The Mindset Matters: Psychological Capital and Strategic Responses During Crisis

The goal of this study is to investigate how the Psychological Capital of owner-managers influences their strategic responses, ultimately impacting the performance of a company during the COVID-19 pandemic. Grounded on established psychology, upper echelons theory and crisis literature, we find evidence in our sample of 381 owner-managed companies that higher Psychological Capital leads to a preferred adaption of offensive strategic responses, which in turn positively influences the performance of a company during crisis. We contribute to the entrepreneurship literature and upper echelons theory by introducing Psychological Capital to the debate and thus shed light on which measures can be used to increase or sustain the performance of owner-managed companies throughout crisis.