IDEAS home Printed from https://ideas.repec.org/p/zbw/zewdip/312574.html
   My bibliography  Save this paper

Taking it personally? The role of personality in strategic crisis management

Author

Listed:
  • Hottenrott, Hanna
  • Schoonjans, Eline

Abstract

Economic crises can have substantial impacts on companies and their stakeholders. The ability of organizations to manage and cope with crises is therefore central to the direction and severity of their impact. We explore an underidentified determinant of strategic crisis management by focusing on the role of decision-makers' non-cognitive and cognitive traits. In a representative sample of 1,408 young companies founded between 2012 and 2019 in Germany, we find that founders' personality impacts the choice of crisis management strategy in the COVID-19 context. Risk-tolerant founders respond with operative innovation rather than retrenchment. Conscientiousness is linked to choosing a perseverance strategy and openness to experience to strategic innovation. More agreeable founders, however, are generally less responsive. Finally, migration experience and education are positively associated with innovative crisis responses. Our results have implications for policymakers and practitioners when designing measures to cope with economic distress.

Suggested Citation

  • Hottenrott, Hanna & Schoonjans, Eline, 2024. "Taking it personally? The role of personality in strategic crisis management," ZEW Discussion Papers 24-086, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:312574
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/312574/1/1919073817.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hsieh, Linda & Child, John & Narooz, Rose & Elbanna, Said & Karmowska, Joanna & Marinova, Svetla & Puthusserry, Pushyarag & Tsai, Terence & Zhang, Yunlu, 2019. "A multidimensional perspective of SME internationalization speed: The influence of entrepreneurial characteristics," International Business Review, Elsevier, vol. 28(2), pages 268-283.
    2. Caliendo, Marco & Cobb-Clark, Deborah A. & Pfeifer, Harald & Uhlendorff, Arne & Wehner, Caroline, 2024. "Managers’ risk preferences and firm training investments," European Economic Review, Elsevier, vol. 161(C).
    3. Rüdiger Fahlenbrach & Kevin Rageth & René M Stulz, 2021. "How Valuable Is Financial Flexibility when Revenue Stops? Evidence from the COVID-19 Crisis [The risk of being a fallen angel and the corporate dash for cash in the midst of COVID]," The Review of Financial Studies, Society for Financial Studies, vol. 34(11), pages 5474-5521.
    4. Danny Miller, 1991. "Stale in the Saddle: CEO Tenure and the Match Between Organization and Environment," Management Science, INFORMS, vol. 37(1), pages 34-52, January.
    5. Miriam Bruhn & Dean Karlan & Antoinette Schoar, 2018. "The Impact of Consulting Services on Small and Medium Enterprises: Evidence from a Randomized Trial in Mexico," Journal of Political Economy, University of Chicago Press, vol. 126(2), pages 635-687.
    6. Stefano Ramelli & Alexander F Wagner, 2020. "Feverish Stock Price Reactions to COVID-19," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 9(3), pages 622-655.
    7. Jeffrey G. Covin & William J. Wales, 2012. "The Measurement of Entrepreneurial Orientation," Entrepreneurship Theory and Practice, , vol. 36(4), pages 677-702, July.
    8. Marcati, Alberto & Guido, Gianluigi & Peluso, Alessandro M., 2008. "The role of SME entrepreneurs' innovativeness and personality in the adoption of innovations," Research Policy, Elsevier, vol. 37(9), pages 1579-1590, October.
    9. Ufuk Akcigit & Nathan Goldschlag, 2022. "Measuring the Characteristics and Employment Dynamics of U.S. Inventors," Working Papers 22-43, Center for Economic Studies, U.S. Census Bureau.
    10. Trunschke, Markus & Peters, Bettina & Czarnitzki, Dirk & Rammer, Christian, 2024. "Pandemic effects: Do innovation activities of firms suffer from Long COVID?," Research Policy, Elsevier, vol. 53(7).
    11. Klyver, Kim & Nielsen, Suna Løwe, 2021. "Which crisis strategies are (expectedly) effective among SMEs during COVID-19?," Journal of Business Venturing Insights, Elsevier, vol. 16(C).
    12. Hud, Martin & Hussinger, Katrin, 2015. "The impact of R&D subsidies during the crisis," Research Policy, Elsevier, vol. 44(10), pages 1844-1855.
    13. Fletcher, Jason M., 2013. "The effects of personality traits on adult labor market outcomes: Evidence from siblings," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 122-135.
    14. Buchheim Lukas & Krolage Carla & Link Sebastian, 2022. "Sudden stop: When did firms anticipate the potential consequences of COVID-19?," German Economic Review, De Gruyter, vol. 23(1), pages 79-119, February.
    15. Ding, Wenzhi & Levine, Ross & Lin, Chen & Xie, Wensi, 2021. "Corporate immunity to the COVID-19 pandemic," Journal of Financial Economics, Elsevier, vol. 141(2), pages 802-830.
    16. Warwick McKibbin & Roshen Fernando, 2021. "The Global Macroeconomic Impacts of COVID-19: Seven Scenarios," Asian Economic Papers, MIT Press, vol. 20(2), pages 1-30, Summer.
    17. Archibugi, Daniele & Filippetti, Andrea & Frenz, Marion, 2013. "Economic crisis and innovation: Is destruction prevailing over accumulation?," Research Policy, Elsevier, vol. 42(2), pages 303-314.
    18. Gao, Lei & Han, Jianlei & Pan, Zheyao & Zhang, Huixuan, 2023. "Individualistic CEO and corporate innovation: Evidence from U.S. frontier culture," Research Policy, Elsevier, vol. 52(9).
    19. Amore, Mario Daniele & Pelucco, Valerio & Quarato, Fabio, 2022. "Family ownership during the Covid-19 pandemic," Journal of Banking & Finance, Elsevier, vol. 135(C).
    20. Campbell, Robert J. & Short, Cole E. & Graffin, Scott D., 2025. "Balancing the radical and the incremental: CEO affiliative humor and organizational ambidexterity," Research Policy, Elsevier, vol. 54(1).
    21. Pierre Azoulay & Benjamin F. Jones & J. Daniel Kim & Javier Miranda, 2022. "Immigration and Entrepreneurship in the United States," American Economic Review: Insights, American Economic Association, vol. 4(1), pages 71-88, March.
    22. Sharma, Smriti & Tarp, Finn, 2018. "Does managerial personality matter? Evidence from firms in Vietnam," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 432-445.
    23. Michael Jensen & Edward J. Zajac, 2004. "Corporate elites and corporate strategy: how demographic preferences and structural position shape the scope of the firm," Strategic Management Journal, Wiley Blackwell, vol. 25(6), pages 507-524, June.
    24. Matthew S. Kraatz & Edward J. Zajac, 2001. "How Organizational Resources Affect Strategic Change and Performance in Turbulent Environments: Theory and Evidence," Organization Science, INFORMS, vol. 12(5), pages 632-657, October.
    25. Charlotte R. Ren & Ye Hu & Tony H. Cui, 2019. "Responses to rival exit: Product variety, market expansion, and preexisting market structure," Strategic Management Journal, Wiley Blackwell, vol. 40(2), pages 253-276, February.
    26. Seth Carnahan, 2017. "Blocked But Not Tackled: Who Founds New Firms When Rivals Dissolve?," Strategic Management Journal, Wiley Blackwell, vol. 38(11), pages 2189-2212, November.
    27. Charles E. Eesley & Yong Suk Lee, 2021. "Do university entrepreneurship programs promote entrepreneurship?," Strategic Management Journal, Wiley Blackwell, vol. 42(4), pages 833-861, April.
    28. Elena Kulchina, 2017. "Do foreign entrepreneurs benefit their firms as managers?," Strategic Management Journal, Wiley Blackwell, vol. 38(8), pages 1588-1607, August.
    29. Astrid Marinoni, 2023. "Immigration and Entrepreneurship: The Role of Enclaves," Management Science, INFORMS, vol. 69(12), pages 7266-7284, December.
    30. Jiang, Zhengyang & Peng, Cameron & Yan, Hongjun, 2024. "Personality differences and investment decision-making," Journal of Financial Economics, Elsevier, vol. 153(C).
    31. Marianne Bertrand & Antoinette Schoar, 2003. "Managing with Style: The Effect of Managers on Firm Policies," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1169-1208.
    32. Danny Miller & Jean-Marie Toulouse, 1986. "Chief Executive Personality and Corporate Strategy and Structure in Small Firms," Management Science, INFORMS, vol. 32(11), pages 1389-1409, November.
    33. Sharma, Smriti & Tarp, Finn, 2018. "Does managerial personality matter? Evidence from firms in Vietnam," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 432-445.
    34. Xu, Jing & Li, Haizheng, 2023. "Managerial human capital and corporate R&D investment," Journal of Economic Behavior & Organization, Elsevier, vol. 213(C), pages 151-171.
    35. Danny Miller, 1983. "The Correlates of Entrepreneurship in Three Types of Firms," Management Science, INFORMS, vol. 29(7), pages 770-791, July.
    36. Frédéric Delmar & Scott Shane, 2006. "Does Experience Matter? The Effect of Founding Team Experience on the Survival and Sales of Newly Founded Ventures," Post-Print hal-02311638, HAL.
    37. Ken G. Smith & Curtis M. Grimm, 1987. "Environmental variation, strategic change and firm performance: A study of railroad deregulation," Strategic Management Journal, Wiley Blackwell, vol. 8(4), pages 363-376, July.
    38. Nils Stieglitz & Thorbjørn Knudsen & Markus C. Becker, 2016. "Adaptation and inertia in dynamic environments," Strategic Management Journal, Wiley Blackwell, vol. 37(9), pages 1854-1864, September.
    39. Julian Oliver Dörr & Georg Licht & Simona Murmann, 2022. "Small firms and the COVID-19 insolvency gap," Small Business Economics, Springer, vol. 58(2), pages 887-917, February.
    40. David Roodman, 2011. "Fitting fully observed recursive mixed-process models with cmp," Stata Journal, StataCorp LLC, vol. 11(2), pages 159-206, June.
    41. Gary Chapman & Hanna Hottenrott, 2024. "Founder Personality and Start-up Subsidies," Industry and Innovation, Taylor & Francis Journals, vol. 31(2), pages 241-270, February.
    42. Zwick, Thomas & Frosch, Katharina & Hoisl, Karin & Harhoff, Dietmar, 2017. "The power of individual-level drivers of inventive performance," Research Policy, Elsevier, vol. 46(1), pages 121-137.
    43. Reher, Leonie & Runst, Petrik & Thomä, Jörg, 2024. "Personality and regional innovativeness: An empirical analysis of German patent data," Research Policy, Elsevier, vol. 53(6).
    44. Pol Herrmann & Sucheta Nadkarni, 2014. "Managing strategic change: The duality of CEO personality," Strategic Management Journal, Wiley Blackwell, vol. 35(9), pages 1318-1342, September.
    45. Anthony L. Iaquinto & James W. Fredrickson, 1997. "Top Management Team Agreement About The Strategic Decision Process: A Test Of Some Of Its Determinants And Consequences," Strategic Management Journal, Wiley Blackwell, vol. 18(1), pages 63-75, January.
    46. John A. Pearce II & David A. Fritz & Peter S. Davis, 2010. "Entrepreneurial Orientation and the Performance of Religious Congregations as Predicted by Rational Choice Theory," Entrepreneurship Theory and Practice, , vol. 34(1), pages 219-248, January.
    47. Tessa Recendes & Federico Aime & Aaron D. Hill & Oleg V. Petrenko, 2022. "Bargaining your way to success: The effect of Machiavellian chief executive officers on firm costs," Strategic Management Journal, Wiley Blackwell, vol. 43(10), pages 2012-2041, October.
    48. Rui J. P. de Figueiredo & Emilie R. Feldman & Evan Rawley, 2019. "The costs of refocusing: Evidence from hedge fund closures during the financial crisis," Strategic Management Journal, Wiley Blackwell, vol. 40(8), pages 1268-1290, August.
    49. Arturs Kalnins & Wilbur Chung, 2006. "Social Capital, Geography, and Survival: Gujarati Immigrant Entrepreneurs in the U.S. Lodging Industry," Management Science, INFORMS, vol. 52(2), pages 233-247, February.
    50. Covin, Jeffrey G. & Rigtering, J.P. Coen & Hughes, Mathew & Kraus, Sascha & Cheng, Cheng-Feng & Bouncken, Ricarda B., 2020. "Individual and team entrepreneurial orientation: Scale development and configurations for success," Journal of Business Research, Elsevier, vol. 112(C), pages 1-12.
    51. Giones, Ferran & Brem, Alexander & Pollack, Jeffrey M. & Michaelis, Timothy L. & Klyver, Kim & Brinckmann, Jan, 2020. "Revising entrepreneurial action in response to exogenous shocks: Considering the COVID-19 pandemic," Journal of Business Venturing Insights, Elsevier, vol. 14(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Krammer, Sorin, 2021. "Navigating The New Normal: Which Firms Have Adapted Better To The Covid-19 Disruption?," MPRA Paper 109485, University Library of Munich, Germany.
    2. Krammer, Sorin M.S., 2022. "Navigating the New Normal: Which firms have adapted better to the COVID-19 disruption?," Technovation, Elsevier, vol. 110(C).
    3. Banerjee, Pradip & Dhole, Sandip & Mishra, Sagarika, 2023. "Operating performance during the COVID-19 pandemic: Is there a business group advantage?," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    4. Zhao, Jing & Cao, June & Huang, Jingchang, 2023. "CEO/board medical background and stock returns during the COVID-19 pandemic," Economic Modelling, Elsevier, vol. 127(C).
    5. Sule Alan & Gozde Corekcioglu & Matthias Sutter, 2023. "Improving Workplace Climate in Large Corporations: A Clustered Randomized Intervention," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(1), pages 151-203.
    6. Duan, Yuejiao & El Ghoul, Sadok & Guedhami, Omrane & Li, Haoran & Li, Xinming, 2021. "Bank systemic risk around COVID-19: A cross-country analysis," Journal of Banking & Finance, Elsevier, vol. 133(C).
    7. Glossner, Simon & Matos, Pedro Pinto & Ramelli, Stefano & Wagner, Alexander F., 2022. "Do institutional investors stabilize equity markets in crisis periods? Evidence from COVID-19," CEPR Discussion Papers 15070, C.E.P.R. Discussion Papers.
    8. Pol Herrmann & Sucheta Nadkarni, 2014. "Managing strategic change: The duality of CEO personality," Strategic Management Journal, Wiley Blackwell, vol. 35(9), pages 1318-1342, September.
    9. Marco Pagano & Josef Zechner, 2022. "COVID-19 and Corporate Finance [The risk of being a fallen angel and the corporate dash for cash in the midst of COVID]," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 11(4), pages 849-879.
    10. Fang,Sheng & Goh,Chorching & Li,Shaomin & Xu,L. Colin, 2022. "Firm Resources, Strategies, and Survival and Growth during COVID-19: Evidence from Two-WaveGlobal Surveys," Policy Research Working Paper Series 9997, The World Bank.
    11. Cakici, Nusret & Zaremba, Adam, 2021. "Who should be afraid of infections? Pandemic exposure and the cross-section of stock returns," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 72(C).
    12. Zaremba, Adam & Kizys, Renatas & Tzouvanas, Panagiotis & Aharon, David Y. & Demir, Ender, 2021. "The quest for multidimensional financial immunity to the COVID-19 pandemic: Evidence from international stock markets," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 71(C).
    13. Jiang, Fei & Kong, Dongmin & Lu, Zhengfei & Ma, Yongqiang & Yi, Yang, 2023. "Geographic dispersion and corporate resilience during the COVID-19 pandemic," International Review of Financial Analysis, Elsevier, vol. 88(C).
    14. Blagica Petreski & Marjan Petreski & Bojan Srbinoski, 2020. "The potential of export-oriented companies to contribute to post-Covid-19 economic recovery in North Macedonia," Finance Think Policy Studies 2020-12/33, Finance Think - Economic Research and Policy Institute.
    15. J. Ruben Boling & Torsten M. Pieper & Jeffrey G. Covin, 2016. "CEO Tenure and Entrepreneurial Orientation within Family and Nonfamily Firms," Entrepreneurship Theory and Practice, , vol. 40(4), pages 891-913, July.
    16. Manrique Hernández-Ramírez & Ronald Mora-Esquivel & Juan Carlos Leiva, 2022. "Orientación emprendedora y desempeno innovador en mipymes. El rol moderador de la orientación estratégica," Estudios Gerenciales, Universidad Icesi, vol. 38(162), pages 95-108, March.
    17. Ducret, Romain, 2021. "Investors' perception of business group membership during an economic crisis : Evidence from the COVID-19 pandemic," FSES Working Papers 524, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    18. Ľuboš Pástor & M Blair Vorsatz & Jeffrey Pontiff, 0. "Mutual Fund Performance and Flows during the COVID-19 Crisis," The Review of Asset Pricing Studies, Society for Financial Studies, vol. 10(4), pages 791-833.
    19. Andrieș, Alin Marius & Ongena, Steven & Sprincean, Nicu, 2021. "The COVID-19 Pandemic and Sovereign Bond Risk," The North American Journal of Economics and Finance, Elsevier, vol. 58(C).
    20. Ouyang, Xiaoling & Yang, Yuchuan & Du, Kerui, 2024. "Impact of CSR on stock return resilience during the 2020 public health emergency: Evidence from the Chinese financial market," International Review of Financial Analysis, Elsevier, vol. 96(PB).

    More about this item

    Keywords

    Strategic Crisis Management; Crisis Responses; COVID-19; Founder Personality; Cognitive Traits;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:312574. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zemande.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.