Crises in Business Markets: Implications for Interfirm Linkages

In the global economy, firms link with customers and suppliers through a complex nexus of strategically critical interfirm relationships. Due to the diversity of environments and networks involved, these linkages are increasingly vulnerable to catastrophic disruption, i.e., crisis. As such, the authors offer an advanced conceptualization of crisis and explicate the interplay of crisis and interfirm relationships. Based on qualitative data from 27 interviews of executives in 13 firms, including 2 in-depth case studies, the authors develop a five-phase processural model of crisis consisting of: (1) awareness and acknowledgment, (2) sensemaking, (3) response design, (4) response implementation, and (5) reconciliation in the aftermath. Throughout the model the authors emphasize the manifestation and influence of crisis in the interfirm relationship as well as the role of the interfirm relationship in crisis management.