Building on a multi-case study of four Algerian SMEs, this chapter explores how organizations can navigate intractable crises within volatile and fragile institutional environments. Adopting a hybrid theoretical lens combining inhabited institutionalism and economics proximity, we theorize how SMEs' strategic responses to managing intractable crises are anchored in local micro-interactions. More specifically, our findings posit four proximity-related strategies: passive anchoring, productive anchoring, contribute anchoring, and interactive anchoring. These local strategy choices seem fruitful, probably because they are not extreme and are rather compromises between values, the need for strategic action space, and the importance of State support for the firm in contexts, where the State is still omnipresent in everyday economic life. Our study extends our understanding of crisis management in volatile institutional environments and offers theoretical implications to the inhabited institutional perspective.
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