Small-business resilience in a remote tourist destination: exploring close relationship capabilities on the island of St Helena

Abstract

We investigate how small businesses in a very remote island tourist destination are able to cope with shocks and disruptions they face, that is, their resilience. Given their size and resource limitations as well as disadvantages due to lack of accessibility and remoteness, we expect resilience in these types of firms to be underpinned by their close relationships with other local stakeholders. Drawing on concepts from Instrumental Stakeholder Theory (IST), we explore how close relationship capabilities with stakeholders affect small business resilience on the remote tourist destination of St Helena. Through in-depth interviews with the owner-managers of seven case firms on the island we identify how aspects of IST are relevant to resilience, while also uncovering emerging variables of interest. To make sense of these variables we use a Fuzzy Cognitive Mapping (FCM) approach, capturing respondents’ mental models in graphical form. The result supports IST by reinforcing the positive effects of valuable partners and mutually beneficial interaction with valuable partners, as well as a negative impact of the cost of managing relationships. However, negative impacts of logistical costs and, surprisingly, the role of government policy on resilience are also identified. Implications for research and policy are discussed.