Surviving economic crisis through pro-active strategies. Experiences from the Zimbabwean economic crisis.

International Journal of Research and Scientific Innovation (IJRSI) | Volume VIII, Issue III, March 2021 | ISSN 2321–2705

Surviving economic crisis through pro-active strategies. Experiences from the Zimbabwean economic crisis.

  Josphat Nyoni¹, Martin Dandira², Elias Kandjinga^3
1Women’s University in Africa, Harare, Zimbabwe
^2,3Namibia University of Technology

Abstract
Existing literature argue that pro-active and innovative strategies remain the most effective strategies for firms experiencing an economic crisis. However, given the dynamic nature of economic crisis globally, this study aimed to examine the influence of the pro-active strategies on the performance of manufacturing firms during the 1996-2014 economic crisis in Zimbabwe. The study also attempted to determine the most effective pro-active strategies that manufacturing firms operating in an economic crisis need to focus on and embrace in order to survive and remain competitive during and after the crisis. The study was guided by the positivism resrach philosophy and adopted an explanatory research design. Data for this was collected using a structured questionnaire. Data was analysed for correlation using the MATLAB software. A total of 102 manufacturing firms that exercised pro-active strategies formed the sample of the study. The study showed that pro-active strategies moderately improved performance in periods of economic crisis. The findings of the study showed that pro-active strategies had a positive but moderate influence on profitability and growth dimensions of performance. The study showed that the pro-active strategies of introducing new products, consistently seeking new opportunities and rapid expansion by taking over struggling firms during the period of economic crisis only moderately improved performance. The study concluded that manufacturing firms that the adoption of pro-active strategies may not significantly lead to survival and sustainability in economic crisis. The study recommends that manufacturing firms operating in economic crisis must in addition to pro-active strategies adopt other supportive and complementary strategies such as being more analytical and innovative e in all pro-active tactics and strategies in periods of economic crisis

Key terms: Pro-active strategies, economic crisis, performance, manufacturing firms

1 Introduction

Firms in the global world have continued to experience economic and financial crises over the last decades. The increased frequency of economic, financial and health related crises has led to increased interest in research studies focusing on the strategies that may help firms and countries to survive in periods of crises. The recent COVID-19 has also brought in a number of viability and survival challenges to companies and hence a focus on survival strategies is now a priority among researchers. Although several strategies have been suggested as a respond to challenges of economic, financial and health related crises, the role of pro-active strategies in economic crises is receiving greater attention among researchers.
Economic, financial crises are general characterised by environmental turbulence, unpredictability, period of austerity, consumers’ reluctance to spend and a lack of trust in companies. These factors have usually led significant firms closures and bankruptcy. The global economic crisis of 2008-2009 and the previous ones led to a large scale companies closures although some companies managed to survive (Grossberg, 2009, Kotler and Caslione, 2009, Piercy, Cravens and Lane, 2010, Reeves and Deimler, 2009).

The challenges of economic crises generally requires that firms adopt various strategic responses in order to survive. Scholars and strategy specialist have recommended a number of strategies that firms need to adopt in periods of economic crises. Strategies ranges from aggressive strategies, risk taking strategies, defensive strategies.

A typical reaction in economic crisis is the adoption of proactive strategies (O’Malley, Story, and O’Sullivan,2011). According to Nickell, Rollins and Helmann (2013) pro-active strategies make firms highly competitive which in turn may lead to survival in periods of economic crisis(Nickell, Rollins and Helmann, 2013). However there is still no agreement

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