"Organizational resilience and impacts of the COVID-19 pandemic on Philippine businesses"

Written by Rene Estremera. Posted in News

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.

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