Surviving a cluster collapse: risk aversion as a core value

Purpose – This paper analyses firms, which survived in a collapsed regional cluster. The target is to analyze whether the principles for enduring success identified researching success factors of very old firms also apply in such an environment. Design/methodology/approach – The authors conduct a series of contrasting case studies, embedded in cluster theory and enduring success research. Findings – Firms survived with very different strategies and levels of outsourcing. However, surviving firms were congruently very conservative in their finances and in innovation behavior. Risk aversion and an early detachment from the declining cluster were found as success patterns for survival. Research limitations/implications – Owing to the disappearance of most other firms in the cluster, it was not possible to evaluate their unsuccessful strategies, which means that they cannot be excluded for sure if failed firms applied similar tactics than the surviving firms. This study is focused on one cluster in one industry. Future research could feel encouraged to test the enduring success principles on large scale, multi‐industry surveys. Practical implications – The conclusions from this research stress the merits of a conservative approach to corporate management, which contrasts with a more risk‐taking attitude managers may feel tempted to take in order to satisfy some (financial) stakeholders. Social implications – The “conservatism hypothesis” discussed in this research complements the discussion on corporate ethics. Originality/value – This paper adds to existing enduring success literature by applying it to the extremely challenging environment of a declining industry. It contributes to cluster theory, in particular to cluster life cycle research.