Organizational resilience and impacts of the COVID-19 pandemic on Philippine businesses
by Glory Dee A. Romo, Jon Marx P. Sarmiento, Francis Levi A. Durano, Imee Marie A. Acopiado, Thaddeus R. Acuña, Adonis M. Traje, and Geraliza D. Wahing
School of Management, University of the Philippines Mindanao, Davao City, Philippines
The COVID-19 pandemic has had global repercussions as many countries embarked on measures such as mobility restrictions to avoid the further spread of the virus. This has led to reduced economic activities worldwide across all industries. The pandemic has negatively impacted enterprises such as in the form of increasing costs, reducing sales, and labor-related challenges including remuneration or retrenchment. Through a mixed-method analysis using fuzzy set Qualitative Comparative Analysis (fsQCA), we analyzed the asymmetric relationship between organizational resilience attributes and costs, sales, and the number of employees among Filipino enterprises. This paper used the Benchmark Resiliency Tool (BRT) developed by Resilient Organisations which includes 13 organizational resilience indicators. Data from key officers of the 293 enterprises all over the Philippines participated in the survey through Google Forms. The resilience indicators were grouped according to their three main attributes, namely, leadership and culture, networks, and readiness to change. The results revealed that high practice of change-ready attributes such as the enactment of planning strategies is a key factor that resulted in the reduction of the employee count among enterprises during the COVID-19 pandemic. Conjoining this attribute with either low leadership or with low network makes an enterprise more likely to reduce employees. Thus, being ready for changes, especially during times of unexpected and unpredictable situations such as the COVID-19 pandemic is a critical component of adaptation. Overall, our results showed that enterprises that practice a single organizational resilience attribute (at a high level) are associated with encountering either higher costs or sales decreases during the COVID-19 pandemic. Owing to their similar results, both increased costs and reduced sales of the enterprises show that in totality, the practice of organizational resilience attributes is crucial during external shocks, especially since the COVID-19 pandemic has led to a challenging environment for enterprises to operate. Reducing the number of employees may be used by crisis-stricken enterprises as a short-term strategy for recovery and how remuneration can instead be implemented to avoid the cascading negative effects of retrenchment on an employee’s household. Financial performance is used as a basis of enterprises’ strategies, and in extreme cases, retrenchment might be among the only viable solutions for the survival of a business during crises. There is a need for regular employee-employer consultation for more labor-friendly actions that are also more likely to be implemented in addition to empowering employees with the current situation of the enterprises.Moreover, the rise of online methods of purchasing may indicate an opportunity for businesses to invest in online sales infrastructure. Combining conventional modes of selling with online methods may increase the sales potential of enterprises.
FAQs
The pandemic has negatively impacted enterprises such as in the form of increasing costs, reducing sales, and labor-related challenges including remuneration or retrenchment.
How were businesses affected by the COVID-19 pandemic? ›
Many businesses across the country saw their supply chains interrupted, demand for their products and services decline, shortages in supplies and inputs, and government-mandated closures. At the same time, the federal government implemented programs designed to help keep employees on payrolls.
How is the Covid-19 pandemic affecting organizational operations? ›
In 2022, of those companies that were impacted by the coronavirus pandemic but had returned to normal level of operations in 2020, 2021 or 2022, 4.1 percent of companies canceled, 12.45 percent postponed, 11.65 percent decreased, and 2.8 increased some of their budgeted capital expenditures during the coronavirus ...
How to increase organizational resilience in the face of COVID-19? ›
Understand the effect of COVID-19 on employees and partners of the supporting organization. Provide direct support to groups that are most impacted. Create tailored solutions to help resolve the specific needs of each impacted group. Develop strong and consistent communication channels to employees and partners.
What are the problems with businesses in the Philippines? ›
The business environment in the Philippines faces several challenges. These include restrictions on ownership and price control, high compliance costs, ambiguous interpretations of statutes by regulatory agencies, and conflicts between national and local regulations .
How does COVID-19 affect the Philippines economically? ›
Last, the estimated total loss amounted to 2.9 trillion PhP in 2020 and 3.2 trillion PhP in 2021. More than two-thirds of the losses were in the commercial sector as it responded to both policies and the COVID-19 case surge. In contrast, the industrial sector was affected primarily by the lockdown implementation.
How did COVID impact the economy? ›
The COVID-19 pandemic precipitated a devastatingly sharp contraction of economic activity and huge job losses in early 2020, as government restrictions and fear of the virus kept people at home and businesses shut.
How did COVID affect international business? ›
In early 2020, when the coronavirus began impacting communities and industries around the world, international trade ground to a halt almost overnight. Some countries closed their borders, factories shut down to stop the spread of infections and buyers around the world cancelled orders or stopped ordering entirely.
What jobs were most affected by COVID-19? ›
While the job losses were widespread, they were greatest in industries that involve people (employees, customers, or both) coming in close contact. The leisure and hospitality industry suffered the greatest job losses, but every major industry lost jobs over the year. (See charts 2 and 3.)
What did the government do to help businesses during COVID? ›
California Rebuilding Fund
This program provides loans of up to $100,000 or 100 percent of a business' average monthly revenues for three months prior to the COVID-19 pandemic, whichever amount is lower.
The effects of Covid-19 on within-firm productivity are estimated to have been negative throughout the period from 2020 Q2 to 2022 Q1. For hourly labor productivity, the effects are estimated to have averaged -2.3%, with a peak negative within-firm effect in 2021 Q4 of -3.7% (see Figure 4 Panel A).
How have companies adapted to COVID? ›
Some businesses adjusted to the pandemic by increasing telework, adding workplace flexibilities, or changing pay. A business's response to the pandemic often depended on a particular firm's policies, which were often extended to some or all employees in the firm regardless of individual establishment size.
What is an example of organizational resilience? ›
Every organization took a different approach to dealing with the situation at hand, which resulted in a variety of organizational resilience examples. Office workers, for example, primarily worked from home. Corporations quickly deployed VPNs and video conferencing software to enable remote workers to do their jobs.
What are your thoughts about resilience and the COVID-19 pandemic? ›
Developing your resiliency is a key mental health strategy for responding to COVID-19 and many other stresses facing our communities, our nation, and our world. Some people think of resiliency as the ability to “bounce back” from difficulties, but it is more than that.
How has Covid-19 impacted teams in the workplace? ›
1. Teams working during COVID-19 suffered from challenges including increased external distractions, forgetfulness, and procrastination. 2. Challenges experienced individually by team members can interact with and compound one another to have an emergent impact on the larger team.
How did the COVID pandemic affect the economy? ›
The COVID-19 pandemic precipitated a devastatingly sharp contraction of economic activity and huge job losses in early 2020, as government restrictions and fear of the virus kept people at home and businesses shut.
What are the challenges of SME in the Philippines? ›
Notwithstanding the recognition of the important roles SMEs play in these countries, their development is largely constrained by a number of factors, such as lack of access to appropriate technology; limited access to international markets, the existence of laws, regulations and rules that impede the development of the ...
What do you think of the Philippine economy? ›
The Philippines has been one of the most dynamic economies in the East Asia and Pacific region. With increasing urbanization, a growing middle class, and a large and young population, the Philippines' economic dynamism is rooted in strong consumer demand supported by a vibrant labor market and robust remittances.
How did COVID-19 affect globalization? ›
According to World Travel and Tourism Council estimates for 2020, international travel arrivals could fall by 75% compared with previous years (World Travel and Tourism Council). The COVID-19 pandemic has remarkably influenced global higher education, especially due to travel restrictions and campus closures.
