Strategic Management of Entrepreneurial Firms during Recession

Juhana Peltonen

Research output: ThesisDoctoral ThesisCollection of Articles


The existing research on strategic management and entrepreneurship provides relatively few prescriptions to entrepreneurial firms for navigating recessions. The key managerial problem in recession involves ensuring short-term survival while investing in future growth. However, decision-making during recessions occurs in a context of high uncertainty, which may hinder the ability of managers to take optimal strategic actions. In this doctoral dissertation, I examine these issues mainly through the lenses of the behavioral theory of the firm, resource orchestration theory, and entrepreneurial bricolage. I employ survey and archival data on small and medium-sized Finnish software companies from 2007 to 2011. The first essay examines when and why entrepreneurial firms adjust their workforces during recession. This study finds that these decisions are primarily driven by changes in sales. In addition, the results suggest that workforce adjustment decisions can spread through board interlocks. Taken together, the findings suggest that both short-run economic reasons and social influences explain firms' decisions to engage in countercyclical and procyclical strategies. The second essay examines the performance implications of procyclical and countercyclical strategies during recession for firms with different strategic orientations. The findings suggest that countercyclical strategies lead to better performance, but the nature of the relationship is influenced by the degree of proactiveness in the firm's strategic orientation. The third essay focuses on entrepreneurial bricolage, i.e., how firms obtain new valuable resources at seemingly minimal costs by combining resources of lower value. This essay advances quantitative research on bricolage by developing a novel measurement scale that addresses the weaknesses identified in prior scales. Combined, this dissertation informs theory and practice on the strategic management of entrepreneurial firms during recession by examining performance outcomes of within recession strategies, the factors that drive strategy adoption during recession, and the strategic alternatives that are available to decision-makers.
Translated title of the contributionYrittäjämäisesti toimivien yritysten strateginen johtaminen taantuman aikana
Original languageEnglish
QualificationDoctor's degree
Awarding Institution
  • Aalto University
  • Maula, Markku, Supervising Professor
Print ISBNs978-952-60-5983-9
Electronic ISBNs978-952-60-5984-6
Publication statusPublished - 2014
MoE publication typeG5 Doctoral dissertation (article)


  • economic recession
  • behavioral theory of the firm
  • attention-based view
  • resource orchestration
  • retrenchment


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