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COVID 19 and the Business Management Crisis: An Empirical Study in SMEs

Author

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  • Margarida Rodrigues

    (CEFAGE-UBI Research Center, Department of Management and Economics, Universidade da Beira Interior, Estrada do Sineiro, 6200-209 Covilhã, Portugal)

  • Mário Franco

    (CEFAGE-UBI Research Center, Department of Management and Economics, Universidade da Beira Interior, Estrada do Sineiro, 6200-209 Covilhã, Portugal)

  • Nuno Sousa

    (CETRAD Research Center, Universidade de Trás-os-Montes e Alto Douro, 5000-801 Vila Real, Portugal)

  • Rui Silva

    (CETRAD Research Center, Universidade de Trás-os-Montes e Alto Douro, 5000-801 Vila Real, Portugal)

Abstract

The COVID-19 pandemic has forced many firms to close, causing an unprecedented interruption in trade in most sectors of economic activity worldwide. Although global supply chains have been affected by the general lockdown, due to their particular characteristics, small and medium-sized enterprises (SMEs) have been hit most severely by the measures implemented to prevent the spread of the virus. This study aims to determine how these firms coped with the disruption caused by the closure, in terms of population and their daily lives to carry out their economic activities. For this purpose, a qualitative methodology (descriptive and inductive) was used through the use of snowball sampling with a questionnaire in Portugal during the lockdown. The results obtained show that SMEs face a series of difficulties from interrupting their operations, which has caused serious liquidity problems, with effects on their future continuity and maintaining jobs. Additionally, it showed the importance of government measures to support these firms today and in the future, although the number of firms adhering to them is considerably affected by the eligibility criteria and the speed of institutions’ response. The main contribution of this research lies in confirming that the weaknesses in SMEs are the principal obstacle to a resilient response to this crisis, such as their limited liquidity, human resources, digitalization, and use of information technology. These weaknesses and/or threats had already been indicated in the various theoretical currents stemming from Organizational Theory, so the originality of this contribution lies in the fact that the managers of these SMEs are endowed with other skills and characteristics, such as, for example, dynamic capacities to manage business in an unparalleled crisis and to continue their operations, even when faced with a global blockage. Implications for theory and practice, limitations, and suggestions for future research are also presented.

Suggested Citation

  • Margarida Rodrigues & Mário Franco & Nuno Sousa & Rui Silva, 2021. "COVID 19 and the Business Management Crisis: An Empirical Study in SMEs," Sustainability, MDPI, vol. 13(11), pages 1-20, May.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:11:p:5912-:d:561321
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    References listed on IDEAS

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    2. Metsiou Anastasia & Broni Georgia & Papachristou Eleni & Kiki Magdalini, 2023. "Business Ethics Covid and War in the Center of Lignite Production," Journal of Finance and Investment Analysis, SCIENPRESS Ltd, vol. 12(1), pages 1-2.
    3. Xie, Xuemei & Wu, Yonghui & Palacios-Marqués, Daniel & Ribeiro-Navarrete, Samuel, 2022. "Business networks and organizational resilience capacity in the digital age during COVID-19: A perspective utilizing organizational information processing theory," Technological Forecasting and Social Change, Elsevier, vol. 177(C).
    4. Nishant Saravanan & Jessica Olivares-Aguila & Alejandro Vital-Soto, 2022. "Bibliometric and Text Analytics Approaches to Review COVID-19 Impacts on Supply Chains," Sustainability, MDPI, vol. 14(23), pages 1-33, November.
    5. Marko Šostar & Vladimir Ristanović, 2023. "An Assessment of the Impact of the COVID-19 Pandemic on Consumer Behavior Using the Analytic Hierarchy Process Model," Sustainability, MDPI, vol. 15(20), pages 1-31, October.

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