Skip to main content

2022 | Book

Crisis Management for Small and Medium-Sized Enterprises (SMEs)

Strategies for External Crises


About this book

This book provides an in-depth introduction to crisis management and leadership in SMEs, as well as methods, approaches and cases against the background of different crises; external ones in particular. Featuring contributions from research and practice, this book covers a plethora of SMEs from different sectors to match the diverse nature of small business practice. The combination of a sound theoretical framework for small firm crisis management along with practical instruments/methods and cases, help to improve the organizational resilience of SMEs. The authors also guide the reader to resources beyond the book, including an online “Crisis Toolkit” comprised of material such as further publications, crisis management blueprints, guidelines, checklists, and company cases on crisis management-related issues.

Table of Contents

Introduction to the Book, Its Aim, and Content
The Coronavirus came suddenly and unexpectedly. Yet, we were aware of its worrisome effects on individuals and organizations in the form of switches to short-time work, applications for state support, and even first closures very soon. The increasing focus on crisis management which had been put by the big consulting companies such as McKinsey and the likes suggested that organizations had a vast amount of catching up in this respect. In sum, the Coronavirus spread has shown us all how fragile organizations are, the smaller companies in particular. In fact, we learned that the majority of companies had no or only an underdeveloped approach to crisis management, thus the crisis hit them hard, and many of the organizations did not survive the crisis. The consequences for both society and economy are obvious.
Susanne Durst, Thomas Henschel

Introduction to Main Concepts of Crisis Management

Crisis Management: From a Theoretical Point of View
The aim of this chapter is to set the frame for the book’s topic, namely crisis management in SMEs. In order to do so, the chapter starts broadly and introduces the topics of crisis and crisis management before turning to crisis management in SMEs. This is followed by a brief summary of the current body of knowledge with regard to crisis management in SMEs from a research point of view. The chapter demonstrates a clear need for more rigorous researches. Thus, it opens the door for the subsequent chapters presented in this book and is intended to further our understanding of crisis management in SMEs.
Susanne Durst, Thomas Henschel
Crisis Management Practices in Small- and Medium-Sized Firms
The topic of crisis management, which is currently gaining in importance, has so far been little focused on small- and medium-sized companies. Because of this, there are currently only a few substantive results relating to this problem. Therefore, there is a considerable need for research with regard to crisis management, especially in small- and medium-sized companies. At the current status, a corresponding crisis plan has not yet found its way into all SMEs. If a corresponding strategy already exists, there are still considerable implementation barriers in many cases. Finally, as essential prerequisites for successful crisis management, employees should be comprehensively informed and involved, and plans should be tried out or tested in practice. In the present study, therefore, it was taken as an opportunity to examine the status quo of crisis management in German SMEs and to identify an understanding of the degree of implementation and the corresponding implementation difficulties. Six hundred and eighty-one companies were surveyed from September to October 2020.
Susanne Durst, Thomas Henschel, Johanna Salzmann
Crisis: A Philosophical Insight
Nowadays, it is popular to speak about the crisis in different fields of activities. Thinking in terms of the crisis has become a new normality—every day we hear and read about the environmental crisis, economic crisis, healthcare crisis and political crises. There is less attention to the concept of the crisis itself and very little attention to the link between the crisis philosophy and SMEs. This chapter tries to shed light on the relevant insights of the crisis philosophy to understand and cope with crises in SMEs. Using basic philosophical analytical tools like clarifying the concept, systematizing different approaches and dividing complex concepts into smaller and simpler ones helps to understand and cope with multilayer concepts like crisis. Encouraging managers in small and medium enterprises to use philosophical tools to understand the crisis they face provides a stronger ground for choosing the best strategies for crisis management.
Aive Pevkur

Crisis Management from Perspectives of Sector, Type of Business and Networks

Managing Crisis in SMEs
In this chapter, we discuss the COVID-19 crisis management from the point of view of SMEs. We review the available literature and based on that develop a conceptual framework. We analyse how SMEs have managed COVID-19 crisis. We take a deeper look at the manufacturing SMEs and tourism SMEs—the sectors that are seen more affected by the crisis. The COVID-19 pandemic is a great public health emergency, but also deeply impacts small- and medium-sized enterprises (SMEs). SMEs are limited in their financial capacity and often do not have professionals employed whose task is to analyse the business risks and to suggest effective, timely measures. Sudden shortage and even unavailability of liquidity have been affecting a number of SMEs and may in the near future affect even larger number of companies. The measures practised by the SMEs are seen most effective when applied in a simultaneous and coordinated manner, supported by government subsidies.
Tarmo Koppel, Olga Tšernikova
Crisis Management and Leadership: A Search for Competencies in SMEs
The current chapter focuses on leadership competencies during crisis management, particularly in SMEs. In order to better understand how SMEs are dealing with the crisis, the concept of SME is described. Based on the literature review, the crisis management model with crisis management practices for SMEs is presented. Afterwards, the core crisis leadership competencies are discussed and different perspectives are presented. Based on previous researchers and several theoretical approaches, we propose conceptual framework for leadership activities, responsibilities and tasks during crisis time.
Marina Järvis, Karin Reinhold
Crisis Management from the Perspective of Sustainable Supply Chains
Outsourcing, globalization and innovation have been some of the main trends persisting in the supply chains for a significant amount of time. Furthermore, the wicked problems related to environmental issues and consumption have been steadily increasing in their scope and scale. However, with the extraordinary event commonly known as COVID-19 that came into play, some of the main issues and dangers of those trends were exposed. Those include but are not limited to the interdependence on the cross-national borders, constantly changing requirements, uncertainty and paperwork, lack of transparency and unified systems for monitoring and tracking the real-life data and the appropriate data management techniques. Although a lot of efforts were performed trying to take more proactive approaches, there are limited guidelines coming from practitioners or literature existent concerning supply chain crisis management. This chapter examines some selected cases and business practices that were identified by literature review and qualitative interviews to provide insights about the current and possible future developments of supply chain management and resilience.
Jana Peterson, Wolfgang Dieter Gerstlberger
Different Crises in Family SMEs and How to Prepare for Them
In this chapter, we discuss and analyse how family SMEs can prepare for crises originating in different areas. In specific, we discuss how family SMEs can prepare for crises originating in the family, the firm and the environment. There is an overlap in family SMEs, which implies that it is necessary to account for all three areas in a crisis situation. All three dimensions can be the origin for a crisis and part of a solution to handling the crisis. In the following, we discuss each dimension in detail with regard to crisis management in family SMEs. The study offers advice for family SMEs facing a crisis situation caused by internal causes, business or family-induced. Family SMEs should prepare themselves well in advance—with crisis management—to face severe shocks, and not just react under stress. This leads to a more proactive crisis management approach.
Börje Boers, Thomas Henschel
Crisis Management in the Public Sector in Times of COVID-19: Insights from Peru
Crises have become a permanent part of the everyday life of organizations, and quick and decisive responses to them are crucial. This applies to public sector organizations in particular given their role in society. Taking the COVID-19 pandemic as a starting point, this empirical study investigates how smaller Peruvian public sector organizations have been coping with COVID-19 so far. Based on an exploratory qualitative research design, a series of semi-structured interviews were conducted with employees from small Peruvian public sector organizations. In addition to insight into the organizations’ measures and responses to addressing the crisis, the chapter provides insights into the role of crisis management and other related approaches in the organizations. Given the lack of research, this chapter contributes to the underdeveloped study of crisis management in Latin America in general and the practice of crisis management in the public sector. The findings presented in this chapter have not only implications for the leadership of small public organizations but also implications for policymakers and their immediate and forthcoming actions and approaches regarding crisis management.
Susanne Durst, Mariano Martin Genaro Palacios Acuache, Wolfgang Gerstlberger

Crisis Management from the Perspectives of Business Functions

Crisis Management in SMEs from a Leadership Perspective
The chapter illustrates how leadership behaviour can enhance crisis management in order to achieve higher organizational resilience in SMEs. Theoretical concepts of leadership, crisis management and organizational resilience are discussed in order to propose a framework of ambidextrous leadership behaviour in crisis management. The study is carried out by action research, and results so far show that ambidextrous leadership in SME supports all five phases of crisis management and reduces barriers for organizational resilience. Practitioners may benefit from the application of the framework as a blueprint for their own business. Researchers may be interested in empirical testing of the proposed model on a larger scale.
Ilka Heinze
Crisis Management in German Leasing Companies
The globalized “VUCA world” (volatility, uncertainty, complexity and ambiguity) with numerous crises over the last years and increasing complexity leads to a higher need for crisis management also for leasing SMEs. Also, COVID-19 showed recently the importance of immediate actions during crises. In comparison with other industries, the German leasing industry is regulated through banking supervision. Therefore, the respective implementation and execution of crisis management are subject to public investigations performed by the regulatory auditors. Regulative requirements focus mainly on IT aspects. The following article comes up with a comprehensive approach considering not only IT but also other important aspects such as liquidity management, HR and (knowledge) risk management as well as business continuity management.
Christian Glaser

Crisis Management Frameworks and Standards

Preparing for Crises: Enhancing Resilience
The Concept of ISO Standards
The objective of this anthology is to explain how to maintain sound companies. The editors claim that many of the companies hit by the ongoing pandemic (2021: COVID-19) “may not survive the crisis”. Their research revealed a shortage of tools concerning SMEs, and there seems to be a lack of practical frameworks, which are directly applicable for SMEs. The anthology aims at responding to this unsatisfactory situation. Knowing the tools provided by ISO one is inclined to be more hopeful. This chapter focuses on preparing for crises by enhancing resilience as defined by ISO standards, and adopting management disciplines that contribute towards preparing for crisis, with an emphasis on business continuity management. This chapter will offer advice on how to prepare your organization to respond to a disruption and enhance resilience through business continuity management processes as defined by ISO 22301:2019. A road map to enhancing resilience by establishing business continuity management and its processes is presented to the reader.
Frank Herdmann
Crisis Management and Risk Management in SMEs: Towards an Integrated Early Warning System
Risk is intrinsic to each company, and threats can come unexpectedly. Over the past few years, the strict interaction between crisis management (CM) and risk management (RM) has become particularly relevant for small and medium enterprises (SMEs), which have experienced severe difficulties in dealing with crises (e.g. coronavirus pandemic). Most of those companies have no approach or a rudimentary approach to crises, and only a few prevent insolvency or bankruptcy in a timely manner. Accordingly, it is crucial to develop an RM approach that can adapt to the specific characteristics of SMEs and that considers both financial information and non-financial information as early warning indicators of a crisis. Each SME needs to follow a coherent, logical and integrated process to determine if there are liquidity problems and the stage of the financial distress, thus considering a set of indicators as integrated with the risk analysis concerning the business environment, risk mitigation strategies and responses. Therefore, this chapter proposes the integration between risk management process and the most relevant key financial early warning indicators used by practitioners and default prediction models.
Chiara Crovini

Conclusions and Outlook

Conclusions and Outlook
The aim of the final chapter is to conclude the book and its content and based on it to provide a number of promising research avenues that will hopefully help in further developing the timely and relevant field of crisis management and related fields. Thus, the main contribution of this chapter is a list of research avenues, which can act as useful starting point for those interested in studying the topic. These avenues are divided into general and specific topics and are expected to provide interested persons a range of interesting points of departure.
Susanne Durst, Thomas Henschel
Crisis Management for Small and Medium-Sized Enterprises (SMEs)
Susanne Durst
Thomas Henschel
Copyright Year
Electronic ISBN
Print ISBN