Organizational Resilience and the Attention-Based View of the Firm—Empirical Evidence from German SMEs

Abstract

The need for organizations to increase resilience is still growing, not least because of economic crises, such as the 2007–2009 global financial crisis, the COVID-19 pandemic, and supply shortages in raw material procurement combined with rising commodity costs and energy prices. We use an attention-based view approach as a theoretical lens to investigate the shift in management’s attention due to a crisis, with a particular focus on working capital management (WCM) as a decisive finance tool. In addition, we examine how management’s attention shifts to organizational resilience (OR). We also analyze how managers’ cognitive flexibility (CF), which reflects their ability to anticipate and quickly adapt, moderates the change in attention. By surveying 307 top and middle managers in German small- and medium-sized enterprises, we measure the crisis effect on the shift in managerial attention to WCM and OR. In addition, we measure managers’ CF and examine the contribution of these individual characteristics in the context of WCM and OR. Our mediation model reveals a positive, indirect-only effect of the crisis on the shift in management attention to OR mediated by the shift in management attention to WCM. In addition, our results show that managers’ CF negatively moderates the effect between managerial focus shifts to WCM and to OR. Our study’s results deepen the understanding of the importance of managers’ CF in times of crisis and the impact of CF on sales development, suggesting that managers’ CF may influence the link between the focal characteristics of WCM and OR.

1. Introduction

The need for organizations to increase resilience is still growing, not least because of economic crises, such as the 2007–2009 global financial crisis, the COVID-19 pandemic (see also [1,2]), and supply shortages in raw material procurement combined with rising commodity costs and energy prices. Crises are viewed as forces of organizational change that can serve as “attention-getting events” that compel management to focus on a problem that may have been previously neglected [3] (p. 80). In this study, we define a crisis as a temporary accumulation of negative impacts that are exceptional and affect an organization or parts of an organization.

In the context of negative external events, such as crises, the literature defines organizational resilience (OR) in several ways [4,5,6]. We consider OR as an indicator of an organization’s performance, which consists of financial volatility, sales growth, and survivability [7], and we refer to the definition of resilience at the organizational level proposed by [4] (p. 220), who defines OR as “an organization’s ability to anticipate potential threats, to cope effectively with adverse events, and to adapt to changing conditions.” We suggest that if an organization cannot tackle a crisis because of a poorly performed shift in managerial attention, then the organization’s overall survival is at risk. Therefore, it is important to link managerial attention to aspects that strengthen the organization’s financial volatility, sales growth, and survivability.

Working capital management (WCM) is an instrument used to provide a sufficient level of working capital in organizations [8], which becomes particularly important in the context of crises such as the COVID-19 pandemic [9]. WCM is observed in the strategic field of balancing the tension between liquidity and profitability [10], and it is “a crucial element in keeping liquidity and fostering enterprise profitability” [11] (p. 100). External crisis-related effects such as increases in interest rates reflect the importance of WCM as a means of releasing and securing liquidity. Focusing on financial tools such as WCM to ensure sufficient liquidity levels affects the financial position of an organization, which also affects the organization’s resilience [12]. Organizations deploy their financial resources to create economic value and meet financial liabilities for internal and external stakeholders such as employees, lenders, and shareholders [13]. In crisis situations, the balancing element of WCM is pushed into the background, and the liquidity-securing element of WCM is crucial, making WCM an important management tool in organizations (e.g., [14,15]). However, an omission in research is evaluation of how crises affect the shift in managerial focus to WCM and to the organization’s resilience.

The authors of [16] define cognitive flexibility (CF) as “the ability to match the type of cognitive processing with the type of problem at hand” (p. 1032). Individual characteristics of decision-makers, such as their CF, reflect the composition of organizational systems and are critical sources of OR [17]. CF becomes increasingly important in the context of crises and unexpected events [16], and in contrast to the literature on WCM, research has confirmed an effect of cognitive capabilities in the context of OR [4,18,19].

The attention-based view (ABV) of the firm [20,21] is used to analyze attention-driven decision-making in organizations. Recently, in the context of crises and OR, the ABV has been associated with project and risk-management approaches [22,23,24] or used to examine how crises impact organizations in specific industries, such as tourism [25]. Although securing liquidity in crisis situations is crucial to strengthen organization’s financial sustainability and survivability, there is a lack of research using an ABV approach to examine how managerial attention shifts to WCM or OR in times of crises and how the shift of management attention to WCM affects managerial focus on OR. We use an ABV approach as a theoretical basis to connect the elements of WCM and OR in times of crisis. In this regard, we use the ABV as a theoretical lens to investigate the shift in management’s attention due to a crisis, with a particular focus on WCM as a decisive finance tool. In addition, we use the ABV as a theoretical base to investigate the shift in management’s attention due to a crisis, with a particular focus on OR as a decisive indicator of organization’s financial sustainability, sales growth, and survivability. This effect is closely linked to the open research question of how managers use their CF to fine-tune WCM without unnecessarily increasing the WCM-immanent trade-off of sacrificing profitability while increasing OR. Despite considerable research on various OR disciplines in recent years [26], there is still a lack of evidence-based research that examines how organizations can find competent managers or develop the characteristics of managers to foster OR. In addition, there is a lack of research in the value of such managers for OR. In particular, there is need for research on the overall value and importance of how managers’ characteristics, such as CF at the individual level affect resilience at the organizational level, how managers’ CF contributes to an organization’s ability to withstand and recover from crises, and thus how to develop OR capabilities from a multi-level perspective.

Our study aims to address these gaps in the literature by using a quantitative survey approach among top and middle managers in German small- and medium-sized enterprises (SMEs) (German SMEs represent 99.4% of all German companies [27]) to investigate focus shifts in managerial attention to WCM and OR when a crisis occurs. In addition, we measure managers’ CF and examine the contribution of these individual characteristics in the context of WCM and resilience at the organizational level. We focus on SMEs because they are much more sensitive to financial fluctuations, supply network relationships, technological changes, and changing customer relationships than larger organizations [28], which we expect to lead to greater focus shifts in managerial attention. SMEs suffer the most during crises because they are highly vulnerable, with limited financial and human resources [29,30]. They usually operate at only a few locations [31], so disruption of operations (e.g., those triggered by restrictions such as lockdowns) can have a significant impact on the organizations, which we expect to result in a more distinctive shift in managerial attention.

Compared to other organizations, SMEs are usually less prepared for crises [32,33]. Although many SMEs have a strategic advantage over larger organizations in their ability to respond quickly to a changing business environment, few fully develop this capability to improve resilience to major crises [29]. Research on business and exogenous shocks has generally focused on large organizations [34], and the relevance of research on SMEs, shocks, and the resulting crises has perhaps never been greater than it is now [35]. Among the management tools that influence organizations’ profitability, competitiveness, and consequent survivability, WCM in SMEs is considered decisive [36,37,38,39,40].

We draw on recent research concerning the literature on ABV and the COVID-19 pandemic, such as the authors of [25,41]. We follow recent calls in the field of ABV research (e.g., [42]) to consider individual actors across different hierarchical levels, such as top and middle managers, and extend research on the relationship between the organizational and individual focus and OR (e.g., [43]). We address the impact of CF as an individual characteristic of managers on focus shifts in managerial attention to WCM and OR and discuss whether managers’ CF can be implemented in the recruitment and personnel selection process to finally increase OR. In addition, we draw on recent calls for organization-level studies in the context of COVID-19, such as the authors of [44], who call for examining the factors that explain differences in how hard the crisis ultimately hit different organizations and what makes organizations resilient during a crisis.

Our study addresses the following open research questions: (1) how does the focus of managerial attention shift to WCM and OR when a crisis occurs and (2) what is the role of CF in this process? To answer these questions, we examine focus adjustments using SMEs as examples.

We distinguish WCM and OR as follows: WCM includes key performance indicators (KPIs) and practices used for assessing and managing the trade-off between liquidity and profitability and to ensure sufficient liquidity levels within organizations. OR, in contrast, is a set of measures [45] and capabilities [4] that determine an organization’s resilience. Components and tools of WCM affect and contribute to the organization’s financial position, and the financial position of the organization in turn is considered a relevant part of OR [12].

This paper contributes to the literature in four ways. First, we explore the shift in management attention to WCM and OR, providing initial quantitative empirical evidence involving top and middle management attention to WCM and OR in German SMEs when a crisis occurs. Our results indicate that management attention to WCM positively mediates how a crisis affects management attention to OR in terms of an indirect-only mediation. Second, we reveal a decisive moderating role for managers’ CF in this process, showing that CF mitigates the impact of management attention to WCM with regard to OR only. Third, in the absence of suitable measurement constructs in the literature, we develop a measurement construct comprising items for OR, which we have derived from the relevant OR literature [4,18,46,47,48,49,50]. Fourth, based on the discussion of our findings, we provide theoretical and practical implications, identify additional research gaps and suggest directions for future research.

2. Theory and Hypotheses Development

2.1. Literature Overview and Discussion of the ABV of the Firm

The ABV explains the focus shifts and characteristics of managerial information processing, distribution of managerial attention, and their impact on organizational decisions and performance [21]. Although managerial attention depends on the organization’s strategy and how information is provided and distributed within organizations [20,51], managerial personnel process information and translate it into decisions that affect organizational performance or its indicators, such as OR. The ABV provides a useful approach for systematizing the allocation and distribution of information in organizations and adapting it to the organizational strategy. Particularly in times of crisis, a focused allocation and distribution of information (i.e., focused toward the source of the crisis) is crucial in order to survive the crisis. However, this is not about the best possible implementation of the organizational strategy but rather about static or dynamic crisis intervention.

The ABV presents a strategic approach to implementing and translating an organization’s strategy into managerial attention. Ocasio identified three interrelated premises regarding how organizations manage information flow: “focus of attention”, “situated attention”, and “structural distribution of attention” [20] (p. 188). Focus of attention is described as the selective attention-driven doing of managers [20]. About situated attention, Ocasio writes that “what decision-makers focus on, and what they do, depends on the particular context they are located in” [20] (p. 190). Structural distribution of attention is described as organizations’ structure-driven allocation and distribution of information [20]. The current study focuses on situated attention and the impact of crisis effects and their influence as determinants of new and volatile situations that organizations face.

ABV has been used to explain and structure several interdisciplinary aspects of intra-organizational decision-making processes and the link between organizations’ strategy and focus-driven managerial information processing; examples include growth aspects of firms [52], discontinuous technological change [53], sustained innovative performance [54], human resource management [55], innovation processes [56], innovation in social networks [57], waste management [58], mergers and acquisitions [59], and strategic change [60,61]. The authors of [62] described the impact of strategic omissions in the innovation process on organizations’ performance and losses of market share in certain markets. The authors of [42] provide a comprehensive overview of the development of the ABV in their literature review. The ABV approach is also used to manage and improve the management of crises [63]. Although the ABV was developed over 20 years ago, this approach is still being used, further developed, and discussed [64,65]. The studies mentioned above address how significant externalities, such as a crisis, affect organizations and how managerial attention affects management of these crises. In the same vein, we use the ABV to examine the management of crises from the perspective of shifts in managerial focus on WCM and OR.

The ABV explains the relationship between information allocation and information distribution within organizations with regard to controlling the focus of decision-makers. The aim is to direct management’s attention in such a way that the organizational strategy can be implemented and achieved. In times of crisis, the attention of decision-makers must be focused on aspects that are crucial to the survival of organizations, such as WCM, in order to mitigate the effects of the crisis. This is also crucial for the OR. Furthermore, it is important to investigate the extent to which other factors, such as CF, affect decision-makers’ change in focus and impact on OR. If CF is relevant here, it must be discussed to what extent the organization is influenced in its importance for the allocation of information, distribution of information, and direction of the attention of decision-makers.

2.2. Literature Overview and Discussion of OR and Its Theoretical Relationship with ABV

The literature on OR is equivocal. Previous reviews offer different OR definitions and concepts regarding OR frameworks, level of detail, and respective time periods (e.g., [4,5,6,26,31,45,46,66,67,68,69]. In addition to more recent studies that use an ABV approach in the context of crises and OR (e.g., [22,23,24,25], we have identified parallels in the OR and ABV literature in terms of (1) organizational responsiveness, (2) dynamic capabilities, (3) organizational adaptability and strategic adaptation, and (4) antecedents of OR, such as organizational ambidexterity. The flexibility inherent in ambidexterity is emphasized by the organization’s adaptability in the area of allocation and distribution of crisis-relevant information. This means that the organization’s ability to adapt to the effects of crises guides the focus of management and thus directly affects the organization’s resilience.

Table 1. Overview of the relationship between OR and the ABV in previous studies.

	OR		ABV
	Relation to OR	Source	Relation to ABV	Source
Responsiveness of organizations	Organizational response to external threats as one of five literature streams	[30]	Organizational response to organizational issues	[49,63]
Dynamic capabilities	Essential part and outcome of OR capacity	[6,19,64]	Linking dynamic capabilities, attentive processing, and organizations’ anticipative and adaptive capacity	[49]
Organizational adaptability	Prerequisite for organizations to increase their resilience	[6,19]	Attention structures and communication channels as important sources of organizational adaptability	[21]
Strategic adaptation	Prerequisite for OR	[59]	Managerial attention can negatively impact strategic adaptation	[62]
Ambidexterity	Antecedent of OR	[69,70]	Particular channel configuration; cognitive flexibility	[16,62,68]

provides an overview of the relationship between OR and the ABV in relation to the above-mentioned terms.

Resilience in business and management research has split into five research streams, one of which considers OR as an organization’s response to external threats [31]. In this regard, an organization’s capacity to respond to external threats, i.e., its responsiveness to turbulences or discontinuities such as crises, is mentioned as a key component in several definitions of OR [18,70]. In the context of organizational responsiveness, The authors of [51] noted that “the firm’s governance channels (The authors of [71] define a firm’s governance channels as the “formal collective interactions set up by the firm to control, allocate and monitor organizational attention and resources” (p. 635) such as strategic reviews, audits, personnel reviews, ad hoc committee meetings, and budget forecasts) serve to link the available set of strategic initiatives (The authors of [51] define strategic initiatives as “action alternatives for addressing issues and the fundamental source of variation in firm activities” that “compete for limited attention in the firm’s decision-making channels” (p. 43)) with the available set of strategic issues (The authors of [51] define strategic issues as “the organization’s problems and opportunities” (p. 42)) and guide the evolution of a firm’s strategy” (p. 56). The authors of [72] examined organizational values and issue flows, i.e., the scope, scale, and speed of organizational response to organizational issues, and identified the relationship between organizational issues and organizational response. The more values an issue encompasses and the more closely it is linked to a particular value, the more likely it is to attract management’s attention. In the context of our research question of how management attention shifts to WCM and OR when a crisis occurs, this is a relevant consideration. In addition, “responding to new or important issues requires some organizational slack, especially managerial time and attention”, the authors note [72] (p. 522).

We view dynamic capabilities as a concept of considerable importance in the context of our study and the process of shifting the focus of attention. The dynamics of information allocation and information distribution have a direct impact on the ability of organizations to deal with and survive crises.

In the OR research, dynamic capabilities are considered essential to an organization’s resilience capacity (e.g., [4,18,73]). For this study, we refer to the OR definition proposed by the author of [4]. Given its multi-layered nature, including consideration of proactive, present, and reactive perspectives, we perceive this definition as the essence of the various approaches and definitions of OR in the respective literature. The author of [4] considered dynamic capabilities as an outcome of an organization’s anticipative, coping, and adaptive abilities. The authors of [51] linked attentional processing and an organization’s anticipatory and adaptive capacity and dynamic capabilities. These anticipatory and adaptive capacity and dynamic capabilities in turn are essential parts of OR. Following the authors of [51], dynamic capabilities result from attentive processing of issues and initiatives within governance channels, enabling firms to anticipate opportunities and threats in the market and non-market environments through performance and environmental feedback. In the context of our research question of how management attention shifts to WCM and OR when a crisis occurs, this is also a relevant consideration. The concept of dynamic capabilities is in line with ABV theory, as dynamic capabilities are processes that enable firms to pay attention to internal and external stimuli, enabling the firms to adapt their activities to the demands of a changing environment [51].

Attention structures and the use of procedural and communication channels can be important sources of organizational adaptability [20], whether from an operational or strategic perspective. In contrast to dynamic capabilities, organizational adaptability (The literature also includes terms such as an organization’s “adaptive ability”, “capability”, and “capacity” [47,74,75]) is perceived as an important prerequisite for organizations to increase resilience [4,31]. The organizational ability to adapt—for instance, to a changing environment—is addressed in prior OR definitions (e.g., [7]), and in line with dynamic capabilities, some authors already consider organizational adaptability as an essential conceptual part of OR frameworks (e.g., [4]). This integration indicates a direct link between OR and the ABV, following Ocasio’s approach [20], which explains whether and how organizations adapt to a changing environment, noting that “much research on attention has focused, directly or indirectly, on explaining organizational adaptation” [21] (p. 1293). In the organizational context, but from a more strategic perspective, the authors of [71], following the author of [76], defined strategic adaptation as “the coordinated responses to competitive threats as well as the proactive pursuit of new opportunities” (p. 636), whereas the OR definition of [4] includes both anticipatory (proactive) and adaptive (reactive) aspects. The strategic adaptation of an organization to changes is a prerequisite for OR [68]. Integrating managerial attention influences an organization’s ability to respond to threats and opportunities, and a lack of integration within and across channels can negatively influence strategic adaptation [71], reducing an organization’s resilience capacities.

In the OR literature, authors have begun to integrate organizational ambidexterity into the study of OR and respective frameworks [77]. Moreover, there is empirical evidence that organizational ambidexterity, as an antecedent of OR, facilitates SME resilience [30]. Organizational ambidexterity is an organization’s capability to apply exploration and exploitation simultaneously [78] or the “capacity to simultaneously demonstrate alignment and adaptability across an entire business unit” [79] (p. 209). In their study on the integration of corporate and business unit attention within and across an organization’s governance channels, the authors of [71] provided insights into a structural mechanism that may enhance organizational ambidexterity. The authors suggest that particular channel configurations may facilitate the behavior of organizational ambidexterity, stating that “specialized channels focus attention on one activity or the other, but when tightly coupled with other channels with alternative foci, the system creates a solution that enables the organization to explore and exploit opportunities simultaneously” (p. 657). In this way, the authors directly link managerial attention and organizational ambidexterity (as an antecedent of OR).

2.3. Literature Overview and Discussion on WCM

The literature provides different approaches to defining WCM (e.g., [80,81]). We refer to the authors of [82], who define WCM as a conglomerate of managerial decisions that influence the scope of working capital by managing current assets and current liabilities (see also [37]). WCM focuses on the management of sales (for instance by reducing the time between delivery and receipt of payment), purchases, and inventory. The aim is to optimize working capital and provide a sufficient level of liquidity, as defined by an organization’s strategic approach and the denouement of the basic conflict between liquidity and profitability [8,10]. WCM measures—such as days inventory held, days sales outstanding, and days payables outstanding—are derived from managerial areas and agglomerated in the KPI designated as the cash conversion cycle [37,82,83,84]. The impact of WCM on an organization’s performance has been discussed in several studies (e.g., [85,86,87]. Especially for small organizations, WCM is a performance-supportive management issue [15,84,88]. WCM is a managerial tool derived from an organization’s strategy and determined by managerial decisions resulting from attentional foci [20], affecting the financial position of an organization. Currently, however, the respective literature does not link ABV and WCM. Given that there is a consensus in the literature that WCM is an important and decisive tool for organizational performance, especially in times of crisis, the absence of this link is surprising. In particular, an approach is lacking that facilitates an understanding of how SMEs deal with WCM during a crisis. WCM is considered to be performance-relevant for organizations, and the management of working capital also affects OR. The authors of [74] describe the impact of managing capital (they call it “capital resilience” (p. 2)) on an organization’s resilience. We link WCM to OR to investigate the extent to which crisis-caused focus changes directly affect OR. By linking WCM and OR, we try to explain the importance of the relationship between both fields. Furthermore, we emphasize the need to understand the importance and interaction between managerial attention and WCM. In this study, we investigate the impact of managerial focus changes per se on OR and thus do not explicitly deal with the two functions of WCM (securing liquidity and releasing liquidity) and their characteristics. The distinction between securing and releasing liquidity is not relevant in our analysis as we focus on the shift in management attention and not on the prioritization of individual management tools. We see the relevance of the distinction between securing and releasing liquidity rather as an aspect that should be considered when focusing on sector-specific tools for WCM. A detailed distinction between the functions and their individual effects on OR offers substantial opportunity for future research.

2.4. Literature Overview ans Discussion on Cognitive Flexibility

CF is considered an important trait that allows decision-makers to manage complex tasks such as multitasking and finding solutions to new, changing, or unexpected conditions in the environment [89,90,91]. The authors of [92] related cognitive processes associated with exploration to attentional control and found a positive correlation between the strength of attentional control and decision-making performance. The authors of [91] identified CF as a cognitive characteristic that is particularly relevant to the challenges associated with organizational ambidexterity. An organization’s resilience capacity comprises cognitive, behavioral, and contextual elements [93]. Organizations can detect weak cues or emerging issues in the environment only if they have sufficient “attention capacity” [94] (p. 888). Following the author of [4], “cognitive capabilities (e.g., mindfulness, sensemaking, and critical reflection) are needed to understand environmental developments and make appropriate decisions” (p. 233). Using her OR conceptualization, the author of [4] showed that “each resilience stage demands cognitive actions to generate and select action alternatives, and behavioral actions to implement the best alternatives and respond effectively to the crisis situation” (p. 233).

Owing to the multiple meanings and definitions of CF in psychological research, the author of [90] developed a unified CF framework that conceptualizes CF as a part of the cognitive system. This framework encompasses the interaction between multiple cognitive mechanisms or components at the cognitive level (e.g., executive functions, perception, and conflict monitoring) as well as the interaction between sensorimotor mechanisms, cognition, and context in developmental time at an individual level (i.e., at a more general level). The authors of [16] define CF as “the ability to match the type of cognitive processing with the type of problem at hand” (p. 1032). In this sense, the CF level depends on how well managers can balance fast, experience-based decision-making with the need to make slow decisions based on new thinking and methods [16]. In his conceptualization of the mechanisms of decision-making in cognitive research, the author of [95] distinguishes between fast, experience-based, impulsive problem-solving behavior (System 1) and cognitively demanding, slow, and conscious problem-solving behavior (System 2). Moreover, managers are subject to other factors besides the use of the two systems, such as biases, information overload and stress that affect decision-making [96,97,98,99,100]. To describe problem-facing decision-makers and to consider different possibilities, this matching requires identifying different elements, views, and perspectives, and reflecting on the identified elements [16]. One of the most commonly used definitions is that of [101], which refers to CF as “a person’s (a) awareness that in any given situation there are options and alternatives available, (b) willingness to be flexible and adapt to the situation, and (c) self-efficacy in being flexible” (p. 623). In the context of this study, the factor of self-induced managerial focus adjustment is of particular interest. The ABV postulates that the organization must create the necessary conditions for adapting the management focus. CF suggests that this focus adjustment is rather person-specific or the result of certain individual management characteristics (e.g., the ability to proactively anticipate consequences or to evaluate alternative courses of action on an ad hoc basis). Therefore, the effect of CF needs to be considered in the context of our study.

2.5. Hypothesis Development

Organizations experiencing an economic crisis, triggered for instance by an economic recession, face major threats to their financial performance and ultimately to their survival [32,102,103,104]. WCM is perceived as an important tool to support organizations’ profitability and ensure sufficient liquidity, both of which influence OR [105]. When a crisis threatens an organization’s profitability or liquidity, managerial focus should shift to WCM tools or measures. In the same way, if a crisis threatens an organization’s resilience, managerial focus should shift to tools or measures that evaluate and, if necessary, increase resilience. Based on our literature overview, we argue that ABV predicts that threats triggered by a crisis attract managerial attention and shift its focus to WCM-related and OR-related aspects. We assume that such crisis-induced shifts in focus to WCM (ΔyWCM) or OR (ΔyOR) correlate with the magnitude of the impact of the crisis, in our case using the organizations’ sales decreases (ΔxSales) as an indicator of the crisis impact. As crises materialize differently in organizations, it is hardly possible to quantify the effects of crises. Consequently, we used the development of sales as a crisis indicator (see [106,107]) Therefore, we propose Hypotheses (H1) and (H3):

H1. 

A crisis positively (+) shifts the focus of managerial attention to working capital management.

H3. 

A crisis positively (+) shifts the focus of managerial attention to organizational resilience.

WCM is a managerial tool that impacts and determines an organization’s financial position by maintaining a sufficient level of liquidity [82]. The sufficiency of working capital is determined by the strategic predefinition of the conflict of objectives between liquidity and profitability [10]. Based on our literature overview and in line with the author of [12], we argue that an organization’s financial position is an important aspect of and affects OR, suggesting a relationship between measures that impact an organization’s financial position, such as measures of WCM and OR. We assume, that focus shifts in attention toward WCM affect fucus shifts in attention toward OR. To show the impact of this sequence of effects, we propose the following hypothesis (H2):

H2. 

The focus shift of managerial attention to working capital management positively (+) shifts the focus of managerial attention to organizational resilience.

Referring to Martin and Rubin’s definition of CF [101], an organization’s performance is impacted and determined by managerial attention regarding alternative procedures and decisions, as well as managers’ ability to adapt to volatile situations. Linking to ABV, managers’ ability to adapt ad hoc to volatile environmental circumstances or impacts is key for performance generation or resilient decision-making. Empirical evidence in the literature shows that CF as a managerial characteristic affects the process and the focus of managerial attention [91,108]. CF presupposes the above premises, so we assume that managers who have higher levels of CF act proactively and are not driven by external effects in their actions to a level comparable to that of managers with lower CF. Following the authors of [16], managers with a higher CF therefore analyze and anticipate problems (i.e., crises) more consciously. In this case, an economic or socio-political development is more quickly recognized (or even expected) as an external impulse, and possible implications for the organization are analyzed ad hoc and compensated for [92,108]. This setup leads to an anticipatory consideration of possible environmental scenarios and impacts the relationship between crisis-driven shifts in focus and OR. To pick up on Kahneman’s systematics [95], managers with a higher CF use their problem-solving System 2 more consciously because they identify externalities earlier or more accurately as potential crises and recognize the need for a more complex approach to solving them. Managers with a lower CF, on the other hand, tend to recognize crises later and act impulsively based on experience. They are more likely to be caught unprepared by a crisis and need to focus their attention more on the effects of the crisis. Managers with a higher CF tend to act proactively and with anticipation and are less likely to be caught unprepared by crises and have to reorient in response. Based on our literature overview, we argue that CF impacts the WCM and OR association through an opposite moderator relationship. The higher a manager’s CF, the lower the effect between WCM and OR and the effect of crisis-driven changes in focus. Thus, a lower level of managerial CF then would strengthen the relationship between WCM and OR. Therefore, we propose H4:

H4. 

Cognitive flexibility negatively (−) moderates how the focus of managerial attention to working capital management affects the focus of managerial attention to organizational resilience.

In line with H4, we hypothesize that CF influences how the crisis affects the focus shift of managerial attention on OR through an opposite moderator relationship. The higher a manager’s CF, the lower the effect of crisis-driven focal changes on OR. In contrast, lower levels of manager CF also indicate a strengthening of the relationship between the crisis effect and OR.

Therefore, we propose H5:

H5. 

Cognitive flexibility negatively (−) moderates the effect that the crisis has on shifts in the focus of managerial attention to organizational resilience.

In Figure 1, we present our research model, which is based on the hypotheses we derived. The observed variable for the crisis effect (ΔxSales) and the latent variables for the shift in management’s focus of attention to WCM (ΔyWCM), the shift in management’s focus of attention to OR (ΔyOR), and managerial CF are detailed in the measures section.

3. Method

3.1. Sample and Procedures

To test our hypotheses, we employed a survey design to get responses from 349 top and middle management employees of German SMEs in November 2021. We set a minimum turnover limit of EUR 500,000 per year to avoid the participation of self-employed and very small organizations with little or no organizational structure, such as hierarchical levels and clearly defined functions within the personnel. We received responses from organizations with a number of employees (full-time equivalent) between 10 and 250. Given the anonymity and non-traceability of respondents, we can provide only inferred information about the population from which we drew our sample and have no information about the actual respondents. We adjudicated 42 questionnaires as invalid because respondents answered the survey in under 2 min (n = 7; the average response time was 709.50 s (standard deviation (SD) = 1342.97)), because they were not top or middle management employees (16), or because they were so-called straight-liners (19), reducing the number of complete and usable responses to 307. From this pool of respondents, we determined an average age of 45.08 years (SD = 11.44) and that 36.48% were female (112 of 307 respondents). As noted, we surveyed only managerial employees in top and middle management positions. Mean tenure in the current position was 10.65 years (SD = 7.97). Participants worked in different industries, including trade (n = 48), services (117), manufacturing (59), arts, entertainment, and recreation (15), logistics (14), information and communication (28), hospitality (16), and others (10).

3.2. Measures

The measurement of OR (resilience as a KPI) is not sufficiently standardized in research. While securing a sufficient level of liquidity in times of crisis is a critical factor for organizational survivability, because of the 2020–2021 COVID-19 pandemic years, sales in several branches, such as, trade, entertainment, and recreation, fell to almost zero (e.g., [109,110]). To tackle these pandemic-related challenges, the German government established a broad band of tools for financial support, including compensation for sales losses and for legal support, including temporary suspension of the obligation to file for insolvency. However, since we asked about changes in sales (which do not include government aid measures) and not earnings (where government aid measures would play a role) as an indicator of the impact of the crisis, we assume that the effect of these measures is negligible for our study. We have not investigated how government interventions affect managers’ attention shifts and assume that the crisis itself has an impact on managers’ attention. Nevertheless, a habituation effect could impact managerial focus in future crises. In other words, if crises are consistently mitigated by government intervention, the adjustment of management focus could become obsolete (Although governmental support is a regulatory issue and thus not part of the context in this paper, we discuss it briefly here because of its impact on organizations’ liquidity and working capital).

For our survey, we used a corresponding seven-point Likert scale, ranging from (1) to (7), for each of the three measurement constructs. A list of all measures is provided in

Table 2. Summary statistics.

Construct	Item	Mean	SD	Definition
Shift of the focus to working capital management (ΔWCM)	Question: On a scale of 1 to 7, how has your day-to-day focus changed on the following topics compared to before the crisis (2019)? (1 = focus has strongly decreased; 4 = focus remained unchanged; 7 = focus has strongly increased)
	ΔWCM_01	4.50	1.33	Sales situation of the organization
	ΔWCM_02	4.46	1.29	Liquidity situation of the organization
	ΔWCM_03	4.58	1.24	Market situation of the organization
	ΔWCM_04	4.43	1.13	Receivables management (order to cash)
	ΔWCM_05	4.26	1.04	Liability management (purchase to pay)
	ΔWCM_06	4.38	1.14	Inventory management (inventory held)
	ΔWCM_07	4.79	1.25	Customer satisfaction
	ΔWCM_08	4.29	1.25	Supplier loyalty
Shift of the focus to organizational resilience (ΔOR)	Question: On a scale of 1 to 7, how has your day-to-day focus changed on the following topics compared to before the crisis (2019)? (1 = focus has strongly decreased; 4 = focus remained unchanged; 7 = focus has strongly increased)
	ΔOR_01	4.44	1.17	Innovation
	ΔOR_02	4.76	1.24	Efficiency
	ΔOR_03	5.07	1.28	Flexibility
	ΔOR_04	5.24	1.23	Adaptability
	ΔOR_05	4.87	1.19	Anticipation
	ΔOR_06	5.10	1.10	Situation awareness
	ΔOR_07	4.97	1.27	Survival
	ΔOR_08	4.97	1.24	Improvisation
	ΔOR_09	4.17	1.28	Growth
	ΔOR_10	5.04	1.09	Learning
	ΔOR_11	4.46	1.12	Networking
Cognitive flexibility (CF)	Question: The following statements deal with your beliefs and feelings about your own behavior. Read each statement and respond by circling the number that best represents your agreement with each statement. (scale from 1 (strongly disagree) to 7 (strongly agree]))
	CF_01	5.24	1.28	I can communicate an idea in many different ways.
	CF_02	4.64	1.56	I avoid new and unusual situations. (R)
	CF_03	5.39	1.43	I feel like I never get to make decisions. (R)
	CF_04	5.13	1.22	I can find workable solutions to seemingly unsolvable problems.
	CF_05	4.84	1.67	I seldom have choices when deciding how to behave. (R)
	CF_06	5.72	1.16	I am willing to work at creative solutions to problems.
	CF_07	5.31	1.15	In any given situation, I am able to act appropriately.
	CF_08	5.53	1.16	My behavior is a result of conscious decisions that I make.
	CF_09	5.32	1.21	I have many possible ways of behaving in any given situation.
	CF_10	5.09	1.82	I have difficulty using my knowledge on a given topic in real life situations. (R)
	CF_11	5.66	1.21	I am willing to listen and consider alternatives for handling a problem.
	CF_12	5.57	1.28	I have the self-confidence necessary to try different ways of behaving.

N = 307; items marked (R) are reverse scored.

.

After data collection, we applied exploratory factor analysis (EFA) for the WCM and OR measures we developed, confirmatory factor analysis (CFA) for the CF measure from the literature [101] as well as composite reliability tests to test the reliability and validity of these measures. The results of the EFA and CFA serve as the basis for the calculation of our latent variables in the measurement model. Because surveys of top managers cannot be used to examine past cognitions [111] and the relevant literature lacks attention measures (In this study, we use the term “measures” synonymously with “measurements” or “measurement constructs”) [21], in this study, we focus on measuring the managerial attention shift triggered by crises.

To avoid common-method bias, the most commonly discussed potential source of error in such surveys [112], we used several procedures recommended in the relevant literature [113]. We diametrically rotated the scale poles for some variables in the questionnaire, separated the measurements of the dependent and independent variables, and counterbalanced the order of the measurements of the dependent and independent variables. We used neutral wording and allowed participants to respond anonymously to minimize socially expected behavior. This aspect was particularly important as participants were asked to report on sensitive issues, such as annual sales, focus on WCM, and focus on OR.

3.3. Impact of the Crisis

Based on the authors of [107], we used sales decreases as an indicator for crisis impact. We measured the impact of the crisis in terms of the change in yearly sales between 2020 and 2019 (ΔxSales) as the observed variable (divided into eight levels, ranging from sales decreases of more than 60% to sales increases of more than 60%).

3.4. WCM

Following the author of [10], we measured the focal change of managerial attention to WCM (ΔyWCM). [10], who described the tensions within WCM, developed a questionnaire to measure colliding goals in the fields of liquidity and profitability. We adapted this questionnaire to measure the focus shifts in managerial attention to WCM during the COVID-19 crisis. We concentrated on focal changes in the areas of sales, liquidity, market situation, purchase to pay, days inventory held, order to cash, customer satisfaction, and supplier reliability. Respondents rated their focus shift in attention to WCM, as compared to the pre-crisis situation in 2019, on a seven-point Likert scale with symmetric poles ranging from “focus has strongly decreased” (1), to “focus has remained unchanged” (4), to “focus has strongly increased” (7). The list of all WCM measure items is provided in Table 2.

3.5. OR

To capture the focus shift in management attention to OR (ΔyOR), we developed a measurement construct, including items for OR, based on the relevant literature [4,18,46,47,48,49,50]. We developed our own measurement construct comprising items for OR, which we have derived from the relevant OR literature, as we did not find any measurement constructs suitable for our purposes in this literature. Our 11-item measurement construct included relevant OR items for innovation, efficiency, flexibility, adaptability, anticipation, situation awareness, survival, improvisation, growth, learning, and networking. Respondents rated their focus shift in attention to OR, as compared with the pre-crisis situation in 2019, on a seven-point Likert scale, with symmetric poles ranging from “focus has strongly decreased” (1), to “focus has remained unchanged” (4), to “focus has strongly increased” (7). The list of all OR measure items is provided in Table 2.

3.6. CF

To measure CF, we used the “Cognitive Flexibility Scale” developed by the authors of [101], which has since been used and revalidated in several studies (e.g., [91,114]). This scale comprises 12 items that respondents rated on a seven-point Likert scale, ranging from “strongly disagree” (1) to “strongly agree” (7). The list of all CF measure items is shown in Table 2.

4. Results

Table 2 presents the descriptive statistics of our measurement items. The highest value in the WCM share was in the area of “customer satisfaction” (mean: 4.79; SD: 1.25), followed by “market situation of the organization” (mean: 4.58; SD: 1.24), and the area of “liability management” showed the lowest values (mean: 4.26; SD: 1.04). The OR domain was dominated by “adaptability” (mean: 5.24; SD: 1.13), whereas “growth” yielded the lowest values (mean: 4.14; SD: 1.28). We conducted an EFA for the focus shift in management’s attention to WCM (ΔyWCM) and OR (ΔyOR). After eliminating one problematic measurement item (ΔyOR_09) in the OR construct that had low factor loading and cross-loading to another factor, we evaluated the reliability and validity of the measurement constructs [115]. In addition, we evaluated the reliability and validity of the CF measurement construct by conducting a CFA for CF. We used CFA because it is appropriate when using constructs from previous literature [116] and because it tests the unidimensionality of a construct [117,118]. Furthermore, to evaluate the reliability of the measurement constructs, we computed Cronbach’s alpha (α ΔyWCM: 0.805; α ΔyOR: 0.823; α CF: 0.859). Cronbach’s alpha for each measurement construct is >0.8, indicating good internal consistency [119].

Table 3. Validity and reliability measures and correlation coefficients.

	AVE	MSV	ASV	CR	α	ΔxSales	ΔyWCM	ΔyOR	CF
ΔyWCM	0.401	0.363	0.171	0.806	0.805	0135 **	0.633
ΔyOR	0.460	0.209	0.223	0.836	0.823	0.028	0.502 ****	0.678
CF	0.579	0.209	0.092	0.869	0859	0.152 ***	0.255 ****	0.329 ****	0.761

AVE: average variance extracted (square root of AVE is presented in bold in the diagonal); MSV: maximum shared squared variance; ASV: average shared squared variance; CR: composite reliability; α: Cronbach’s alpha. Level of significance: **: p < 0.05; ***: p < 0.01; ****: p < 0.001.

shows the reliability and validity conditions for all measurement constructs as well as the correlation coefficients. To check for reliability, we calculated the CR (composite reliability) [116]. To check for convergent and discriminant validity, we calculated the AVE (average variance extracted), the MSV (maximum shared squared variance), and the ASV (average shared squared variance) [116]. We furthermore calculated Cronbach’s alpha as well as the correlation coefficients. Table 3 shows that the reliability condition (CR > 0.7) and the validity conditions (convergent validity: CR > AVE, AVE > 0.5; discriminant validity: MSV < AVE, ASV < AVE) are fulfilled for all constructs, with the exception of the AVE for ΔyWCM and ΔyOR, which is minimally below 0.5 [116]. We used IBM SPSS STATISTICS version 29 to carry out EFA, CFA, and reliability and validity for the measurement constructs.

To evaluate the overall fit of our research model, we used the EFA and CFA results to estimate a structural equation model (SEM) using IBM SPSS AMOS version 29 (see Figure 2). The goodness-of-fit assessment revealed a good fit to the data (χ²/df = 1.983 GFI = 0.912, NFI = 0.878, CFI = 0.935, RMSEA = 0.057) [116]. This result supports the general rationale of our research model. Because the focus of a covariance SEM model is on the overall fit of the model to the data and less on the individual relationships, we subsequently evaluate the hypothesized individual relationships, including the resulting indirect and total effects.

4.1. Hypothesis Testing

We estimated the structural equation model by using moderated mediation analysis [120,121,122]. Figure 2 shows the results of this analysis.

H1 predicts that the occurrence of a crisis positively shifts the focus of organizational attention to WCM. The moderated mediation analysis shows a positive and significant impact of the change in sales between 2020 and 2019 (ΔxSales) and the shift of management’s attention to WCM (ΔyWCM) (ΔxSales → ΔyWCM: β = 0.050, p < 0.05). The 95% confidence interval ranges from 0.0071 to 0.0921 and does not include zero. Thus, H1 is supported.

H2 predicts that the shift in the focus of organizational attention to WCM positively shifts the focus of organizational attention to OR. The moderated mediation analysis shows a positive and significant impact of the shift in management’s attention to WCM (ΔyWCM) on the shift in management’s attention to OR (ΔyWCM → ΔyOR: β = 1.555, p < 0.001). The 95% confidence interval ranges from 0.9022 to 2.2077 and does not include zero. Thus, H2 is supported.

H3 predicts that a crisis positively shifts the focus of organizational attention to OR. The moderated mediation analysis reveals that the effect of the change in sales between 2020 and 2019 (ΔxSales) on the shift in management’s attention to OR (ΔyOR) is not significant. The 95% confidence interval ranges from −0.2470 to 0.2928 and includes zero. Thus, H3 is not supported.

H4 predicts that CF negatively moderates how the focus of organizational attention to WCM affects the focus of organizational attention to OR. The moderated mediation model reveals a significant negative influence of CF on the effect between ΔyWCM and ΔyOR (β = −0.384, p < 0.001), which supports H4.

H5 predicts that CF negatively moderates the effect of the crisis on the focus of organizational attention to OR. The moderated mediation model reveals that the effect of CF on the effect of the change in sales between 2020 and 2019 (ΔxSales) and ΔyOR is not significant. Thus, H5 is not supported.

The indirect effect of a crisis on focus shifts in OR (Δx Sales → ΔyWCM → ΔyOR) is positive and significant (p < 0.05 and p < 0.001, respectively). Because the direct effect of ΔxSales on ΔyOR is not significant, only an indirect mediation can be inferred [122]). The conditional effects of the focal predictor (ΔyWCM) at values of the moderator CF are shown in

Table 4. Conditional effects of ΔyWCM at values of cognitive flexibility (CF).

CF	Effect (ΔyWCM)	p (β)
2.520	0.604 ****	<0.001
2.876	0.468 ****	<0.001
3.172	0.354 ****	<0.001

****: p < 0.0001.

. Our results indicate that the higher the value of the moderator CF, the lower the effect between ΔyWCM and ΔyOR.

Figure 3 shows the distribution of mean CF on ΔxSales in each ΔxSales category. The overall average in CF is 5.287 (SD = 0.870). The average of CF in ΔxSales categories from 0% to >60% is 5.333 (SD = 0.891). The average of CF in ΔxSales categories from <−60% to 0% is 5.237 (SD = 0.848).

In order to present the CF in relation to sales development, we have assigned the CF to the individual clusters of sales development in accordance with our survey construct and the resulting sales development.

Overall, we find a positive indirect-only effect of the change in sales between 2020 and 2019 (ΔxSales) on the shift in management’s attention to OR (ΔyOR), mediated by the shift in management’s attention to WCM (ΔyWCM). Furthermore, we find a negative moderating effect of CF on the effect between ΔyWCM and ΔyOR.

4.2. Additional Analyses

To rule out alternative explanations, we control for the effects of employees, gender, and top and middle management by integrating the control variables in the SEM. None of the control variables (employees, gender, and top and middle management) have a significant impact in the SEM.

We performed additional descriptive analyses, as presented in

Table 5. Additional descriptive analyses.

		ΔyWCM		ΔyOR		CF
	n	Mean	S.D.	Mean	S.D.	Mean	S.D.
Total Sample	307	4.461	0.788	4.826	0.722	5.287	0.870
Top Management	80	4.355	0.893	4.884	0.799	5.342	0.948
Middle Management	227	4.499	0.746	4.805	0.694	5.267	0.843
Male	195	4.436	0.770	4.756	0.729	5.224	0.873
Female	112	4.506	0.820	4.946	0.698	5.395	0.859
Trade	48	4.432	0.706	4.813	0.728	5.321	0.821
Services	117	4.421	0.787	4.830	0.735	5.293	0.890
Manufacturing	59	4.581	0.790	4.718	0.739	5.418	0.879
Arts, Entertainment and Recreation	15	4.425	1.084	5.012	0.810	5.433	0.938
Logistics	14	4.429	0.652	4.799	0.724	4.792	0.846
Information and Communication	28	4.558	0.759	4.880	0.691	5.354	0.921
Hospitality	16	4.328	1.003	4.909	0.766	4.932	0.644
Others	10	4.413	0.682	4.946	0.351	5.125	0.783

. Table 5 shows the mean value and SD of ΔyWCM, ΔyOR, and CF, classified by top and middle management, respondent gender, and the respective industry. The highest and lowest values per category are marked in bold.

Crises cause middle management respondents to shift focus more to WCM (ΔyWCM: mean = 4.499; SD = 0.746) than top management respondents do, and women focus more on WCM than men do (ΔyWCM: mean = 4.506; SD = 0.820). The manufacturing industry has the highest focus on WCM (ΔyWCM: mean = 4.581; SD = 0.790), and the hospitality industry has the lowest focus on WCM (ΔyWCM: mean = 4.328; SD = 1.003).

Top management respondents shift their focus more to OR than middle management respondents do (ΔyOR: mean = 4.884; SD = 0.799), and women focus more on OR than men do (ΔyOR: mean = 4.946; SD = 0.694). The arts, entertainment, and recreation industry has the highest focus on OR (ΔyOR: mean = 5.012; SD = 0.810), and the trade industry has the lowest focus on OR (ΔyOR: mean = 4.813; SD = 0.728).

Top management has a higher CF than middle management does (CF: mean = 5.342; SD = 0.948), and women exhibit a higher CF than men do (CF: mean = 5.395; SD = 0.859). The arts, entertainment, and recreation industry has the highest CF (CF: mean = 5.433; SD = 0.921), and the logistics industry has the lowest CF (CF: mean = 4.792; SD = 0.846).

5. Discussion and Conclusions

Our study examines how a crisis that manifests itself in a decline in sales affects management’s attention to WCM and its shifts in focus to OR. The moderated mediation analysis shows a positive and significant impact of the change in sales in a crisis and the shift of management’s attention to WCM. This result supports our hypothesis that a crisis positively shifts the focus of managerial attention to WCM. In the context of organizational responsiveness, we argue that the crisis effect becomes an operational organizational issue that shifts management attention to WCM measures in the short term. The more values an issue encompasses and the more closely it is linked to a particular value, the more likely it is to attract management’s attention and thus become a strategic issue [72]. In the short term, the crisis effect becomes an operational issue requiring organizational responsiveness, which in turn requires management time and attention, such as to WCM measures to save liquidity. In the long term, the crisis effect becomes a strategic issue that is linked through the organization’s governance channels to the available set of strategic initiatives to guide the development of organizational strategy [51].

The moderated mediation analysis shows that management’s attention shift to WCM has a positive and significant impact on management’s shift in attention to OR when a crisis occurs. This result supports our hypothesis that the focus shift in managerial attention to WCM positively shifts managerial attention to OR. We conclude from these results that managers facing a crisis adapt to external challenges and focus their attention on needs caused by the crisis.

Strategic adaptations are perceived as a prerequisite for OR (e.g., [4,31,68]), where organizations’ strategic approaches, attentional capabilities, and anticipative and adaptive capacities result from managerial attention and attentional focus shifts [20,51]. This pattern indicates a new ABV perspective in which managerial attention is driven not only by organizational determinants, such as allocation and distribution of information [20], but also by external and unexpected influencing factors. We found no direct effect between crisis and OR, so we assume that managers’ focus shift to OR is stronger when liquidity aspects are concerned. The premises of the ABV are at least extended here by the effect of the CF. The organization no longer seems to be responsible for executing the management’s foci. The extent to which the CF supports or replaces the ABV must also be discussed. We assume that managers with a high CF (can) largely dispense with the support function of the organization in the area of information allocation and information distribution, which is supported by our results. Managers with a high CF have a lower focus shift in times of crisis than managers with a lower CF. The effect of the ABV can therefore be seen as a compensatory function for CF deficits.

We argue that OR and the ABV are linked because an organization enables decision-makers to quickly anticipate and manage crises (i.e., focus shifts). Such focus shifts—for instance, towards WCM—may increase survivability and thus enhance OR. We established a link between ABV and OR by showing that focus adjustments to WCM have a significant and positive effect on focus adjustments to OR. OR, initially understood more as an organizational task, becomes a management-based, focus-driven task through its linkage with the ABV. In this way, OR seems to depend on organizational factors and on individual characteristics, such as managers’ CF, both of which are influenced by external factors (i.e., factors that affect the organization and the decision-makers) and whose impact is weakened or strengthened—for instance, by managerial characteristics, such as managers’ CF.

Our study shows that external factors, such as crisis-related impacts, determine situated attention. Corresponding to the ABV, managers are exposed to a wide range of unexpected or extraordinary situational factors in times of crisis, which define the respective situation and materialize their effects and impacts on the organization.

As our results show, crisis does not directly affect focal changes to OR. We could determine a direct relationship only by measuring the focus shifts to WCM, and we identify an indirect-only mediation [122] between the crisis impact and focus shifts to OR mediated by WCM. Without looking at WCM, the function of this mechanism would be unknown. Adaptation of managerial focus to WCM is an important mediator that enforces focus shifts to OR. Such a shift in managerial focus is the prerequisite for applying appropriate measures to increase OR and ultimately improve the organization’s performance. The focus on OR appears to have been relatively low until financial concerns were at risk. This pattern indicates a major influence of liquidity-oriented management control on OR and implies the importance of financial aspects, such as liquidity and profitability within German SMEs, especially in times of crisis. Components and tools of WCM affect and contribute to the organization’s financial position, which also is considered part of OR [12]. Because the financial position can be affected by WCM and affects OR, we interpret our results as suggesting that a stronger focus on the financial position of the organization, e.g., on measures related to WCM, also increases management’s focus on OR measures. In other words, a stronger focus on WCM measures results in a stronger focus on the organization’s financial position. A stronger focus on the financial position of the organization in turn results in a stronger management focus on OR.

The moderated mediation analysis reveals a significant negative effect of CF on the relationship between ΔyWCM and ΔyOR, which supports our hypothesis that CF negatively moderates how the focus of managerial attention to WCM affects the focus of managerial attention to OR. The moderated mediation model reveals that the influence of CF on the effect of the change in sales between 2020 and 2019 (ΔxSales) and ΔyOR is not significant. This result is consistent with the non-significant impact of the crisis effect and the shift in management’s focus to OR.

Our results indicate that the higher the value of the moderator CF, the lower the effect between ΔyWCM and ΔyOR. In other words, the higher the degree of CF, the less focus adjustments concerning WCM will affect focus adjustments concerning OR. The result may be decision-makers with a high CF who do not act as liquidity-oriented as intended by the organization, requiring greater interconnectedness with an organization’s strategy. In turn, a low CF might indicate that managers tend to “stick” to liquidity-oriented management tools and that the focus shift in WCM and OR is synchronous. Prior research provides evidence that CF is a potential influencing factor [91] and a KPI for managerial performance [16].

Managerial CF is described as a relevant cognitive capability related to organizational ambidexterity (e.g., [91]), which in turn has been described in research as an antecedent of OR that promotes SME resilience [30]. In contrast to the WCM literature, which lacks the link to cognitive capabilities or managerial characteristics such as CF, OR research already emphasizes the relevance of cognitive capabilities [4]. We argue that management’s CF affects management’s focus on OR, which is supported by our results as well as by the relationship between cognitive capabilities and OR already described in the related literature. From a multilevel perspective, our results provide empirical evidence of how managers’ characteristics, such as CF at the individual level, affect the shift in focus to resilience at the organizational level. This, in turn, is a prerequisite for applying appropriate OR measures to withstand and recover from crises, and thus for developing future OR capabilities to enhance resilience at the organizational level.

Our study’s results deepen the understanding of the importance of managers’ CF in times of crisis (see Figure 3) and the impact of CF on sales development, suggesting that managers’ CF may influence the link between the focal characteristics of WCM and OR. This finding could connect to other channels of research, e.g., the authors of [91], who found that CEO CF as an individual managerial characteristic impacts organizational level ambidexterity indirectly through its effect on CEO information search activities.

Moreover, CF as a managerial characteristic might be a tipping point, determining whether managers tend to act in parallel when they synchronize a focus shift on both WCM and OR if their CF is low and use other (or more) focuses when their CF is high. This possibility might have implications for the design of studies on management behavior in times of crisis and, in an upstream step, also on the process of recruiting or personnel selection of managers.

The positive, indirect effect between crisis-driven, WCM-related managerial focus shifts and focus shifts to OR indicates a more reactive action of managers. In other words, managers take action in a reactive way when an external effect (crisis) hits an organization and do not behave in a proactive or anticipatory way. We argue that when a crisis occurs, managers shift their WCM-related attention to the crisis impacts and adjust their decision-making, which softens negative crisis effects and increases the focus shift to OR. Managers with a higher CF focus more on OR without extensive WCM-focus adjustments.

Although dividing managers into two groups while focusing on their managerial behavior in only one category (CF) seems to be too simplistic [123], our study shows that CF is a decisive factor that is linked to specific managers’ attitudes or characteristics. We find that managers with higher CF had better sales development compared with managers with a lower CF (see Figure 3). Research on the link between managers’ CF and organizations’ sales development remains scarce [16]. Further studies are needed to examine the extent to which managers’ individual CF affects organizational level resilience and the impact of shifts in focused attention.

Based on recent studies that address the ABV in the context of OR, such as the authors of [22,23,24], our results support further study of the use of the ABV in times of crises by revealing the impact of crisis-induced focus shifts on OR. The focus of the decision-makers has implications for OR, which in turn requires allocation and distribution of information driven by the organization strategy as a basis for decision-making. In addition, our findings broaden this perspective and the influence of external factors, such as a crisis, on the focus of decision-makers. Furthermore, our results provide insights into the role that managerial CF plays in this context.

The theoretical implications of our study are based on an extended view of the factors influencing focus shifts on OR. Previous research aimed at viewing OR as an organizational task. In our study, we show that management’s focus-driven decisions directly affect aspects of OR and need to be considered from a decision-making and behavioral approach. We argue that future research should take up this point and investigate linkages such as those between management intent and OR.

The practical implications of this work relate to the view on OR. OR is ensured not only by the organizational structure and process organization but also by management’s focus shifts caused by external factors, which affect OR and must be considered. Dynamic capabilities, for instance, are processes that enable organizations to attend to internal and external stimuli, enabling the organization to adapt their activities to the demands of a changing environment. We argue that future research should further investigate the role of dynamic capabilities in the process of management’s focus shifts and the context of OR. In particular, researchers should examine which dynamic capabilities enhance or mitigate management’s focus shifts during times of crisis as well as the impact of these focus shifts on OR.

Managers and their focus are not only driven by organizational settings—that is, information allocation and information distribution—but also directly by external impacts such as a crisis. This relationship entails the risk of limited focus and, consequently, an isolated risk consideration when managers cannot consider all risks because of low CF and/or biases. The link between OR and the ABV shows the possibilities of controlling management’s focus through intra-organizational information allocation and distribution. Furthermore, management’s focus clearly has a substantial influence on the sales situation of organizations and must be adapted actively. To this end, concepts must be developed to increase CF and implement it in personnel selection processes. CF is an individual factor, like all characteristics of potential applicants in the application process. Only the integration or interweaving of these individual characteristics with the organization can contribute to organizational success. Individual managerial characteristics are becoming increasingly important for organizational success and are considered an important evaluation criterion for stakeholders [124].

Based on our results, it might be a fruitful research avenue to examine how managers’ CF might be implemented in the recruitment and personnel selection process to ultimately increase resilience at the organizational level. In this context, future research might derive appropriate measurement models for managerial CF from the literature and adapt them for an efficient recruitment and personnel selection process.

Our results contribute to an academic debate regarding managerial focus shifts on WCM and OR from the ABV perspective in times of crisis. Our results provide initial explanations of the relationships between WCM and OR from a management perspective. The insights gained form a starting point for further research on the integration of WCM and OR from the ABV perspective. It would be important to examine the shift in focus on WCM and OR induced by a crisis towards the application of specific WCM and OR measures and ultimately their impact on organizational performance.

One of the limitations of this study is that it is based on cross-sectional data. To gain further insights into the shifts in management’s attention triggered by negative exogenous events and to validate the quantitative empirical findings of our study, future research could focus on a panel with several data collections, over a longer period.

Second, we concentrated on focal shifts in managerial attention to WCM and OR without considering other antecedents of OR. Prior literature on OR and the ABV of the firm links managerial attention and antecedents of OR, such as organizational ambidexterity. Future studies should address this potential link in the relevant literature by examining the impact of a crisis on the focus of managerial attention to WCM or OR and the ambidexterity of organizations using established measurement constructs, such as that of [125].

Third, surveys of top managers are not appropriate for examining past cognitions [111]. Thus, we measured the self-reported shift in the managerial attention to WCM and OR. To better compare the extent of focus shifts, future studies could measure managerial focus ex ante and ex post of negative external events, such as crises. Furthermore, they could focus on assessing OR capabilities (e.g., [126]) to measure organizations’ resilience before, during, and after a crisis.

Fourth, regarding the COVID-19 crisis, there should be an impact analysis of the governmental aid granted during the COVID-19 pandemic. We investigated focus shifts to WCM and excluded regulatory changes and effects. Future research should examine the extent to which managers’ attention is driven by expectations of repeated government assistance in future crises. Further research should explore whether regulatory factors, such as governmental financial support, affect managerial focus shifts. If managers expect governmental support when a crisis affects the organization’s survivability, are they acting as if they have a safety net? Does this affect their CF and focus adjustment?