When confronted with difficulties in life, certain people crack whereas some swing back (Ma et al., 2018). According to Bhamra et al. (2011), what is it that makes all the difference between people, societies, and countries surviving, adapting, and even prospering in the face of the most unforeseen life challenges? The solution is primarily based on resiliency qualities. Holling (1973, p. 17) invented the term “resilience” in his landmark book “Resilience and stability of ecological systems,” in which he claimed that resilience was a measure of the ability of a system to absorb changes while still surviving, and it determined how long it could last.

Resilience, as a holistic perspective, has been studied in a variety of areas. Walker et al. (2002) researched on ecological systems, Powley (2009) investigated positive psychology, Sheffi and Rice (2005) examined organizational management, and Hollnagel et al. (2006) analyzed engineering. According to Linnenluecke (2017), each field has its own definition of resilience; thus, operationalization and conceptualization differed among research. Werner and Smith (1977), for example, believed that resilience was critical for children’s development and growth, and therefore, several early studies focused on the individual resilience conceptualization for child development and growth. Management scholars and practitioners have recently been quite interested in conceptualizing and operationalizing organizational resilience (such as, Coutu, 2002; Weick et al., 2008; Oeij et al., 2017; Prayag et al., 2020) to investigate how organizations deal with difficulties and create new abilities and skills.

However, Burnard and Bhamra (2011) referred to organizational resilience as “the ability of an organization to generate awareness and reduce vulnerability to risky environments, to reinvent business strategies in the face of change, to continuously be aware of and adjust to changes, and to proactively react before the need for a change becomes obvious.” The concept of survival and recovery from adversity is entrenched in this definition, and it is the ability of an organization to adapt that is critical to its long-term viability (Salehi and Veitch, 2020). Firms should not just respond and adapt to various disruptions, but should also initiate, restore, and rebuild the structure of an organization and its affiliations to ensure that they can thrive in the adversity (Jiang et al., 2019). The literature recognizes two major components of organizational resilience: adaptive and planned (Filimonau et al., 2020; Prayag et al., 2020). Firm continuity and planning of risk management are examples of planned resilience, since they make use of current or established planning and resources. These are mostly activities that occur before a disaster. According to Chowdhury et al. (2019), adaptive resilience arises throughout the pandemic phase, as businesses create new skills by flexibly answering unexpected conditions. Adaptive resilience is built on risk knowledge, flexibility, and change preparedness of an organization (McCarthy et al., 2017).

According to Duchek (2020), resilience occurs at various levels within an organization, and these stages interrelate to define the resilience of the organization. The competence of an organization and procedures that are involved in resilience, according to Lengnick-Hall et al. (2011), are formed from a mixture of personal level characteristics such as, understanding, abilities, and skills. Thus, owners of small firms with high level of psychological capital (i.e., hope, optimism, resilience, and self-efficacy) are more probable to encourage the resilience of their firms.

In organizational behavior theory, psychological capital has a long research history (Wu and Chen, 2018). According to Luthans et al. (2007), psychological capital has been advocated as a positive, distinctive, and long-lasting method that goes beyond typical human resource management and organizational behavior to recognize and develop the full potential of individuals. According to research in these fields (such as Baron et al., 2016; Ozturk and Karatepe, 2019; Sihag, 2020), psychological capital has been demonstrated to improve employee individual performance, as well as minimize employee absenteeism, stress, and attrition. Firm commitment and job satisfaction are positively associated with psychological capital, according to current research on the impact of psychological capital on individual performance, attitudes, and behaviors at work (Kang and Busser, 2018). Furthermore, according to Saud et al. (2021), psychological capital has a significant association with employee innovative and optimistic behaviors while dipping down negative attitudes of employees like anxiety. It can be considered that psychological capital can minimize employee anxiety and stress, and maximize employee productivity.

Psychological capital has been related to a variety of organizational behaviors and outcomes in the tourism literature. For instance, according to Schuckert et al. (2018), leadership styles in the hotel sector have a substantial influence on the psychological capital of an individual at work. Furthermore, psychological capital can have a substantial influence on the perceptions by hotel employees of their work-life quality and minimize the likelihood of turnover (Huang et al., 2020). Paek et al. (2015) emphasized that psychological capital improves job satisfaction and firm commitment, and lowers down the rate of stress. Positive innovative work behaviors can be influenced by psychological capital (Wang et al., 2021). On the other hand, these studies have not been undertaken in the context of small businesses in the tourism sector during the pandemic.

This study employs the definition by McFarlane and Norris (2006) of disaster, who defined it as “a potentially traumatic occurrence that is collectively experienced, has an immediate beginning, and is time-limited; disasters may be attributed to natural, technological, or human causes.” People who have been affected by the COVID-19 pandemic may feel extensive and long-term stress; thus, those who are affected by disasters must devise strategies for dealing with it (Hansel et al., 2020). Psychological capital, according to Prayag et al. (2020), plays a crucial role in the responses of people in stressful situations and can help to alleviate the stress and anxiety caused by disasters. It can also help people to increase their ability to take preventative measures (Pathak and Joshi, 2020). On the other hand, the recent studies concentrate on individual recovery in the event of a crisis rather than firm recovery through the role of an entrepreneur, which is a major gap in the literature on crisis restoration. When pressures are seen as demanding by an individual in the workplace, they can lead to positive organizational outcomes. However, negative organizational outcomes may grow if they are seen as dangerous (Prayag et al., 2020). The positive psychological capital of individuals can play a crucial role in their recovery from crises (Milosevic et al., 2017).

The Transaction Model of Coping developed by Lazarus and Folkman (1984) describes the “process of a potentially stressful person-environment transaction.” Person and environment influencing variables, coping, cognitive evaluation, stress, and outcomes were all incorporated in their model. Moreover, according to Lazarus and Folkman (1987), cognitive evaluation and coping are critical determinants of traumatic person-environment interactions and their short and long-term effects. The transactional theory given by Lazarus and Folkman (1987) states that stress is a connection between the environmental expectations of a person and the availability of the resources to respond.

According to Lazarus and Folkman (1984), coping is a basic strategy to managing stress, and it refers to continuously changing cognitive and behavioral efforts to regulate a problematic person-environment connection. Furthermore, Lazarus and Folkman (1984) and, subsequently, Taylor and Schneider (1989) identified two categories of coping strategies: problem- and emotion-focused strategies. Lazarus and Folkman (1984) described both strategies as “problem-focused coping attempts to change the cause of stress or address issues by direct actions, while emotion-focused coping aims to avoid, distance, and selective attention to lessen or manage the emotional pain associated with stressors.” According to Folkman and Moskowitz (2004), both methods can be employed as an immediate stress response.

The recent study of Prayag et al. (2020) suggests that emotion-focused coping may be more effective in instances where an individual has less control over stresses. Some argue that determining the coping effectiveness requires examining the context or scenario (Zeidner, 1995). The literature on tourism has focused on coping strategies of tour guides in connection to stress and emotions while guiding, as well as how locals deal with the probable consequences of tourism growth (Min, 2014; Jordan et al., 2015). These studies, however, do not investigate it in the context of a pandemic. For instance, the study of Mason et al. (2010) on flood victims discovered that reasoning, detachment, and avoidance were the most common problem- and emotion-oriented coping strategies. Furthermore, as a result of the Canterbury earthquakes, Prayag and Orchiston (2016) identified that entrepreneurs employed coping strategies through a problem- and emotion-based approach to deal with gloomy tourism locations.

Positive psychology is the foundation of psychological capital and focuses on how people may maximize their abilities and skills by concentrating on the optimistic characteristics of their environments (Pathak and Joshi, 2020). Individuals who have accumulated psychological capital, according to Luthans (2002), are more adaptable to changes in the external as well as internal surroundings of an organization. Bandura (1997) defined self-efficacy as the belief of an individual in his/her capacity to do a task effectively and productively. The capability altitudes of individuals improve when they have faith in their own skills to complete a task. The ability of an individual to achieve desired goals and self-worth are just few of the components that lead to the higher level of reliance of an organization during a difficult environment (Prayag et al., 2020). Thus, individuals with greater level of self-efficacy will be more effective in terms of the resilience of an organization. Accordingly, this study proposes the following hypothesis:

Hope, according to Snyder et al. (1991), is “a positive motivational state based on an interactively generated feeling of effective agency (goal-directed energy) and paths (planning to fulfill objectives).” Hope is having clear goals in mind and having a strategy in place to deal with any setbacks along the way to reach those goals (Pathak and Joshi, 2020). Hope can help individuals to manage their emotional discomfort while also motivating them to overcome problems (Prayag et al., 2020). Hope entails assessing the chances of achieving the objectives of an individual in the future. Therefore, hope is a way to attain organizational resilience (Othman and Nasurdin, 2011). The capability to transform goals and strive toward achieving goals in the face of hardship improves organizational resilience (Searle and Barbuto, 2011). Thus, this study proposes the following hypothesis:

Extremera et al. (2009) discovered a relationship between optimism and resilience, which is defined as a general assumption of positive aspects that will occur in the future. Liu et al. (2012) explain that disasters provide a variety of obstacles for the tourism industry, and that managers must remain optimistic and minimize any changes from the strategy to achieve the intended objectives. Optimism theory, according to Scheier and Carver (1985), indicates that expectations about good outcomes lead to targeted action to attain the main objective. Furthermore, according to Luthans (2002), as a component of psychological capital, optimism is defined as having optimistic expectations for the present and the future. Higher goal orientation is associated with higher perceived success expectations (Carver et al., 2010; Pathak and Joshi, 2020). When confronted with a problem, optimistic individuals are better at regulating their negative emotions and are more adaptable and receptive to new experiences (Prayag et al., 2020). In the existing situation, once small tourism organizations are on the edge of shutting down their businesses, optimism might inspire owners/managers to consider new approaches to overcome a difficulty, enhancing their overall success. Thus, this study proposes the following hypothesis:

Luthans et al. (2007) explained that resilience is a combination of assets and resources inside an individual that helps them to gain confidence and see the positive aspect of a challenge. In the small tourism sector facing a variety of internal and external difficulties, such as changes in technologies and preferences of customer, climate change and natural disasters, and substantial arrangements during or after crises, owners/managers of hotels must have the ability to rebound in the occasion of any crisis (Pathak and Joshi, 2020; Prayag et al., 2020). According to Beasley et al. (2003), the capability to overcome difficulties during crisis and succeed in doing so gives an individual a sense of accomplishment that will create a sustainable impact on their business. Furthermore, the empirical study by Prayag et al. (2020) suggests that resilience correlates to better organizational resilience during times of crisis. Therefore, this study recommends the following hypothesis:

Psychological capital is concerned with how entrepreneurs may take advantage of their assets by focusing on the optimistic parts of their environment (Sarwar et al., 2017; Baluku et al., 2018). Entrepreneurs that have a high level of psychological capital are more adaptable to changes in the external environment (Tang, 2020). The study of Pathak and Joshi (2020) investigates the impact of psychological capital of hotel owners on organizational resilience during the COVID-19 pandemic. The study gathered data from 103 respondents in Indian urban cities, all of whom were small business owners of hotels, in order to better comprehend these interactions. The findings demonstrate that the psychological capital of small hotel owners can promote hope, self-efficiency, and optimism in order to realize circumstances and planning for future uncertainties. It also emphasizes how the association between psychological capital and organizational resilience has a substantial impact on the recovery process. Therefore, the following hypothesis is developed in this study:

The role of mediating variables in the relationship between stressful situations and adaptive outcomes has received a lot of attention lately (Boswell et al., 2004). In previous research (such as Folkman et al., 1986; Folkman and Lazarus, 1988; Parkes, 1994), coping has been shown to be a key mediating element in the person-environment connection. According to Folkman and Lazarus (1980), there are two forms of coping: “emotion-focused which aims to control or reduce the associated emotional discomfort, and problem-focused, which aims to change the problematic person-environment relationship.”

Anshel (2000) explains that coping has been defined in psychology as realistic and adaptable ideas, emotions, and relationships between a person and their environment in order to solve issues and handle stressful situations. Lazarus and Folkman (1984) established that coping encompasses “cognitive and behavioral efforts to handle particular external and internal pressures that are assessed as straining or surpassing a person’s resources.” The levels of coping of individuals are determined by the dynamics of change in their relationships with their surroundings (Drnovsek et al., 2010).

Psychological capital carries hope that not only allows entrepreneurs to cope with the emotional distress that comes with their circumstances, but it also motivates them to address the difficulties (Castro and Zermeño, 2020). Similarly, optimism is an essential element of psychological capital, since it is related to an emotion-focused coping strategy that allows an individual to reinterpret a circumstance in a more positive way (Liang and Cao, 2021). The third component of psychological capital is self-efficacy; it might be considered a problem-focused coping strategy, since it allows business owners to act in reaction to a situation (Prayag et al., 2020). Finally, according to Luthans (2002), the ability of individuals to cope successfully in the face of considerable change is defined as resilience, which encompasses prosocial behavior and issue-solving abilities. As a result, coping strategies, problem and emotion-focused, are involved with resilience.

Prayag et al. (2020) conducted a study to examine how psychological capital (optimism, hope, resilience, and self-efficacy) affects organizational resilience in a crisis. A qualitative research study in Kaikoura, New Zealand, found that participants were able to activate psychological capital to improve organizational resilience by adopting problem-focused and emotion-focused coping techniques. As small tourism firms manage the recovery process after a crisis, this may lead to better awareness of situation modifications in internal as well as external circumstances. Hence, the previous studies found a mediating effect of coping strategies (problem-focused and emotion-focused) between psychological capital and organizational resilience; therefore, this study hypothesized the following hypothesis:

As previously discussed, it is critical to comprehend psychological capital of small tourism firm owners/managers to build organizational resilience during a crisis. Therefore, the first aim of this study is to identify the significant influence of psychological capital on the resilience of tourism SMEs during the COVID-19 pandemic in Malaysia, and the second aim is to assess the mediating impact of coping strategies between psychological capital and the resilience of tourism SMEs during the COVID-19 pandemic in Malaysia. Hence, Figure 1 shows the conceptual model for this study, which conceptualized major components of psychological capital and their impact on organizational resilience. Moreover, the novelty of the study is to introduce the components of coping strategies (problem- and emotion-focused) as mediators to explore its effects between psychological capital and organizational resilience.

The data were collected from 644 owners/managers of small enterprises in the tourism sector of various cities in Malaysia. Set (2013) identified tourism business activities, which was followed by this study. The economic activities of the respondents were: accommodation services; transportation services; art, entertainment and recreation services; food and beverage services; miscellaneous tourism services; travel agency; tour operator; and tourism guide services. Furthermore, gender, age, marital status, education, religion, and income level of the respondents have all been categorized. A demographic analysis was performed based on the items in the questionnaire to establish the backgrounds of the respondents, as shown in Table 1.

Testing for multivariate normality is the most important assumption in structural equation modeling (SEM). SEM assumes continuous variables in the research and produces the best results (Andreassen et al., 2006). Skewness and kurtosis values in the ± 3 range, according to Ghasemi and Zahediasl (2012), may indicate that a variable is distributed normally. In this study, the statistical value of skewness and kurtosis for each construct is determined and reported in Table 2.

According to Tarhini et al. (2016), “internal consistency signifies the extent to which respondents are reliable across the items mentioned in the questionnaire as a measurement scale.” Furthermore, Pallant (2020) explained that Cronbach’s alpha of more than 0.7 is considered as good internal consistency. In this study, Cronbach’s alpha was used to measure the internal consistency for the following variables: self-efficacy (α = 0.884), hope (α = 0.895), optimism (α = 0.843), psychological resilience (α = 0.869), problem-focused (α = 0.858), emotion-focused (α = 0.891), and organizational resilience (α = 0.838). According to Kline (2015), variables that have reliability of more than 0.8 is considered as very good or excellent internal consistency.

Discriminant validity refers to the degree to which one construct differs from another (Cheah et al., 2018). According to Voorhees et al. (2016), the correlation between the two conceptions should be lower than 0.85. In this study, the discriminant validity of all the constructs was evaluated using SPSS statistics version 22.0. The results are presented in Table 3, and show that the correlation among the constructs is less than 0.85.

Confirmatory factor analysis (CFA), the first step of two-stage SEM statistical method, allows a researcher to rectify measurement error during the assessment of multiple variable relationships (Ong and Puteh, 2017). Maximum likelihood valuation is performed to estimate the associations among the variables and their corresponding indicator items. Shek and Yu (2014) identified that in CFA the factor loading of each item should be 0.6 or above to be considered acceptable. According to the findings, the factor loading of items and fit indices are in the acceptable range; summarized CFA results are shown in Table 4.

Following the CFA validation findings, the overall measurement model was assessed. The model that links the latent constructs to their indicators is referred to as the overall measurement model (Kline, 2015). The findings of this study demonstrated that the goodness-of-fit indices for the overall measurement model was well-fitted, such as RMSEA of 0.043 and chi square value of 623.433 with 643 degrees of freedom, GFI = 0.916, AGFI = 0.919, CFI = 0.934, and CMIN/df = 1.546. The overall measurement model is depicted in Figure 2.

The findings of the study show that the composite reliability (CR) values of all the constructs are over 0.7, indicating that the variables are internally consistent. Furthermore, the value of average variance extracted (AVE) for all the variables was found to be greater than 0.5, indicating that the constructs are convergent valid (Fornell and Larcker, 1981).

As described by Fornell and Larcker (1981), “the discriminant validity was determined by comparing the square root of each AVE in the diagonal with the correlation coefficients (off-diagonal) for each construct in the relevant rows and columns.” The statistical results of the average variance extracted (AVE) value in this study is more than 0.6 for all the constructs. Table 5 shows the AVE and CR findings.

The structural model (stage 2) was used to investigate the relationship of psychological capital and organizational resilience. AMOS 21.0 was used to evaluate the data. In contrast to earlier studies (such as Hair et al., 2014; Kline, 2015), the goodness-of-fit indices are tested in this study, as shown in Figure 3. The results were well-fitted, with an RMSEA of 0.037 and a chi square value of 565.886 with 643 degrees of freedom, GFI = 0.915, AGFI = 0.909, CFI = 0.941, and CMIN/df = 1.674.

Table 6 shows the results of direct relationships. The study used a significance level of 1.96 for the z-value and a p-value < 0.05, as recommended by Kline (2015). Hypotheses H1a, H1b, H1c, H1d, H2, H3a, H3b, H4a, and H4b were statistically significant in the evaluation of hypothesized relationship.

Relationships that proposed the mediating influence of problem-focused and emotion-focused coping strategies on psychological capital and organizational resilience were investigated in this study using H5 and H6. The indirect effect of a problem-focused coping strategy was 0.27 (0.61 × 0.45 = 0.27), whereas the direct effect of psychological capital on organizational resilience was 0.24. Similarly, the indirect effect of an emotion-focused coping strategy was 0.28 (0.58 × 0.49 = 0.28), whereas the direct effect was 0.24. The form of mediation used here is partial mediation, because the direct effect remains significant after the mediator enters the model (Awang et al., 2015). As a result, it was discovered that both problem-focused and emotion-focused coping techniques played a role in mediating the relationship.

We implement the bootstrapping method to validate the mediation analysis after confirming direct and indirect effects. According to Awang et al. (2015), the researchers calculated the standardized indirect and direct effects, as well as their significance levels, using a 1,000-bootstrap sample with a bias adjustment of 95%. Hypothesis H5 and H6 were accepted. The statistical findings of the investigation are shown in Table 7.