Assessing Long-term Performance in Manufacturing Companies Hit by a Natural Disaster: The Role of Organizational Resilience and Human Capital

Natural disasters represent an increasing threat to businesses, putting at risk their continuity in light of sustainable performance conditions. The present chapter explores the role of organizational resilience and of human capital in manufacturing companies hit by a natural disaster, an earthquake in the current study, by considering performance in the long run. In doing so, a survey has been performed on a sample of 131 manufacturing companies by the Emilia earthquake (Italy) in 2012, considering both perceptual data and balance sheet data. This represents a key contribution of this chapter, as extant literature on the impact of resilience on business performance has mainly used perceptual data; conversely, ourstudy, considering balance sheet data, enables a more comprehensive and realistic view of the phenomenon. The sample was selected from the AIDA database, as it includes revenue data that we could add to the perceptual measures obtained by administering a structured questionnaire. Partial least squares structural equation modeling (PLS-SEM) was then employed. The results show the importance of developing adaptive processes that leverage on the organization’s human capital and resilience to respond to adverse exogenous events. More specifically, it has been found that human capital and organizational resilience are profitable to post-disaster economic performance in the long run, supporting the economic sustainability of affected businesses. The implications are related to reinforcing new business solutions and adaptive strategies, looking at both organizational resilience and human capital investment to reach a stable economic business performance in the long-run after a detrimental event.