Learning the hard way vs. vicarious learning: Post crisis learning for small business

Abstract

Crisis management is a critical responsibility for all organizations. Regardless of the size of the organization, it is essential to address three general phases - pre-crisis planning, management and recovery during and immediately after the crisis and learning and adjustment recovery after the crisis. Entrepreneurial concerns and small businesses, however, differ from larger, more established businesses in the mechanisms for avoidance and/or reacting to crises, specific types of crises they may face and the disproportionate effect crises has on them, and the ways in which they learn and adjust after a crisis. This paper explores the critical phase of learning from crisis through a small business/ entrepreneurial lens. The authors propose a five step process to recover from crisis and prepare for the future that emphasizes learning not only from your own experience and the external environment, but from other businesses that faced challenges during the crisis.