Businesses and their community in times of COVID-19: a stakeholder theory approach

Abstract

PurposeThe purpose of this study is to build an understanding of how firms operate under the COVID-19 crisis. Specifically, the study examines the significance of firms’ survival for their surrounding community, business–community relations during this severe situation and factors helping firms address this unprecedented challenge. The conceptual tenets of stakeholder theory are considered.Design/methodology/approachA qualitative data collection approach was selected, with face-to-face and online interviews undertaken with owners and managers of 33 firms operating in Singapore.FindingsFirstly, while survival during the current unprecedented crisis is perceived to be most important for the firms’ employees, owners/managers also perceive domino effects on other companies working alongside the participating firms, as well as effects on clients and suppliers. Secondly, increased collaboration with industry, stronger partnerships with suppliers and business partners and closer relationships with staff are highlighted during the crisis. Thirdly, key factors helping firms’ survival in the initial year of the crisis included: a clear goal; a cohesive/nimble staff team; reinventing, adapting and being resilient; and family support and management support.Originality/valueThis study contributes empirically and conceptually to the literature on firm adaptation and firm–community relationships during a severe crisis. Empirically, the findings and related dimensions provide practical guidance concerning the interdependence between firms and their stakeholders. Conceptually, the inductive analysis, which enabled the development of a theoretical framework, illustrates the relationships between the study’s emerging dimensions and those predicated by stakeholder theory, namely, the descriptive, instrumental, normative and managerial.