twelve, has a direct correlation with the validity of the connections made. Since as number of interviews increases, the number of perspectives arises as well. Few interviews also raise the risks of finding weak correlations, which later can be interpreted as causality. Since all companies had connections to Scandinavia, it makes the interview findings less representative of other parts of the world. In the same sense, all interviewees were male. The 100% male participation did not reflect the percentage of asked women, and not the distribution of male versus female CEOs of SMEs in general. 10 The interview consisted of mainly open-ended questions, which gave the companies a chance to answer freely and without the influence of what answer might be perceived as correct. However the open-ended questions also increase the possibility of being perceived as complex, and fundamental crisis management actions could have been left out. The analysis method most applied, both during the interviews and during the complied analysis, was pre- dominately deductive. Even though an inductive approach was present, the deductive was the approach most applied. A risk with the deductive approach was the bias of wanting to fit concepts into categories. A possible risk with the method is that a connection could be drawn without enough support for causality. An ethical aspect that is important for the study is anonymity. Trade secrets and sensitive information were perceived as an ethical aspect of the thesis. A risk recognized was an information breach, where information shared during interviews was not meant to be shared. As a measure, all the companies were given a letter, A, B, C, and further, to remain anonymous. Another measure made to ensure the companies’ anonymity was to present the companies’ revenue as rounded-off values and the number of employees in intervals. 11 3 Literature findings This section consists of a systematic literature study, where relevant literature has been reviewed to provide an understanding and deeper knowledge about different crisis management perspectives. These concepts were investigated to find what could enhance the flexibility of SMEs at high-impact, unexpected events. The basis for the literature study was the RESPIRE model. The researched topics are illustrated in Table 3 to provide an overview of this literature study. Table 3: Table presenting the covered topics in the studied literature. 3.1 Crisis management To understand the meaning and importance of crisis management for SMEs when encountering unexpected events, an investigation was made to define what a crisis is and the impact it may have on an organization. A specified focus on SMEs management approaches during high-impact and unexpected events like COVID-19 characterized the research. When searching literature about crisis and crisis management, it was found that crises can be viewed from different perspectives; an event known to the company, known to some and unknown to others, or as an unexpected event. Different views on crisis management, and how it can be carried out in an organization’s activities using business continuity strategies to enhance resilience before, during, and after a crisis were also found. It additionally became known that after a crisis incident, there is a high importance of learning from the crisis experience to prepare for future incidents. The examination of the effectiveness of a company’s crisis management can be reviewed using different reviewing methods. 3.1.1 Crisis perspectives Today, extreme crisis events are arising at an increased frequency than before. Companies and individuals need to develop the ability to navigate through this disruptive environment (Chua 2023). Traditional perspectives on crises have been discussed in previous literature. It was found that a crisis can be viewed as both an event and a process. Pearson and Clair (1998) lifts a perspective on an organizational crisis that states that it can be seen as an event threatening the vitality of an organization. If such an event arises it has a big impact on the organization, however it is also stated that the occurrence of the event is of low probability. Williams et al. (2017) discusses the process perspective on crisis and mentions that a crisis develops over a period of time. In contrast to the perspective presented by Pearson and Clair (1998), viewing crisis as a process emphasizes that there is more to a crisis than just the event. Williams et al. (2017) adds weight to the existence of underlying factors that contribute to weakening the orga- nizational system and making it more vulnerable to crisis-triggering factors. The crisis process is perceived in this article as linear and stated to be divided into a series of distinct phases where each phase differently affects the company. Strategic drift is the initializing phase of the crisis and is triggered when a company fails to pay attention to external changes in the market, where the caution can be for instance organizational imperfections in combination with managerial ignorance. The second phase is incubation, which is where underlying factors can contribute to a crisis. However, these factors are described as not yet being activated and a crisis can therefore 12 not break out at this state. For the crisis to outbreak it is outlined that there is a need for a triggering event, which can take the form of a natural disaster, financial crisis, new technologies out-compete the old ones, and polit- ical turbulence. The final phase of the crisis period is the resolution phase which starts when a solution is found. However, the previously described crisis perspective belongs to the traditional linear viewpoint. Chua (2023) claims that a crisis in today’s world has more complexity to it, and highlights the characteristics to be non-linear. Additionally, it is also stated that a crisis can arise in three different ways, the first one being creeping which is stated to often result in an acute crisis, the second being looming and the third one is called black swan event. The author explained a black swan event to be a metaphor used to illustrate an event that exhibits attributes such as being unexpected and unforeseen. It is described that this type of event can in a post-crisis state be perceived as predictable and the occurrence of it to even be explainable. Nevertheless, when it first arises the event can be either unknown to the scientific community or unknown to some and known to others. The black swan event is a crisis described to have a catastrophic impact and low probability. Fabiano et al. (2024) discusses crisis when it is perceived as an unexpected event and refers to it as un- predictable, pointing out that undesired events can arise even under normal conditions. One unexpected event being widely discussed in recent years is COVID-19 which is stated by the authors to have exposed the vulnerability of organizational and infrastructural systems revealing its complexity and emphasizing the inter- dependence among different industry sectors. There is a debate about whether COVID-19 is of the character of a black swan event or not. Ni et al. (2022) states that since COVID-19 affected and disrupted global operations which generated a chain of negative responses and market breakdowns, it can be seen as a black swan event. Chua (2023) discusses on the other hand that it can be seen as a looming event because there existed knowledge about pandemics, and that such events occurred before COVID-19. Pearson and Clair (1998) mentions that the characteristics of a crisis event, in general, are uncertainty regarding ways of investigating and solving problems, what caused the crises, and the outcome of it. It is also mentioned that in times of crisis, rapid decision-making is of high importance. Despite this, Chua (2023) describes that when a crisis in the world of today is perceived as an unexpected event, it cannot be viewed as one single event containing a starting and ending point. Fabiano et al. (2024) highlight that in these types of events, there is a need for enhanced proactive and reactive management strategies to enable a better process of decision-making. 3.1.2 The concept of crisis management In the face of a crisis, crisis management is applied and demonstrated in the actions a company takes to prevent a crisis from occurring or mitigate the effects when it emerges. Crisis management is strategically and operationally planned by organizational actors together with external stakeholders (Pearson & Clair, 1998). Communication between actors in the company and stakeholders is important for both parties because it enhances the awareness of roles and responsibilities (Gibb & Buchanan, 2006). When a potential crisis is avoided it is stated to be seen as effective. It is also stated to be effective when key stakeholders perceive that the benefits of crisis management surpass the negative consequences, encompassing both short-term and long-term perspectives. Further, the preparation is presented to for example include planning activities to minimize potential risks (Pearson & Clair, 1998). 3.1.3 Linear and cyclic approach on crisis management Two different approaches to the process of crisis management have been found in the literature. These two perspectives are presented and compared to provide a better understanding of different views on the topic. Crisis management strategies have been described in the literature as a linear process. However, a linear approach is stated by Chua (2023) to be a traditional crisis perspective. Pearson and Clair (1998) further describes that this linear crisis process starts with companies’ current crisis preparation. This preparation is based on the executive’s viewpoint of the value and need of crisis preparedness. In enterprises where company leaders hold the belief that their business is protected from a crisis outbreak, there will exist a reduced priority for risk management strategies. The mindset of the decision-makers is therefore outlined as crucial for the company’s response. In sectors governed by regulations and well-established management frameworks, the perceptions of executives together with the corporate culture shape and influence the approach to prioritize crisis management (Pearson & Clair, 1998). 13 From the linear point of view, the process continues into the second phase by implementing organizational crisis management plans and preparations. These plans are stated to build on the connection between the company’s management strategies and the environmental context. This environmental context is based on industrialized practices and industry regulations (Pearson & Clair, 1998). In today’s business world, there is an increased number of regulations and legislation, requiring companies to have for instance a crisis continuity management plan and strategy in place (Herbane, 2010). Another approach to crisis management described in previous literature is to view it as a cyclic process. This approach starts with a signal detection phase, and during this initial stage, the opportunity to identify warning signals arises. This enables issues to be addressed and a crisis outbreak can possibly be prevented. The second phase in this cyclic process is called probing and prevention. In this stage, known risk factors are sought after to take action to reduce the potential damage (Veil, 2011). Returning to the linear perspective, it is stated that a triggering event is the breaking point between the preparation phase and the response phase. The response phase contains both reactions from organizational members and prepared strategical crisis response. It is stated that individual and collective reactions impact how the planned response is carried out. An executive’s perception of risk and success may create a collective understanding among the organizational members for the company’s robustness. If the organization’s current situation does not harmonize with the collective view, the likelihood of the firm facing more severe consequences of a crisis grows. The outcome therefore is affected by previous planning, responses, and actions (Pearson & Clair, 1998). In contrast to the linear perspective Veil (2011) highlights in the cyclic perspective, the phase of damage containment as a response to a crisis. Organizational actors are working to minimize the damage caused by a crisis outbreak. The cycling process continues with a recovery phase characterized by attempts to restore the functions of the business without a delay to reach the condition in the pre-crisis stage. The last phase in the cyclic process is the learning phase connecting the cycle with its start point. In this phase, the aim is to examine and evaluate the crisis management system to provide improvements and evolve the organization’s way of responding to a crisis. In Figure 3 below was inspired by previously presented literature. The linear crisis management process described by Pearson and Clair (1998) and the cyclic management process described by Veil (2011) are related to the crisis perspective discussed by Williams et al. (2017). Figure 3 below illustrates an interpreted overview of these perspectives. Figure 3: Interpreted view of the linear and cyclic crisis management process. 14 3.1.4 Approaching early warning signs In the crisis management process, there should be a focus on paying attention to "weak signals". By adopting this focus the potential risks of a crisis can be minimized, by for example allocating resources to organizing activities and to other activities aimed at protecting the organizational system. By attempting this strategy, the expected outcome is stated to realign a disrupted or weakened organization system towards its normal condition during any stage of the crisis (Williams et al., 2017). Early warning signs are indicators of a crisis outbreak. It is stated that firms often overlook these signs which limit their ability to act appropriately, denying them the opportunity to recognize and respond to opportunities to mitigate the occurrence of a crisis (Veil, 2011). Despite this, if well prepared and reactions and response align with the situation of the crisis the outcome may be that the company survives the crisis without any remarkable damage impact (Pearson & Clair, 1998). For a company to maintain its resilience the identification of warning signals in the context of unexpected events such as COVID-19 should be integrated with other company-specific information of importance (Fabi- ano et al., 2023). The window of opportunities where companies can identify early warning signs varies between different types of crises as illustrated in Figure 4. For a creeping event, the period is for instance longer than for a black swan event due to the reason that a creeping event is characterized by gradual changes enabling warning signs to be more easily detected. Despite this, the warning signs of a black swan event can be more difficult to notice due to them being characterized as weak, incomprehensible, and can arise at a random frequency (Chua, 2023). When encountering an unexpected event, the experience is out of line with current knowledge about crises and risks. The reason behind the lack of knowledge is that no past event illustrates its possibility making it unknown to the company. It is therefore more difficult to be prepared due to the events’ unpredictability. Organizations should, even in this kind of situation, strive to be as prepared as possible and respond effectively. Preparedness in the context of an unexpected event is for a company to strive to become anti-fragile and robust (Hajikazemi et al., 2016). Figure 4: An illustration of how the different types of crises can be interpreted, in the context of triggering events and window of opportunities. 3.1.5 Crisis response and learning Strategic plans must be made to identify the need for specific responses and evaluate the potential benefits that these will bring in the acute crisis. The timeline of the window of opportunities for response depends on 15 how large and quickly the threat affects the company. This will impact the planning time as well as the firm’s growth, profits, and future opportunities. In the early stages of the threat, little is known about the future impact, therefore the responses need to be unspecified enabling space for increased flexibility. Nevertheless, when the situation becomes clearer and more precise, the decision-making is made more rapid to give an amplified response (Ansoff, 1975). Veil (2011) points out that learning from past actions is of high value when examining the crisis management system. It is stated that when a company fails to identify potential warning signals during a crisis management routine, learning from these mistakes can be impeded. The author asserts that organizations that seize the chance to gain knowledge and develop new strategies and innovative tactics during times of crisis, can reclaim robustness in a post-crisis stage. Veil (2011) continues by stating that an acknowledgment of crisis management frameworks provides a company with the opportunity to learn from previous crisis events which will enable the responsiveness to a new one. It’s also pointed out that the capacity of signal detection systems affects the company’s way of recognizing potential warning signals. 3.1.6 Unexpected events and SME crisis management approach The crisis management strategy of a company, when encountering an unexpected event, partly depends on the size of the firm. Anticipating a high-impact unexpected event will be more difficult for SMEs than larger firms due to the scarcity of higher levels of financial resources, diversity in supply chains, inadequate insurance coverage, and a smaller administrative planning system (Iborra et al., 2020). There is a mixed picture of the beliefs in the value and benefits of formal, systematic, and rational approaches to crisis management planning in SMEs sectors. Hubris and heuristics in entrepreneurial decision-making are common despite evidence illustrating the advantages of strategic planning (Herbane, 2019). Strategic crisis responses made by SMEs are described to be effective when the capturing of early responses is done by applying actions in the form of cost-cutting, striving to preserve the status quo of operational activities by for instance financing debts and engaging in an innovative renewal in strategic crisis response activities (Clauss et al., 2022). The outcome of a crisis in an SME context depends on the post-crisis recovery, which in the absence of crisis strategy and practices in combination with a lack of risk management competence can mitigate or prevent the company from bouncing back from a disruption (Herbane, 2019). It has been shown that SMEs possess unique capabilities to effectively respond to a crisis that in the outcome of a crisis event will strengthen the company. There exist different factors that positively affect the crisis responsiveness of SMEs. These factors are: if the firm established in recent years, management expertise, and business orientation on the market (Clauss et al., 2022). To enhance the flexibility in management strategies during an unexpected event companies need to under- stand that effective preparation and planning strategies are most useful when encountering crisis threats that are already known to the company. Developing new skills and capabilities to apply in crisis management strategies is, therefore, a requirement for contingency plans to be developed to mitigate potential disruptions (Chua, 2023). 3.1.7 Evaluating the crisis and performance The occurrence of COVID-19 was for many SMEs unlikely, there was a lack of knowledge about access to assis- tance or support, they were not prepared for the consequences and their risk management itself was insufficient. Therefore, it’s suggested for SMEs to focus on activities such as prevention planning, and risk identification and to seek experience and practical guidance from others when managing risks (Grondys et al., 2021). The approach to crisis management responses of SMEs can be influenced by other companies that earlier faced similar crises. Learning from actions taken by other organizations during a disruption in the surrounding envi- ronment can raise awareness of experiences in a larger business context that can foster resilience in companies (Herbane, 2019). Furthermore, Steen et al. (2024) claim that scenario-based training can help to forecast human behavior during a crisis. It’s highlighted as a dynamic process that aims to improve knowledge about the operational 16 context, working environment, strengths, and weaknesses of day-to-day operations. It will help to gain an un- derstanding of existing practices and give individuals experience. According to the authors, three prerequisites are needed to be able to learn from the situation and create proactive learning. The elements are learning opportunities, whether there are any similarities between the events, and the ability to confirm that learning has occurred. The text argues that the number of things that go right, for example, successful improvisation, is larger than the number of outcomes of failure. To be able to learn from past incidents, Shrivastava (1993) suggests that post-crisis activities should ex- amine how the company was affected by the crisis. It is suggested by the author to study and evaluate the crisis by using a framework called the 4Cs. The method is described to encompass four key aspects of crisis which are: causes, consequences, caution, and coping. By examining the first key aspect which is the cause of a crisis, the underlying conditions that enabled the immediate malfunctions to take effect can be traced down. It is described by the author that by studying a crisis, short-and long-term damageable consequences can be detected, which encompasses the second key aspect (consequences). These damages are stated to often be connected to the global condition. According to Thakur (2021) the macro-environmental effect on an organization can be mapped by using the PESTEL framework which also is helpful in the firm’s decision-making. The author applied this framework to analyze healthcare waste management during COVID-19. The PESTEL framework is presented in the article and stands for political, economic, social, technological, environmental, and legal factors, which all have an external multidimensional impact on a company and can be the source of consequences. Shrivastava (1993) further presents the third key aspect in the 4Cs framework as a caution, which specifies the way a company has developed its skills in warning signal detections. This can for example be executed by developing an early warning system. Lastly, the author brings up coping as the fourth key aspect. This aspect includes how a company can build up a long-term recovery plan. This recovery plan involves how a crisis is communicated in the company, the establishment of crisis and emergency management teams, how disputes are resolved, and how assistance is provided to people suffering from the crisis consequences. 3.2 Business continuity management In the matter of how a company survives a crisis disruption, business continuity is a framework of interest. Business continuity management (BCM) can be described as a conceptual framework with a main focus on how companies can maintain operations after experiencing a disruption (Gibb & Buchanan, 2006). To respond to an acute crisis, organizational and strategical structures, roles, processes, and resources are needed and established through BCM (Herbane, 2019). BCM can during a crisis provide a company with tools that strengthen certainty in continuing to deliver products and capabilities of a process. It is advocated for companies to invest in BCM because the results of not doing so can be devastating for the company, following loss of revenue and at worst cessation of the operational business. It is mentioned that enterprises must identify the worst-case scenario for their business and how they will continue operating during and after the crisis. Additionally, the company needs to consider the time it would take, from the crisis outbreak until the cessation of business activities, and also the time taken to return to business as usual (Gibb & Buchanan, 2006). Roffia and Dabić (2024) described that before COVID-19, several SMEs did neither conduct crisis training in the context of unfavorable business conditions, nor did they have a business continuity plan in place. In recent decades, SMEs have become renowned for their speed, responsiveness, and adaptability, which indicates their robustness. Despite this, the adoption of a business continuity plan is uncommon among SMEs. When implementing BCM into a company’s management strategy, the process is according to Tammineedi (2010) divided into three phases. The three phases are presented in the article as pre-event preparation, event management, and post-event continuity. According to the author, when implementing business continuity (BC) several key activities need to be executed in each phase. The pre-event preparation phase is stated to focus on identifying risks, interpreting those risks based on the impact it has on the overall business and business processes, making a continuity plan and vendor agreements based on the generated information, and focusing on risk awareness, training personnel and review the company’s maintenance plan. The author mentions that 17 the second phase, the event management phase is characterized by activities executed during the crisis for instance emergency response, coordinating and communicating with public authorities, damage assessment, salvage operations, and insurance cost tracking. In a post-crisis state, there is a shift in BCM activities to focus on the restoration of operations, review decision-making, update continuity plans, and settle insurance claims. 3.2.1 Risk assessment concerning known and unexpected events In the pre-event preparation phase previously described, this phase can include a risk assessment activity aimed at identifying and reviewing known risks that could impact the company. The activity contains six key elements which are connected and performed in a sequenced loop. The loop is stated to include the following activities: identifying risks, evaluating and implementing countermeasures, and identifying resources, vulnerabilities, and threats. Failure mode and effects analysis (FMEA) is an additional methodology often used in the risk assessment process Tammineedi (2010). According to Liu et al. (2013), FMEA is a tool that can be used on systems, processes, and services to reduce the likelihood of potential failures. By applying this method, an analysis of identify and rank failure modes can be made. The analysis is executed by taking risk factors into account where the factors in a failure mode are multiplied to compute a risk priority number (RPN) of possible failure modes. Tammineedi (2010) suggest that when the methods are used in the risk assessment process, RPN should be used together with a criticality parameter. Tammineedi (2010) advocates that the criticality parameter would add value by giving higher priority to a more critical failure mode with the same RPN as another. According to the author, this would enable the avoidance of investing in low-severity risks. Hajikazemi et al. (2016) mentioned that an attempt of predicting and evaluating the risk of an unexpected event by using various types of risk assessment tools is a method of unreliability. The reason behind this statement being the lack of knowledge about these types of unexpected events. Fabiano et al. (2024) added concepts to already established risk assessment processes by discussing how it can be implemented on unexpected events which never have been experienced by the company. It is presented that newly developed safety approaches enabling foreseeing high-impact and unexpected events such as COVID-19 can be integrated to improve the continuity of business activities. Such approaches are stated to for instance be the bow tie analysis (BTA). According to Lim and Won (2024), BTA is widely used in industries to identify interconnections between ongoing organizational activities and potential threats that are directly connected. This analysis can make out the base to establish an extended crisis preventive approach. Additional approches wihich is discussed by Fabiano et al. (2024) is to analyze the root of cause, how strong the safety barriers are and to preform a modelling of the company’s current resilience against different crises. Werther (2013) sheds light to mainstreamed used models and analysis being built up to examine known changes. This is explained to be the reason for them to often fail when applied to unexpected events. It is claimed by the author that predictions of the future cannot be accurately forecasted in the context of a large scale, high impact, and rare event. Additionally, it is mentioned that the potential of solving unknown future dilemmas can in some extent be executed by using computers to gather information and process data. The author adds to this statement by arguing for difficulties in computerised foresight’s and based this argument on the complex and dynamic characteristics of the real-world. Further, emphasising the reasons behind a company surviving an unexpected event being situational awareness. This type of awareness should consist of a reasonable seance making enabling the possibility to foresee an event that might occur in the future. 3.2.2 Product realization process As a product are realized, several stages is passed. A product realization process starts from the idea of the product, through the concept phase, into industrialization phase and lastly the production. In operations management in automotive industries by Gobetto (2014), the industrialization phase is described in macro phases and macro stages. In operations management in automotive industries, the industrialization phase is defined as the process and action a product goes through product design, manufacturing engineering process and lastly the production. Gobetto (2014) goes into a deep description of the industrialization phase and where the production process is vulnerable. The industrialization process macro stages are further defined as a concept and style delivery, project validation, production process, delivery for production and lastly commercial launch. The first stage consists of forming an idea for the production, which is followed by the second stage where the 18 testing and refining the production is the main activities. When the product is determined and validated the production process starts. In the production process, begins with step three, the type of equipment and tools that will be used is determined, as well as the process of requiring the material and labor and the manufacture equipment and machines are determined and then developed or required. During the fourth step, Delivery for production, the product is ramping up to be created in a bigger scale and bigger number, so it can be delivered when the fifth step, commercial launch, is present. Gobetto (2014) identifies areas where the management can be prone to interruptions, and therefore make the operations and the company vulnerable. The purchasing of materials, which falls into the third step, is an area prone to delays which follows interruptions in production. The delay of material will affect the ramping up period. 3.3 Resilience management A complementary concept to BCM is resilience management. Birkmann et al. (2013) stated that resilience is a concept generated from research fields such as ecology, psychology and social-ecological systems; and the term is addressing the capability to cope or bounce back from adverse circumstances. Herbane (2010) mentioned that in order to improve resilience in companies when implementing plans, it is insufficient to only apply a planning approach, measures to are also needed. Different types of approaches regarding the implementation of resilience thinking is discussed by Fabiano et al. (2024). By for example applying an analysis on the company’s production plant, the authors mentioned that the company’s management team can maintain an overview by approaching to identify different trends and change direction or transients if needed. This analysis approach on the production plant can provide the company with an improved perspective and grip on abnormal states in the process to avoid incidents. Steen et al. (2024) claims that by adapting a resilience analysis in the preparation phase, it is assumed that the complexity of an organization or system can be broken down and interconnections can be identified. It is alleged that it would provide a foresight into how changes can be foreseen, by for example reviewing operational activities in need of continuous improvement. It is alleged that it would provide a fore- sight into how changes can be foreseen, by for example reviewing operational activities in need of continuous improvement. A study made by Herbane (2019) on SMEs in the United Kingdom showed that SMEs can survive a cri- sis in the absence of a preparedness strategy. However, it was identified that the capacity for an organization to respond to a crisis could increase with a preparedness plan in place. It was found in the study that an organizations resilience does not always relay on the preparedness strategy. It is stated that if there is a strong belief in the firm’s ability to respond to and prevent a crisis situation, and it exists adequate resources to mobilize the organization, the resilience of the firm can be high. Steen et al. (2024) claims that uncertainties are not being properly addressed and treated in standard BCM approaches. The authors suggests that there is a need to shift focus to a more proactive type of framework called resilience management. By fostering resilience in BCM, it would be possible to transition; from a mindset characterized by control and obligations to a more flexible and adaptable way of thinking. To make this incorporation, it is suggested that resilience thinking should to be implemented into the preparation phase, day-to-day operations and also the learning phase. All of these phases should be characterized by proactivity for instance when reviewing operational activities, formulating response procedures, evaluating conditions of an ongoing situations, making a cohesive plan of action and applying the outcome of a collaborative decision- making. Further, resilience thinking in the learning phase should be implemented in activities such as incident analysis, evaluation reasoning and scenario-based training. Todesco and Klein (2021) discuss in their article about SME response to COVID-19 and organizational resilience. It is stated that in order for SMEs to be better equipped and adaptable in a crisis situation resilience behaviour can help them to prepare for a post crisis environment. Roffia and Dabić (2024) mentioned that in order to mitigate or avoid potential crisis effects, gaining knowledge about crisis situation will strengthen SMEs ability to respond to the crisis situation when searching for solutions. The fact that SMEs are small sized companies can enhance their flexibility making them more responsive. 19 3.3.1 Supply chain resilience A resilience mindset is not only to be adapted into an organization’s daily activities, nevertheless it can addi- tionally be adapted into the supply chain. Wieland and Durach (2021) stated that resilience also illustrates the ability an organisation has to adapt and transform after a crisis event. Supply chain resilience can be described as the needed robustness and flexibility to manage disturbance to quickly return to an equilibrium state and reach stability. Fabiano et al. (2024) described the same concept but shed light on factors such as cross-sector collabora- tion, agility and dynamic capabilities contributing to an increased resilience in organizations. Further, the author discussed limitations in the risk management of companies trying to implement continuity in their supply chain networks, which were revealed during COVID-19. Companies faced several challenges during this period of time, where the main ones being for example unavailability of raw materials, delivery delays and complexity in production. Resilience in supply chains is mentioned to increase if there is a strategical improvement of the relationships in both global and local supplier networks. In order to make this improvement there is a need of enhanced flexibility of machines, trucks and technicians in and outside of production. Wieland and Durach (2021) adds a perspective that suggests returning to one best state may not always be the optimal case. It is alleged that resilience thinking can become meaningless if the previous best state is after external changes in the environment perceived as the old normal state. The concept of resilience thinking in the supply chain context is described to add weight on the two key points: the ability to adapt and the possibility to transform. Therefore, the authors suggests that it is not favorable to aspire to reach one fixed state, because it might not be the optimal one anymore when the circumstances have change. Fabiano et al. (2024) also points out that a recovery implies to return to the normal state after being exposed to a dis- ruption can be developed to be more efficient, resulting in a company returning to an even better state than before. According to Guntuka et al. (2024), complex supply chain network makes it difficult for companies to prepare for and recover from supply chain interruptions. It is mentioned that contemporary supply chain networks usually are complex, and the reason being the networks which are built up of numerous interconnected layers across extensive geographic areas. In order to be able to identify prospected causes of an interruption, the authors ads weight to the importance of examine different parts in the supply chain in the preparation phase. It is stated that this will add value to the company’s supply chain management by enabling a reduction of negative impacts from a crisis disruption. Gantuka et al. (2024) also proposes that applying this type of activities to the preparation phase will contribute to a more adaptable supply chain. They also state that the possibility to quickly recover from a disruption would increase which results in the company becoming more resilient. 3.4 Business practices during COVID-19 In the current business environment characterized by intense competition and rapid change, organizations must adjust at an unprecedented pace. To maintain and develop a robust and competitive company, several business practices is found to be significant and additional examples of overall strengths, weaknesses, opportunities, and threats as SMEs navigate the pandemic. Finally, several examples of implemented actions are presented below. 3.4.1 Technological integration and advancement According to Rao et al. (2023), the implementation of innovation and the use of digital support or assets is crucial for SMEs. The resources are described as a coordinator for research and networking, and they also mention that an interaction with customers using digital media will bring sustainability, continuity, and growth. Lack of administrative and technical resources makes SMEs more exposed to external disturbances. An example of technological integration was utilizing a banking app for the administration of business expenses. In addition to this, Klein and Todesco (2021) express that in a span of eight weeks, the pandemic has advanced the integration of digital technologies by roughly five years. Two presented examples by Rao et al. (2023) are the essential use of remote communications during the lockdowns and the affected supply chain management in general due to COVID-19. According to Klein and Todesco (2021), remote work became the new norm for the employees. Though, an aggravating aspect of SMEs catching up with investments in technology is the lack of liquid assets. 20 3.4.2 Business management and innovation Rao et al. (2023) continues with aspects of entrepreneurship and management. With a creative and progressive management, the opportunities for survival during a crisis increases. The work must contain a positive learning culture which encourages knowledge sharing at all stages. A great cooperation between entrepreneurs and clients as well as an innovative leadership is significant for sustainable business development. The authors states that the internal communication and care being effective were essential during the pandemic. The em- ployees sensed an affinity amongst each other when the employer provided a safe working environment, both financially, psychologically and for their health. They conclude that if the crisis was not promptly identified and addressed by the management, it caused a significant delay in the implementation of contingency strategies. Klein and Todesco (2021) present the centralized leadership among SMEs as an advantage considering the rapidly evolving surroundings. With closer internal stakeholders; managers and employees, and external stakeholders; customers and suppliers, the information gathering gets easier. A mentioned example is the change in customer demands which entails both the act of obtaining, recognizing, and responding. Further, the rapid actions required are handled more easily because of their agility and broad scope of labor competen- cies. Generalist professionals, due to their broad skill, are better positioned to take on various projects and tasks. As previously mentioned, the internal share of information between managers and employees is crucial. Klein and Todesco (2021) states that a successful sharing method maintains the knowledge and also involves employees in the development of innovative business ideas. A given example of providing this climate is to gather individuals who come together due to their interests and dedication to a specific topic. With the primary goal of enhancing their knowledge and expertise through knowledge sharing, different Communities of Practice (CoPs) support the growth of both innovative ideas and collaborative networks. The different professionals should share resources, innovations, and competencies to elaborate the business by adapting new technologies and explore different markets. Finally, Klein and Todesco (2021) describe that the close relationships in CoPs among local SMEs can provide benefit over competitors. Lastly, Klein and Todesco (2021) state the liability of smallness as one of the most significant problems for SMEs. The impact of external and internal factors is described as more pronounced on smaller businesses due to lack of resources in both funds and expertise. For instance, the loss of key employees to larger companies, fewer financing opportunities, the emergence of new rivals, and significant crises is mentioned by Klein and Todesco (2021). Adam and Alarifi (2021) continues with that SMEs face potential harm during a socioeco- nomic and health-related crisis due to their essential need for robust relationships with customers and suppliers. Rao et al. (2023) describes the sudden demand of various face masks as an opportunity to sales and exportation. An approach where the companies change production rapidly to more requested items entail improved financial fulfilment. Klein and Todesco (2021) states several actions made by SMEs. They moved sales and advertise- ment to apps, websites and through social media and engaged with numerous networks to connect with potential customers. They also initiated the sale of goods directly to consumers and purchasing directly from suppliers and therefore remove intermediaries. This was carried out by local cooperative initiatives for coordinated sales and distribution. Clauss et al. (2022) presents a study actions taken by SMEs when responding to COVID-19. The study is made on companies in Austria, Germany, and Liechtenstein to illustrate examples of successful, adaptable and innovative management skills and ways of finding opportunities to develop their business model. A distiller and beverage producer seized the opportunity to operate in a different market segment by starting to produce bottles for disinfectants. Another company developed specific online events in order to adapt to the changing business circumstances. There was also one example of a cooking company which responded to the crisis of COVID-19 by adapting its business by entering different markets. For example, the company started selling toilet paper, masks an