The Impact of COVID-19 on Exporting Challenges of SMEs : A Study of International New Ventures across Industries in India
Ahsan, Jaweria (2021)
Ahsan, Jaweria
2021
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi-fe2021051830475
https://urn.fi/URN:NBN:fi-fe2021051830475
Kuvaus
Born Global - International New Venture
Tiivistelmä
Resource-constrained SMEs as the backbone of economies, contribute heavily to employment, and drive innovation. However, it is estimated that 66% of SMEs fail within ten years from their establishment because of the adversities they face owing to their small size and limited resources. Despite their unparalleled growth and significance in the global economy, SMEs, especially those that have been international since their inception, have not been adequately researched. Therefore, using the Theory, Methods, and Context (TMC) framework suggested by Paul et al., (2017) for future research on exporting SMEs, this thesis incorporates (a) theories of International New Ventures (INVs), (b) exploratory research based on qualitative methods of case study, and (c) a country-of-origin context to study ten exporting INVs from four different industries in India.
There have been countless global crises in the past, but nothing could have prepared SMEs for the devastatingly disruptive impact that COVID-19 has had on occupational health and safety, labour, revenues, and business continuity itself. The purpose of the thesis is to explore the influence of COVID-19 on exporting challenges that INVs from different industries have been facing since the onset of the pandemic in India. The objectives of the study include exploring how the chosen industries have been affected, and uncovering the reforms that companies are planning to implement in the de-covidisation era. Understanding these aspects provides insight into how SMEs behave throughout all the three phases of global crisis management.
Using the qualitative research method, ten experts representing ten case companies were interviewed. Furthermore, two additional interviews were conducted to extract industry-level information from a regional Export Agent, and the Managing Director of one of the well-known EXIM logistics and ship building companies in East India.
The findings relate to how COVID-19 has exacerbated export challenges arising in the four main functional departments of business: human resource, production, logistics and supply chain, and finance. Being primarily a health crisis, the pandemic has severely affected labour-intensive manufacturing units. As subsets of the fashion sector, leather and cotton textiles industries struggled majorly with decline in demand. For INVs in the fruits and vegetables industry, transportation disruptions were most challenging because of the “perishable” nature of agricultural products - however, demand remained stable because “essential” products have a low elasticity of demand. Eyewear industry faced a major dip in sales, but a steep rise has been predicted in 2021, owing to the deterioration of eyesight because of increased screen-time during The Great Lockdown. All SME-INVs faced liquidity issues, although the degree of impact varied based on company profiles and industry. Through organisational learning in the post-crisis phase, INVs are planning to engage in strategic crisis management by re-evaluating their financial management, closing loopholes in contracts that stakeholders exploited during the pandemic, and looking into Business Interruption Insurance, among several other reforms.
The pandemic has exposed institutional loopholes by demonstrating the fragility of the global industry, which needs to be resilient with the help of resolve, re-imagination, and reform. Based on the findings of the study, this thesis provides several recommendations for interdependent systems to achieve resilience, allowing for the ability to anticipate, absorb, recover from, and adapt to the aftermath of disruptive shocks arising in the future - because crises are not a matter of “if”, but “when”.
There have been countless global crises in the past, but nothing could have prepared SMEs for the devastatingly disruptive impact that COVID-19 has had on occupational health and safety, labour, revenues, and business continuity itself. The purpose of the thesis is to explore the influence of COVID-19 on exporting challenges that INVs from different industries have been facing since the onset of the pandemic in India. The objectives of the study include exploring how the chosen industries have been affected, and uncovering the reforms that companies are planning to implement in the de-covidisation era. Understanding these aspects provides insight into how SMEs behave throughout all the three phases of global crisis management.
Using the qualitative research method, ten experts representing ten case companies were interviewed. Furthermore, two additional interviews were conducted to extract industry-level information from a regional Export Agent, and the Managing Director of one of the well-known EXIM logistics and ship building companies in East India.
The findings relate to how COVID-19 has exacerbated export challenges arising in the four main functional departments of business: human resource, production, logistics and supply chain, and finance. Being primarily a health crisis, the pandemic has severely affected labour-intensive manufacturing units. As subsets of the fashion sector, leather and cotton textiles industries struggled majorly with decline in demand. For INVs in the fruits and vegetables industry, transportation disruptions were most challenging because of the “perishable” nature of agricultural products - however, demand remained stable because “essential” products have a low elasticity of demand. Eyewear industry faced a major dip in sales, but a steep rise has been predicted in 2021, owing to the deterioration of eyesight because of increased screen-time during The Great Lockdown. All SME-INVs faced liquidity issues, although the degree of impact varied based on company profiles and industry. Through organisational learning in the post-crisis phase, INVs are planning to engage in strategic crisis management by re-evaluating their financial management, closing loopholes in contracts that stakeholders exploited during the pandemic, and looking into Business Interruption Insurance, among several other reforms.
The pandemic has exposed institutional loopholes by demonstrating the fragility of the global industry, which needs to be resilient with the help of resolve, re-imagination, and reform. Based on the findings of the study, this thesis provides several recommendations for interdependent systems to achieve resilience, allowing for the ability to anticipate, absorb, recover from, and adapt to the aftermath of disruptive shocks arising in the future - because crises are not a matter of “if”, but “when”.