Building Resilience in Volatile Environments: The Case of the Blue Lagoon in Iceland

This chapter explores how the Blue Lagoon, one of Iceland’s most iconic and economically significant tourist destinations, has built organizational resilience in response to recurring natural disruptions, particularly volcanic activity and associated environmental risks on the Reykjanes Peninsula. Applying organizational resilience theory, the study analyzes how the Blue Lagoon anticipates, absorbs, and adapts to crises by examining various operational, strategic, and ethical responses. Drawing on qualitative interviews with executives and directors, the chapter identifies five interrelated themes: adaptive crisis management and operational flexibility, innovation in safety and risk mitigation, strategic leadership and decision-making culture, employee support and well-being, and learning culture and knowledge sharing. These themes demonstrate how resilience is not simply a technical capacity, but an embedded and evolving process shaped by leadership culture, community collaboration, and employee engagement. The chapter also highlights the company's ethical tensions in maintaining operations during periods of elevated risk. These include navigating trade-offs between financial imperatives and health-related responsibilities, especially regarding informed consent, risk communication, and duty of care toward guests and employees. By integrating real-time environmental monitoring, well-being programs, and knowledge sharing with local stakeholders, the Blue Lagoon has emerged as a case study of how tourism-dependent organizations can pursue profitability and responsible practices. The findings contribute to academic and practical discussions on resilience, emphasizing the need for context-specific strategies that reflect the complexity of volatile environments. In doing so, the chapter connects its case insights to broader sustainability frameworks, including ESG standards and the UN Sustainable Development Goals.