Interfirm collaboration as a performance-enhancing survival strategy within the business models of ethnic minority-owned urban restaurants affected by COVID-19

Purpose: Guided by resource-based theory, this investigation examines the extent to which knowledge sharing as part of inter-firm collaboration serves as a performance-enhancing strategy; that is, in the context of assisting ethnic minority-owned urban restaurants to survive during a major market disruption. Specifically, the study features owner-managers perceptions concerning the evolving environmental circumstances associated with the novel coronavirus (COVID-19) pandemic.

Design/methodology/approach: Data collection took place among owner-managers of urban restaurants in a Canadian city during the COVID-19 pandemic in late 2020. This featured semi-structured interviews with restaurants’ owner-managers originating from various ethnic origins together with secondary data where possible. Data analysis followed an adapted Gioia approach.

Findings: Examples of inter-firm collaboration include restaurants’ owner-managers leveraging social capital and sharing knowledge about the effects of legislation and health guidelines on operating procedures, together with good and bad practices where firms have pivoted their business models via take-outs, patio dining and in-room dining. Irrespective of the strength of network ties (within and across ethnic communities), owner-managers were motivated to share information to facilitate their survival. Nevertheless, this study raises questions over the extent that certain decision-makers exhibit strategic flexibility responding to environmental conditions together with their respective ability to engage/retain customers plus service-oriented employees. Additionally, whether some owner-managers will continue to collaborate with their competitors after COVID-19 ends, and if so, with whom and the magnitude of activities. In particular, ‘trust’ via psychological contracts and ‘complementary strategies’ among partners across co-ethnic and different ethnic origins are key considerations.

Originality: A body of knowledge exists addressing the notions of both inter-firm collaboration and market disruptions in the broader cross-disciplinary literature. However, the inter-firm collaborative practices of small firms with ethnic minority ownership that are otherwise rivals remain under-researched. More specifically, inter-firm collaboration as a survival strategy for owner-managers during the market disruption arising from a crisis situation features as an original contribution.