How can service organizations build resilience by leveraging capabilities and service worker team knowledge?

Purpose Grounded in dynamic capabilities theory, this study aims to examine how dynamic capabilities and a transactive memory system (TMS) can build the resilience of service organizations and improve their financial performance. Limited studies examine the link between a TMS and organizational resilience. Design/methodology/approach The authors test a theoretical model on a sample of 350 UK service firms that were impacted by the COVID-19 pandemic and analyze the data using partial least square structural equation modeling. Findings Results highlight the positive effects of a TMS and dynamic capabilities on organizational resilience. Only a TMS and organizational resilience have direct positive effects on financial performance. Originality/value To the best of the authors’ knowledge, this is the first study to ascertain the influence of a TMS on organizational resilience in service firms following adversity.