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The economics of COVID-19
(2020)
Purpose
Within a very short period of time, the worldwide pandemic triggered by the novel coronavirus has not only claimed numerous lives but also caused severe limitations to daily private as well as business life. Just about every company has been affected in one way or another. This first empirical study on the effects of the COVID-19 crisis on family firms allows initial conclusions to be drawn about family firm crisis management.
Design/methodology/approach
Exploratory qualitative research design based on 27 semi-structured interviews with key informants of family firms of all sizes in five Western European countries that are in different stages of the crisis.
Findings
The COVID-19 crisis represents a new type and quality of challenge for companies. These companies are applying measures that can be assigned to three different strategies to adapt to the crisis in the short term and emerge from it stronger in the long run. Our findings show how companies in all industries and of all sizes adapt their business models to changing environmental conditions within a short period of time. Finally, the findings also show that the crisis is bringing about a significant yet unintended cultural change. On the one hand, a stronger solidarity and cohesion within the company was observed, while on the other hand, the crisis has led to a tentative digitalization.
Originality/value
To the knowledge of the authors, this is the first empirical study in the management realm on the impacts of COVID-19 on (family) firms. It provides cross-national evidence of family firms' current reactions to the crisis.
We used structural topic modeling to analyze over 800,000 German tweets about COVID-19 to answer the questions: What patterns emerge in tweets as a response to a health crisis? And how do topics discussed change over time? The study leans on the goals associated with the health information seeking (GAINS) model, discerning whether a post aims at tackling and eliminating the problem (i.e., problem-focused) or managing the emotions (i.e., emotion-focused); whether it strives to maximize positive outcomes (promotion focus) or to minimize negative outcomes (prevention focus). The findings indicate four clusters salient in public reactions: 1) “Understanding” (problem-promotion); 2) “Action planning” (problem-prevention); 3) “Hope” (emotion-promotion) and 4) “Reassurance” (emotion-prevention). Public communication is volatile over time, and a shift is evidenced from self-centered to community-centered topics within 4.5 weeks. Our study illustrates social media text mining's potential to quickly and efficiently extract public opinions and reactions. Monitoring fears and trending topics enable policymakers to rapidly respond to deviant behavior, like resistive attitudes toward containment measures or deteriorating physical health. Healthcare workers can use the insights to provide mental health services for battling anxiety or extensive loneliness from staying home.
This research examines the impact of firms’ decision-making, crisis management, and risk-taking behaviors on their sustainability and circular economy behaviors through the mediating role of their eco-innovation behavior in the energy industry in Iraq. Firms are exploring applicable mechanisms to increase green practices. This requires the industry to possess the essential skills to overcome the challenges that reduce sustainable activities. We applied a dual-stage structural equation modeling (PLS-SEM) and a multi-criteria decision-making (MCDM) approach to explore the linear relationships between variables, determine the weight of the criteria, and rank energy companies based on a circular economy. The online questionnaire was sent to 549 managers and heads of departments of Iraqi electric power companies. Out of these, 384 questionnaires were collected. The results indicate that firms’ crisis management, decision-making, and risk-taking behaviors are significantly and positively linked to their eco-innovation behavior. This study confirms the significant and positive impact of firms’ eco-innovation behavior on their sustainability and circular economy behaviors. Likewise, eco-innovation behavior has a fully mediating role. For the MCDM methods, ranking energy companies according to the circular economy can support policymakers’ decisions to renew contracts with leading companies in the ranking. Practitioners can also impose government regulations on low-ranked companies. Thus, governments can reduce the problems of greenhouse gas emissions and other environmental pollution.