Macroeconomic Cycles and Business Strategy Adaptation

International Academy
Dec 1, 2025
23 min read

Author: Lina Marković — Affiliation: Independent Researcher

Abstract

Macroeconomic cycles—alternating phases of expansion, slowdown, recession, and recovery—shape the environment in which firms operate. Managers cannot control interest rates, inflation, or aggregate demand, but they can design strategies that anticipate, absorb, and even leverage these cyclical changes. This article examines how firms adapt their strategies across macroeconomic cycles by combining insights from economics with three sociological and institutional frameworks: Pierre Bourdieu’s theory of capital and fields, world-systems theory, and institutional isomorphism.

Using a qualitative integrative literature review of books and peer-reviewed articles, with particular attention to research published in the last five years on crisis response and post-pandemic recovery, the paper builds a multi-level framework linking macroeconomic phases to firm-level strategic choices. The analysis shows that: (1) firms that treat cycles as a normal feature of the environment, rather than as exceptional shocks, develop stronger dynamic capabilities; (2) Bourdieu’s concept of multi-dimensional capital explains why firms with rich portfolios of economic, social, cultural, and symbolic capital adapt faster and more creatively; (3) world-systems theory highlights that exposure to cycles and the space of possible strategies are unevenly distributed between core, semi-peripheral, and peripheral economies; and (4) institutional isomorphism drives convergence in visible responses—such as cost-cutting, standard risk-management practices, and rapid digitalisation—while leaving room for deeper differentiation based on firm-specific resources.

The article argues that contemporary business strategy should be explicitly “cycle-savvy”: in expansions, firms should accumulate buffers and invest in learning; in slowdowns, they should prioritise sensing and scenario planning; in recessions, they should protect core capabilities and reconfigure value propositions; and in recoveries, they should scale proven crisis innovations and institutionalise resilience. The conclusion outlines implications for managers and identifies research gaps at the intersection of macroeconomic analysis, field theory, and institutional perspectives.

Keywords: macroeconomic cycles; business strategy; crisis management; Bourdieu; world-systems theory; institutional isomorphism; strategic adaptation

1. Introduction

Managers are increasingly aware that they do not operate in a stable macroeconomic environment. Over the last two decades, firms in many sectors have experienced a sequence of disruptions: the global financial crisis, the eurozone debt crisis, commodity price swings, the COVID-19 pandemic, a period of unusually low interest rates followed by sharp tightening, new inflationary pressures, and persistent geopolitical tensions. For many organisations, these developments have turned what were once considered “exceptional shocks” into a recurring feature of business life.

Macroeconomic cycles are usually defined as recurrent but irregular fluctuations in aggregate economic activity. Classical business cycle analysis focuses on changes in output, employment, consumption, and investment. Contemporary research adds financial variables—credit spreads, asset prices, and leverage—to capture the interaction between real and financial cycles. For firms, these abstract indicators translate into very concrete conditions: fluctuating demand, changing access to finance, shifting exchange rates, and varying labour market tightness. Investment decisions, pricing strategies, internationalisation moves, and innovation projects are all affected by where the economy sits in the cycle.

Yet firms do not respond to macroeconomic cycles in the same way. Even within the same industry and country, some businesses suffer large losses in a downturn while others manage to stabilise revenues or even gain market share. Traditional strategy research explains these differences with concepts such as resources, capabilities, and competitive positioning. These remain important, but they do not fully capture how macroeconomic pressures are filtered through social structures, institutional expectations, and the global hierarchy of economies.

This article addresses the following central question:

How do firms adapt their strategies across different phases of macroeconomic cycles, and how can sociological and institutional theories help explain variation in these responses?

To answer this, the article brings together three perspectives that are rarely combined in the same analysis of business strategy:

Bourdieu’s theory of capital and fields, which emphasises how economic, social, cultural, and symbolic capital shape an organisation’s position and room for manoeuvre.
World-systems theory, which treats the global economy as a stratified system of core, semi-peripheral, and peripheral regions, each with different exposure to cycles and different capacities for response.
Institutional isomorphism, which explains why organisations tend to imitate one another under uncertainty and how regulatory, normative, and mimetic pressures shape strategic choices.

These perspectives help move beyond a narrow reading of cycles as purely economic phenomena. They show that macroeconomic phases not only affect firm revenues and costs; they also reconfigure fields of competition, redistribute power and legitimacy, and open or close different strategic options depending on a firm’s capital profile and global position.

The remainder of the article is structured as follows. Section 2 presents the theoretical background on macroeconomic cycles and the three sociological and institutional lenses. Section 3 explains the qualitative integrative review method. Section 4 develops an analysis of strategic adaptation across the four phases of the cycle—expansion, slowdown, recession, and recovery—with concrete illustrations from sectors such as tourism, manufacturing, and digital services. Section 5 summarises the main findings and discusses their implications. Section 6 concludes with reflections on “cycle-savvy” strategy and directions for future research.

2. Background: Theoretical Perspectives on Cycles and Strategy

2.1 Macroeconomic cycles as the outer environment of strategy

Macroeconomic cycles are often visualised as waves: expansions give way to slowdowns, recessions, and recoveries, though the timing and amplitude of each phase vary across episodes and countries. Traditional descriptions emphasise turning points—peaks and troughs in aggregate output. More recent work distinguishes between business cycles in the real economy and financial cycles driven by credit conditions and asset prices. When credit booms reinforce expansions and credit crunches deepen recessions, firms experience more volatile environments.

From the firm’s perspective, each phase of the cycle has characteristic features:

Expansion: rising sales, easier access to credit, stronger labour demand. Customers are optimistic, and firms can pursue growth strategies, launch new products, and enter new markets.
Slowdown: growth decelerates, inventories accumulate, financial markets become more cautious. Managers face mixed signals and must decide whether to interpret them as temporary noise or as the beginning of a deeper downturn.
Recession: output and employment fall, credit tightens, uncertainty spikes. Demand becomes more volatile and price-sensitive; some customers default or disappear.
Recovery: growth resumes, often unevenly across sectors; credit conditions stabilise; confidence gradually returns. Firms must decide how much to “return to normal” and how much to keep new practices adopted in the crisis.

Strategy research has increasingly recognised that these phases shape the opportunity set for firms. For example, empirical studies show that pre-crisis investments in digital infrastructure helped firms pivot more effectively to remote work and online channels during the COVID-19 recession. Firms that had diversified their markets and suppliers before the crisis were less exposed to country-specific lockdowns or trade disruptions. At the same time, excessive expansion and leverage in periods of low interest rates made some firms vulnerable when financing costs rose.

However, macroeconomic indicators alone do not determine behaviour. Two firms facing the same fall in demand may make very different choices: one may cut investment, freeze hiring, and reduce marketing; another may selectively invest in innovation, renegotiate contracts rather than terminate them, and communicate openly with stakeholders to preserve trust. To understand these differences, we turn to sociological and institutional perspectives.

2.2 Bourdieu: capital, field, and habitus under cyclical pressure

Pierre Bourdieu’s work provides a rich vocabulary for analysing organisational behaviour in structured environments. Three concepts are particularly relevant: capital, field, and habitus.

Capital refers to resources that can be accumulated and converted. Bourdieu distinguishes economic (money, assets), cultural (knowledge, skills, credentials), social (networks, connections), and symbolic (recognition, prestige) capital. These forms interact and can be transformed into one another.
Field is a structured space of positions in which actors compete for specific stakes. The business field in a given industry includes incumbents, challengers, regulators, professional bodies, and other stakeholders.
Habitus is the set of durable dispositions that guide perceptions and actions, shaped by past experiences in the field.

In the context of macroeconomic cycles, these concepts help explain how firms experience and respond to expansions and downturns.

During expansions, firms with strong economic capital can fund growth and experimentation. They may also invest in cultural capital—such as advanced analytics, new product development, and employee training—and build social capital through alliances and community engagement. These investments do not guarantee immediate returns, but they create reserves of capability and legitimacy that are invaluable in future downturns.

When the economy enters slowdown or recession, the field of competition becomes more contested. Margins shrink, customers become more selective, and banks tighten lending standards. Firms draw on different capitals to navigate this environment. Economic capital allows them to absorb losses and avoid damaging measures such as cutting core staff or abandoning key markets. Social capital with banks, suppliers, and public authorities can secure better financing terms or access to support schemes. Cultural and symbolic capital—reputations for quality, reliability, or responsible behaviour—help retain customers when they reduce the number of suppliers they work with.

Capital is also convertible. For example, a strong reputation (symbolic capital) can be converted into more favourable contract terms (economic capital) or into invitations to policy consultations (social capital). Crises often accelerate these conversion processes: stakeholders look for credible partners, and firms with the right mix of capitals can strengthen their position even when overall demand falls. By contrast, firms that relied heavily on a single form of capital (for example, low-cost production without strong relationships or reputation) may find themselves with few options when the environment turns hostile.

Habitus matters as well. Firms that previously survived severe crises may develop dispositions of prudence, early warning, and willingness to experiment with adaptation. Their managers are more likely to read slowdowns as signals of structural change rather than temporary noise. Firms that have only experienced long expansions may have a growth-oriented habitus and be reluctant to adjust, delaying action until their situation becomes critical.

In short, Bourdieu’s framework highlights that macroeconomic cycles interact with structured inequalities in capital and position: not all firms face the same constraints or opportunities, even if headline indicators affect them equally.

2.3 World-systems theory: uneven cycles in a global hierarchy

World-systems theory, associated with Immanuel Wallerstein and subsequent scholars, views the global economy as a stratified system composed of core, semi-peripheral, and peripheral zones. Core economies host high-value activities, advanced technology, strong financial systems, and powerful states. Peripheral economies specialise more in primary commodities or low-wage manufacturing and often depend on external capital and markets. Semi-peripheral economies occupy intermediate positions with a mix of both characteristics.

Macroeconomic cycles operate across this hierarchy in uneven ways. A downturn in core economies can reduce demand for raw materials, tourism services, and manufactured exports from peripheral regions. It can also trigger capital flight, exchange-rate volatility, and higher borrowing costs for governments and firms in those regions. Conversely, strong expansions in core economies may draw resources and talent away from peripheral countries or increase their vulnerability to commodity price swings.

For business strategy, this means that the same global cycle is experienced very differently depending on a firm’s location and international footprint:

A tourism operator in a peripheral island economy may see demand collapse almost overnight when recessions hit major origin markets.
A manufacturing firm in a semi-peripheral country may find export orders falling while imported inputs become more expensive due to currency depreciation.
A multinational headquartered in a core economy can reallocate production, financing, and marketing efforts across countries to smooth the impact of local downturns.

World-systems theory also draws attention to the role of global value chains. Firms inserted into these chains may be subject to pressure from lead firms in core economies, which can quickly shift orders or impose new contractual terms when the cycle turns. Local suppliers with limited bargaining power may be forced to absorb much of the shock.

At the same time, global cycles can open spaces for strategic upgrading. For instance, during periods of restructuring, some semi-peripheral firms may use crises to renegotiate their position in value chains, invest in higher-value activities, or develop regional markets that are less dependent on any single core economy.

In this sense, world-systems theory suggests that business strategy adaptation cannot be separated from questions of global power and dependency. Macroeconomic cycles redistribute not only income and employment but also opportunities for upgrading and risks of marginalisation.

2.4 Institutional isomorphism: convergence under uncertainty

Institutional theory argues that organisations seek legitimacy as well as efficiency. In environments characterised by uncertainty and complex interdependencies, firms often look to external models to decide what constitutes “appropriate” behaviour. DiMaggio and Powell identified three mechanisms that drive institutional isomorphism—organisations becoming more similar over time:

Coercive isomorphism, arising from laws, regulations, and formal or informal pressures from powerful actors such as states or large customers.
Mimetic isomorphism, occurring when organisations imitate perceived successful peers or role models, especially under uncertainty.
Normative isomorphism, resulting from shared professional norms, educational backgrounds, and industry standards.

Macroeconomic cycles intensify these pressures. During booms, normative and mimetic pressures may encourage firms to adopt certain growth-oriented practices—aggressive leverage, complex financial instruments, or rapid international expansion—because these are seen as modern or necessary to compete. Regulatory regimes may also become more permissive.

In downturns and crises, coercive pressures can shift abruptly. Governments introduce new reporting requirements, risk-management regulations, or eligibility criteria for support programmes. Industry associations publish guidelines for responsible conduct. At the same time, mimetic pressures may push firms toward similar responses: cost-cutting programmes, large-scale layoffs, or adoption of specific digital platforms.

Empirical studies show that crisis periods often generate waves of similar reforms across firms and sectors, not all of which are equally effective. Some organisations adopt sustainability reporting, enterprise risk-management frameworks, or resilience labels primarily to signal conformity to stakeholders, with limited internal change. Others use the same tools as starting points for substantive transformation.

Institutional isomorphism therefore helps explain both the convergence of visible strategic responses to macroeconomic cycles and the variation in their depth and impact. Firms that have strong internal capacities and multi-dimensional capital may use institutional pressures as a resource to advance meaningful change, while others comply only superficially.

2.5 Towards an integrated conceptual framework

Bringing these perspectives together, we can think of macroeconomic cycles as an outer layer of constraint and opportunity that interacts with:

The capital structure and field position of firms (Bourdieu).
Their location in the world-system, which shapes exposure to global shocks and access to counter-cyclical resources.
The institutional pressures that encourage convergence on particular responses.

Strategic adaptation across cycles is therefore multi-layered. It involves economic calculations about investment and cost structures, but also political and symbolic struggles over legitimacy, access to support, and control of key positions in organisational fields. The next sections outline how the present article builds this integrated view through a qualitative review of existing research and then applies it to the four phases of the macroeconomic cycle.

3. Method

This study uses a qualitative integrative literature review to build a conceptual framework for business strategy adaptation across macroeconomic cycles. Unlike a narrow systematic review focused on a single discipline or method, an integrative review allows for the combination of theoretical, empirical, and methodological contributions from diverse fields.

3.1 Scope and selection criteria

The review concentrates on three bodies of literature:

Macroeconomic and business cycle research that analyses the nature of expansions, slowdowns, recessions, and recoveries, including in emerging and developing economies.
Business strategy and organisational adaptation research, particularly studies on crisis management, resilience, and business model adaptation during and after major downturns.
Sociological and institutional theory, especially works drawing on Bourdieu, world-systems theory, and institutional isomorphism in organisational contexts.

To ensure relevance to contemporary practice, particular emphasis is placed on publications from roughly the last five years, especially those that analyse the COVID-19 pandemic, its aftermath, and recent shifts in inflation and financial conditions. Classic theoretical works from earlier decades are included where they provide foundational concepts.

3.2 Search and identification

Sources were identified through academic databases and publisher catalogues using combinations of keywords such as “business cycles and firm strategy”, “crisis management and business model adaptation”, “COVID-19 and organisational resilience”, “Bourdieu capital and organisations”, “world-systems and global business”, and “institutional isomorphism crisis”. Reference lists of key articles were also used to locate additional works.

The selection focused on:

Peer-reviewed journal articles in management, economics, sociology, and related fields.
Scholarly books and book chapters presenting relevant theories.
Empirical studies that provide concrete evidence on how firms adapted during recent crises, particularly in tourism, hospitality, manufacturing, and digital services.

Policy reports and working papers were consulted to contextualise macroeconomic developments but are not central in the reference list, which prioritises books and journal articles.

3.3 Analytical procedure

The analytical process involved three stages:

Coding for macroeconomic phase and sector: Each study was examined to identify which phase(s) of the cycle it addressed (for example, crisis response, post-crisis recovery, pre-crisis preparation) and in which sector or country context.
Coding for strategic response: Strategic responses were grouped into broad categories such as cost management, innovation and digitalisation, diversification, stakeholder management, and organisational learning.
Coding for theoretical lens: The theoretical assumptions used in each study were noted, including whether they drew explicitly or implicitly on resource-based views, behavioural theories, institutional perspectives, or critical sociology.

Comparative reading then allowed for the identification of recurring patterns: types of strategies associated with certain phases, varieties of response across sectors and regions, and the role of different forms of capital and institutional pressures.

The aim is not to produce statistical generalisations, but rather to synthesise conceptual insights and develop a structured narrative about how firms adapt to cycles under different structural conditions. This framework is intended to guide both managerial reflection and future empirical research.

4. Analysis: Strategic Adaptation Across the Macroeconomic Cycle

4.1 Expansion: growth with buffers rather than growth at any cost

In expansions, many firms enjoy increasing sales, easier access to credit, and positive customer sentiment. It is tempting to assume that demand will continue to grow and that taking on additional debt or long-term commitments is safe. Empirical studies, however, show that firms which use expansions only to maximise short-term growth often find themselves over-leveraged and inflexible when the cycle turns.

From a Bourdieusian viewpoint, expansions are moments when firms can accumulate and convert different forms of capital at relatively low cost. Profits provide economic capital that can be retained as liquidity buffers rather than fully distributed. Part of this capital can be transformed into cultural capital—through investment in R&D, new product development, analytics capabilities, and training—and into social capital, by building deeper relationships with suppliers, customers, local communities, and regulators. These investments may be less visible to financial markets than aggressive expansion, but they increase the firm’s ability to adjust quickly later.

In a world-systems perspective, expansions in core economies often stimulate cross-border investment and tourism, opening opportunities for firms in semi-peripheral and peripheral regions. Local firms may expand capacity, enter export markets, or partner with international brands. However, if they become highly dependent on a single origin market or commodity, they may be severely exposed when that market slows down. Expansion strategies that diversify both markets and supply sources, even if they yield slightly lower short-term returns, provide better protection against future downturns.

Institutional dynamics in expansions are characterised by strong normative and mimetic pressures to adopt prevailing “best practices”. In some periods, these may include sophisticated financial engineering, rapid internationalisation, or ambitious sustainability branding. The danger is that firms adopt these practices uncritically, driven by the desire to appear modern or legitimate rather than by careful analysis of their own capacities and risk profile.

A cycle-savvy expansion strategy therefore includes:

Maintaining conservative leverage and significant liquidity even when borrowing is cheap.
Systematically investing in human capital, organisational learning, and digital infrastructure.
Building redundancy and flexibility into supply chains instead of single-sourcing from the cheapest supplier.
Diversifying across regions and segments to reduce dependence on any single macroeconomic environment.

4.2 Slowdown: interpreting signals and making reversible moves

Slowdowns are ambiguous. Growth slows, some indicators deteriorate, and financial markets become volatile, but the economy may not yet meet formal criteria for recession. Managers face the difficult task of distinguishing between a temporary pause and a structural shift.

From the perspective of habitus, firms with prior crisis experience may become more cautious earlier, while those socialised in long expansions may discount warning signs. The internal narratives that managers use—whether they see a slowdown as a normal part of the cycle or as an unusual disturbance—shape their responses.

Strategic actions in slowdowns often include:

Postponing large irreversible investments such as major acquisitions or new plants.
Tightening credit policies and scrutinising customer risk.
Reviewing pricing strategies and product portfolios to identify vulnerable lines.
Increasing the frequency of scenario planning and monitoring of leading indicators.

At the same time, firms can use slowdowns as laboratories for experimentation. Because growth is slower, the opportunity cost of testing new processes or business models is reduced. For example, a tourism firm may trial flexible booking options or hybrid physical-digital experiences; a manufacturer may pilot predictive maintenance technologies to reduce downtime; a digital platform may experiment with new subscription tiers.

World-systems theory suggests that slowdowns in core economies are often felt more acutely in peripheral ones, even before official recessions are declared in the core. Export-oriented firms in these regions may see orders decline while currency volatility increases. Their strategic room for manoeuvre is narrower, but they can still pursue regional diversification, renegotiation of contracts, and selective cost adjustments that preserve core capabilities.

Institutionally, slowdowns tend to strengthen mimetic behaviour. When uncertainty rises and future conditions are unclear, firms look to “reference organisations”—industry leaders, large competitors, or influential multinationals—to infer what should be done. If these reference firms begin cost-cutting or investments in specific technologies, others may follow. This imitation is not always harmful, but it can lead to herd behaviour and under-investment in distinct capabilities.

In short, the key strategic challenge in slowdowns is to maintain flexibility: taking steps that improve resilience without locking the firm into a permanently defensive posture.

4.3 Recession: protecting the core and reconfiguring value

Recessions are marked by declines in output and employment, tighter credit conditions, and rising uncertainty. Many firms experience revenue drops that are too large to absorb through minor adjustments. They must decide where to cut, what to protect, and whether to reposition their offerings.

Economic logic suggests cost cutting, and indeed many firms reduce discretionary spending, freeze hiring, or restructure operations. But empirical research on crisis responses shows that firms which focus exclusively on cost reduction—especially through across-the-board cuts—often damage their long-term competitiveness. By contrast, firms that combine defensive and offensive strategies—reducing costs while continuing to invest selectively in innovation, customer relationships, or strategic capabilities—tend to emerge stronger.

Bourdieu’s notion of capital conversion is central here. Firms with large economic capital can choose to run losses for a period in order to retain core staff, maintain R&D investments, or honour commitments to key partners. This decision effectively converts accumulated economic capital into symbolic capital (trust and loyalty) and longer-term cultural capital (capabilities and knowledge). Firms with strong social capital may be able to negotiate more favourable terms with banks, landlords, or suppliers, redistributing some of the burden of the recession.

In sectors such as tourism and hospitality, the COVID-19 recession illustrated these dynamics vividly. Some hotels and tour operators closed entirely or shed most of their workforce. Others rapidly reconfigured their offerings—targeting domestic rather than international visitors, using digital platforms to maintain relationships, or repurposing facilities for alternative uses. Similar patterns appeared in manufacturing and services, where firms that could shift to remote work, adjust product lines, or integrate into new value chains fared better than those constrained by rigid structures.

World-systems theory again highlights the unevenness of options. In peripheral economies, recessions triggered by shocks in the core can quickly become financial crises, with sharp currency depreciation and rising interest rates. Local firms may have little access to long-term credit in their own currency and face higher import costs at the moment when revenues fall. Some resort to informal networks and family capital, illustrating the importance of social capital in the absence of institutional support. Others seek alliances with core-based multinationals, exchanging autonomy for survival.

Institutionally, recessions generate strong coercive pressures. Governments may introduce support programmes with conditions attached, such as employment guarantees or reporting requirements. Regulators may tighten risk-management and disclosure rules. At the same time, mimetic pressures lead many firms to adopt similar cost-cutting measures and crisis communication templates. Studies of organisational behaviour during crises show that reference groups can shift: instead of imitating global leaders, firms may look to peers in their own region or sector whose survival strategies appear credible.

Strategically, the recession phase is about protecting the core while reshaping the periphery:

Identifying the most critical capabilities, relationships, and assets that must be preserved even at high short-term cost.
Discontinuing products, markets, or activities that no longer align with the firm’s comparative advantages.
Exploring new value propositions relevant to changed customer needs, such as affordability, safety, reliability, or flexibility.
Communicating transparently with employees, customers, and communities to preserve symbolic capital and maintain the possibility of a trust-based recovery.

4.4 Recovery: consolidating learning and scaling innovation

Recovery phases bring relief but also new strategic dilemmas. As demand returns and credit conditions improve, firms must decide which crisis-era innovations to maintain, which temporary measures to reverse, and how quickly to expand again. The danger is a simple return to pre-crisis routines, ignoring the lessons that could make the organisation more resilient to future cycles.

Bourdieu’s notion of field restructuring is helpful here. Recessions reorder positions in the competitive field: some incumbents weaken or disappear, while new entrants or previously marginal players gain ground. In recovery, firms seek to stabilise their new positions and convert crisis-generated symbolic capital—being perceived as reliable, innovative, or supportive of stakeholders—into durable advantages. This may involve formalising new brands, strengthening partnerships, or codifying new practices.

World-systems theory suggests that recoveries can be asynchronous across the global economy. Core economies may rebound faster due to strong fiscal and monetary support, while some peripheral economies suffer “lost years” of slow growth and high debt. Multinationals can again reallocate resources across regions, while local firms may experience delayed or fragile improvements. Strategy in recovery must therefore be geographically differentiated: expanding aggressively in some markets, remaining cautious in others, and using the renewed cash flow to reduce vulnerabilities exposed by the crisis.

Institutionally, recoveries are periods when new norms can be entrenched. Post-crisis regulatory reforms, changes in investor expectations, and evolving professional standards may durable reshape what is considered legitimate business behaviour. For example, greater attention to risk management, digital resilience, or environmental and social responsibility can become part of the baseline expectations for firms. Those that invested seriously in these areas during the downturn may find themselves ahead of competitors.

For strategy, the recovery phase is an opportunity to:

Scale successful crisis innovations—for example, hybrid service models, digital platforms, or flexible work arrangements—into stable business models.
Rebuild and renew the workforce, addressing burnout and investing in future skills.
Rebalance the portfolio of markets, products, and partnerships in light of what the crisis revealed about resilience and vulnerability.
Institutionalise resilience practices through written policies, training, and integration into budgeting and planning processes.

4.5 Sectoral illustrations: tourism, manufacturing, and digital platforms

To make the above analysis more concrete, it is helpful to briefly consider three sectors that have been strongly affected by recent cycles: tourism, manufacturing, and digital platforms.

Tourism and hospitality are highly sensitive to macroeconomic conditions and shocks to mobility. In expansions, international travel grows rapidly, encouraging investment in new capacity. In downturns, especially those involving health or security concerns, demand can collapse. Firms that built strong brands (symbolic capital), alliances with local communities and governments (social capital), and digital marketing capabilities (cultural capital) before the crisis were better able to pivot toward domestic markets, new experiences, or alternative uses of facilities.
Manufacturing firms, particularly in emerging economies, are exposed to fluctuations in global demand, exchange rates, and input prices. Expansions may bring export booms, but also pressure to upgrade technology and comply with new standards. During recessions, firms that had developed lean but flexible operations, diversified their customer base, and invested in process innovation could adjust output and product mix more effectively. Their position in global value chains—whether they were low-margin suppliers or higher-value partners—also shaped their options.
Digital platforms and technology firms experienced a peculiar pattern in the recent cycle: some benefited from surging demand during lockdowns, while others suffered from reduced advertising or investment spending. Firms that used the boom period only to maximise user numbers without building sustainable revenue models faced difficulties when conditions normalised. Those that invested in trust, data governance, and reliable infrastructure were better positioned to adapt to regulatory changes and shifting user expectations.

These examples underline the article’s core argument: macroeconomic cycles are filtered through field positions, capital structures, world-system roles, and institutional pressures, producing distinct adaptation paths even within the same sector.

5. Findings and Discussion

The integrative review and phase-by-phase analysis support several overarching findings about macroeconomic cycles and business strategy adaptation.

5.1 Cycles should be treated as normal, not exceptional

First, firms that explicitly treat macroeconomic cycles as normal features of the environment—rather than rare or unpredictable shocks—develop more consistent approaches to resilience. They invest systematically in buffers and learning during expansions, maintain flexibility during slowdowns, protect core capabilities during recessions, and institutionalise improvements during recoveries. This approach aligns with recent empirical evidence showing that pre-crisis investments in digital infrastructure, capabilities, and diversified partnerships strongly influenced how firms navigated the COVID-19 downturn and early recovery.

5.2 Multi-dimensional capital shapes adaptation capacity

Second, Bourdieu’s concept of multi-dimensional capital offers a powerful lens for understanding why some firms adapt more effectively than others. Economic capital is critical, but social, cultural, and symbolic capital are equally important:

Social capital with banks, regulators, and business partners can translate into better access to financing, information, and collaborative solutions.
Cultural capital in the form of skills, routines, and organisational knowledge enables faster reconfiguration of products, processes, and channels.
Symbolic capital—reputation, perceived responsibility, and credibility—encourages customers, employees, and communities to continue supporting the firm even under stress.

Crises reveal the hidden value of these non-financial capitals. Firms with narrow capital profiles struggle to respond beyond basic cost cutting, while those with richer portfolios can pursue more creative and sustainable strategies.

5.3 World-system position conditions both exposure and opportunity

Third, world-systems theory highlights that the space of possible strategies is not the same everywhere. Firms in core economies typically have better access to counter-cyclical policies, deep capital markets, and advanced institutional support. Firms in peripheral economies may face capital flight, high interest rates, and weaker public safety nets during downturns, even when they are not responsible for the original shock.

However, this same hierarchy can create windows for upgrading. During global restructurings, some semi-peripheral firms have moved into higher-value activities, such as specialised manufacturing or digital services, by using crises to renegotiate their place in value chains. Success in such moves again depends on their capital structures and their ability to build alliances and credibility across borders.

5.4 Institutional isomorphism explains waves of similar responses

Fourth, institutional isomorphism offers insight into why many firms adopt similar strategies during cycles—sometimes with positive, sometimes with negative consequences. Coercive pressures from regulators and powerful customers can lead to meaningful improvements in transparency and risk management. Normative pressures from professions and industry bodies can spread useful practices.

But mimetic behaviour under uncertainty can also produce herding, where organisations rapidly copy each other’s strategies—such as aggressive leverage in booms or across-the-board layoffs in recessions—without assessing their suitability. In some cases, firms adopt high-status labels or reporting frameworks mainly to appear legitimate, with limited internal change. The challenge for managers is to differentiate between substantive and symbolic conformity.

5.5 Strategic levers differ by phase but must be coordinated over time

Finally, the analysis confirms that the most effective strategic levers differ across phases:

In expansion, the priority is to capture opportunities while building buffers and capabilities.
In slowdown, the focus is on careful interpretation of signals and reversible moves.
In recession, the central task is to protect the core and reconfigure value.
In recovery, the key challenge is to consolidate learning and scale successful innovations.

However, these levers must be understood as parts of a single intertemporal strategy, not as isolated responses. Decisions taken in one phase condition what is possible in the next. Under-investment in resilience during booms limits options in downturns; failure to learn from crises undermines the benefits of recovery.

6. Conclusion and Directions for Future Research

This article has argued that understanding how firms adapt to macroeconomic cycles requires integrating economic, sociological, and institutional perspectives. Macroeconomic phases structure the broad environment, but actual strategic outcomes depend on firms’ capital profiles, their positions in global hierarchies, and the institutional models they adopt or resist.

For managers, several implications follow:

Make cycles explicit in strategy. Assumptions about future macroeconomic conditions should be a visible part of strategic plans, with explicit scenarios for different phases.
Build multi-dimensional capital. Liquidity and low leverage are vital, but so are strong relationships, capabilities, and reputations. Investments in social, cultural, and symbolic capital pay off especially in downturns.
Think globally but asymmetrically. Firms operating across borders should recognise that macroeconomic phases may differ across regions. Strategies should be tailored to local conditions rather than assuming a single global cycle.
Use institutional pressures constructively. Regulatory and normative expectations can be used as frameworks for meaningful improvement instead of being treated as mere compliance burdens. At the same time, managers should critically evaluate mimetic pressures before imitating others.
Treat crises as learning opportunities. Every downturn reveals strengths and weaknesses in the organisation’s model. Recovery phases are moments to embed improvements into structures and routines rather than simply returning to old habits.

For researchers, the integrated framework developed here suggests several avenues for future work:

Comparative studies of firms in different world-system positions, examining how capital structures and institutional contexts shape adaptation paths across multiple cycles.
Longitudinal research that tracks how organisations accumulate and convert different forms of capital over time, relating these trajectories to macroeconomic indicators.
Detailed analyses of institutional isomorphism in crisis contexts, exploring when convergence promotes resilience and when it contributes to systemic fragility.
Sector-specific studies in tourism, manufacturing, and digital industries, linking concrete strategic choices to broader macroeconomic patterns and field dynamics.

In an era of frequent shocks and structural transformations—including digitalisation, demographic change, and the transition to low-carbon economies—macroeconomic cycles are unlikely to disappear. Instead, they will continue to interact with these long-term trends in complex ways. Firms that cultivate a cycle-savvy, field-aware, and institutionally informed strategic mindset will be better equipped not only to survive volatility but also to use it as a source of renewal and competitive advantage.

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References

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