Managing disruptions in international distribution channels: effectuation, business model innovation, and channel resilience

Global turbulences can unexpectedly disrupt international distribution channels, making channel resilience an important issue for firms distributing internationally. The effectuation process can help, but existing means may not always fit the changing market conditions. Drawing from the entrepreneurship and international marketing literature, this study tested the idea that novelty-centered business model innovation (BMI) mediates the relationship between effectuation process and channel resilience, and that deep uncertainty moderates both stages of that mediation, from effectuation to BMI and from innovation to channel resilience. It used data on 115 firms based in Wuhan, China, which distributed internationally before and, to the extent possible, during the COVID-19 pandemic. Wuhan was the first city to confront COVID-19 and is thus an optimal setting to investigate unexpected crises. Findings suggest that multinational enterprises can take advantage of novelty-centered BMI to enhance their channel resilience against unpredictable crises. With novelty-centered BMI, firms can create new means and combine them with existing ones in a new way to adapt to changed market conditions, which is an essence of channel resilience. This study's findings shed new light on the capability-building of emerging market multinationals to enable imagination and experimentation with effectuation in responding to major disruptions.