Organizational resilience as a human capital strategy for companies in bankruptcy

BACKGROUND: Bankruptcy is a crisis that generates severe stress and anxiety, resulting in maladaptive behavior and inappropriate decision-making at both individual and organizational levels. There is limited research or guidance for management to address the consequences of bankruptcy on an organization's human capital. OBJECTIVE: This study examined the human capital management principle of organizational resilience that was employed by a company that successfully reorganized and emerged from bankruptcy. METHODS: This study translated seven principles of organizational resilience proposed by Mallak to operationalize a conceptual model of organizational resilience for companies operating in bankruptcy. The model is evaluated using a qualitative research approach comprised of an original case study of Integrated Electrical Services, Inc. RESULTS: The results of the research points to the importance of de-centralized operational decision making, expanding communication channels, ensuring adequate external resources, and engaging external stakeholders in the management of an organization seeking to successfully operate and ultimately emerge from bankruptcy. CONCLUSIONS: The research identified the central importance of expanding decision making boundaries in the resilience of organizations and their ability to adapt when under adverse conditions such as bankruptcy. The implications support an organization developing a human resource strategy to develop organizational resilience.