How business pivots during war: Lessons from Ukrainian companies’ responses to crisis

Abstract

This article explores how large companies in Ukraine have been responding to the crisis caused by the war. We find that the core theories of managerial reaction to crisis—the threat-rigidity and contingency theories—aptly describe companies’ responses to the war, with the first theory explaining companies’ initial reactions, and the latter theory explaining the subsequent behaviors of companies as the war continued. The most surprising findings here were the value of the pandemic as an experience in dealing with war, and the way in which, when war becomes the new normal, managers seek to take advantage of opportunities to build resilience and redundancy. The shift in perception and attitude this entails exemplifies the adaptability companies display in the face of such difficult situations as a full-fledged war. Our research yields four suggestions for managerial responses to crises: (1) view every crisis as a learning opportunity in preparation for future crises, (2) use business continuity plans as a means of reducing initial threat-rigidity reactions, (3) prioritize crucial over nonrelevant corrective actions, and (4) recognize that crisis-generated discontinuities may last longer than expected, thereby requiring long-term plans that respond both to emerging threats and to novel opportunities.