Introduction
Various crises and challenging situations may be rather damaging for companies or societies and require specific management efforts. When a certain crisis situation arises, depending on its magnitude, it can disrupt the usual rhythm of the life of a group of people, make significant changes in the work of an organization or its individual sectors, or cause a disruption in the systems of several countries. Consequently, leaders and governments urgently need to provide emergency response and relief measures in order to avoid negative consequences as much as possible. Therefore, it is possible to say that effective crisis communication and management are equally vital within a small group of people, organizations, and a whole country.
There are some situations that require more efficient measures and responses because they pose an increased danger and can affect a vast number of different sectors of life. For example, the outbreak of the COVID-19 pandemic has brought many unexpected negative impacts on the countries and changed people’s usual way of life (Boin et al. 15). Various industries, including airlines, restaurants and hotels, leisure facilities, auto equipment, and others, had to face restrictions and demand declines, so response measures were required from the industries’ representatives (Lilleker et al. 26). Additionally, it was the task of governments to manage the situation properly and address all the challenges and issues.
However, the leaders did not manage to prevent and eliminate all obstacles during the initial phase of the crisis. For instance, China was expected but eventually could not prevent the virus from spreading across the world (Boin et al. 6). What is more, many spheres and systems were not even ready for such a situation (Abbas 2). For example, as noticed by Hidayat et al., the education sector failed to implement online studies as efficiently as was expected because this option was not properly developed before the crisis (69). Further, in Pakistan, the healthcare system was not ready for the challenges of the coronavirus (Abbas 2). Consequently, the aftermath of the coronavirus appeared to be even more damaging.
At the same time, some measures actually appeared to be effective, which is why the overall process of managing the world crisis may be considered relatively successful. Still, the system of governmental management of such severe emergencies needs to be upgraded. Some countries should strengthen public sector systems like education and healthcare and consider more effective measures adopted by other states that managed to control the COVID-19 outbreak more rapidly and successfully.
Methodology
This paper seeks to gather relevant information and explore the topic in order to define the best crises management practices that were or could be used by the governments during the COVID-19 pandemic. The research method selected for this writing is a comprehensive literature review. The in-depth analysis of primary and secondary sources will allow learning about various views and opinions regarding the main topic of the paper and compare and contrast the responses of different countries to the coronavirus threats. The literature review will include resources precisely related to the COVID-19 pandemic, books and articles discussing crisis management and communication in general, and other valuable sources.
Literature Review
Crisis communication and management are analyzed by an extended number of academics. Various effective and ineffective tools, schemes, and techniques are described by researchers, and many cases of major organizations or countries dealing with crises are also explored. Further, despite the fact that the coronavirus outbreak is a relatively recent event, there is already a vast body of academic literature examining various aspects of government responses to COVID-19. Some relevant points from major sources are discussed in detail below.
The Unique Characteristics of the COVID-19 Crisis
It is hard to disagree that the coronavirus pandemic is an extremely challenging and unexpected event, which is why it is beneficial to explore crisis communication and management using this event as an example. Many researchers agree that this is a unique crisis situation with threats and obstacles for almost all systems and spheres (Hidayat et al. 71; Lilleker et al. 31; Trachsler and Jong 485). As noticed by Boin et al., “what places the coronavirus pandemic in a class of its own is the combination of three types of characteristics” (6). To be more precise, COVID-19 qualifies as a creeping, transboundary, and solidarity crisis (Boin et al. 6). This is a rather rare and powerful combination that empowers the problem to be more challenging and destroying. These three characteristics are explored in detail in the following paragraphs.
A Creeping Crisis
This characteristic means that the pandemic stretched out over time. Overall, it is possible to say that there was no clear and sudden beginning of the pandemic. Instead, the world could see many worrying signals and the attempts of China to manage the newly emerged disease and eliminate it (Wodak 341). Additionally, many experts could not believe in the seriousness and danger of the coronavirus. However, those efforts of China were not successful, and the COVID-19 virus escaped and spread rapidly across the whole globe. The eventual scale of the crisis surprised many leaders who did not expect their countries to become infected. What is more, after disappearing for a while, the virus returned, causing new waves and threats (Trachsler and Jong 486). These characteristics allow considering the COVID-19 outbreak a creeping crisis.
A Transboundary Crisis
It is fair to notice that there were no sectoral, geographical, and jurisdictional borders for the COVID-19 virus, which is why it is also a transboundary disaster. As mentioned above, the coronavirus disease was a severe threat for almost all countries, meaning that it did not “fall neatly within the jurisdiction of one governmental entity” (Boin et al. 8). What is more, “there was no self-evident jurisdictional or sectoral point of gravity from which response efforts should be organized” (Boin et al. 8). In other words, numerous representatives of all corners of society and all levels of governance assumed a certain role in crisis management and response. Since they all had different sets of responsibilities, concerns, and available resources, there were tensions and misunderstandings regarding the roles and duties of those leaders. According to Boin et al., “the pandemic severely tested the capacity of existing systems of intergovernmental relations… to mount coherent responses and prevent politically damaging blame games” (8).
A Solidarity Crisis
What makes COVID-19 a solidarity crisis is that a vast number of people were not directly threatened by the disease but were made or asked to sacrifice their comfort in order to eliminate the problem. Thus, according to researchers, “COVID-19 was more than ‘just’ a respiratory illness” (Boin et al. 7). In other words, socially disadvantaged individuals, persons living in high-density communities, the elderly, and people with specific underlying health conditions like diabetes, immune system deficiencies, and obesity were at a higher risk of getting severely ill or even dying.
In order to reduce these risks, other people had to give up many components of their comfortable lives and maintain social distance, avoid crowded places like restaurants, cafes, or cinemas, and wear masks and gloves. However, Boin et al. state that “this well-publicized pattern began to gnaw at the credibility of the crisis response,” and some citizens, medical practitioners, and economists “questioned government claims about the virus and its consequences” (7). Therefore, persuading everyone to comply with not always comfortable or beneficial safety measures has become one of the most challenging tasks faced by the governments.
Most Systems Were Not Ready for the Pandemic
The effectiveness of crisis response measures partly depends on the initial readiness of systems for various emergencies. Boin et al. notice that “political systems, public institutions, and policy processes were clearly not built to deal with a serious pandemic” or any other mega-crisis (12). Unfortunately, though public sector services like welfare, healthcare, and education were successfully developed to operate on a daily basis, “designing capacities to deal with plausible worst-case scenarios has never been core business of most governing systems” (Boin et al. 12). Consequently, most governments and leaders of public sectors had to rapidly come up with new measures aimed at eliminating or preventing the negative consequences of the COVID-19 pandemic (Lilleker et al. 51). Nevertheless, they struggled with implementing these measures, including tracing and testing potentially infected citizens, devising emergency relief measures, and enforcing lockdowns (Boin et al. 12). Filling numerous gaps in the systems’ preparedness was a major part of crisis management, which is one reason why response strategies have not been as effective as possible.
Examples of More and Less Successful States
It is essential to note that there were both effective and ineffective measures implemented by different countries. For instance, in some states, the governments did not manage to develop the best scope and timing of lockdown measures (Lilleker et al. 130). They used to introduce severely strict rules that were later followed by the immediate relaxation of restrictions, resulting in the second and the third waves (Boin et al. 12). Therefore, it is possible to state that such a scheme of introducing and then eliminating severe measures generally leads to the worsening of a crisis event.
Still, some governments introduced rather effective measures, and a number of countries are an example of successful cases. For instance, as noticed by Boin et al., New Zealand and China managed to reduce the number of infected people to the minimum and eliminate the negative effects of the COVID-19 crisis in the shortest time possible compared to other states (12). Australia, Canada, and Germany, countries that are otherwise chronically contentious and disjointed, also managed to develop and implement remarkably well-coordinated measures. Their secret of success was in severe restrictions and personal safety measures, preparation of hospitals, and higher solidarity of citizens (Frieden). Additionally, “the countries that performed best have learned from their mistakes and used data to continuously improve” (Frieden). At the same time, Frieden notices that the response measures of the U.S. government may be considered one of the least effective.
The Importance of Crisis Management
Special management strategies are necessary for any enterprise affected by the crisis. Crises can manifest themselves in many forms; one of them is the COVID-19 pandemic. The pandemic poses a serious threat to people, businesses and economies around the world. While governments are taking significant measures to combat coronavirus, companies are quickly adapting to the changing needs of their employees, consumers and suppliers, while solving financial and operational problems. A crisis, regardless of its form, can potentially threaten the success of a business and negatively affect its finances. Therefore, effective strategies are needed to enable enterprises to survive during the crisis (Weick et al., Ambiguity as Grasp 118). Crisis management is the process of preparing and managing any emergency or unexpected situations that affect the business, stakeholders, employees, customers and revenue. This is an essential component of the overall corporate management strategy.
Crisis management is slightly different from risk management, which requires assessing potential threats and finding the best way to avoid them. The threat has already arisen in the anti-crisis management, and the company needs to fight it (Abbas 2). However, crises are not always harmful to business, as they can motivate companies to be successful in the near future. For example, many businesses are investing in digital transformation by implementing web applications to facilitate teamwork and improve data security when working remotely from home.
Stages of Anti-Crisis Management
Crisis management traditionally includes three stages. The first, pre-crisis, stage of crisis management is the prevention of possible crises. This process includes strategic planning, recruitment and training of the crisis management team, as well as modeling for the implementation of the strategic plan. The second step is to respond to the crisis during the crisis stage and implement the crisis management plan that was created in the pre-crisis period (Lilleker et al. 97). Any actions that are being taken at this stage must be carried out promptly. For example, during the pandemic, many enterprises implemented a policy of working remotely from home to reduce the risk of transmission of coronavirus, as required by the government. Obviously, no one knew in advance how long this policy would have to be applied. Therefore, for the purposes of crisis management at the second stage, the company should already have an application that supports the efficiency and continuity of remote work.
The final, post-crisis stage comes when the crisis passes or has already passed. However, the process of crisis management is still ongoing. At this stage, it is advisable to evaluate the strategies used to overcome the crisis, whether they were effective or need to be improved (Pyszczynski, What Are We So Afraid 836). This will help the company to better prepare for a new crisis in the future. The actions taken to manage the crisis must be effective and applicable immediately.
Crisis Management Plan
The anti-crisis management plan is necessary so that the company can reduce the impact of the crisis. Here are some of the benefits of creating a crisis management plan. First of all, it helps to maintain the business reputation of the company, especially in the eyes of customers, competitors and industry leaders during and after the crisis. Moreover, the anti-crisis plan increases the safety, health and well-being of all employees of the enterprise (Spector 274). To create an effective anti-crisis management plan, it is necessary to implement a number of actions. First, it is necessary to identify the crisis faced by the enterprise as quickly as possible. It is necessary to find out whether the crisis is caused by internal or external circumstances, whether this influence is felt by enterprises of this industry alone or by enterprises of almost every industry, etc.
Next, the crisis manager has to assess the impact of the crisis on the company. Having determined the type of crisis, it is necessary to assess the impact of the crisis on the company, employees, customers and other stakeholders. This is important for making the right management decision, since the impact of the crisis may consist in eliminating damage in the identified areas. For example, it may be a drop in production and sales, or customer dissatisfaction and a reduction in the customer base (Frieden 58). The impact may also include a deterioration in business reputation (including a reduction in goodwill), a decrease in brand loyalty and an increase in costs. At the third stage, develop anti-crisis measures. When the type of crisis is established, as well as its possible consequences are clarified, certain measures should be worked out. They should be easily and quickly implemented at the expense of the available resources of the enterprise in order to overcome the crisis and minimize its negative effect.
Consequences Of the Crisis for Companies
As mentioned above, the crisis that businesses around the world are now facing is the coronavirus pandemic. This crisis was difficult to predict, and which, as practice has shown, was inevitable. The consequences faced by companies include lower sales and falling profits, as well as reduced productivity due to social distancing policies. Enterprises where urgent anti-crisis measures were not taken suffered huge losses. The situation on them worsened every day: for example, the reduction in turnover led to the inability to pay salaries to employees (Alpaslan et al. 92). Organizations in the fields of education, real estate, industrial production, retail trade, transport and logistics suffered losses.
In the research conducted by the analytical center, 86% of entrepreneurs indicated that the spread of the coronavirus had a negative impact on the financial performance of their organization (Barton et al., Group Resilience 1411). Small businesses were under attack: in companies with up to 100 employees, the negative consequences are especially noticeable; 88% of entrepreneurs noted them (Barton et al., Group Resilience 1410). In companies with a staff of more than 100 people, negative consequences were noted a little less often (79%). In order to avoid a scenario involving staff reductions or layoffs, most enterprises have implemented a work-from-home policy.
Business Reputation Support
Separately, it should be noted that the list of anti-crisis measures should certainly include technologies to support business reputation. The professor of management believes that business reputation is an invaluable intangible asset (Han, The Disappearance of Rituals 57). It influences the perception of employees, customers and other key stakeholders of the organization. Consequently, sustainability, productivity and the future trajectory of business development depend on business reputation. In his article, Han provides some recommendations that are extremely important for effective crisis management during a pandemic (Han, The Disappearance of Rituals 57). It is necessary to provide all possible psychological support to employees, clients and other interested parties. Opportunities should also be sought for financial assistance to stakeholders in need. This is not only the right thing to do from a moral point of view, but also, most likely, the right strategic step in the long run.
It is often believed that full transparency of business is a certain kind of utopia and it seems impractical, undesirable or even unethical to most business leaders. It is also worth being open with the staff regarding their work prospects at the enterprise. Transparency of relationships is also important with sponsors and investors regarding future business scenarios in the short and medium term (Trachsler et al. 486). Openness requires some effort and causes concern. Nevertheless, it is necessary more than the concealment of reality, which will not cause a positive reaction from stakeholders in the long term.
It is very important to communicate with key stakeholders. This gives them confidence that the company is well aware of the problems. It also guarantees that the organization is working on their solution, providing up-to-date information for processing and timely response in the event of a crisis. Thus, there are many reputation support technologies that can be effectively used to manage an enterprise during the COVID-19 pandemic crisis.
Adapting to the Crisis
Even after the pandemic subsides, an unpredictable future awaits everyone, which requires more flexibility than ever before. While the COVID-19 crisis is unique to modern history, a look at previous global disruptions reveals some winning strategies that have helped businesses stay resilient in the face of the crisis. Today’s business leaders are rightly focused on the huge business continuity challenges associated with COVID-19, and first and foremost they must continue to ensure maximum employee safety and financial sustainability (Fisher et al. 132). They should also assess the resilience of supply chains and strengthen critical systems to support unprecedented levels of remote work while countering the surge in cyber-attacks.
Digital Transformation
The organizations that advanced the furthest on the path of digital transformation before COVID-19 adapted to the crisis better than others. Their business models and working business processes were able to quickly accept and flexibly respond to the changes taking place. Businesses that lack a reliable digital network or online presence have faced difficulties. Meanwhile, software companies are facing a high level of demand to meet the rapidly changing needs of customers and business behavior. They provide collaboration tools, software as a service, and cloud resources. However, businesses, no matter how digitalized they are, need to try to move beyond the immediate business continuity issues caused by the pandemic.
Experience Of Previous Crises
Today, restrictions imposed by Governments are increasingly being lifted, so strategic steps should be taken for the future, taking into account the lessons already learned. This is necessary in order to prepare for the new living conditions after the COVID-19 pandemic. Lessons show that organizations must act quickly and decisively to maintain resilience in the current crisis and in the uncertain future after the COVID-19 pandemic. When businesses started opening again, the situation changed. Social and political reactions have a negative trend, as the pandemic continues to reach its peak or in some areas returns to its previous level (Vidal 110). Wherever possible, as the company reopens, opportunities for development are being sought. They are taking win-win strategic actions that will help them become stronger in the anti-crisis competition.
Businesses are becoming more digital, with data-driven and cloud-based applications. They make business processes more flexible and cost structures more variable. Organizations also improve the safety of employees and customer service. Leaders are reassessing how the development, strength, or recurrence of the pandemic in various geographic markets affects their recovery strategies. This means adjusting assumptions, reevaluating all scenarios, and strengthening their ability to predict and react accordingly.
Strategic Recommendations
Companies must constantly orient themselves and adjust their course, overcoming many potential cross-risks that hinder their movement. In order to ensure the sustainability of enterprises in the post-crisis world, the following strategic recommendations can be made (Barton et al., Performing Under Uncertainty 79). It is necessary to optimize organizational structures; the crisis is the time when it is necessary to reconsider the organizational structure of the enterprise. In its simplest form, organizational design and hierarchies within the company should meet the levels of centralization and optimize all business processes.
To perform each business function, it is necessary to use the minimum resources necessary for work. In a more complex version, organizational design should take into account the prospects of the entire enterprise, including changes in the composition of top managers (Pyszczynski, Terror Management Theory 177). It is also necessary to proceed from a rethinking of the role of the corporate center and the creation of a center of excellence for the use of existing opportunities and continuous improvement of the company’s activities.
Today, in a typical company, most of the direct subordinates to the CEO are not directly responsible for profits and losses. Instead, they serve as a link between the main business operations and the CEO, or are operational and functional managers. To achieve growth in a crisis, most companies need to clean up their structure in order to create business segments that have wider opportunities, smaller number and scale. They should eliminate most complex operations and reduce their corporate functions in order to focus only on protecting the enterprise in a crisis and meeting work standards.
Moreover, they should create new positions to be occupied by senior management, including positions related to digital capabilities, big data and analytics, innovation, new business models and customer experience. This step will not only accelerate the development of the enterprise and increase its efficiency in overcoming the crisis. It will also simplify the organization itself in order to make anti-crisis management decisions more quickly. Strategic reallocation of resources is also needed. After optimizing the organizational structure, the company needs to strategically reallocate resources to create teams that support market leadership or at least competitiveness (Han, The Burnout Society 77). The cost and size of each function should be distributed according to strategic priorities and needs. Historically, managers at different levels have been given the right to allocate only resources within their competence. Rarely has there been a system that allows you to reallocate resources within an organization and do it dynamically, rather than annually during the budgeting process.
Entering the post-COVID-19 era, organizations need to reset their costs and then reallocate them according to strategic priorities. When redistributing, winners and losers inevitably appear. Therefore, a corporate-oriented way of thinking and effective change management is crucial for the advancement of the organization. It is necessary to continue to actively introduce digital technologies and automation. Many enterprises, especially industrial ones, are among the leading industries with the potential for digitalization and automation, but lag behind in their actual implementation. This reluctance to such a transformation can be partly explained by the lack of capital and the need to retrain employees, and partly by inertia, lack of interest and resistance to change. Now, with the pandemic crisis, most company executives have begun to understand the importance of automation. This is a powerful way to respond to the ever-increasing pressure to increase efficiency, innovation and speed of economic development. Moreover, the cost of automation is falling due to more advanced and less expensive technologies and ready-made solutions, and demand is growing.
At the same time, most of the business processes of the enterprise can be at least partially automated with the help of advanced analytics and predictive modeling. They allow to make optimized decisions in real time, and also reduce time-consuming manual operations. To quickly start digitalization and automation, companies can implement ready-made solutions or develop customized ones. As businesses implement the proposed changes, it will be necessary to develop across the enterprise (Han, The Expulsion of the Other 91). In order to support the new strategic model, it is necessary to strictly implement methods of change management in crisis conditions. The current crisis should not cause concern, as it may become an incentive for the company to develop more effective strategic solutions to other obstacles in the future. Crisis management is important so that enterprises can better prepare for future crises and reduce their impact, thereby maintaining the efficiency of their business.
Crisis Management Strategies
In the context of the new coronavirus pandemic, companies are forced to demonstrate a sufficiently high ability to adapt to new realities, one of the forms of which is the transformation of existing business models. Restrictions in the travel industry, the closure of many offline points of sale, the transfer to remote work of millions of employees around the world – all this entails serious economic consequences. Therefore, the ability to survive and maintain growth potential in a crisis is determined by the ability of companies to transform their business. It is safe to say that only those organizations that promptly and accurately respond to the current global challenge, including through transformation, will be able not only to maintain their position, but also significantly strengthen it in certain positions.
There are several of the most common transformation strategies in the world that have demonstrated their effectiveness during the pandemic. The first strategy is the same product and service, but new sales channels. The second strategy is the same infrastructure, but a new product and service. The third strategy is the same product, but a new infrastructure. The strategy of the same product and service, but new sales channels, is a proactive strategy for business transformation during a pandemic (Heide et al. 66). Its content is determined by the sale of the same or similar goods or services that the company provided before the pandemic, but using new sales channels. The most effective tool for promoting products in such conditions are online sales.
The request for the phrase order online in the Google search engine in March 2020 was carried out about 230 thousand times, which is one and a half times more than in March 2019 (Williams et al. 765). It is March 2020 that accounts for the maximum value of this indicator (Williams et al. 766). This situation is due to the introduction of a self-isolation regime around the world, a number of restrictions on the implementation of economic activities.
Today, many companies around the world that used to work exclusively offline are undergoing a digital transformation and are switching to an online mode of activity in order to maintain business and customer flow. An example is the Chinese cosmetics company, Lin Qingxuan. The retailer was forced to close 50% of its stores across the country, including all outlets in the city of Wuhan, which resulted in an 85% decrease in the company’s sales (Bauman, Liquid Fear 67). However, the management of Lin Qingxuan perceived the current situation as an opportunity for digital transformation of the business for its further sustainable development. The company has reoriented more than 150 employees of offline stores to work online (Bauman, Liquid Fear 69).
Using online platforms, employees conducted online broadcasts; recommending the company’s products and providing discount coupons, attracted customers and stimulated online sales. As a result, thanks to the transformation of the business, the online sales of one consultant in two hours increased to sales equal to the sales of four retail stores in normal periods. In general, Lin Qingxuan in Wuhan managed to increase sales by 230% compared to sales of the previous year.
It is also worth noting that such a strategy will remain relevant even after the resumption of the work of physical outlets of companies, since online platforms provide a large number of opportunities for business development and promotion. According to experts, after the pandemic, most companies will consider online activity as the most important condition for dynamic business development (Huang et al. 52). An equally popular strategy for business transformation in the context of a pandemic is the use of the same infrastructure by the organization, but with the introduction of a new product or service.
Due to the difficult epidemiological situation around the world, consumer demand for some goods and services has significantly decreased, which, in turn, has led to underutilization of production capacities of companies. At the same time, the demand for some products and services has fallen, while the demand for others has remained high and is even showing growth (Boin et al. 95). In such conditions, individual organizations, using the shift in the structure of demand that has occurred, reorient the existing infrastructure for the production of new goods and services.
According to Forbes, one of the most authoritative and well-known economic publications in the world, the demand for disinfection and sterilization products in America alone increased 150 times in March 2020 compared to April 2019 (Sinha 86). A similar trend can be observed in other countries. Companies such as LVMH (a French manufacturer of luxury goods), Pernod Ricard (a French manufacturer of alcoholic beverages) and Skyrora (a Scottish space company) switched to the production of hand sanitizers in a few days.
There are many successful examples of reprofiling activities among American companies. For example, the manufacturer of dance shoes, clothing and accessories Just Dance, which supplies goods to 70 countries of the world in normal times, began to manufacture personal protective equipment (Bauman, Liquid Life 53). 40% of the company’s production was transformed, which was reoriented to the manufacture of medical gowns, disposable shoe covers and masks (Weick et al., Managing the Unexpected 88). The strategy of the same product, but the new infrastructure has also proved effective in the face of changing demand patterns. Companies that are faced with a colossally increased demand for their products or services are seeking to quickly expand their infrastructure. This is done in order to increase production capacity or expand the ability to provide services. Such a strategy in most cases requires interaction with external counterparties.
A successful example of the implementation of such a strategy can be considered on the example of cooperation between the iGoods service and Walmart. The retailer, in whose stores customers can buy goods of various categories, from food to household appliances, has stopped independently coping with a huge number of online orders from customers, since the demand for the delivery of goods during the self-isolation regime has become huge. Therefore, the hypermarket chain began to cooperate with iGoods, which is one of the largest delivery services (Crawford 93). During the first three months of working together, the company made deliveries in the amount that is twice as high as in 2019 (Li 74). Now the marketplace is actively developing new partnerships with other companies and is already working with major retailers.
Transformation as an Anti-Crisis Management Strategy
Before taking certain transformation measures during the crisis, the company’s management will have to answer the following questions. It is necessary to find out whether there is an opportunity in the organization to sell products and services through online channels. Internet access is the most accessible promotion tool in the current conditions. Next, it is worth evaluating the organization’s ability to use the existing infrastructure to produce new products or provide new services that are in high or moderate demand at the moment. This issue is especially relevant for organizations that are faced with the problem of reducing consumer demand (Han, In the Swarm 71). Then it is worth choosing a way in which the organization can increase its ability to produce and distribute products or services in the shortest possible time. This issue is important for organizations that are trying to cope with the sharply increased demand for their goods and services. In this case, building new partnerships will be the best option for developing the company’s potential during the crisis period.
Thus, the answers to the above questions will allow to choose the strategy that best suits a particular company. Regardless of the chosen strategy, competent transformation allows most companies to remain competitive and continue to function successfully. It should also be noted that the answers to these questions in the format of a strategic response to the current crisis require high creativity, openness to challenging assumptions and willingness to look beyond the obvious in countering threats, using the new opportunities created by COVID-19.
The Main Trends of Crisis Management
The labor market, the work of industries, companies, customer behavior, relationships with partners and organizational systems – all this has changed the form, volume and business models. After analyzing the actions of medium and large business companies, several trends can be identified. The first of them is the customization of products or the adaptation of goods and services to a specific customer, taking into account their requirements and wishes.
Today there is a clear trend of a decrease in the number of spontaneous purchases. First of all, this is due to falling incomes of the population. Thus, customers began to scrutinize the products before giving their money. Products that are maximally tailored to specific needs are successful. For example, companies providing storage services have reconsidered their view of the product, starting to sell not it, but the solution to the problem. They have added to their target audience organizations that have closed their offices and for this reason are forced to store furniture and appliances somewhere (Hidayat et al. 82). In addition to storage, they offer disassembly, packaging, transportation and subsequent delivery to a new place of all things. Logistics companies, in turn, instantly rebuilt the processes and organization of warehouses to suit the specifics of online trading, which many retailers have switched to. Cargo carriers change the focus of cross-border services depending on the closeness or openness of countries, the needs of the client.
The second trend is total digitalization; the pandemic is the first crisis in which IT budgets were cut last, remained untouched or grew. Contact centers, document management, employee management — these and many other functions and processes urgently underwent automation. Companies whose activities were not digitalized did it in an emergency mode in one or two weeks (Nietzsche 75). In addition, for a number of organizations, the pandemic has become a time of reorganization. Under the influence of external critical circumstances, the enterprises studied in detail the internal processes for their subsequent optimization and digitalization. Including to reduce employee costs.
The increasing role of partnerships has become an illustration of the increasing role of industry, inter-industry unions and associations. Companies in the field of rental services, private medicine, restaurateurs, representatives of the retail sector cooperate and work together to develop, offer and implement common solutions. In addition, many organizations are trying to support their trading partners. For example, one of the publishing companies helped its distributors to create online stores (Wodak 348). Among other things, they offer a more flexible payment system, provide direct assistance in specific projects. The forms of staff motivation are also undergoing changes. The environment is too changeable and companies are moving from complex and confusing KPIs-reward systems to encouragement for specific benefits for the client and the company (Singh 84). A typical example is the experience of an American furniture manufacturer which significantly reduced the share of fixed remuneration and switched to a kind of payment for a specific result.
Thus, the business models of companies have changed quite a lot in recent months, and some have changed dramatically. At the same time, a huge plus is that most are not aimed at shrinking the business, but at optimizing it and adapting to customer needs as quickly as possible. Paradoxically, it is possible that the crisis associated with the pandemic will become a factor for modernization and growth, and not for stagnation.
Conclusion
The events of the spring of 2020, such as the fall in oil prices and the consequences of the global epidemic of coronavirus infection, led to the shutdown or slowdown of many industries. As a result, many market participants have significantly reduced or completely abandoned the purchase of other companies’ services. Not all participants of the market segments were ready for such an abrupt termination of funding. This research examined new and insightful ways of management crisis not related to staff reduction. This article has revealed the differences between management in the pre-crisis period and enterprise management strategies during the crisis. As a result of the study, it can be concluded that there is an urgent need to make changes in the processes of activity during the crisis.
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