Abstract
COVID-19 is a pandemic of the 21st century, a disease that shook the world and altered the lives of entire communities. Due to the enormous negative influence on the economy, it permanently alters the way an organization operates, leading businesses to develop crisis management techniques and implement new innovative practices. Agriculture is no exception. Given the sector's constant growth, which is not only due to population growth but also to continuous lifestyle changes, it is critical to implement recovery plans at the organizational and government levels. Thus, this chapter provides an overview of crisis management, including its key characteristics and framework; analyzes the importance of innovation in the agricultural sector; provides an overview of the agricultural sector; examines the impact of the pandemic on this sector and some recovery strategies; and examines the attitude of agricultural professionals toward the COVID-19 crisis.
TopIntroduction
The SARS-CoV-2, also called COVID-19, gained this designation in order to not create unnecessary panic among the population of different countries, such as Asia that suffered great impact of SARS in 20031 (WHO, 2020a). Despite of its outbreak in Wuhan province in China in late 2019, it was reported to World Health Organization´s Chinese office only on 31st of December the same year. The virus spread that started with 282 confirmed cases, mostly in China and some in Japan, Republic of Korea and Thailand, turned out to be the most devastating pandemic of the XXI century counting around 173.005.553 cases and 3.727.605 death worldwide (WHO, 2020b). The most harmful impact on health of populations was registered in Americas and Europe (43% and 31% cumulative cases respectively) (WHO, 2020b), and as a consequence world’s economy suffered irrecoverable damage.
As a preventive measure, massive lockdowns and household isolations, gradually adopted across and within countries, had a major influence on collapse of economic activity worldwide (FAO, 2020). All companies (directly or not) experienced COVID-19 impact on their activity, through factories’ shutdowns, labor shortages due to cash flow stress, and disruptions in the supply chain (Reid et al., 2020 as cite in Rowan & Galanakis, 2020).
While the most of the governments were concentrated on reducing the transmission and further spread of this proven to be deadly virus, the whole industries had to rethink their business models and transition to sustainable supply chains in the aftermath of COVID-19 that includes rethinking vulnerabilities created by over-reliance on ‘just-in-time’ or ‘business-as-usual’ practices (Sarkis et al., 2020 in Rowan & Galanakis, 2020).
There is no doubt that economic recovery is not expected to occur shortly (FAO, 2020a) but there are some industries, such as those belonging to agrifood sector, that are crucial to survival of populations. According to FAO report, the most destructive impact of current pandemic is being observed in the group of low-income food-deficit countries, which are not self-sufficient enough to produce the food they consume. Eventually, the number of people without regular access to basic food supplies will increase (FAO, 2020a).
In 2018, the agro-sector in European Union reached € 1.098 billion turnovers and employed 4.24 million people (Saguy et al., 2018 as cite in Rowan & Galanakis, 2020). The importance of sector is undeniable, that is why most of the countries granted economic stimulus (European Commission provided €750 billion to help mitigate the shock from COVID-19 pandemic). As for other priorities established by EU (European Union) there are climate actions, health program and digital strategies, created in order to ensure continuity of supply chain for food, medical products and services across European Union.
Beside existing stimulus, each company had to make urgent decision in order to survive first shock of COVID-19 and to prevent possible pandemics impacts in future. In such situations, crisis management and recovery strategies play imperative role.
The main purpose of present research paper is to study managers’ attitude towards crisis provoked by COVID-19 virus spread and strategies adapted by organizations in agro-sector (agriculture and agri-food) in order to minimize pandemic impact. In order to achieve the main goal, theoretical overview was structured in two parts (Figure 1): Crisis (concept and management) and Response (possible strategies for better recovery).
Figure 1. Theoretical background structure
Key Terms in this Chapter
Overt: Occurs when all precautionary measures available to deal with concealed crisis are ineffective.
Postcrisis: When the acute stage has passed and the organization has reverted to “normalcy”.
Chronic Crisis Stage: Where the greatest harm is done to the firm and its stakeholders, including employees, management, investors, customers, suppliers, the local community, and even government regulators.
Trigger Event: The event that initiates the crisis and makes it visible to the organization's main stakeholders.
Preconditions: Warning stage, where the set of several small events that take place before actual crisis occurs.
Covert: Occurs when no action is taken during a potential crisis, when temporary obstacles in achieving organizational goals are encountered, and when organizational capacity is not fully leveraged to overcome the crisis.
Crisis: An unforeseen incident marked by complicated settings of turmoil and tension, frequently accompanied by a dearth of accurate information.