Two Routes to Strategic Adaptation in Crisis: The Case of Small Businesses During the COVID-19 Pandemic in Israel

The COVID-19 pandemic posed an immediate existential threat to the survival of businesses worldwide, with a special threat facing smaller businesses, as they typically have fewer available resources or long-term survival-related reserves. We assessed 200 small business owners in Israel, right after the height of the pandemic, asking them to report actions taken to adapt their business to the new reality imposed on them. We tested the extent to which they applied negative and positive coping resources to cope with change. We focused on two major personality characteristics, one representative of negative coping (catastrophizing) and the other representative of positive coping (emotional intelligence). We hypothesized that catastrophization would show a negative association with strategic change, and emotional intelligence would show a positive association. Surprisingly, we found positive associations between both of these personality resources and adaptive change in the business strategy. We conclude that in the face of crisis, negative and positive mindset resources both lead toward adaptive change.