Indore (Madhya Pradesh): A study by Indian Institute of Management Indore has revealed that resilience is a key driver of entrepreneurial success for disadvantaged entrepreneurs in uncertain environments. It identified four major resilience factors—personal competence, social competence, family coherence and social support—that significantly impact decision-making.
Among these, social support was the strongest predictor of effectuation, a flexible business approach that emphasises leveraging resources and adapting to uncertainty.
Conducted by Prof Prashant Salwan and his co-author, the research, published in the Journal of International Entrepreneurship, explored how resilience influences effectuation—a flexible approach to business that focuses on leveraging available resources rather than sticking to rigid plans.
By analyzing data from 522 disadvantaged entrepreneurs using a mixed-methods approach, including multiple linear regression and semi-structured interviews, the study provides both quantitative and qualitative insights.
The study identified four major resilience factors that significantly impact effectual decision-making.
1) Personal competence, which includes problem-solving skills, confidence and adaptability, enhances an entrepreneur’s ability to navigate challenges.
(2) Social competence, or the ability to form meaningful relationships and networks, plays a crucial role in entrepreneurial success.
(3) Family coherence provides emotional and financial support, helping entrepreneurs withstand business uncertainties.
(4) Social support, found to be the strongest predictor of effectuation, reinforces the importance of trust-based networks and community backing.
The findings also highlighted that community coherence and path dependence moderate the relationship between resilience and effectual logic showing that past experiences and social connections significantly shape entrepreneurial actions. For entrepreneurs, the research suggested that developing resilience through skill-building, networking and adaptability can enhance business success in unpredictable environments.
“Policymakers can use these insights to design interventions that strengthen community support networks and provide mentorship opportunities for disadvantaged entrepreneurs. Business leaders can also benefit by investing in entrepreneurial training programmes that emphasise social competence and strategic alliances, leading to sustainable growth and innovation,” said Salwan.
This study highlights resilience as a crucial factor in entrepreneurial success, particularly for those operating in challenging environments. “By recognising resilience as an antecedent to effectuation, we offer a fresh perspective on how entrepreneurs make decisions under uncertainty,” Salwan said.
Entrepreneurs from disadvantaged backgrounds often face systemic barriers, but resilience enables them to turn constraints into opportunities. The findings emphasised the power of social networks and trust in navigating business challenges.
