Strategic Management Issues After COVID-19

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Table of Contents

Introduction
Management and the Economy
Marketing and the Economy
Data Analysis and the Economy
Accounting and the Economy
Finance and the Economy
Ethics and the Economy
Making Connections
Conclusion
References

Introduction

The consequences of quarantine still have a substantial impact on business. The tense atmosphere persists; however, if many businesses had a critical question about the struggle for existence at the beginning of the pandemic, now companies are experiencing the consequences of the crisis, looking for ways to recover and return to previous indicators. Effective management becomes one of the factors due to which the business continues to exist and succeed in the post-COVID period.

Management and the Economy

The pandemic has given an unprecedented impetus to the digital transformation of the company’s management processes. The key success factors of digital transformation are strategic planning, clear change management and implementation of the values and principles of “digital culture” (Hitt et al., 2020). The value of the digital form of interaction is constantly growing in all industries. This is important both for communication and for the development of products and services. Companies are paying more attention to the study of digital customer experience (Hitt et al., 2020). The product approach combined with digital technologies allows companies to manage the cost of the product effectively. A common opinion on actions and an active desire to achieve goals increases the effect of mitigating measures.

Moreover, it increases the readiness of organizations and reduces vulnerability. Companies that react quickly and adapt to unpredictable threats are characterized by a network structure, flexible and understandable instructions, distributed responsibilities and quality leaders, as well as less interdependence (Hitt et al., 2020). Due to the rapid digitalization spurred by the pandemic, the role of CEOs, finance and IT directors in determining the business strategy and structure has increased significantly. According to The Gartner CEO Survey: The CFO Perspective” financial directors are increasingly involved in the process of digitalization of business and even initiate it (Hitt et al., 2020). Thus, 82% of CFOs plan to increase investments in digital opportunities for companies in the coming years. Another Gartner study says that two-thirds of CIOs have taken the lead in high-impact initiatives aimed at addressing the challenges posed by the pandemic (Hitt et al., 2020). Technical directors began reporting directly to the CEO, training and guiding them and other senior managers during the crisis, as well as working with them to create a reliable digital strategy.

Marketing and the Economy

Social networks, blogs, and online communities have redefined people’s attitudes toward information itself, company brands, other consumers, and even themselves in a pandemic. In accordance with the situation, marketers rethink how the attitude to business changes and what happens to their current and potential customers. Even studies before the pandemic showed that young people in the 15-24 age group spend 6 to 10 hours on the Internet every day (Dias, 2021). These are quite diverse activities: searching for information, downloading music and videos, communicating in messengers with their friends. This is a massive field of action for marketers, where they can use these touchpoints with the target audience to promote products and services (Dias, 2021). In the conditions of a current pandemic situation, this field is beginning to expand significantly and cover possible older clients.

Brand authority becomes very important when it is impossible to view the product before buying offline. To make a deal, especially when it comes to expensive goods or food, the buyer needs to trust the seller. Therefore, companies need to build a personal brand consistently. Brand evaluation should become one of the key KPIs for all employees who work directly with customers (Dias, 2021). Just to be present in the digital space in a post-COVID time — to have a formal business card website, a profile on a social network for SEO because competitors already have it — will not work (Dias, 2021). Active interaction with customers in the network has become a priority. With the help of social networks, companies are able to communicate directly with customers, broadcast their values and receive feedback.

Data Analysis and the Economy

Today, the seller’s communication with the buyer takes place simultaneously on different platforms: on the website, in social networks and messengers. Prompt and polite responses to every comment and private messages have become the norm. The client expects consistency between the services, so they should not notice inconsistencies in the work of different departments of the company (Ilyina, 2021). Communication is built with a real person with their own client experience. It is necessary to avoid situations when, for example, the buyer receives a message about the delivery date in the messenger after receiving the order. For this reason, all customer data must be collected in a single system (Ilyina, 2021). Accurate segmentation of consumers and an individual approach to each client are beneficial to both parties. The clients get what they are waiting for, and the seller uses the resources optimally.

Modern digital tools allow companies to predict customer needs as accurately as possible. For example, real-time streaming analytics helps them set up dynamic pricing based on up-to-date data, not statistics (Ilyina, 2021). It is worth noting the fact that consumer standards have increased significantly during the pandemic. Today, the buyer expects that the seller will anticipate the wishes and immediately fulfil them. Therefore, marketing communications should take into account not only general characteristics, such as age, gender, and place of residence, but also correspond to consumers’ personal values.

New interests, changed patterns of behavior, as well as transformations in content consumption patterns – all this creates new opportunities (Ilyina, 2021). Updating and, more importantly, enriching all user databases from all vendors will allow companies to build new hypotheses. Understanding what the audience is thinking about and what worries them is essential because understanding the real problems can become a growth point for business development.

Accounting and the Economy

In the conditions of the current state of the economy and the limited availability of various kinds of resources, the cost management process and the problem of choosing appropriate management models play a significant role. In whatever conditions an organization exists, its fundamental task is to ensure the high efficiency of its activities, including with the help of a well-organized cost management system (Bocanet, 2021). The purpose of budgeting at the enterprise is primarily to ensure that its activities are provided with the necessary monetary resources in terms of volume and structure. It is also necessary to increase the efficiency of its activities through detailed planning, and cost control carried out at all levels of management from various types of activities.

In the context of the spread of COVID-19, the so-called resilience approach has become popular, focusing on ensuring strategic sustainability or adaptability of the economy. This approach provides the need to save as much as possible on costs to concentrate resources of a technical, managerial and financial nature (Bocanet, 2021). In addition, they are used to transform the entire activity of the enterprise at all stages of business processes. According to experts of the consulting company Boston Consulting Group, the use of such an approach not only creates the groundwork for the practical overcoming of crisis phenomena (Bocanet, 2021). In addition, it forms the basis for the implementation of re-equipment, radically changing all existing socio-economic orders. Moreover, the implementation of this concept accelerated significantly during the coronavirus pandemic.

Finance and the Economy

Small and medium-sized businesses employing less than 20 people are sensitive to fluctuations in demand and financial shocks. A particularly negative impact is the drop in sales, which occurs in small businesses by 10%, and on average by 6% more often than in large businesses (Gigauri, 2021). Similarly, the exposure of small and medium-sized businesses to financial shocks is explained. However, large businesses are more susceptible to shocks from changes in export demand. In this regard, the new strategy of the company should be based on protecting the reputation of the company and the license to operate (Gigauri, 2021). The use of broader use of online services such as virtual training, retail delivery, online banking, that is, be ready for new acquisition and investment opportunities and certainly consider the possibility of diversification. PESTLE (political, economic, social, technological, legal and environmental circumstances) and SWOT remain useful tools for considering the current business situation.

The process of managing indicators acts as an auxiliary tool for obtaining information necessary for the risk management mechanism being developed. Adverse trends should be analyzed and their impact on this mechanism assessed (Gigauri, 2021). Appropriate actions of the management mechanism should be taken for those areas of activity defined as fundamental in the enterprise’s business processes. Corrective actions may include reallocating resources (funds, personnel, and production schedule changes) or activating a planned mitigation strategy (Gigauri, 2021). It is essential that this mechanism emphasizes the need to reassess the identified risks that systematically affect the company’s activities. As the system goes through the development lifecycle, in this case, most of the information will become available for risk assessment. If the magnitude of the risk changes significantly, the approaches to its treatment should be adjusted.

Ethics and the Economy

Since the pandemic, overpromising products or services to potential clients to make a transaction has been a significant topic in marketing. During the sales process, this ethical problem is a relatively typical occurrence. To complete a transaction, salespeople often raise misleading expectations and exaggerate items or services (without disclosing all relevant facts and procedures) (Zhao, 2021). This ethical issue undermines the company’s openness, integrity, and ability to develop trust with its customers. It can also create a knowledge gap, resulting in a loss of corporate credibility. On the other hand, the pandemic has had an influence on this sort of ethical dilemma among corporations. People have been focused on buying basic things since there has been a noticeable reduction in consumption (Zhao, 2021). As a result, goods that were outside of their fundamental needs were ignored. Thus, there is a risk that corporations’ advertising strategies would involve overpromising and false promises to persuade customers to buy their goods. In times of crisis, it is unavoidable for firms to fight tooth and nail merely to stay afloat.

Many organizations have turned to remote workplaces due to the epidemic, encountering new (to them) ethical challenges. The surveillance of their staff is one of the most prevalent. Many companies supply equipment to their employees, but many others do not, and they must install monitoring software (Zhao, 2021). It is critical to make sure that the company’s limits are appropriately conveyed to employees in order to avoid misunderstandings and disputes over employee privacy and free expression.

Making Connections

When solving problems of strategic planning and management, economic and mathematical modelling and forecasting, it is necessary to identify situations and conditions caused by uncertainty to compare them with situations and conditions that inspire risk. In particular, the lack of reliable information about the competitive offer of substitute products is a kind of uncertain situation that creates prerequisites for risky decisions and actions on the part of the company’s top managers (Esposito, 2021). Uncertainty and risk assessments can also be carried out using different scientific approaches and methods belonging to the exact science or different branches of knowledge.

The external environment includes two essential components – the macroeconomic environment and the microenvironment of the immediate environment. Based on the structure of these environments, it is legitimate to assert that an organization is able to influence its surrounding microenvironment to a greater extent ((Esposito, 2021). It is shown as part of consumers, partners, competitors and other stakeholders with whom it has developed direct or indirect relationships. Thus, it becomes possible to reduce the degree of its uncertainty and create opportunities in it, thanks to the construction of cross-functional teams’ interaction. The external macroeconomic environment, the determinants of political, economic, demographic, environmental and other exogenous factors, acts as some inevitably acting cause. These factors are difficult to predict, so that they can be partially neglected.

Conclusion

The COVID-19 pandemic has raised the bar and created severe challenges for organizations in all sectors worldwide. Digital transformation is considered an absolute necessity so that companies can stay in business. The “human dimension” of these transformations, encompassing culture, organizational structure, ways of working and leadership, is seen as the most critical factor influencing the achievement of transformation results.

References

Bocanet, A. (2021). Business analysis in post-pandemic era. Academy of Strategic Management Journal, 20(4), 1–9.

Dias, A. (2021). Post-pandemic recovery strategies: Revitalizing lifestyle entrepreneurship. Journal of Policy Research in Tourism, Leisure and Events, 1–18.

Esposito, M. (2021). Building the strategic architecture of the post pandemic corporate landscape. LSE Business Review.

Gigauri, I. (2021). New economic concepts shaping business models in post-pandemic era.International Journal of Innovative Technologies in Economy, 1(33), 1–11.

Hitt, M. A., Arregle, J. L., & Holmes, R. M., Jr. (2020). Strategic management theory in a post‐pandemic and non‐ergodic world. Journal of Management Studies, 10, e12646.

Ilyina, L. (2021). Big data management and data analysis: Applied solutions in view of the spheres of the modern economy. Advances in Mathematics for Industry 4.0, 12, 281–306.

Zhao, J. (2021). Reimagining corporate social responsibility in the era of COVID-19: Embedding resilience and promoting corporate social competence.Sustainability, 13(12), 6548.

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