Assessment Title: Coursework

Module Leader: Dr Zafeira Kastrinaki

Distribution Date: January 2022

Submission Deadline:
12.00 UK time (midday, lunchtime) on 27/04/22

Feedback by : 27/05/22, 20 working days from the deadline

Contribution to overall 100%

module assessment:

Indicative student time 42 hours in total equivalent to 5.5 full-time working days
working on assessment:

Word or Page Limit (if 2,500 words excluding references, (+/-10%)

applicable):

Assessment Type Individual

(individual or group):

Submitted by:
Student ID:

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 Table of Contents
Introduction......................................................................................................................................3

The current outbreak of the COVID- 19..........................................................................................4

Highlight the importance for international companies to prepare for, and respond, to global crises
and pandemics.................................................................................................................................4

The impact of the spread of covid19 will vary based on international companies’ organisational
resilience, level of exposure, geographic distribution and other factors.........................................6

Critically discuss how international firms are directly or indirectly affected by the COVID 19
pandemic..........................................................................................................................................7

Critically discuss and evaluate risk mitigation plans that international companies can develop to
reduce the effects of a global pandemic..........................................................................................8

Conclusion.....................................................................................................................................10

References......................................................................................................................................11

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Introduction

With the outbreak of the COVID19 pandemic, the business organisations had to shut down their
operations due to the guidelines of lockdown issued by the governments (Apedo-Amah et al.,
2020). The aim of this report is to understand the current scenario after the outbreak of covid-19
and the importance of international business organisations to respond to the global crisis along
with the outbreak of the pandemic. It also discusses the spread of the co-ed 19 pandemics and the
major factors that can lead to increased risk and uncertainty. In addition to this, the report also
sheds light on how business organisations are impacted by the outbreak of the pandemic and the
major risk faced by the business organisations to reduce the effect of the global pandemic.

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The current outbreak of the COVID- 19

COVID-19 has revealed persistent inequalities based on income, race, age, gender, and location.
Despite recent improvements in global health, people around the globe continue to experience
complex, interrelated threats to their healthiness and well-being deeply embedded in social,
political, economic and environmental factors (WHO, 2022). The outbreak of the COVID-19
pandemic has not only created negative impacts on human health but also has also negatively
impacted the growth of the economy in a severe manner. The governments of all the major
countries had to impose lockdown protocols to reduce the contraction of the virus and keep the
people safe. This has led to the growth of a recession situation.

Many businesses have been forced to close as a result of the COVID-19 pandemic, causing
unprecedented disruptions throughout most industry sectors. Short-term challenges confront
retailers and brands, including those relating to safety and health, supply chain, employees,
working capital, customer needs, sales, and advertising. As discussed by Craven et al., (2020),
overcoming these obstacles does not guarantee a bright future or even a future at all. This is
primarily because, once the pandemic is finished, we will be thrust into a world that is massively
different from the one that existed prior to the outbreak. Many markets, particularly in the
tourism and hospitality industries, have vanished. All organisational functions are designed to
prioritise and optimise spending, as well as reschedule tasks that will not add value in today's
environment.

Companies, particularly start-ups, have imposed a hiring moratorium that will last indefinitely.
Simultaneously, online entertainment, communication, and shopping are all experiencing
extraordinary growth. Consumer-packaged-goods companies are often under more pressure than
ever as the economy continues to suffer from the effects of COVID-19. Food and packaging
commodities have seen a 22 per cent increase in price. Manufacturing wages and labour costs
increased from 5% to 20% of total costs in 2020.

Highlight the importance for international companies to prepare for, and respond, to
global crises and pandemics.

As the COVID-19 pandemic spreads, it is clear that businesses are taking calculated steps to
protect employees and reduce financial and operational risk. As a result of travel restrictions,
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mandatory social distancing, and homeworking, many multinational businesses have reduced the
output of facilities and/or suspended operations in affected regions. Companies and governments
all over the world are keeping a close eye on the situation. While cyber risk is a new factor to
consider in resilience planning, businesses have had various resilience plans in place for disaster
recovery, business continuity and crisis management for a long time (Sheng et al., 2021). While
these plans are effective for a variety of business disruptions, they may fall short in the event of a
global crisis such as a coronavirus or other pandemic. The business organisations that are
operating on a global scale have responded to the pandemic by making use of digital
technologies and implementing large scale changes in business operations.

Corporate leaders have pledged to help influence COVID-19's rehabilitation and rebuilding
efforts by contributing their knowledge, networks, and resources. Coronavirus pandemic exposed
longstanding social and economic fault lines, resulting in a crisis in our society and economies.
It's part of a larger effort to rebuild the basics of the economy and society, together and quickly,
to create a kinder, more environment friendly, and more robust future. The Great Reset initiative
was launched this week by the World Economic Forum.

In January 2021, the World Economic Forum (WEF) will host a unique twin summit on the
Great Reset that will take place in Davos, Switzerland, as well as virtually from around the
world. The Prince of Wales and other international leaders discussed the importance of the
global energy transition during the project's launch. As one of the Forum's key strategic partners,
BP has committed to becoming a net-zero company by the year 2050. (WEF, 2022). The Chief
executive officer Bernard Looney also mentioned that climate change is an urgent issue, and that
creative solutions are needed from all stakeholders. Globally, the spread of COVID-19 is
unparalleled.

COVID-19 Risk Outlook: A Preliminary Assessment and its Implications has been produced by
the World Economic Forum (WEF) in partnership with Zurich Insurance Group and Marsh &
McLennan on May 19, 2020, to help businesses understand the rising dangers of the coronavirus
pandemic. Two-thirds of those polled listed a long-term global recession as their main business
concern. More than half of the respondents cited consolidation and bankruptcies, the failure of
industries to rebound, and supply chain disruption as their top three worries (WEF, 2022).

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Geopolitical issues are also a major concern for businesses, with more than 40 percent naming
increased limitations on the mobility of people as a major concern. A rise in cyberattacks and
data piracy, as well as a full breakdown of IT infrastructure and networking, are the third most
worrisome issues for organisations to deal with, according to research. As the globe rebuilds and
adjusts to a "new normal," collaboration between the commercial and public sectors will be even
more vital. It has already helped resolve some of the most serious economic and business
challenges related with the COVID-19 epidemic.

The impact of the spread of covid19 will vary based on international companies’
organisational resilience, level of exposure, geographic distribution and other factors.

COVID-19 has reignited an old debate regarding the risks of international production's supply
chain. As discussed by Ibn-Mohammed et al. (2021) Government lockdowns have also affected
the availability of domestic inputs, so there is no indication that economies would have fared
much better in the utter lack of global value chains. The pandemic has brought to light both the
weaknesses and strengths of global value chains, particularly in terms of the supply of essential
goods. International production networks, according to previous experience, can be disturbed and
play a role in the spread of market turmoil across industries all across the globe. They do,
however, aid companies and countries in recovering more quickly.

Successful risk management approaches at the firm level, with an emphasis on risk awareness,
increased transparency in the value chain, and promoting agility, can lead to more resilient
production networks (OECD, 2022). Supplier diversification and 'just in case' processes are goals
for essential activities, with sourcing strategies varying based on the scale of acceptable risk.
Governments can help businesses build more adaptable global value chains by accessing and
distributing data on bottleneck upstream perspective and concentration, working to develop
stress tests for critical supply chains, and creating a regulatory environment that isn't a source of
policy-related uncertainty.

Critically discuss how international firms are directly or indirectly affected by the COVID
19 pandemic

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On the supply side, health concerns are reflected in lower activity throughout all local sectors of
the economy, including tradable industries like manufacturing. When academics try to measure
the effects of a health problem, mortality and morbidity are the traditional factors of the
decreased productivity workforce. The main issues affecting countries' supply capacity are
reduced labour supply caused by self-isolation measures, mobility restrictions, illness, and
increased mortality. The key supply-side impacts include a decrease in total labour supply, an
increase in the risk premium, and an improvement in productivity costs in all sectors.

The massive interruptions to international trade and global value chains are probably the most
striking impact of the current pandemic (GVCs). The surprises to GVCs result in "triple hits" in
the manufacturing sectors of the most "globalised" economies. A most needed to meet the
influence of the COVID-19 pandemic was a sudden surge in world-wide demand for COVID-19-
related medical equipment and supplies, which has outpaced existing domestic production levels,
leading to increased import demand and rising prices. Export restrictions imposed by large
economies facing shortages resulted in price increases of up to 20.5 per cent in the case of
medical masks, as per the World Bank. Pandemics, moreover, have a long-term negative impact
on aggregate demand (Verbeke and Yuan, 2021). On the demand side, the pandemic has a
variety of effects, including decreased household spending and increased business lack of
certainty about future demand, both of which reduce business investment.

The long-run effects of fifteen major pandemics, ranging from the Black Death (1347-1352) to
the H1N1 Pandemic (2009) and found that such major events could cause transient downward
shocks to the natural interest rate over the medium term (around 10-20 years). Investment
demand is expected to decline as the economy's labour shortage reduces the need for large
investments. Savers may react to the shock by increasing their savings, either behaviourally as
new preventative motives start, or simply to replace the lost capital used up during the apex of
the calamity, they discovered (He and Harris, 2020). Not only is there a drop in aggregate
consumption demand, but there are also disrupted usual consumption patterns and market
anomalies as a result of panic among consumers and businesses as choices for certain activities
change as a result of the outbreak.

To achieve long-term, inclusive growth, the workplace must be transformed to maximise the
efforts of all employees. Women in all sectors have taken on more household responsibilities in
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the COVID-19 era, and more women are reporting feelings of burnout. These issues are
exacerbated for women in the healthcare industry, who have fewer opportunities to work
remotely and feel emotionally more pressure to put work ahead of family. Despite these
obstacles, healthcare continues to outperform other industries in terms of female representation,
with more than two-thirds of entry-level employees and 53% of employees in senior-manager or
higher positions, which is 18 percentage points higher than the national average (Mckinsey,
2022).

To achieve maximum sustainable growth, each segment, industry, and function would have to
reimagine itself. Procurement executives, for example, are trying to deal with one of the most
difficult market conditions of their careers (McMaster et al., 2020). Among other major changes,
procurement organisations must take a prominent role in safeguarding enterprise margin and
economic expansion, invest in proven process and technology automation, and develop extensive
expertise in supply market dynamics.

Critically discuss and evaluate risk mitigation plans that international companies can
develop in order to reduce the effects of a global pandemic

Enterprise Risk Management is a methodology and software infrastructure for identifying and
communicating those influences to your organisation, industry, and geographic location. It
produces a strategy and establishes a communication and implementation mechanism. A risk
management process brings everyone in your organisation together to advance the development
and change in order to mitigate the negative effects of events. It's critical to reduce the
coronavirus's economic impact (Settersten et al., 2020). Fear can be turned into action and
uneasiness into the peace of mind with this foundation and enterprise risk management plan.

Disruption Due to Social Distancing

Public health officials use the term "social distancing" to describe certain actions they take to
stop or slow the propagation of an extremely infectious disease. During the peak pandemic
months of December 2020 to March 2021, "social distancing" policies in US workplaces and
schools are likely to be required. During this time, most business organisations and travel will be
cancelled or shortened. In 2019, the Internet accounted for only about 14.1 per cent of all retail

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sales worldwide. Because physical purchasing cycles may be impeded, the fate of the surviving
85.9% of commercial enterprises may be jeopardised.

Unemployment, Recession and Investment Pull-back

According to projections, we will be in a full-fledged recession by the end phase of the year.
Conferences are being cancelled at an alarming rate. People are being asked to work from home
by corporations. Students are being asked not to return to school after Spring Break. Constant
investment as well as utilisation power the economic engine of growth. Experts doubt a COVID-
19 vaccine will be accessible prior to the second quarter of 2021. As discussed by McCann, P.
and Ortega-Argilés (2021), Uncertainty has a negative impact on investments, and businesses are
likely to reduce growth investments, making a contribution to a rapid downturn in the economy.
In the "second wave" of COVID-19, which is expected to peak in the third quarter, there may be
substantial layoffs at current businesses.

For mitigating the issues faced by the businesses in a smart and effective way, the business
organisations are required to implement the following to counter the uncertain conditions.

Readiness Assessment: The managers of the business organisations need to perform risk
assessments and thereby develop enhanced insights about their operating markets and their effect
on the business organisations. Companies can track the progress and adherence using the
readiness assessments, which break down practices and standards into actionable fragments.

Risk Management Plan: It is critical for all companies to do a risk assessment to identify and
prioritise any new risks or holes in current controls for new situations, such as the emergence of
pandemics or a recession. The development of the risk management plan will enhance the overall
business success and create scope for enhanced and strategic management of the risk.

Developing Policies: Policies need to be revisited, updated, and communicated with the
progression of the pandemic and with the availability of new information. Revising and
reviewing a work-from-home policy, for example, will be efficient only if it is disseminated with
governance monitoring for adoption from across the organisation.

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Conclusion

From the above study, it can be concluded that the business organisations had suffered severe
losses and the overall economy all across the globe was highly impacted after the outbreak of the
coronavirus pandemic. The governing bodies and other local administrations are providing
benefits for the business organisations to ensure increased benefits and reduced taxes. Various
organisations across the globe are meeting virtually and discussing enhancing the global value
chain. This will create scope for increased growth and development of the organisations and
counter the impact of the pandemic. It can also be seen that the imposition of lockdown protocols
has prevented the businesses to perform all the activities and enhancing profitability. There are
several risks such as the risk of disruption and the risk economic slowdown and unemployment.
Business organisations can enhance their activities and reduce the overall risks by conducting
risk assessments and developing mitigation plans to reduce the overall impact of the risk on the
growth and development of the business organisation.

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References

Apedo-Amah, M.C., Avdiu, B., Cirera, X., Cruz, M., Davies, E., Grover, A., Iacovone, L.,
Kilinc, U., Medvedev, D., Maduko, F.O. and Poupakis, S., 2020. Unmasking the Impact of
COVID-19 on Businesses.

Craven, M., Liu, L., Mysore, M. and Wilson, M., 2020. COVID-19: Implications for
business. McKinsey & Company, 8.

Donthu, N. and Gustafsson, A., 2020. Effects of COVID-19 on business and research. Journal of
business research, 117, pp.284-289.

He, H. and Harris, L., 2020. The impact of Covid-19 pandemic on corporate social responsibility
and marketing philosophy. Journal of business research, 116, pp.176-182.

Ibn-Mohammed, T., Mustapha, K.B., Godsell, J., Adamu, Z., Babatunde, K.A., Akintade, D.D.,
Acquaye, A., Fujii, H., Ndiaye, M.M., Yamoah, F.A. and Koh, S.C.L., 2021. A critical analysis
of the impacts of COVID-19 on the global economy and ecosystems and opportunities for
circular economy strategies. Resources, Conservation and Recycling, 164, p.105169.

McCann, P. and Ortega-Argilés, R., 2021. The Covid-19 shock: the UK national and regional
implications in the light of international evidence. In Productivity and the Pandemic. Edward
Elgar Publishing.

Mckinsey, 2022., COVID-19: Implications for business. [online] Available at:

https://www.mckinsey.com/business-functions/risk-and-resilience/our-insights/covid-19-
implications-for-business [Accessed 13 April 2022]

McMaster, M., Nettleton, C., Tom, C., Xu, B., Cao, C. and Qiao, P., 2020. Risk management:
Rethinking fashion supply chain management for multinational corporations in light of the
COVID-19 outbreak. Journal of Risk and Financial Management, 13(8), p.173.

OECD, 2022., COVID-19 and global value chains: Policy options to build more resilient
production networks. [online] Available at:
https://www.oecd.org/coronavirus/policy-responses/covid-19-and-global-value-chains-policy-
options-to-build-more-resilient-production-networks-04934ef4/ [Accessed 13 April 2022]

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Settersten Jr, R.A., Bernardi, L., Härkönen, J., Antonucci, T.C., Dykstra, P.A., Heckhausen, J.,
Kuh, D., Mayer, K.U., Moen, P., Mortimer, J.T. and Mulder, C.H., 2020. Understanding the
effects of Covid-19 through a life course lens. Advances in Life Course Research, 45, p.100360.

Sheng, J., Amankwah‐Amoah, J., Khan, Z. and Wang, X., 2021. COVID‐19 pandemic in the
new era of big data analytics: Methodological innovations and future research directions. British
Journal of Management, 32(4), pp.1164-1183.

Verbeke, A. and Yuan, W., 2021. A few implications of the COVID-19 pandemic for
international business strategy research. Journal of Management Studies, 58(2), pp.597-601.

WEF, 2022., A prolonged global recession, job losses and another pandemic: the COVID-19
risk report reveals top concerns for business. [online] Available at:
https://www.weforum.org/agenda/2020/03/how-are-companies-responding-to-the-coronavirus-
crisis-d15bed6137/ [Accessed 13 April 2022]

WEF, 2022., Companies commit to realising a Great Reset of capitalism. [online] Available at:
https://www.weforum.org/agenda/2020/03/how-are-companies-responding-to-the-coronavirus-
crisis-d15bed6137/ [Accessed 13 April 2022]

WHO, 2022., The impact of COVID-19 on global health goals [online] Available at:
https://www.who.int/news-room/spotlight/the-impact-of-covid-19-on-global-health-
goals#:~:text=COVID%2D19%20has%20exposed%20persistent,and%20environmental
%20determinants%20of%20health. [Accessed 13 April 2022]

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