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Organizational Resilience to Disruption Risks: Developing Metrics and Testing Effectiveness of Operational Strategies
Milad Baghersad1, Christopher W Zobel2
1Department of Information Technology & Operations Management, College of Business, Florida Atlantic University, Boca Raton, FL, USA.
Summary
This study introduces three metrics to measure organizational resilience against disruptions. Findings show that operational slack and scope broadening impact resilience differently, guiding risk management strategies.
Area of Science:
- Business Administration
- Operations Management
- Risk Management
Background:
- Organizations face increasing disruptions, necessitating robust resilience strategies.
- Existing literature lacks comprehensive metrics for evaluating organizational resilience performance.
- Understanding the impact of specific strategies on resilience is crucial for effective risk management.
Purpose of the Study:
- To propose and validate three novel metrics for assessing organizational resilience against disruptions.
- To empirically evaluate the effectiveness of operational slack and scope broadening as resilience strategies.
- To provide actionable insights for decision-makers in enhancing organizational resilience.
Main Methods:
- Developed three distinct metrics: initial loss, maximum loss, and total loss over time.
- Empirically analyzed manufacturing firms experiencing disruptions from 2005-2014.
- Assessed the impact of operational slack and scope broadening on the proposed resilience metrics.
Main Results:
- Operational slack and broadened scope affect different resilience metrics in varied ways.
- Specific aspects of operational slack positively influence resilience.
- Broadening business and geographic scope demonstrates a nuanced impact on resilience metrics.
Conclusions:
- The proposed metrics offer a practical framework for evaluating organizational resilience.
- Maintaining operational slack and broadening scope can enhance resilience, but their effectiveness is context-dependent.
- Results inform risk management by clarifying conditions under which strategies improve resilience.
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