Transform to adapt or resilient by design? How organizations can foster resilience through business model transformation.

Advisors and consultants consider business model transformation (BMT) as vital in responding to disruptive events like the COVID-19 pandemic. However, some companies demonstrated exceptional resilience during the pandemic without BMT. Given this scenario, we investigate the effect of BMT on firm resilience in 2020, the pandemic’s first year. We collect data from 336 Italian companies and develop an improved resilience measure that maximizes consistency with our theoretical framework. The results reveal that firms following an adaptive path towards resilience successfully leverage BMT. We also found that innovative and more internationalized companies are more likely to follow an absorptive path towards resilience, thus reducing the need for BMT when facing shocks. High levels of resilience can be achieved through small adjustments around a situation of constant equilibrium. Our study advances the resilience literature by showing that an absorptive path is equally effective to an adaptive path in fostering organizational resilience.