The power of shared positivity: organizational psychological capital and firm performance during exogenous crises

TLDR: In this article, the influence of organizational psychological capital on the performance of small and medium-sized companies (SMEs) during crises has been examined, and the authors suggest that SMEs use their intangible resources to cope with difficult situations such as the COVID-19 pandemic.

Abstract: This study examines the influence of organizational psychological capital on the performance of small and medium-sized companies (SMEs) during crises. We argue that SMEs use their intangible resources to cope with difficult situations such as the COVID-19 pandemic. Therefore, we investigate how organizational psychological capital impacts performance and creative innovation through such intangible resources, namely, organizational citizenship behavior, solidarity, and cooperation. Methodologically, we combine structural equation modelling and regression analysis on a dataset of 379 SMEs. Our results support the notion that organizational psychological capital positively influences creative innovation of SMEs and thus performance during crises. Our research contributes to the organizational behavior literature by showing that psychological resources of SMEs can strengthen performance in times of crisis and help to prepare for future ones. The COVID-19 pandemic has impacted our economic system tremendously and continues to be a threat, especially for small and medium-sized companies (SMEs). Our research shows that a shared positive thinking, namely, Organizational Psychological Capital, can be used by SMEs to counteract the negative effects of exogenous crises, such as the COVID-19 pandemic. Using a dataset of 379 SMEs, we highlight that organizational psychological capital positively affects creative innovations of SMEs and leads to better performance. Thus, the principal implication of our study is the fact that SMEs should place a stronger emphasizes on their organizational psychological capital and try to stay positive, as it will help them to come up with innovative ideas coping with the effects of the crisis, ultimately increasing their performance and survival rate.