Research in Administrative Sciences under COVID-19

Mónica Lorena Sánchez Limón, María Luisa Saavedra García, Mónica Lorena Sánchez Limón, María Luisa Saavedra García

• Publisher: Emerald Publishing Limited
• Year: 2022
• ISBN:
  9781802622997
• Topic: Politics & International Relations
• Subtopic: Public Affairs & Administration
• Index: Politics & International Relations

Due to the COVID-19 pandemic the entire world experienced a health, humanitarian, and economic crisis with no record in the present century, leading to the paralysis of activities by voluntary or mandatory quarantines. There is great uncertainty about how long the crisis will last and how recovery will be achieved, because of this paralysis and the contraction of demand, auguring a slow recovery.

Research in Administrative Sciences under COVID-19 examines the context surrounding organizations in the face of the COVID-19 Pandemic. Detailing various aspects related to companies and their competitiveness in the face of the global health crisis, chapters cover topics on intellectual capital, burnout (professional exhaustion), stress and technostress, as well as pandemic effects on the human capital of organizations. Developing upon the issues of Corporate Social Responsibility, E-commerce in times of COVID-19 and Design Thinking as a strategy for the economic reactivation of start-ups in Mexico, this volume is the result of research efforts carried out by 23 outstanding researchers from 12 Mexican and Latin American higher education institutions.

Part I

Companies and SMEs

Chapter 1

The Systemic Competitiveness of Latin American MSMEs Under COVID-19

María del Rosario Demuner Flores, María Luisa Saavedra García and Elsa Esther Choy Zevallos

Abstract

Competitiveness has become essential to business survival. Accordingly, the purpose of this chapter is to study the competitiveness of micro-, small-, and medium-sized enterprises (MSMEs) in Latin America under the systemic competitiveness model under COVID-19. Documentary research was conducted, based on reports from the Inter-American Development Bank, the Economic Commission for Latin America and the Caribbean, the World Bank, and the Organisation for Economic Co-operation and Development, among others. The main findings reveal an alarming deterioration at the macro, meso, and meta levels, which requires the design of public policies that consider the situation of MSMEs as essential for reducing poverty and unemployment affecting the region. Although MSMEs hold some advantages at the micro level, they need to receive direct support to enable them to stay afloat and make productive and technological investments.

Keywords: Systemic competitiveness; MSME; COVID-19; enterprises; ECLAC; public policies

Introduction

The Organisation for Economic Co-operation and Development (OECD, 2019d) states that the predominance of micro-, small-, and medium-sized enterprises (MSMEs) in Latin America (LA) makes them key actors in building more inclusive and sustainable growth, mitigating economic impacts and improving social cohesion. Thus, when seeking to improve the standard of living and quality of life of the region’s inhabitants by creating jobs, and reducing poverty and inequality, the promotion of MSMEs is essential, and they should be established as a priority item on region’s agenda; hence, the importance of studying them.

In this chapter, business competitiveness is approached from the Economic Commission for Latin America and the Caribbean (ECLAC) systemic competitiveness model applied to MSMEs, which integrates four spheres that condition and model their performance (Esser, Hillebrand, Messner, & Meyer, 1996; Saavedra, 2012). The macro level includes economic, foreign, fiscal, monetary, trade, exchange, and budgetary policies, among others, that enable the allocation of state resources to improve citizens’ quality of life. The meso level integrates the set of strategies for the efficient development of the environment, such as physical and institutional infrastructure, specific education policies, technology, and local industrial support policies, among others. The meta level includes the design and monitoring of political management reforms to improve the functioning and provide joint solutions to problems between institutions, government, business, and intermediate organisations. Finally, the micro level includes the internal management processes that drive business strategies aimed at leveraging resources and capabilities to succeed, generate profits, and sustain competitive advantage.

According to this model, there needs to be a holistic interaction that favours business competitiveness. Thus, the objective of this chapter is to analyse each of these levels in the context of the Latin American MSME - in the new context of the COVID-19 pandemic - in order to reach a conclusion that reveals a firm’s competitive position.

1.1. Theoretical Framework

1.1.1. The Systemic Competitiveness Model

The systemic competitiveness model proposed by ECLAC was adapted for empirical application to Latin American MSMEs by Saavedra (2012). Defining that ‘… the competitiveness of a firm depends on productivity, profitability, competitive position, internal and external market share, inter-firm relations, sector and regional infrastructure …’, thus justifying the use of the model to determine the competitiveness of an MSME.

This is in line with Esser et al. (1996), who state that business competitiveness is not achieved automatically by improving the macro context, nor is it achieved exclusively on the basis of the company’s resources at the micro level. Rather, it requires the establishment of a complex and dynamic pattern of interaction between the state, enterprises, intermediary organisations, and the integration of society into the productive dynamic. Hence, a competitiveness-oriented incentive mechanism is needed to encourage enterprises to implement continuous learning processes and to increase their effectiveness and efficiency, while at the same time increasing productivity.

It is clear that this concept is characterised by the fact that successful industrial development is not only achieved through a production function at the micro level, or stable macroeconomic conditions at the macro level, but also through the establishment and operation of specific measures by government (industrial infrastructure development) and private development organisations geared towards strengthening enterprise competitiveness (meso level). Thus, the capacity to link these policies is a function of a set of political and economic structures that, aligned with socio-cultural factors and basic patterns for the organisation of a society (target level), will be able to help boost the competitiveness of MSMEs (Naciones Unidas-CEPAL, 2001). These four levels are briefly explained below:

(1) Macro level: fiscal, monetary, trade, exchange rate, budgetary, and competition policies, which enable an efficient allocation of resources and, at the same time, require greater efficiency from companies.

(2) Meso level: environmental efficiency, factor markets, physical and institutional infrastructure. And, in general, specific policies for the creation of competitive advantages, such as educational, technological, environmental, and other policies.

(3) Target or strategic level: political structure and development-oriented economy, competitive structure of the economy, strategic visions, and national development plans.

(4) Micro level: processes within the company to create competitive advantage. Companies’ management capacity, their business strategies, management, and innovation. In other words, the resources available to the company to meet its main goal.

According to this model, it is the interaction between these four levels that drives business competitiveness. This model has been applied to the MSMEs in LA considering their regions or states, as illustrated by two studies coordinated by Saavedra. The first (Saavedra, 2014a) involved 69 researchers from 18 universities in 3 countries (Colombia, Venezuela, and Mexico) and was supported by the Latin American Association of Faculties and Schools of Accounting and Administration. The second (Saavedra, 2014b) involved six researchers from three universities in Mexico City. The model can also be applied specifically to the study of a business sector, as in the work of Saavedra and Milla (2015), where it was applied specifically to the study of industrial MSMEs in Querétaro, Mexico, and in the study by Saavedra and Bermeo (2017), in which they applied this model to wood furniture manufacturing companies in Azuay, Ecuador. This model has been replicated in most Latin American countries, as demonstrated by the fact that the methodology published by Saavedra (2012) has been referenced more than 300 times, according to the Google Scholar citation report. As previously established, in this research, the model will be applied to the study of the competitiveness of Latin American MSMEs under COVID-19.

1.2. Method

Desk-based research was conducted to collect information from secondary sources published on the web repositories of international organisations, including the OECD, the Development Bank of Latin America (CAF), Banco de España, the Inter-American Development Bank, the United Nations, the ECLAC, the International Labour Organisation (ILO), and the World Bank Group. Previous research findings on the different aspects affecting MSMEs and their competitiveness were also collected. Subsequently, all the bibliographic material recovered was analysed, and the themes were grouped considering the levels and variables contained in each level. This was done in accordance with the ECLAC systemic competitiveness approach, following the methodology of Saavedra (2012). Finally, the historical narrative method was used to describe the situation of the Latin American MSME, framed within the systemic com...

Table of contents

• Cover
• Title
• Introduction
• Part I. Companies and SMEs
• Part II. Human Capital and Knowledge Management
• Part III. Marketing and Business Strategies
• Index