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The new normal: How businesses in China are coping with the Covid-19 pandemic

Business leaders and researchers provide insights on their sense-making processes amid the pandemic and how they envision the way forward

Cactus Communications

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Credit: Frontiers of Business Research in China

There is an expression in English that says, "May you live in interesting times." To some, this is a blessing, while to others it is more of a curse. The Covid-19 pandemic has engendered a very interesting time--a time of extraordinary and unprecedented challenges that have thrown individuals and organizations headlong into battles for survival. Politicians, policy-makers, business leaders, and all professionals must dig deeper and come up with solutions to ensure that human civilization continues to survive and thrive in a post-pandemic world. Under these circumstances, the Frontiers of Business Research in China in China recently published six unique perspectives on the challenges that businesses--especially small- and medium-size enterprises (SMEs)--are facing, and the way forward.

The first article, by Prof. Hai Guo from Business School, Renmin University of China (Renmin Business School) and his research associates, argues that digitalization helps organizations to tap into their dynamic capabilities--their abilities to quickly build, integrate, and reorganize internal and external resources to adapt and promote organizational changes in the wake of crises. Prof. Guo opines, "(It) can help SMEs employ emergency responses as well as respond strategically to public crises in the long run, thus contributing to the improvement in SMEs' performance." Moreover, the researchers provide a definite framework that SMEs can use in their digitalization efforts during the pandemic.

In the second article, Prof. Jose C. Alves from the City University of Macao and his colleagues discuss a framework that combines insights on the sense-making processes of business leaders of six firms in Macao at the various crisis stages: how they dealt with internal and external stakeholders and responded to various challenges. The researchers found that most business leaders dealt with the pandemic situation as the "new normal". They adopted strategies that ensured flexibility in human resources management, cost reduction, enhanced customer relations, and capitalizing on government schemes. The researchers recommend that effective handling of the pandemic would require small firms to expand stakeholder engagement and develop new learning.

In the third article, Associate Prof. Ding Ding from the Singapore University of Social Sciences and her colleagues investigated the effects of the negative market sentiments stemming from the pandemic on the stock market. After comparing the closing stock prices of 1,567 firms from 37 sectors they found that some sectors--the ones with a greater degree of digital transformation--were more resilient to the negative market sentiment than others. Dr. Ding explains, "Even as (such) shutdowns have brought many corporeal economic activities to a near-complete standstill, consumer purchases and even trade continue to thrive online."

The fourth article, by Prof. Fengjun Liu of the Renmin Business School and his associates, investigates the impact of internal corporate social responsibility (ICSR) disclosures on consumer brand attitudes. They reveal that the perception of companies fulfilling their social responsibilities positively affects consumer attitudes. Prof. Liu says, "SMEs need to protect employee interests first and actively fulfill their ICSR to establish a good enterprise brand image. This in turn can help enterprises survive the epidemic and usher in greater development opportunities after the epidemic."

The fifth article, by Prof. Hua Song of the Renmin Business School, presents a closer look at the support that SMEs are receiving from financial service providers (FSPs). Their study compares and provides insights into the roles played by three types of FSPs: commercial banks, non-bank financial institutions, and credit-enhanced FSPs. They provide insights into how SMEs can raise capital in these trying times but call for greater collaboration between various stakeholders.

Lastly, in the sixth article, Prof. Fengbin Wang from the Renmin University of China and her colleague discuss the microstructures and dynamic processes within the five-phase system to offer a better understanding of Covid-19 as a complex system. Their study offers insight on possible dialogue between the Western process theory and the Chinese five-phase system that could help policymakers predict system evolution and guide policy decisions.

These perspectives throw light on the precarious situation that the world of business is in due to the pandemic. Nonetheless, they also provide hope and inspiration. We definitely live in interesting times, and the way our business leaders respond will ultimately decide the future of the world.

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Reference

Authors: (1) Hai Guo, (2) Jose C. Alves, (3) Ding Ding, (4) Fengjun Liu, (5) Hua Song, (6) Fengbin Wang

Title of original paper:
(A) The digitalization and public crisis responses of small and medium enterprises: Implications from a COVID-19 survey
(B) Crisis challenges of small firms in Macao during the COVID-19 pandemic
(C) Building stock market resilience through digital transformation: using Google trends to analyze the impact of COVID-19 pandemic
(D) The influence of the corporate social responsibility disclosures on consumer brand attitudes under the impact of COVID-19
(E) How different types of financial service providers support small- and medium-enterprises under the impact of COVID-19 pandemic: from the perspective of expectancy theory
(F) Microstructures and dynamic processes within the five-phase system: regarding COVID-19 as a complex system

Journal:
Frontiers of Business Research in China

DOI:
(A) https://doi.org/10.1186/s11782-020-00087-1
(B) https://doi.org/10.1186/s11782-020-00094-2
(C) https://doi.org/10.1186/s11782-020-00089-z
(D) https://doi.org/10.1186/s11782-020-00096-0
(E) https://doi.org/10.1186/s11782-020-00095-1
(F) https://doi.org/10.1186/s11782-020-00090-6

Affiliations:
(1) Business School, Renmin University of China
(2) City University of Macao
(3) School of Business, Singapore University of Social Sciences
(4) Business School, Renmin University of China
(5) Business School, Renmin University of China
(6) Business School, Renmin University of China

About Frontiers of Business Research in China

Frontiers of Business Research in China (FBR) is a quarterly journal that encourages interdisciplinary studies and interactions between Chinese and international researchers on topics pertaining to business administration. FBR publishes original academic and practical research articles that extend, test, or build management theories. It contributes to business administration practices in the Greater China region and beyond. The journal publishes commentaries and case studies in all areas of business administration, without limitations on research methods. FBR was awarded "The Highest International Impact Academic Journal of China (Humanities and Social Sciences)" in 2019 and 2020.

About the authors

Hai Guo
Prof. Hai Guo is a Professor at Renmin Business School in China. He holds a Bachelor's degree in Information and Computing Science from Xi'an Jiaotong University, where he also completed his Master's and PhD in Business Administration. Since 2009, Prof. Guo has been at Renmin Business School, where he is now a Professor.

Jose C. Alve
Prof. Jose C. Alves is Professor of Management and Dean of the Faculty of Business of the City University of Macau. His research presently focuses on Cross-border Entrepreneurship, Institutions and Sustainability in the Great Bay Area. Prof. Alves holds a PhD in Business Administration from the University of Massachusetts.

Ding Ding
Associate Prof. Ding Ding is the Vice Dean of the School of Business at the Singapore University of Social Sciences. She holds a PhD in Economics from the Nanyang Technological University and is interested in researching on Financial Technology and Digital Inclusion, the Chinese Economy, International Economics, and Education Pedagogy for Lifelong Learners.

Fengjun Liu
Prof. Fengjun Liu is a Professor of Marketing at Renmin Business School. He is the recipient of several notable awards such as the "New Century Excellent Talents" from the Ministry of Education in China and is a valuable member of the Enterprise Committee, China University Marketing Research Society.

Hua Song
Prof. Hua Song is the Associate Dean of Renmin Business School. He obtained his Ph.D. in Economics from Zhongnan University of Finance and Economics. He was also a Research Scholar (Post PhD) in the Department of Economics at Kyoto University in Japan. Prof. Song is an adviser for the Ministry of Commerce Market Regulation Think Tank and the Director of China Logistics Association.

Fengbin Wang
Prof. Fengbin Wang is a Professor of Management at Renmin Business School. She is the recipient of several awards such as the "Top 100 National Excellent Teaching Cases" and the "High-Quality Textbook for Management" awarded by the Ministry of Education of the PRC. She is also the author of two books: "Business Organization and Managerial Systems" and "Management and Control Systems of Business Groups".

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