Reimagining global food value chains through effective resilience to COVID-19 shocks and similar future events: A dynamic capability perspective

Abstract

The restructuring of global value/supply chains gained increasing attention as the unprecedented COVID-19 echoed around the world. Yet, the COVID-19 related theory-driven, large scale quantitative, and empirical studies are relatively scarce. This study advances the extant literature by empirically investigating how do firms in the global food value chains (GFVCs) re-imagine their businesses structure in response to the COVID-19-becoming more resilient and competitive to the current pandemic and similar future events. We leverage a unique data of 231 senior managers of the Australian GFVCs and examine their firms' response strategies. Drawing upon key insights from the dynamic capability view, we find that GFVCs' competitiveness is achieved when exposure to COVID-19 shocks elicits dynamic capabilities-readiness, response, recovery-and these capabilities work jointly and sequentially to cultivate resilience. A key finding of this study is that firms with domestic plus global value chain partners are more resilient than those having only global business partners. This finding implies that excessive reliance on offshoring sometimes becomes lethal, especially amid unexpected and prolonged global shocks and, therefore, companies should strike a balance between domestic and global business partners to remain competitive. These findings offer important contributions to theory, practice, and UN sustainable development goals.

The role of dynamic capabilities and strategic agility of B2B high-tech small and medium-sized enterprises during COVID-19 pandemic: Exploratory case studies from Finland

“…Our findings establish that the case SMEs adjusted their business models to deal with the pandemic, such as remote working and efficient use of IT and communications tools to connect with the employees and customers. These findings support the past scholarship in that SMEs are driven toward digital capabilities to tackle COVID-19 containment measures ( Ali et al, 2022 ; Papadopoulos et al, 2020 ). The case SMEs needed to avoid losing their most valuable assets (highlight skilled employees) in a small open economy where replacement costs of such employees can be high.…”

“…Despite the severity of exogenous shocks (i.e., earthquakes, hurricanes, floods), their consequences were faced by B2B SMEs in a specific country or region ( Gunessee & Subramanian, 2020 ). However, the outbreak of COVID-19 is a major disruptive event of history that has impacted businesses worldwide and disrupted global value chains ( Ali et al, 2022 ; Sakurai & Chughtai, 2020 ). Mandatory lockdowns have been implemented in many parts of the world to limit the spread of disease that led to the shutdown of factories and the temporary closure of businesses relying on physical stores.…”

“…COVID-19 pandemic brought many unprecedented social, technological, and structural challenges for B2B SMEs in many countries ( Markovic et al, 2021 ). These challenges include problems arising from the absence of physical connections and remote working ( Ali et al, 2022 ), cancellation of meetings and global events (like customer meetings, trade fairs, and conferences), closure of borders and travel restrictions, a devastating number of communications problems related to COVID-19, and greater mental issues (e.g., stress, anxiety, nervousness) of stakeholders ( Juergensen, Guimón, & Narula, 2020 ; Markovic et al, 2021 ). These problems have affected and being affected by fear of temporary or permanent dismissal, lack of inventory, disruption of global value chains, stock delivery problems, adjustment to new work arrangements (e.g., working from home, expansion of work roles, changes to information exchange, and virtual meeting), and difficulty in maintaining daily operations ( Hartmann & Lussier, 2020 ; Markovic et al, 2021 ).…”

“…Indeed, several SMEs started implementing digital technologies such as blockchain, the internet of things, and artificial intelligence in response to COVID-19-inflicted containment measures and labor shortages ( Papadopoulos et al, 2020 ). Exposure to COVID-19 elicited DCs in several leading firms dealing with the current pandemic and similar future incidents ( Ali et al, 2022 ). Similarly, a UK sports recovery business, MyoMaster, created an online store to sell products online, allowing people to train at home.…”

“… Mitręga and Choi (2021) note that relational management capabilities (e.g., frequent communication, handling conflicts) significantly support SMEs in the transportation sector in dealing with COVID-19 crisis. Ali, Arslan, Chowdhury, Khan, and Tarba (2022) argued that SMEs of the global food supply chain instigate readiness, response, and recovery-related DCs in response to the COVID-19 outbreak. Papadopoulos, Baltas, and Balta (2020) assume that COVID-19 crisis could trigger digital transformation capabilities in SMEs.…”