Entrepreneurial Decision Making during the Italian Covid-19 Lockdown: Evidences from Hospitality SMEs

Purpose: The following analysis provides a complete framework for understanding the correlation between decision-making logics, with a particular focus on causation and effectuation, and how entrepreneurs of SMEs in northern Italy reacted to crisis and uncertainty led by Covid-19 lockdown. The survey-based obtained model considers the ability of firms to build resilience during times of change by exploiting skills, i.e., agility and preparedness. Methodology: The paper’s results are computed on the basis of a sample composed of 80 entrepreneurs answering to a survey. Cronbach’s alpha estimates the consistency of our sample, while thanks to PLS-SEM and NCA, we measure and assess the structural model. Findings: Results show that decision-making logics have an impact on how entrepreneurs reacted to crisis. In particular, causation is a direct cause of resilience and preparedness and an indirect cause of resilience through preparedness. Effectuation is a direct cause of resilience and agility and an indirect cause of resilience through agility. Finally, both preparedness and agility directly impact on resilience. Research limitations: The research was conducted in one country (Italy) and considering only one business sector (hospitality SMEs). Generalizability of results could be provided by carrying out more studies in other business sectors and/or countries and by increasing the size of the sample. Practical implications: The framework proposes a useful guideline for entrepreneur and managers to cope with future crisis. Moreover, our study contributes to expand research on causation and effectuation frames. Originality/value: The paper provides a framework that connects how entrepreneurs make decisions and their reactions to crisis in a completely new context, i.e., the outbreak and spread of Covid-19 pandemic.