1 INTRODUCTION

Over the last two decades, flooding has been the most frequently occurring natural disaster, accounting for up to 43% of all recorded natural disaster events in the world, and the proportion of the global population exposed to flooding today is 10 times higher than previous estimates (CRED/UNISDR, 2015; Tellman et al., 2021; UNDRR, 2020). As early century (2030) climate change projections stress that exposure to floods will increase further (Tellman et al., 2021), the organisational resilience capacity to extreme weather events (EWEs), such as floods, has sparked a growth over the past decade in scholarly and managerial attention as an essential aspect of business continuity management (Helgeson et al., 2022; OECD, 2021a, 2021b; Schaper, 2022; WEF, 2021). Supporting evidence for this claim suggests that organisational resilience capacity retains a key role in successful responses to adverse situations, crises and shocks. Small and medium-sized enterprises¹ (SMEs) are more vulnerable to face floods in comparison to their larger counterparts, so they are disproportionately affected by such EWEs (Dlugolecki, 2009). The limited resources at their disposal and the lack of time and skills all conduce to an inadequate preparedness for challenges posed by floods (Sullivan-Taylor & Branicki, 2011). SMEs tend to plan in the short-term, reacting to circumstances as they arise and focussing on their very survival (Smith & Smith, 2007). Likewise, they share less formalised structures and codified policies and they are most usually owner-managed, resulting in a command-and-control management culture (Ates et al., 2013). Such characteristics result in limited opportunities to recover from flooding and quickly turn around their operation from a loss-making to a profit-making one (Ingirige & Wedawatta, 2011; Wedawatta & Ingirige, 2012).

Scholars frame the capacity of business entities to be resilient to an EWE disturbance (such as floods) as the rate of recovery and restoration of organisational performance to pre-disturbance conditions, the amount of disturbance (i.e. threshold level) a business entity can absorb before losing structural and/or functional components that will alter or cease operations, as well as the extent to which the organisation maintains its function (i.e. impact resistance) before performance levels are driven to zero (see Linnenluecke & Griffiths, 2010). Nevertheless, while it seems to be accepted as an essential trait of firms effectively transcending uncertain conditions (e.g. Bhamra et al., 2011; Kantur & İşeri-Say, 2012; Linnenluecke & Griffiths, 2010), research deconstructing the enabling conditions and/or inhibitory factors of SMEs' resilience capacity to natural hazards is still fragmentary, sparse and mostly fuelled by anecdotal evidence or normative assumptions (Kuruppu et al., 2013; Linnenluecke, 2017; McNaughton & Gray, 2017; Verreynne et al., 2018). Table 1 presents an excerpt of relevant studies that attempt to shed light on the resilience capacity of SMEs to extreme weather with a special focus on flooding. Studies such as these offer multiple actionable insights and encapsulate implications for SME management as well as policy-design in achieving an ‘EWE-resilient’ sector. Focusing on the individual level of analysis, that is, the individual enterprise and its endeavours to succeed, the emergent picture from this (relatively new) research strand delineates the specification of variables, conceptual relationships or dynamic boundaries of resilience capacity components in an attempt to provide prescriptions for policy-making as well as business management (Bhamra et al., 2011; Linnenluecke, 2017; Linnenluecke & Griffiths, 2015; Mamouni Limnios et al., 2014; van der Vegt et al., 2015). By examining SMEs that have previous experience with floods, in-depth knowledge can be obtained on the effectiveness of strategies and/or practices employed to reduce the impacts and contribute to the recovery process.

Nevertheless, reflecting on the available literature, much work needs to be done to provide enabling conditions for SMEs to better prepare and successfully overcome such environmental perturbations. While several recent studies have sought to analyse impacts and factors associated with the recovery from floods and other EWEs (Frey et al., 2015; Harries, 2013; JBA Consulting, 2012; Johnson et al., 2005; Joseph et al., 2011; Royal Haskoning DHV, 2012; Twigger-Ross et al., 2014), further empirical studies are required to gain a better understanding of particular measures and actions that help SMEs to robustly address short and long-term flood impacts. Such knowledge, which can also be gained through the application of composite firm-level indicators assessing organisational, behavioural and contextual factors of the resilience capacity level, may serve as a basis for developing sets of actionable guidelines of good practice that can be adjusted to individual needs and adopted by SMEs to strengthen their resilience capacity. This can be achieved in collaboration with critical stakeholders in order to plan and implement agendas for action that can enhance the resilience at a community, local or regional level (UKTI, 2011).

Against this background, this study presents the development of a flood resilience capacity index (FRCI) and its application with Greek SMEs from flood-prone areas. The proposed composite metric pertains to cognitive, behavioural/managerial and contextual factors that influence a SME's ability to shape effective responses to meet flood challenges. Our aim, through the proposed indicator-based assessment, is to offer insights towards an analytical framework that could help standardise such screening tasks with the overarching aim of reducing the vulnerability of SMEs to such weather extremes. This can be achieved by identifying major internal and external parameters that affect SMEs' resilience capacity, which is essential given the intrinsic characteristics of these enterprises and that they tend to be primary sources of vulnerabilities in supply chain networks, generating costly single points of failure.

Understanding the ability of European SMEs to become more resilient to floods is crucial, as they account for 99.8% of all enterprises in the EU, contributing more than 53% of the total value added of the EU business sector while providing more than 65% of private-sector jobs in the EU Member-States. In this respect, SMEs are the backbone of the Greek economy, representing the absolute majority of domestic business activity (99.9%), accounting for 56.7% of total value-added and 83% of overall employment (EC, 2021). According to Eurostat, the majority of Greek firms are micro-enterprises (94.6%), with substantial growth (i.e. >10%) in both SME value-added and employment indicated for 2021 (EC, 2021), making the country's SME sector a unique case in the European Research Area on business resilience research.

The rest of the paper is structured as follows. The next section presents the material and methods. Section 3 presents the findings of the study. The paper concludes with managerial and policy implications and highlights possible avenues for future research.

2 MATERIALS AND METHODS

2.1 Area selection and sample identification

The study areas were selected by drawing on the flood risk maps issued by the Special Secretariat for Water (Ministry of Environment, Energy and Climate Change), the European Severe Weather Database of the European Severe Storms Laboratory and available literature (e.g. Diakakis et al., 2012, 2019; Diakakis, Deligiannakis, Andreadakis, et al., 2020; Kazakis et al., 2015; Kourgia et al., 2022; Kourgialas & Karatzas, 2017; Papagiannaki et al., 2015, 2017; Speis et al., 2019). In this respect, the area selection relied on criteria that directly address the study's objectives: (a) severity of flood impacts; (b) existence of SMEs which have been significantly affected by flooding, and (c) increased concern of local stakeholders regarding the future of their area expressed through their involvement in decision-making processes. Based on these criteria, the three study areas selected are: (i) the Evros river region in Thrace, (ii) the town of Mandra in the West Attica region, and (iii) the area of Kalloni Bay Lesvos Island. We opted for three diverse study areas in terms of previous experience with flooding (as evidenced by available historical data), population density, geographical characteristics and main business activities (Figure 1).

The Evros Prefecture is named after the Evros River, which is the largest river in South East Balkans, running through Bulgaria, Turkey and Greece. Evros, its tributaries and a complex network of artificial irrigation channels provide water to the vast majority of the Evros Prefecture plains (Tsantopoulos et al., 2013), making it a key factor for the regional agricultural activity and boosting the local economy. However, the Evros River has repeatedly caused extensive riverine floods, which affect close-by villages, cultivated farms and agri-business for a considerable length along its main branch (Diakakis et al., 2012). A characteristic example is the extensive flood of the spring of 2006, when more than 200 km² of farmland was flooded. As a result, agriculture, transport and water supply networks were severely damaged, causing the worst negative effect on economic activity over the last 50 years (Markantonis et al., 2013).

The area of Mandra is located in Attica, in Thriassion plain, which is host to extensive socio-economic activities and one of Greece's most important industrial centres and logistic hubs (Diakakis, Boufidis, Salanova Grau, et al., 2020). Mandra has a unique flood history, with several events in the last decades (Diakakis et al., 2012). On 15 November 2017, an extreme flash flood event caused extensive damage to the city of Mandra. The flood was triggered by a high-intensity storm that produced a total rainfall amount of nearly 300 mm in 13 h, with the majority of the rainfall falling within 6 h. Apart from the extensive damages to buildings, infrastructure and transportation networks, the flood resulted in 24 tragic deaths, making it the deadliest flood in Greece over the past 40 years (Diakakis et al., 2019; Diakakis, Deligiannakis, Antoniadis, et al., 2020).

The Kalloni river basin drains the broader area of the Kalloni town, which is the second-largest commercial hub of Lesvos Island. The area has a Mediterranean climate, and the land is predominantly covered by agriculture (olive groves), grassland, and brushland habitats (Tzoraki, 2020). The main economic activities in the area are agriculture, livestock production, and retail, as well as small tourism and hospitality enterprises (Koutsovili et al., 2021). Over the last decades, sudden precipitations of high intensity and short duration have caused large volumes of water to end up in the urban fabric. At the same time, the reduced cross-section of the riverbed at this point leads to river overflows, with hazardous effects on the local infrastructure and the community. As a result, Kalloni experienced significant flash floods in 1986, 2005, 2011 and 2016 (Diakakis et al., 2012; Koutsovili et al., 2021; Matrai & Tzoraki, 2018; Tzoraki, 2020).

During the first half of 2021, a sample of 391 SME owners/managers from three flood-prone areas were administered a structured questionnaire on factors that influence the ability to shape effective responses to flooding. The sample was selected following a two-stage sampling technique. In the first stage, specific area blocks were selected, relying on historical evidence of the severity of flood impacts on local businesses. In the second stage, a snowball sampling approach was employed (Bell et al., 2019; Venter et al., 2005) in order to make sure that those SMEs significantly affected from previous years' floods were included. Out of these 391 enterprises, 74% pertain to the service/retail sector, 17% are manufacturing firms and 8% are SMEs operating in the primary sector. The majority of the sample firms (82%) are micro-enterprises (i.e. employing <10 persons and having an annual turnover of no more than EUR 2m) and small business entities (i.e. firms that employ no more than 10–50 persons and whose annual turnover does not exceed EUR 10m), ranging from newly created ones (<3 years old; 6%) to SMEs founded more than 40 years ago (11%). Most SMEs had experienced flooding once in recent years (74%), while the rest had encountered two or more flooding events. In this respect, 29% of the respondents indicated that the severity of flood damages to their business was substantial.

2.2 Model specification

A thorough literature review on variables describing the organisational resilience capacity was performed, emphasising SMEs vis-à-vis natural hazards or weather extremes and with a particular focus on floods (e.g. Herrmann & Guenther, 2017; Kuruppu et al., 2013; Linnenluecke & Griffiths, 2012; Vakilzadeh & Haase, 2021). This allowed us to identify three main groups of parameters (namely, the cognitive, behavioural/managerial and contextual factors outlined in Table 2) that influence an enterprise's ability to withstand, adapt and recover from floods. Cognitive factors pertain to attitudes and perceptions around risk awareness and proactivity as well as the level of knowledge/understanding of climate change impacts and the underlying links to extreme weather. Behavioural/managerial factors refer to organisational behaviour, management culture, organisational planning and learning, and technological and financial resources, along with organisational leadership capabilities. Contextual factors encapsulate the critical role of key stakeholders (local enterprises and community members, business partners, suppliers, customers, friends and relatives, consultants, as well as business chambers and associations, providers of capital and local/central government entities) in SMEs' ability to adapt and recover from flooding.

TABLE 2. Resilience capacity factors, expert weights and explanatory definitions

	Factor	Factor weight	Factor definition/explanation
Cognitive factors	Knowledge/understanding (KNOW; 4 items)	0.088	Sufficient knowledge of climate change driving forces, its impacts and the underlying links to extreme weather/flooding (i.e. situation awareness; good knowledge of what climate change is, what causes climate disruptions, understanding of the low probability/high impact risk linked to extreme weather and the relative increase of such events in absolute numbers in recent years).
	Attitudes/perceptions (ATT; 7 items)	0.114	SME owners-managers have positive attitudes towards the importance of proactivity against flooding and demonstrate awareness of flood risk(s) (i.e. acknowledgement that flood protection is not merely the responsibility of the state authorities, that such extreme weather events can happen at any time during the year, that flood protection is not just good-to-have but an essential aspect in business preparedness and continuity).
Managerial factors	Leadership (LEAD; 4 items)	0.118	Leadership (behaviour) in times of adversity implies that (SMEs which are) leaders make sense of the environment in which they find themselves, and after a certain threshold in handling adversity is crossed, they initiate a new phase in the organisation's lifecycle involving new routines and/or structural patterns, embracing organisational change and new management techniques compared to other peer enterprises.
	Management culture (CULT; 3 items)	0.108	A management culture with resilient characteristics allows one to strengthen an organisation's ability to anticipate floods and to understand that adversity can strike at any time, therefore it proactively fosters risk awareness and centres on long-term survival as well as the need to involve all employees in resilience-building practices and flexible responses towards adverse conditions.
	Technological resources (TECH; 3 items)	0.111	Technological interventions within the business premises to protect from flooding and reduce the time and cost for recovery (e.g. raised level at which machinery, electrical sockets and products are located/stored, flood-resilient flooring, door guards and air brick covers, small-scale retrofits or special mechanisms to prevent damage to expensive equipment in business premises, etc.).
	Organisational planning (PLAN; 2 items)	0.104	Development of organisational plans to prepare for crises and external shocks and ensure functionality during times of adversity (as in the case of extreme/flash floods).
	Organisational learning (LEARN; 1 item)	0.095	The ability of an organisation to learn from past events and utilise such experiences to anticipate future adversity.
	Financial resources (FIN; 1 item)	0.113	Financial slack resources that provide security in effectively responding to crises, allowing the organisation to prepare for & anticipate crises before they occur and enable a quick recovery in times of crises.
Contextual factors	Relational resources (RELAT; 3 items)	0.071	Healthy, positive and strong relationships both within and outside an organisation with key stakeholder groups of the enterprise who can provide financial and/or in-kind support in case of emergency (e.g. other local enterprises and community members, business partners, suppliers, customers, friends and relatives, consultants).
	Institutional support (INST; 6 items)	0.078	Local and Central Government authorities and institutions (incl. chambers of commerce, business associations/federations, providers of capital) whose decisions and active support in the form of laws, regulations, and financial and non-financial assistance allow enterprises to successfully deal with flooding impacts.

An initial pool of items was devised, relying on existing knowledge/studies and developing new items/statements. Scales measuring the different aspects of SMEs' resilience capacity to floods were drawn following the systematic review of prior research and utilising expert input. This process led to a set of items comprising the resilience capacity measurement instrument (see Appendix 1). This composite research instrument was pre-tested using convenience sampling on a small group of SME representatives (Bell et al., 2019) that were easily accessible to members of the research team. Validity and reliability results for the sub-constructs (factors) comprising the specific index conceptualisation revealed acceptable metric properties, as Cronbach's alpha and the percentage of variance explained values were found to be above the acceptable threshold values (i.e. Cronbach's alpha values were above 0.8 and percentage of variance explained was in all cases above 50%). The proposed composite index is of the form:

$$\text{FRCI}=\sum _{i=1}^n\sum _{j=1}^3{A}_{\mathit{ij}}\times w_{\mathit{ij}}^A,$$

where A indicates the various aspects of cognitive (CG), behavioural (B) and contextual (CN) factors comprising the SMEs' FRCI; i = 1, 2, … n, indicates each individual resilience capacity factor; j = 1, 2, 3 indicates the various parameters pertaining to the respective aspect A of cognitive (j = 1 = CG), behavioural (j = 2 = B), and contextual (j = 3 = CN) factors and w_ij represents the individual weight of each resilience capacity parameter (i.e. j factor).

Factor weights were determined through an analytical hierarchy process (AHP) model of pairwise comparisons in order to allocate the relative importance of the criteria, and to achieve this, the AHP tool for decision-making processes developed by Goepel (2018) was employed. The pairwise comparison technique has been widely employed in business research to examine the relative importance of different aspects that describe complex problems in multi-criteria decision-making (Golany & Kress, 1993; van Til et al., 2014). It requires individual decision-makers to provide judgements expressed as preference ratios for pairs of criteria. These preference ratios are entered into a pairwise comparison matrix, and the weights can be derived by normalising the entries from any row or column of the matrix (Saaty, 1980). It is a heuristic decision support technique that allows one to ‘translate’ individual-subjective opinions (i.e. judgements) into measurable numeric relations. In this respect, using the input of a panel of 12 experts (comprised of academic scholars/researchers, sustainability management consultants and business continuity auditors), the prioritisation of resilience capacity factors was obtained. Consistency in the pairwise comparisons was measured through the consistency ratio (CR); the result was satisfactory with CR = 0.3%, that is, well below the recommended standardised threshold value (Saaty, 1990), while the aggregate expert judgements are characterised by a moderate-to-high AHP consensus (75%) in terms of overlap between the priority-setting defined by the expert group. The outcome of the weight allocation task reveals that the expert panel places more importance on the SME owners/managers' attitudes towards flood risk, their leadership capabilities, and the financial and technological resources at their disposal, rather than the contextual factors facilitating flood resilience capacity and the owner/manager's understanding of what may trigger EWEs.

Using the max–min normalisation technique, the data gathered from the sample SMEs were re-scaled to a distribution value between 0 and 1, where the minimum value for each factor is 0 and the maximum value is transformed into 1. The factor weights derived from the expert panel input were then applied to the normalised (resilience capacity) factor values in order to calculate the proposed quantitative metric of flood resilience capacity (whose sequential steps are graphically presented in Figure 2) for the sample SMEs:

$$\text{FRCI}=\begin{array}{l}\left[0.88\times \text{KNOW}\right]+\left[0.144\times \mathrm{ATT}\right]+\left[0.118\times \text{LEAD}\right]\\ +\left[0.108\times \text{CULT}\right]+\left[0.111\times \text{TECH}\right]\\ +\left[0.104\times \text{PLAN}\right]+\left[0.095\times \text{LEARN}\right]\\ +\left[0.113\times \mathrm{FIN}\right]+\left[0.071\times \text{RELAT}\right]\\ +\left[0.078\times \text{INST}\right].\end{array}$$

3 FINDINGS

Table 3 is a summary of the descriptive statistics for the sample SMEs, while Figure 3 presents the histogram plot of the FRCI, both from the overall sample and the three study areas. The mean FRCI for the total sample is 0.609, with considerably lower scores on aspects pertaining to contextual parameters affecting flood resilience capacity. Grouping the mean scores (%) of the FRCI factors into the three domains, it is evident that flood resilience capacity is primarily driven by cognitive factors, followed by managerial competencies, while contextual factors leave much to be desired (see Figure 4). Likewise, looking closer at the 10 factors reveals that it is knowledge/understanding, organisational learning and planning, as well as technological resources that mainly shape SMEs' resilience capacity to floods, followed by leadership capabilities and the owner/manager's attitudes towards flood risk and perceptions of proactive control measures. In contrast, findings suggest that the resilience capacity of these enterprises is to a far lesser degree built by relational resources and institutional support mechanisms or the internal culture that nurtures the anticipation of flooding (see Figure 5).

The bootstrap subsampling has been performed with the utilisation of a total sample of 10,000 iterations to construct the bootstrap subsamples. Figure 6 presents the histograms and normal probability plots for the overall FRCI and for the three regions, based upon the 10,000 bootstrap subsamples. As the graphs reveal, the bootstrap samples follow the normal distribution.

Based upon the 10,000 bootstrap subsamples, the 90% and 95% bootstrap confidence intervals were constructed to determine a reliable estimate of the range of values of the FRCI index in the population of Greek SMEs. To enhance the robustness of the obtained results, the four alternative bootstrap confidence intervals were calculated. Hence, Tables 4 and 5 present the 90% and 95% normal, basic, percentile and bias-corrected and accelerated (BCa) bootstrap confidence intervals for the FRCI, respectively.

The obtained results indicate that there are identifiable differences between the FRCI indices among the three study areas. The FRCIs in the Kalloni area are significantly higher in comparison to the FRCI indices of the Mandra and Evros areas. The confidence interval graphs (Figure 7) depict the mean FRCI and the corresponding 90% and 95% confidence intervals as calculated by the BCa method for the three flood-prone areas of the study. It is evident that the resilience capacity levels in the Kalloni region are statistically significantly higher than in the Evros area. On the other hand, the SMEs' resilience capacity levels between Mandra and Evros do not differ significantly statistically from each other. However, the FRCI figures of SMEs from Evros are the lowest among the three study areas. In this respect, the Evros FRCI values share the wider intervals when compared to the comparatively narrower intervals for the Kalloni FRCI bootstrap values.

Lastly, a deterministic sensitivity analysis is performed to provide measurable evidence with regards to the magnitude of the impact of the 10 explanatory variables of SMEs' resilience capacity on the composite FRCI metric. In Table 6, the sensitivity analysis results that were obtained from the variations of each one of the resilience capacity factors that comprise the FRCI values are presented. The obtained FRCI values were calculated for the minimum, 25th percentile, median, 75th percentile, and the maximum values of each factor, as they were determined by the distribution of their weighted scores. In the last two rows of the table, the range between minimum and maximum as well as the standard deviation of the FRCI values are reported for a better understanding of the overall variation in index scores caused by the resilience capacity factors.

From the sensitivity analysis findings, it is clear that the higher levels of sensitivity of the FRCI are due to the resilience capacity factors of organisational planning, organisational learning, financial resources, attitudes/perceptions, leadership and technological resources. In contrast, the FRCI is less sensitive to factors pertaining to knowledge/understanding, relational resources and institutional support. These results are further confirmed in Figure 8, which is a visual representation of the sensitivity analysis results, with steeper curves indicating a higher degree of sensitivity to deviations from the original estimates. It is clear from the figure that the FRCI is primarily more sensitive to the increase of financial resources and SME owner's attitudes/perceptions. Likewise, FRCI is found to be sensitive to reduced values of organisational learning, technological resources and organisational planning.

4 DISCUSSION AND CONCLUDING REMARKS ON MANAGERIAL, RESEARCH AND POLICY IMPLICATIONS

Our findings lend support to insights drawn from Kuruppu et al. (2013), Marks and Thomalla (2017), Crick et al. (2018), Kato and Charoenrat (2018), in that contextual factors in terms of institutional support interventions are essential to nurturing the resilience and anticipatory prevention of SMEs. It also adds weight to the case for assessed SMEs' owners to work towards a management culture that proactively fosters flood risk awareness and the need to involve all employees in resilience-building practices and flexible responses to such adverse conditions (Hashim et al., 2021; Karman, 2020; Kato & Charoenrat, 2018; Wedawatta et al., 2014). The low levels of organisational planning activities and attitudes to flood hazards identified in the study are in line with findings from other national settings (e.g. Hudson et al., 2022; Kato & Charoenrat, 2018; Neise et al., 2021; Neise & Diez, 2019; Oracion, 2016). Crucially, the financial constraints and the overall limited capacity for business continuity, as reported by sample SMEs, corroborate the critical support needs well-established in the literature (Neise et al., 2021; Oracion, 2016; Samantha, 2018) and win–win opportunities stemming from bottom-up initiatives for the active engagement of SMEs in flood risk management and governance (Bott & Braun, 2019).

Through the proposed indicator-based approach, an analytical framework is set forth that helps to standardise such assessments with an overarching aim of reducing the vulnerability of SMEs to flooding. This is achieved by identifying major internal and external attributes that explain resilience capacity, which is particularly important given the limited resources these enterprises have at their disposal and that they tend to be primary sources of vulnerabilities in supply chain networks, generating single points of failure. In this respect, our study makes three contributions to the extant literature. First, a composite metric is developed to assess determinants of SMEs' resilience capacity, offering insights on how various parameters affect the organisational ability to confront flooding. Second, we provide evidence from Greek small- and medium-sized enterprises for the first time, shedding light on facilitating factors and (underlying) barriers. Third, a replicable assessment method for examining SMEs' resilience capacity characteristics is proposed, contributing to the domains of regional studies, business sustainability and continuity research, as well as to the theorisation of organisational resilience to EWEs (Linnenluecke et al., 2012; Winn et al., 2011).

The proposed FRCI adds to the emerging field of climate services and the considerably under-researched topic of organisational resilience to extreme weather and natural disasters. In line with UN's Sustainable Development Goal (SDG) 1 – Target 1.5 (i.e. ‘by 2030, build the resilience of (…) those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social and environmental shocks and disasters’), it is an attempt to provide a quantification of business resilience capacity to floods and to link such information to SMEs' assistance needs. This is particularly important, taking into account that economic damages from EWEs have reached record-breaking levels over the past decade and that the frequency of such natural disasters is escalating (e.g. Munich Re, 2017, 2021), indicating that the ability to cope with flooding has become a sheer necessity.

The application of the FRCI in a certain study area can highlight ‘best-performers’ among local SMEs, which can serve as industry and/or regional ‘champions’ and allow for a reproducible assessment, the insights of which can cater to both private- and public-sector decision-making. It can be a useful benchmarking tool that local social actors and stakeholders can employ to identify the ability of (local) enterprises to withstand and recover from such environmental disruptions. This bottom-up approach and (self-) assessment tool for SMEs to diagnose their resilience status against flooding can be scaled up to other vulnerable flood-prone areas across Europe and beyond, for a better understanding by governmental bodies of which assistance needs and/or policy interventions will increase SMEs' resilience status under the scope of internal and external factors found to be critical (Wedawatta et al., 2014). The findings derived from the FRCI application can assist local governance structures in understanding how to incentivise SMEs to proactively prepare for such natural hazards in terms of financial and/or other means of support, as well as by facilitating the coordination of multi-stakeholder partnerships for mobilising actions through the dissemination of best practices and screening tools (such as the proposed, self-assessment, indicator-based tool). It can also feed into high-quality, actionable and practical guidelines, manuals and/or management standards on business preparedness to EWEs, towards an enabling regulatory environment, coupled with capacity-building support measures that ensure SMEs are: (a) sufficiently informed of flood threats, (b) incentivised to invest in adaptation-resilience measures, and (c) not stifled by suboptimal or even restrictive policies.

As the proposed FRCI may assist SMEs in preparing for and bouncing back from flood disasters in a strengthened and more resourceful way, it also encapsulates a moderating effect on performance, reputation and, ultimately, on competitiveness and sustainability trajectories (APEC, 2014). In this regard, it paves the way for these enterprises to contribute to the community in terms of leadership, acting as hubs that promote good practice on flood preparedness. Being interconnected with a wide range of stakeholders (e.g., employees, business partners, customers) in the areas where they operate, flood-resilient SMEs can reduce exposure to such EWEs and enhance the recovery of local communities to their adverse impacts, thus contributing to a more resilient society (Neise et al., 2021). Primary findings from the FRCI application provide a fruitful platform for employee development schemes on business continuity planning through options such as web-based or short training interventions (also stressed in Kato & Charoenrat, 2018, Neise et al., 2021 and Hashim et al., 2021). Ultimately, they can provide fertile ground for SME owners-managers to actively engage and promote educational programmes in the form of internal awareness-raising, training material, and exercises among employees to increase knowledge, expertise, preparedness and know-how of critical resilience capacity interventions in the enterprise.

The FRCI also reflects a SME scanning process that offers a mechanism of cross-comparing disaster experts' analysis of flood impacts with survey evidence (like those derived from our study) as an input for prioritising necessary interventions. Hence, it facilitates the development of customised flood preparedness toolkits for SMEs to increase their resilience status – this will also allow them to specify essential external support needs. Crucially, the FRCI can be a useful tool for business consulting services and networks that support and guide SMEs on continuity management where the prioritisation of measures in terms of appropriateness and financial viability is essential. As the implementation of climate adaptation gap assessments and the certification of climate risk assessments are pressing matters for the private sector, the FRCI's structure and rationale can assist in devising formal certification-auditing systems for both individual enterprises and/or SME consultancies. Lastly, the FRCI may inform providers of disaster risk insurance through the refinement of balanced scorecards or screening criteria, which can assist in determining premiums of micro-insurance products (Kato & Charoenrat, 2018) aimed at SMEs towards the endorsement of a ‘flood-proof’ SME sector (Surminski & Eldridge, 2017).

Using the FRCI's structure and rationale, future research can prove our study's observations using larger and stratified samples from diverse national settings and regions for a better understanding of the underlying drivers and barriers of flood resilience through cross-country or regional comparisons. The proposed metric can be further refined and expanded by drawing from other weighting techniques or a larger pool of experts for weight elicitation and by considering additional aspects (i.e. factors) that describe SMEs' flood resilience capacity, which can also be examined through structural equation modelling. Based on the FRCI estimations and proper weighting of each resilience capacity factor, researchers can further explore deterministic and multivariate probabilistic sensitivity analyses schemes for deriving the inference for alternative scenarios associated with the relative effects of the various explanatory variables on the FRCI. In this respect, there is fertile ground to draw inferences with such a proposed scheme of probabilistic sensitivity analysis by employing Markov chain Monte Carlo (McMC) simulations. Lastly, ethnographic research, focusing on key stakeholders and SME owners-managers, can provide supporting evidence to explain variations in the FRCI scores among the study areas of our paper as well as in other flood-prone areas where the composite metric is to be applied. Indeed, while macro-oriented studies of SMEs' resilience capacity allow for valuable insights, flood resilience researchers should emphasise the documentation of the critical importance of a micro-level mapping of SMEs' owners/managers decision-making and strategic thinking. This can be achieved through longitudinal and action research studies to better capture – in temporal terms – trajectories in resilience capacity-building and how essential capabilities are shaped. As there is growing pressure placed on the global community from changing disaster patterns due to extreme weather, there is a window of opportunity as well as an obligation for key stakeholders to actively engage in anticipatory prevention and resilience mechanisms. Among these stakeholder groups, we strongly believe that SMEs represent the segment of the economy with a largely untapped potential in terms of contribution to flood resilience across various scales.