Managing Sustainable Business Relationships in a Post Covid-19 Era

At the time of completing our writing this piece in November 2020, we are still trying to navigate how to go about our daily lives, and businesses face challenges in terms of sustainably navigating the Covid-19 challenge by first surviving and then aiming to develop or thrive. In this chapter, we will draw upon different concepts, but also many examples from across the world in terms of the different relationships between various stakeholders, and within a business and management domain. We will discuss both local and global relationship challenges we face and are dealing with.

Having set the scene above, here from a more philosophical perspective, we start the discussion with the key question of what the purpose of a business is. Why do businesses exist, what are they for? Whom do they exist for? What is their prime objective? And this philosophical question is very important to reflect upon in terms of large and small businesses, across the world and, importantly, what has the pandemic forced us to change as a business? Of course, we have seen what the crisis is about. We have seen the drivers. We have seen what the new normal is going to be. We have seen uncertainty. And so, what is it that we change in our ethos, our existence as a business? That is our second philosophical question.

Coopetition (mix of cooperation and competition) is a strategy used by most businesses that mutually benefit from each other (Pattinson et al., 2018; Gnyawali et al., 2016). Coopetition was seen among vaccine and medical equipment manufacturers in the USA, Germany, and China who shared knowledge to collectively develop Covid-19 vaccines and other equipment such as masks and ventilators (Bloomberg, 2021; Reuters, 2020). Crick and Crick (2020) suggest decision-making authorities to adopt coopetition strategies during emergencies and benefit mutually through data sharing and law relaxations. Crick and Crick (2020) also identify technological collaborations between technology providers such as Apple and Google to be beneficial to business organizations and the public. Businesses must quickly and strategically make their move during global crises to deal with challenges (Liu et al., 2020). Businesses must also design predictive models to plan uninterrupted supply chain (Liu et al., 2020). This could include setting up manufacturing units in different geographical locations, diversified business operations, and so on. Multinational companies (MNCs) are capable of mobilizing funds and resources in emergencies since they operate in multiple locations. The predictive model must consider different scenarios (Liu et al., 2020) such as financial, health, and economy crises. Organizations must now include pandemics, natural disasters, wars, and so on in emergency preparedness and have a strategy in place. For business sustainability, the “triple bottom line” theory is considered most suitable for designing a firm’s strategy. This theory speaks of maintaining a perfect balance between people, profit, and planet (Elkington, 2013; Mattera et al., 2021).

During the Covid-19 pandemic, governments have also been supportive to SMEs. For example, in France, the government sanctioned 4 billion Euros (Mawad, 2020) and in the UK, 1 billion GBP was set aside for SMEs (Stothard, 2020). Collaborations for innovation and sustainability are critical for SMEs. Ties with the government can help in tax reductions and loan subsidies. This is usually the scenario where businesses can benefit from government relations. While the MNCs fared better during the ongoing pandemic, SMEs were struggling to make ends meet mainly due to financial constraints. To lessen these burdens, government and some private companies came forward to help. Bank of America and Unilever donated USD 250 million and USD 540 million, respectively, to fund small businesses and households. When a crisis strikes, mostly small business owners are affected leading to closure of business (Kalogiannidis, 2020). In countries such as Canada, USA, Japan, France, and Germany, governments have initiated job retention schemes to support firms and their employees (OECD, 2020c).

Generally, every business is regulated by law. And within this regulated framework, all responsible stakeholders look for their share of profit from the overall business turnover. During a crisis, if the organization is unable to perform, all stakeholders are on the losing side. Mainly organizations suffer from financial loss. One reason could be that consumers reduce consumption from their end to cut down expenses on non-essential goods and services leading to loss of sales for suppliers. This in turn increases production cost if economies of scale are not exploited as before. When demand is low, prices reduce and ultimately businesses incur losses. For example, prices of crude oil, flight tickets, and vehicles experienced all-time low prices.

In conclusion, tomorrow’s post-Covid-19 organization will look like this. Organizations will have to have an operating model and will have to redesign themselves and restrategize to be flatter in terms of decision-making, in terms of hierarchy, they’ll need to also be fast and quick in terms of speed, in terms of decision-making and in terms of serving their customers. Also, they need to work across functions and collaborate with each other. Recently, we researched and published a paper on how those big and small firms and governments across the world need to collaborate and find solutions to develop a vaccine (Patnaik et al., 2020). Our recent work talks about how that collaboration becomes extremely important. Also, organizations need to be flexible; they need to be nimble is what the literature talks about, being able to move from plan A to B, change their strategies and policies, change their practices. Dynamism, agility, and resilience are other keys required for tomorrow’s post Covid-19 organizations. So here, you can see that all of these things lead to improved outcomes. Be it speed, be it responsiveness, be it efficiency, be it performance. And the bottom line again for any business is how they can deliver better goods and services faster and cheaper, and thus tomorrow’s post Covid-19 organization is going to look like this. Further, those organizations that are looking at the future and want to not only survive but also thrive will need to work toward this. And also, organizations will probably need to be inclusive and of course earn their profit, but not to forget in that process that they can be socially responsible. An Accenture report talks about how the business landscape is changing. On the one hand, you have organizations that understand the impact, implications, and effects of the progression of the pandemic, and on the other hand, how the society or the responses of the businesses are toward the society. And one of the important things identified in this report is that companies are increasingly focusing on their stakeholder’s concern versus focusing purely on profit and shareholder. And so yes, the latest trend is that businesses have realized that social responsibility is also linked to both their surviving and thriving. Another important question many organizations are debating is how can this Covid-19 threat be turned into an opportunity? Of course, not all industries are equal, and not all industries are immune in terms of what businesses they are in, when it comes to exposure to socially responsible behavior. But they can be selective, and again organizations of course have to survive, but then are they inclusive? Are they looking at the social responsibilities along with that survival? Because the age-old saying is that, “collectively we can survive,” or we can only look after ourselves. It is a straightforward thing but not as straightforward possibly if you are a business struggling to survive.