Navigating the Storm: Toward a Theory of IT Portfolio Diversity, Leadership Power, and Organizational Resilience to Major Shocks

In an era of escalating disruptions—from pandemics to economic crises—organizational resilience is vital for survival and growth. This study offers actionable insights for business leaders and policymakers on strategically leveraging information technology (IT) resources and leadership structures to navigate major shocks. We demonstrate that although diverse IT portfolios (e.g., cloud systems, data analytics tools) can enhance resilience by enabling adaptability, balance is key: moderate IT diversity strengthens resilience, but excessive diversity creates coordination complexities that erode it. Crucially, empowering IT leaders with formal decision-making authority helps firms maximize IT flexibility, shifting this tipping point to harness greater IT diversity without compromising coordination. Our analysis of firms during the pandemic reveals that crisis-induced industry turbulence further shapes these dynamics. Adverse turbulence intensifies the risks of overdiversification, requiring tighter alignment between IT strategies and leadership oversight. Conversely, beneficial turbulence allows firms to experiment with IT resources more freely. Policymakers can support businesses by fostering digital infrastructure, incentivizing IT leadership training, and creating frameworks for public-private data sharing during emergencies. By aligning IT flexibility with coordinated execution, firms can turn crises into opportunities for sustained success. This research equips stakeholders with evidence-based strategies to future-proof operations in an unpredictable world.