Entrepreneurs Learn Strategies to Weather Tough Economic Time From UVA Darden Professor
University of Virginia Darden School of Business Professor Jared Harris told local entrepreneurs how they can build resilience into their companies. His talk, held 24 October in downtown Charlottesville, was sponsored by coordinators of the Better Business Challenge (BBC), a friendly competition for local companies integrating sustainable practices into their business strategy.
During the lunch and learn session, Harris explained a current research project that supports a three-step recipe for organizational resilience:
- Psychological approaches — the ability to face challenges with positivity and a resourceful mindset
- Operational approaches — structural or other organizational approaches to prepare for or respond to hardships
- Stakeholder approaches — engagement and cooperation with stakeholders
Although all three approaches seemed to help build resilient organizations, by far the most substantial factor was the “stakeholder approach” — the way a firm engages with external stakeholders in the community. These findings are backed by research he and two co-authors conducted with more than 150 Virginia businesses across different industries. These firms managed to weather economic, geographical, environmental and social storms, and strengthened their businesses for the future.
“We found that 11 percent of the businesses we studied did all three of these strategies,” said Harris, who is also a senior fellow with Darden’s Olsson Center for Applied Ethics. “We saw that there was a significant positive relationship between stakeholder engagement approaches and economic growth, and there was a link between the breadth of the hardship the companies faced and the amount of resources they deployed,” Harris added.
The big lesson for companies — stakeholder engagement pays off. Cooperating with stakeholders within a community and allowing those stakeholders to support the firm during difficult times reaps rewards. In addition, the research findings suggest that practice makes perfect.
“The number of strategies of resilience enacted by firms significantly suppressed the negative effects of hardship on firm profitability,” Harris added.
The Darden School is a partner with the Charlottesville Area Better Business Challenge, in conjunction with the School’s efforts to be a zero waste, carbon neutral organization by 2020. Other partners include the City of Charlottesville, Albemarle County and the Charlottesville Regional Chamber of Commerce. The next U.Va. event will be a sustainability innovation “Pitch Nite” held at the W. L. Lyons Brown III Innovation Laboratory, or i.Lab, on the grounds of Darden 23 January 2014. The BBC culminates with an awards night at The Paramount Theater in June 2014.
The University of Virginia Darden School of Business delivers the world’s best business education experience to prepare entrepreneurial, global and responsible leaders through its MBA, Ph.D., MSBA and Executive Education programs. Darden’s top-ranked faculty is renowned for teaching excellence and advances practical business knowledge through research. Darden was established in 1955 at the University of Virginia, a top public university founded by Thomas Jefferson in 1819 in Charlottesville, Virginia.
Director of Media Relations
Darden School of Business
University of Virginia