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T. Neise et al.
in the United Kingdom revealed that they prefer community-level based flood adaptation and would consequently waive individual adaptation (Thurston et al. 2008).
Wedawatta and Ingirige (2012) conducted four case studies with SMEs in London
and state that the SMEs responded to floods by protection measures (e.g., flood gates),
enhancing business continuity management and usage of insurance coverage.
Existing literature deals particularly with disaster events, but recurrent and aggravating flood risks are less researched. Also, research on the individual adaptation activities of SMEs remains sparse in comparison to the plethora of research
on communities and households. Moreover, this research—especially in hazard
research—lacks strong theoretical conceptualization to grasp (in-)action of individual adaptation. Promising approaches to conceptualize firms’ individual adaptation emerged in organization studies and evolutionary economic geography, namely
the idea of routines (cf. Nelson and Winter 1982) and the dynamic capabilities
framework (cf. Teece et al. 1997).
Firms’ routines enable to understand firms’ behavior to constantly adapt to
changing conditions caused by market dynamics and/or natural hazards such as
floods. Routines describe firms’ behavioral patterns (e.g., standard operating procedures, organizational structures) that describe how firms carry out their regular business activities in ordinary situations (Berkhout et al. 2006; Nelson and Winter 1982;
Zollo and Winter 2002). Empirical evidence shows that firms differ in the ability
to adapt, i.e., some firms performing better than others due to their better routines
that enable more effective adaptation to business impacts such as floods (Cyert and
March 1963).
When firms face changes of high magnitude, speed or unpredictability, and their
established routines become ineffective, they are required to modify their routines
to facilitate an effective adaptation (Gavetti and Levinthal 2000; Nelson and Winter
1982; Zollo and Winter 2002). For instance, when confronted with a significant
increase in flood exposure, firms need to start to search for new adaptation measures
such as new dikes. At the same time, the dynamic capability framework stresses that
the ability to introduce new routines depends heavily on firm-specific organizational
and strategic abilities (Teece et al. 1997; Eisenhardt and Martin 2000). “Dynamic
capabilities”, therefore, refer to higher level competencies that facilitate firms to
develop, reconfigure, and integrate internal and external resources and routines to
address changing economic, social, and ecological circumstances. They encompass
learned bundle of competencies (e.g., skills, technologies, and knowledge) that ensure
firms to develop, integrate, or modify resources and routines (Teece et al. 1997).
We understand firms’ individual adaptation as the mobilization of resources and
learned competencies to develop, integrate, reconfigure and finally utilize firms’
routines to respond effectively to flood hazards or to waive routines that have been
proven as an insufficient basis for adaptation (Eisenhardt and Martin 2000; Teece
et al. 1997; Zollo and Winter 2002). However, maladaptation can occur if firms
possess inadequate dynamic capabilities or the efficacy of the competencies is underor overassessed (Barnett and O’Neill 2010; Grothmann and Patt 2005). In such
situations, adaptation turns into maladaptation if responses are performed that lead to
an increase rather than a reduction in susceptibility and risk to floods. Also, Berkhout
T. Neise et al.
in the United Kingdom revealed that they prefer community-level based flood adaptation and would consequently waive individual adaptation (Thurston et al. 2008).
Wedawatta and Ingirige (2012) conducted four case studies with SMEs in London
and state that the SMEs responded to floods by protection measures (e.g., flood gates),
enhancing business continuity management and usage of insurance coverage.
Existing literature deals particularly with disaster events, but recurrent and aggravating flood risks are less researched. Also, research on the individual adaptation activities of SMEs remains sparse in comparison to the plethora of research
on communities and households. Moreover, this research—especially in hazard
research—lacks strong theoretical conceptualization to grasp (in-)action of individual adaptation. Promising approaches to conceptualize firms’ individual adaptation emerged in organization studies and evolutionary economic geography, namely
the idea of routines (cf. Nelson and Winter 1982) and the dynamic capabilities
framework (cf. Teece et al. 1997).
Firms’ routines enable to understand firms’ behavior to constantly adapt to
changing conditions caused by market dynamics and/or natural hazards such as
floods. Routines describe firms’ behavioral patterns (e.g., standard operating procedures, organizational structures) that describe how firms carry out their regular business activities in ordinary situations (Berkhout et al. 2006; Nelson and Winter 1982;
Zollo and Winter 2002). Empirical evidence shows that firms differ in the ability
to adapt, i.e., some firms performing better than others due to their better routines
that enable more effective adaptation to business impacts such as floods (Cyert and
March 1963).
When firms face changes of high magnitude, speed or unpredictability, and their
established routines become ineffective, they are required to modify their routines
to facilitate an effective adaptation (Gavetti and Levinthal 2000; Nelson and Winter
1982; Zollo and Winter 2002). For instance, when confronted with a significant
increase in flood exposure, firms need to start to search for new adaptation measures
such as new dikes. At the same time, the dynamic capability framework stresses that
the ability to introduce new routines depends heavily on firm-specific organizational
and strategic abilities (Teece et al. 1997; Eisenhardt and Martin 2000). “Dynamic
capabilities”, therefore, refer to higher level competencies that facilitate firms to
develop, reconfigure, and integrate internal and external resources and routines to
address changing economic, social, and ecological circumstances. They encompass
learned bundle of competencies (e.g., skills, technologies, and knowledge) that ensure
firms to develop, integrate, or modify resources and routines (Teece et al. 1997).
We understand firms’ individual adaptation as the mobilization of resources and
learned competencies to develop, integrate, reconfigure and finally utilize firms’
routines to respond effectively to flood hazards or to waive routines that have been
proven as an insufficient basis for adaptation (Eisenhardt and Martin 2000; Teece
et al. 1997; Zollo and Winter 2002). However, maladaptation can occur if firms
possess inadequate dynamic capabilities or the efficacy of the competencies is underor overassessed (Barnett and O’Neill 2010; Grothmann and Patt 2005). In such
situations, adaptation turns into maladaptation if responses are performed that lead to
an increase rather than a reduction in susceptibility and risk to floods. Also, Berkhout