Recession-proofing : - A case study of how Small and Medium-sized Enterprises remain resilient during times of recession

Abstract:

The world today is confronted by the worst financial and economic crisis since the Great

Depression of 1920’s. Due to the financial system being globalised and interdependent, the

contagion effects of the financial crisis trickled down to Europe and ultimately triggered the

recession of 2007-2009, which had far-reaching repercussions on cross-border economic

activities. The severe international downturn had a significant effect on the Swedish economy

and Swedish SMEs. Moreover, the recession has heightened economic uncertainty and combined

with the existing challenges facing SMEs, created one of the most difficult business climates in

decades, hence, a prevailing need for creating resilience.

The purpose of this study is to examine how Swedish Internationalised SMEs remain resilient

during times of recession. This will be studied through investigating what resources and

capabilities were crucial for building resilience and how the SMEs changed their strategy during

the recession to remain resilient. The study is conducted through a qualitative case study and an

abductive approach in order to get a profound insight into the firm’s behaviour. The theoretical

framework is founded on the area of strategy and resilience, by accounting for strategy

formulation, the RBV, resilience and strategic change. Moreover, the empirical chapter presents

the results of the data gathered from the six case companies and is structured according to the

companies and the three research problems. In the analysis, the patterns emerging from the

theoretical framework and the empirical data is analysed based on the three research problems

through trying to understand the underlying reasons for the emerging patterns. The study

conclude that Swedish internationalized SMEs remained resilient during the recession of 2007-

2009, through reconfiguring its critical resources and capabilities, and changing their strategy to

adapt to the changes in the external environment caused by the recession.