The effect of organizational change on Russian industrial enterprises’ growth under external shocks

The geopolitical situation and external shocks of 2020 and 2022 significantly altered the development of Russia’s industry, intensifying the need to analyze organizational change as a key instrument of adaptation. The article examines the impact of structural and strategic organizational change on the growth of Russian industrial enterprises in both the market (revenue dynamics) and social (employment dynamics) contexts. The theories of organizational change, as well as the concepts of competitive advantages and business resilience under external shocks constitute the methodological basis of the research. Econometrics methods were used, including the assessment of the ordinal logit model revealing the direction and significance of the effect that various types of change exert on enterprises’ performance. The evidence base contains data from the fifth round of the survey Russian Enterprises in Value Chains – 2022 by the Institute for Industrial and Market Studies, HSE University, covering 1,879 manufacturing companies located in 71 regions of Russia. Over the period under review, investments in fixed assets were a stable driver of growth, structural change exerted a more predictable impact on employment, while strategic change were associated with heterogeneous effects. Our analysis highlighted differences in the response of revenue and employment to the changes implemented during the pandemic, the recovery, and the onset of large scale sanctions, yet the impact of the firms’ investment projects proved to be the most pronounced and stable. Product innovations and switching to new Russian suppliers had a positive influence on growth in 2020 and a negative effect in 2022. The raw materials exporter status boosted the companies’ growth during the pandemic, while the importer status did so during the sanctions period. Under sanctions, radical managerial decisions gain greater significance, while the impact of gradual organizational transformations diminishes. The research results clarify the mechanisms of industrial firms’ adaptation to crises and provide a basis for devising comprehensive approaches to managing organizational change.