Master's thesis title Crisis management strategies for small and medium-sized enterprises during the COVID-19 pandemic: Saint Petersburg region. The goal of the research is to identify the main challenges and strategies for entrepreneurs during the COVID-19 pandemic crisis by drawing on the experience of Saint-Petersburg SMEs.
Introduction
Another important field of investigation is the assessment of the situation with employees and the unemployment of individual entrepreneurs. They say that stress levels are in some cases so high that "given the uncertainty and breadth of the COVID-19 shock, there is an urgent need for occupational and organizational psychologists to apply the field's current knowledge with the aim of making sense of both helping individuals and organizations manage risks” (Kniffin, 2020).
Objectives, gap, research questions
In the continuation of the study, the related scientific research will be examined with the aim of preparing basic. Subsequently, the details of the empirical study will be shown and explained with respect to the research question.
Basic Concepts and Definitions
In order to emphasize the importance of SMEs as economic entities that actively contribute to the development of the region, it is valuable to describe the key functions of SMEs in the socio-economic sphere. First of all, we should mention one of the most important functions, which is crucial not only for the city, but also for the state government (due to the exclusive status of St. Petersburg) - SMEs are a unique tool for reducing poverty and guaranteeing economic sustainability at the microeconomic level (Большанина, 2015).
SME Support measures for COVID crisis in Russia
In Russian economic literature, it is a conventional idea that the main indicator of the development of small and medium-sized enterprises is the number of persons employed. Number of people employed in small enterprises in certain regions Source: Unified Register Of Small and Medium-Sized Enterprises, 2020.
Strategic priorities of SMEs within the Pandemic
So, there is a question, taking into account such positive effects in the conditions of the Russian economy. The problem finds its roots in 1990 - the complicated period in the recent history of the Russian Federation (Бухвалд, 2020).
Impact of the pandemic crisis on the economic activities of SMEs in Saint Petersburg
But the downside of such a saturation of the regional economy with the shadow players is currently more obvious than ever: the decrease in the effectiveness of state support for companies brutally affected by the corona crisis. The final striking peculiarity of Russian SMEs, which is completely at odds with the Big 4 consultancy proposals for crisis management, is digitization and the use of new technologies to facilitate operations under new lockdown conditions.
Main obstacles and countermeasures
From the perspective of the World Bank, the depth of the decline in world GDP will be much stronger than in 2008-2009. According to the local government of Saint Petersburg, tourism is one of the pillars of the region's economy.
Summary
The above proposition is confirmed by statistical data from Petrostat, which has stated that the industrial sector in Saint Petersburg returned to the level of five years ago - for the first time since December 2015, the industrial production index showed negative values (Федеральная служба государственнои стика, 2021).
Literature review
Second, crises are typically described in the context of the cyclical nature of economic and social systems. As a result of the studies conducted in different periods of economic development, the framework of crisis management has also changed significantly. In addition to the researchers' special interest in the time dimension of crisis management, the direction of management activities also represents a challenging theoretical question.
The graph below represents the main areas of operation of SME owners in times of crisis. Given the specific nature of the crisis, some researchers first define preventive crisis management. In the eyes of small businesses, it began to lose its meaning” (Ryakhovskaya, 2013).
The main goal of this type of crisis management is to restore sufficient liquidity and solvency of the enterprise, i.e.
Selective strategies that proved an adequate response to the crisis
The other group of researchers, however, continues to insist that it all depends on the initial amount of resources available to the company, as well as on the length of the crisis. Nevertheless, the scope of exit strategy has become significantly larger at the beginning of the 21st century, even in Russian management science. Maitlis (2010) has recognized "the interconnectedness of sensemaking within organizational change and social change" (Maitlis and Sonenshein, 2010) and emphasizes the external to the organizational-social side of the crisis and the manager's responsibility to adequately perceive the new social- financial conditions.
Internal factors are related to the company's activity, its economic marketing strategy, objective and psychological characteristics of the management. All internal variables, as well as the organization as a whole, are the consequence of the implementation of previous decisions. But “informal cooperation can aim to reduce transaction costs for each of the participating SMEs.
The synergy of internal variables contributes to the overall objectives of the organization and, in the case of COVID-19, also to its resilience.
Introducing possible contributions to existing research
In today's globalized and interconnected economy, SMEs often require the involvement of supporting parties. The internal factor of the social and professional network is in charge of increased awareness and effective resource "withdrawal". This year in particular, resource sharing has become the most intense manifestation of networking and relationships in the business sphere.
In the current context of the new crisis, Russian banks assess the credit risks of SMEs as extremely high, which negatively affects the performance of the sector. Improving one variable can cause both an improvement and a deterioration in the overall performance of an organization. However, considering the exceptional circumstances of the 2021 crisis and the relatively low percentage of crisis management literature focusing on SMEs, the study may be relevant to the current situation at various levels.
The primary objective of this research is to find out how SMEs in the St. Petersburg region cope with the quarantine crisis.
The rationale for the elaboration of the interview guide
In addition, our research is focused on respondents in St. Petersburg, Russia due to the ultimate goal of the researcher. Participant validation was organized by discussing the results of the investigation with the research participants. This sample is appropriate in this study because it includes people from different sectors of the economy.
In addition, we will request a determination to ensure an understanding of the issue and to seek additional comments. However, some blocks were combined due to interviewees' time and energy. To ensure compliance with the recommendations, the interviews were transcribed (in accordance with the agreement with the participants).
Apparently, the validity of the study will depend on the overall value of the interviews with which data was collected.
Data analysis
Most of the questions that were prepared for the interviews were open-ended. It is generally advisable to explore the reliability of findings in qualitative studies. In the academic literature and by practitioners, the use of a range of information channels is known as methodological triangulation.
First, the examination of the data obtained and then its interpretation facilitated finding appropriate answers to the research question. Consequently, the data are aggregated and a structural-semantic analysis of the entrepreneurs' answers takes place. Respondent validation also works as an important means of increasing the credibility of the information.
In the analysis phase, a careful review of the research design, method and process ensures the reliability and validity of the research findings.
Findings
The company's annual profit at the end of the pandemic year was more than 15 mln. In addition, it said that the innovative approach in most functional areas (except for the reduction of wages and working hours for 2 months) has helped to increase the revenue by up to 20% by the end of the year. The additional burden was the business loan, rent payments and the entrepreneur's personal mortgage.
The company had 5 employees in 2020 (in 2021 they hired 1 new permanent employee) all of them are local, no foreign employee is part of the team. In terms of service, the company has not interrupted work with any of the segments and has extended to fully complete all the tasks defined in the contracts. For all dimensions of the business, the owner stated that expenses have been cut without exception.
The manager shares the belief that the size of the company would not have made much of a difference, as "the situation was unexpected and it was hardly possible to prepare an action plan to face the obstacles."
Conclusions
For the employer side, the most difficult decisions were made regarding the dismissal of staff. From the information gathered, we can conclude that none of the companies followed an exit strategy. The owner of 8's took full advantage of the downsizing in the form of cost reduction and partial reduction of the company's activities.
The results of the study show that the strong impact of the crisis on SMEs resulted in the use of a mixture of standard practices. Companies 1 and 2 reduced the length of the shift to 6 hours, while the owner of company 5 ensured that the working day lasted 5 hours. 34; My company was not on the seriously affected list, so there was little hope of government support.
I suspect that it went that way because of the artificial nature of the crisis" The above notion from the company's 5 owner goes in line with the story that the company's 8 manager shared: ".
Limitations
Infraone Research, Жундриков, А., Якунина, Е., & Галактионова, А. https://infraone.ru/sites/default/files/analitika/2020/postvirusnaya_infrastructure_10_trendov_202 0_infraone_research.pdf. European SMEs in the midst of the COVID-19 crisis:. assessing policy impact and responses. https://drive.google.com/file/d/1xVK4lSanDZSCN6kGAHXikrGoKgpVlcwN/view. The economics of COVID-19: initial empirical evidence on how family businesses in five European countries are coping with the corona crisis", International Journal of Entrepreneurial Behavior & Research, Vol.
Retrieved September 11, 2020, from http://www.oecd.org/sdd/business-stats/statistical-insights-small-medium-and-vulnerable.htm. Have you tried to reduce financial costs (for example, by choosing low-cost debt).
