COVID-19 as a Source of Failure or a Catalyst for Positive Changes in Business?

Abstract

Theoretical background: Beyond doubt, the COVID-19 pandemic has caused a series of perturbations in the economies of almost every country in the world. This global crisis has contributed to the business turmoil and has been seen in services in particular. Due to restrictions on economic activity introduced by governments of countries, which were aimed at slowing down the scale of virus infections, many enterprises faced a severe dilemma, i.e. how to continue their activities, how to survive the crisis, and maybe end this activity, or change it into another. For many companies, the pandemic crisis turned out to cause multi-faceted losses and even bankruptcy. But also, some companies saw the crisis as an opportunity to introduce positive changes and gain new sales markets and customers. For these companies, the coronavirus pandemic has become a growth catalyst.

Purpose of the article: The theoretical part of the article is devoted to analyzing the literature resources on the coronavirus pandemic and its impact on business. In the practical part, the author explores the results of the quantitative research conducted in 2021 to find out how the coronavirus influenced the functioning of the SME sector in Poland. The author posed the following research questions: How did coronavirus impact the functioning of enterprises? How did companies cope with this crisis? Was the pandemic crisis a source of financial failure or collapse of Polish enterprises? Was it an opportunity for market success? Did the pandemic initiate new business strategies, cause or accelerate changes in the business model?

Research methods: The literature review was made using the database of scientific articles in Google Scholar and ResearchGate. The author searched for relevant articles using the following keywords: “COVID-19”, “coronavirus”, “pandemic”, “pandemic crisis”, and “lockdown”. The quantitative study covered 500 Polish business entities operating in production, trade, and services in domestic and foreign markets. There were no limitations regarding the area of activity (according to the Polish Classification of Activities) or the number of years of firms’ presence on the market. The study did not cover large enterprises, i.e. 250 or more employees.

Main findings: In general, the coronavirus pandemic caused problems in the market but did not contribute to the drastic collapse of the SME sector, nor was it a catalyst for their spectacular development. The conducted study showed that most companies dealt moderately well with the pandemic crisis. They took remedial action to avoid a complete loss of liquidity, going out of business, and bankruptcy risk. A small percentage saw an opportunity in the crisis or used this time to improve their situation.