TABLE OF CONTENTS

CHAPTER 1

I. THE PROBLEM AND IT’S BACKGROUND

INTRODUCTION

SIGNIFICANCE OF THE STUDY

STATEMENT OF THE PROBLEM

CONCEPTUAL FRAMEWORK

SCOPE AND DELIMITATION OF THE STUDY

II. REVIEW OF RELATED LITERATURE AND STUDIES

III. RESEARCH METHODOLOGY

METHODS AND TECHNIQUES USED

POPULATION AND SAMPLE OF THE STUDY
INSTRUMENT OF THE STUDY
DATA GATHERING PROCEDURE

IV. PRESENTATION, ANALYSIS, AND INTERPRETION OF DATA

V. SUMMARY OF FINDINGS, CONCLUSIONS RECOMMENDATIONS

SUMMARY OF FINDINGS
CONCLUSIONS
RECOMMENDATIONS
 THE EFFECTS OF COVID-19 TO SMALL BUSINESS

I. THE PROBLEM AND IT’S BACKGROUND

INTRODUCTION

The study examined the effect of the Corona Disease 2019 (COVID-19) pandemic on the revenues

of small businesses operating industrial sectors, as well as the degree to which these business

change or adjusted their business activity, or altered degree to which they utilized open innovation

tools and implemented innovation promotion processes. Despite the wide spread impact of

COVID-19 in all aspects of life, the majority of small businesses in industrial of sector did not

experience a decline in revenue, nor did they alter their business activities or the extent to which

they employed open innovation promotion processes. The Philippines took swift action including

Enhance Community Quarantine (ECQ) to contain the pandemic and launched emergency subsidy

program with massive public spending to support disrupted households and business. The strict

lockdown ran from mid-March to the end of May 2020 in the national capital region and high-risk

provinces, causing huge economic losses. Six months after the March lockdown, the Philippines

economy has moved to the recovery stage, but Micro, Small, and medium-sized Enterprises

(MEMEs) continuing to confront a sharp in demand and revenue.

SIGNIFICANCE OF THE STUDY

Students

The rapid and unplanned change to teaching and learning online format brought by COVOD-19

has likely impact many, if not all, aspects of University students lives worldwide.

Future researcher

The COVID-19 pandemic has resulted in unprecedented research worldwide.

Parents

They will gain something from this study since it will be of use to them in analyzing the possible

implications of effect that Covid-19 might have on the owner of micro company

Teacher

Due to the complex nature of healthcare professionals’ roles and responsibilities, the education of

this workplace is multifaceted and challenging.

STATEMENT OF THE PROBLEM

The purpose of the study is to determine what are the impacts of the effect of Covid-19 to small

businesses strategies to grade 11 students in Barangay San Bonifacio, San Manuel, Pangasinan in

online learning modality who are going to take online learning.

This research aims to answer the following question in specifically;

1. What are the factors that affects the small businesses in the country at times of pandemic?

2. How other businesses adapt to situation of pandemic?

3. How did social media perform a big role for business at times of pandemic?

4. What would be the significance of adaptation of small businesses to remain its operation at times

of pandemic?

CONCEPTUAL FRAMEWORK

Towards the end of 2019, an infectious and viral disease code named: COVID-19 became
prevalence. The emergence of this novel virus was not evidentially traceable, but was adjudged to
have emanated from a clustering pneumonia of unknown etiology in Wuhan city, a district in
China. This un-identifiable virus spread virally to other part of the globe without frontier. The
medical experts claimed that COVID-19 affects the entire respiratory system of the body by
collapsing the lungs first which leads to shortness of breath and eventual collapse of all functional
organs of the body. In March, 2020, COVID-19 was discovered in Nigeria and the following states;
Lagos, Ogun and FCT fell to record early casualties of the pandemic. The record provided by
NCDC mid-November 2020 indicated many cases of patients that contacted COVID-19 and death
rates. In other to contain the spread of the virus, the federal government instituted several measures,
including a complete lockdown in the nation. This measure became a major constraint to business
and specifically, SMEs due to; restrictions of movement ban on market places, transport restriction
and social distancing order. Therefore, since SME business operations play vital roles in economic
growth and development, efforts should be made to ensure that they do not collapse or go into
extinction. Hence, the need to provide social protection approaches and other palliative measures
by the Federal Government of Nigeria. Therefore, the prevalence and spread of COVID-19 like
wild fire is still a mirage and novel to the world. In view of this, effort has been made to present
reviewed studies of previous researchers in this study area.

These are explained below:

Ade re mi et al. (2020) submitted that COVID-19 spread to Africa as by-product of globalization
while examining the nexus between globalization and Covid-19 pandemic vis-à-vis Africa and
China. Del Rio et al. (2020) examined the impact of COVID-19 pandemic on stock market value
of China, Europe and USA with an application of differential analysis. The authors submitted
study. In Abayomi et al. (2021) in a survey reported that many micro enterprises in the thirty-six
states of the country were operating negatively and being affected by the pandemic particularly in
the area of cash flow, revenue and sales. Following various authors conceptual review, the
researcher has made efforts to present a conceptual relationship between the independent variable,
the proxies that indicated the effect of COVID-19 on depended variable and as shown in Figure 1
below which presents this study’s conceptual framework:

EFFECT OF COVID-19

PANDEMIC

Infectious Diseases:

Sickness,

Diseases,

Illness

Quarantine

Death, etc.

Lock down:

*Restrictions on movement,

*Difficulty accessing inputs,

*Difficulty in exporting and importing

Coping measures and Strategies

o Palliatives
o Government policies and regulations

o NGO intervention

o Reduced loan rate

o Deferred tax payment

SMEs Business Operations:

Economic Shock

Low production and sales, reduced investment

Cash trap, etc.

Cash flow difficulties

Lack of supplies

SCOPE AND DELIMITATION OF THE STUDY

It is self-evident that the COVID-19 pandemic has profound consequences for individuals and
societies. Most research has understandably been focused on understanding the dynamics of the
pandemic and the biology of the infection in order to develop diagnostics, vaccines and treatments.
However, we know that, with time, the current spike of infections will pass. There will be headline
mortality figures and infection rates, lessons learned about emergency preparedness, debates about
the merits of competing strategies to control the infection, but as the rate of new infections
continues to slow, schools will reopen and some semblance of normality will return. However, the
impact of the pandemic on SMEs is that they were forced to either stop for safety measures. Some
small businesses rose as people are looking for things to buy to entertain them and some businesses
have to stop. The expectations were similar to the outcomes since people have expected that some
businesses will stop.
REVIEW OF RELATED LITERATURE

Small- and medium-sized businesses (SMBs) are major contributors to the world economy.

SMBs, which are basically defined as companies with 500 or fewer employees, play an essential

role in shaping more than 90 percent of the private sector and creating 70 percent of all the world’s

jobs. SMBs’ contribution plays a significant role in global economic growth. According to the

OECD, they generate approximately 60% of value-added income in high-income countries. SMBs

assist in reducing income inequality for minorities and shrinking poverty, especially in developing

countries. These companies are also pivotal for local economies, creating employment

opportunities, and sustaining local resources .SMBs constitute a significant value creation source

by advancing economic inclusiveness for underrepresented groups.

Despite the fact that SMBs are more flexible, agile, and more adaptable because of their

smaller scale, they have less access to resources to fall back on during market volatility, creating

further financial, network, and supply chain constraints. Therefore, SMBs count greatly on their

exciting revenues and profits to survive. Due to their inherent nature, SMBs usually have a limited

credit history, which ultimately leads to less access to finance. Additionally, not every small- or

medium-sized company has the opportunity or resources to engage in the international market and

bear various regulatory and administrative costs. These challenges make SMBs vulnerable when

it comes to unprecedented circumstances such as the COVID-19 pandemic. The COVID-19

outbreak has exacerbated growing financial threats and has revealed hidden vulnerabilities for

many small businesses.

When COVID-19 was officially announced as a pandemic by the World Health

Organization (WHO) in March 2020, future thinkers predicted one of the most significant and
unprecedented shifts in the modern era interwoven with uncertainty for people’s future lives and

businesses alike. According to Stephen Morrison and Anna Carroll, “Pandemics change history by

transforming populations, societies, economies, standards, government, and governing structures”.

Many studies, especially the Seven Revolutions Initiative assessment, which is continually updated

with a 30 year time horizon, reveal that COVID-19 has brought a paradigm shift that will have

major implications till 2050. This assessment indicates that the effect of the COVID-19 pandemic

in the long term is unpredictable and most likely quite different than its near-term effect; therefore,

the unevenness and unpredictability of COVID-19 represent the challenges ahead.

The negative impact of the COVID-19 pandemic on SMBs has been severely devastating,

so that many businesses have ceased their operations during the lockdown. Studies reveal that 26%

of SMBs closed from January to May 2020; this number is almost doubled to 50% in some

developing countries such as Ireland and Bangladesh. Another OCED survey shows that nearly

62% of SMBs reported lower sales in the last months comparable to the corresponding period in

2019. Many small businesses operating in industries such as tourism, hospitality, hotels, and food

services have been rigorously affected. For instance, almost 47% of SMBs offering services in

hospitality and 54% of tourism agencies ceased their operations due to the COVID-19 pandemic.

Undoubtedly, the COVID-19 pandemic depicts an external jolt of unparalleled consequence for

SMBs, causing a significant decrease in their earnings and profits. Pedauga et al. (2021) predict

an overall 43% drop in SMBs operating in Spain. Similarly, Diez et al. (2021) expect that the

proportion of insolvent small- and medium-sized enterprises (i.e., SMBs with negative equity) may

rise by six percentage points over 2020–2021. McKinsey’s global empirical surveys (2020)

indicate that between 25% and 36% of small businesses may have closed down permanently from

the disruption in the first four months of the pandemic.

 These challenges are worse for small businesses. Even though small businesses take

advantage of their learning capabilities through their agility, flexibility, and innovation, due to

their constrained resources and limited access to the global market, they are more vulnerable to

crisis events. During the COVID-19 pandemic, almost 30% of small businesses were closed. A

major survey conducted by Bartik et al. (2020) explored the impact of COVID-19 on 5800 small

businesses. They found mass layoffs and closures, with the risk of increased closures due to the

prolonged length of the crisis. This survey showed that the bureaucratic hassles and challenges in

establishing eligibility and credibility for government aid create significant hurdles for small

businesses regarding the effectiveness of the Coronavirus Aid, Relief, and Economic Security

(CARES) Act.

SMEs need to develop proper strategic crisis planning in order to survive and recuperate

from challenging occasions. Stew et al. (1981) introduced resilience for the first time and discussed

how external threats could provoke rigid and fixed responses that might threaten the organization’s

survival. Meyer (1982) introduced “Environmental Jolt” in resilience and how organizations

develop adaptability in response to such threats. Looking at other resilience definitions, Legnick-

Hall et al. (2011) define resilience as a corporation’s ability to effectively develop appropriate

responses to engage in a transformative process to capitalize on disruptive shocks that potentially

threaten business survival. Their definition of resilience has some common elements with

organizational capacities such as agility, flexibility, and adaptability. Still, resilience is distinctive

in its unique characteristic that includes a significant transformation of the corporation. This

transformational approach embraces the idea that resilience should be a strategic initiative

connected to the organizational competitive advantage. In other words, resilience should be allied

with a corporate competitive advantage so that developing a resilient organization should become
a strategic imperative. In another definition provided by Denyer (2017), resilience has been defined

as a strategic objective designed to help a company survive and prosper. Denyer discusses that a

highly resilient organization is more agile, flexible, adaptive, robust, and more competitive

compare to less resilient organizations.

The temporality of resilience has been discussed by many scholars such as Williams et al.

(2017), who believe that resilience does not occur in a particular ‘moment’ but is continually

present. They detail that resilience is a process by which an organization develops and uses

organizational capacity endowments to positively adjust to the environment and sustain

functioning before, during, and following adversity. The two primary approaches of resilience,

namely, characteristic and developmental perspectives, were defined by Sutcliffe and Vogus

(2003). The characteristics perspective towards resilience emphasizes organizations’ inherent

ability to recover from the crisis, while the developmental approach views resilience from a more

ongoing process. Kuckertz et al. (2020) believe that some entrepreneurs seek new opportunities

and build new trends for small businesses during crises. Small businesses have unique

opportunities because of their diverse and robust knowledge to promote resilient market

responsiveness.
THEORETICAL FRAMEWORK

Many small businesses operate in the retail and service sectors and serve the end consumer

through face-to-face interactions. These sectors were the most adversely affected by the COVID-

19 pandemic, due to the restrictions and closures imposed by the authorities (Cao & Leung, 2020).

As noted, small businesses often operate in niche and highly specific markets and are able

to provide something different from standardized products and services offered by large

companies. In the industry sectors particularly, many of them act as specialist suppliers of parts,

components and subassemblies and work as subcontractors to large industrial companies (Yew

Wong & Aspinwall, 2004), which for the most part continued to operate during the COVID-19

period, in view of their status as essential industrial enterprises to the economy.

Hence, the following hypotheses:

H1: The revenue of most small businesses in the industry sector did not decrease during the

COVID-19 period as compared to the corresponding period last year.

H2: Most small businesses in the industry sector have not made changes or adjustments in their

business activity during the COVID-19 period.

H3a: Most small businesses in the industry sector have not reduced their use of open innovation

tools (knowledge-acquisition activities and external collaboration) during the COVID-19 period.

H3b: Most small businesses in the industry sector have not reduced the extent to which sharing

processes were taking place in the business and the extent to which there was a change in the

cultural processes implemented in the business during the COVID-19 period.

H4a: The rate of revenue from subcontracting work among businesses, whose revenues grew or

remained unchanged during the COVID-19 period, is higher than the rate of revenue from

subcontracting work among businesses that experienced a revenue drop during this period.

H4b: There is a negative relationship between the rate of revenue from subcontracting work and

the change in revenue during the COVID-19 period, such that businesses with a high rate of

revenue from subcontracting work displayed revenue growth or unchanged revenues during the

pandemic.

H5a: The rate of revenue from subcontracting work among businesses that changed or adjusted

their business activity during the COVID-19 period is lower than the rate of revenue from

subcontracting work among businesses that made no changes or adjustments during that time.

H5b: There is a negative relationship between the extent to which changes or adjustments were

made in the business activity and income from subcontracting work such that businesses with a

high rate of revenue from subcontracting work show lower levels of change or adjustment in

business activity.

Earlier studies noted the contribution of operating in international markets to business innovation

(Autio et al., 2000; Chetty & Campbell-Hunt, 2005; Madsen & Servais, 2004; Rialp et al., 2005;

Zahra et al., 2000).

The wider the range of foreign markets and cultures in which a business is active, the

greater the firm’s exposure to knowledge sources and to new and varied ideas that allow it to

develop the capabilities and faster learning processes necessary for innovation and for the

advancement of business opportunities. Thus, businesses that operate in the international market

show greater flexibility that makes them better able to cope with change than businesses active
solely in the local market (Autio et al. 2000; Zahra et al., 2000). Also, the pandemic began at

different times in different countries, with differing levels of impact around the world.

Hence, the following hypotheses:

H6a: The rate of revenue from export sales among businesses whose revenues grew or remained

the same during the pandemic is higher than the rate of revenue from export sales among

businesses whose income dropped during that time.

H6b: There is a positive relationship between export sales and the change in revenue during the

COVID-19 period such that businesses with a high rate of revenue from export sales showed

revenue growth or unchanged revenues during the COVID-19 period.

H7a: The revenue rate from export sales among businesses that made changes or adjustments to

their activity during the pandemic is higher than the revenue rate from export sales among

businesses that made no changes or adjustments during that period.

H7b: There is a positive relationship between the extent to which changes or adjustments were

made in the business activity and export sales, such that business with a high rate of revenue from

export sales show a higher degree of change and adjustment in their business activity during the

pandemic.
METHODOLOGY

The sample included small businesses in the industry sectors in Israel that employ between

10 and 50 employees.

The study included 50 business managers out of a group of 202 business managers that

participated in the earlier study by Harel et al. (2019a). The businesses in the present study were

selected based on innovation scores, on measures of OI tool utilization and on the existence of

sharing and cultural processes within the business as found in the prior study. Given that most of

the questions in the present study focused on changes in business activity in the context of OI tool

use and sharing/cultural processes, it was necessary to choose businesses that utilized OI tools at

moderate or higher levels and in which sharing/cultural processes were present to a moderate or

higher degree. For example, there was no point in investigating changes in a business’ scope of

collaboration with external entities, if it had engaged in no such collaborations prior to the COVID-

19 pandemic.

The business selection for the previous study was based on data from the Israeli Industry

and Craft Association that included all small businesses in these sectors, which by law were

incorporated into this organization. The study author contacted these 50 small business managers,

all of whom agreed to a telephone interview, resulting in a response rate of 100%.

The interviews were conducted by telephone (call was initiated by the study author to the

business managers to their personal mobile phone). In light of the acquaintance from the earlier

study, none of the managers refused to participate in the interview for the current study. No

incentive was offered to the study participants.

 During the interview, which lasted for about 10–15 min, the study author filled in the

answers in the questionnaire form, which was prepared by him in advance.

The interviews were not digitally recorded, but the study author recorded the responses in

handwriting as stated during the interview.

DATA COLLECTION

Data collection was conducted using a structured questionnaire that was divided into two

parts, allowing business managers to expand and explain their answers to each question:

The structured questionnaire that was used during the interviews was prepared in advance

by the study author himself, so that he was aware of the purpose, propositions and research

objectives before the interview phase. This also ensured consistency in all of the interviews.

The first part dealt with the changes in revenue and the extent to which changes or

adjustments were made in the business activity during the pandemic period. The second part dealt

with the extent to which there was a change in the business’ usage of open innovation tools

(activities for identifying and obtaining knowledge from external open sources of information—

‘knowledge-acquisition activities’ and collaboration on innovation with external entities—

‘external collaboration’), the extent to which there was a change in the sharing processes that were

taking place in the business and cultural processes that were implemented in the business during

the COVID-19 period as compared to the same period last year.

The changes were examined according to the items included in the indices used by the

researchers in their previous studies (Harel et al., 2019b, 2020a, 2020b).

 The knowledge-acquisition activity index based on a validated index used by Caloghirou

et al. (2004) consists of six items: searching patent databases; searching the Internet for

professional information; entering competitors’ sites; analysis of competing products;

participating in exhibitions and professional conferences; and collecting data from the professional

press. Each manager was asked to estimate the extent to which there was a change in the business’

usage of knowledge-acquisition activity during the COVID-19 period according to these items on

a 5-point Likert scale (from 1 to 5).

The external collaboration index is based on Marques and Ferreira (2009) and includes the

number of collaborations to promote innovation with external entities such as suppliers, customers,

other businesses, consultants, etc.

The sharing processes include five practices: holding weekly meetings for sharing

information, transferring information to employees, reporting on external information after

participating in conferences or meeting with customers, processes for implementing innovations

in the business and taking responsibility for promoting innovation issues as formal part of the job

of an employee other than the manager. Managers were asked to estimate the extent to which there

was a change in these processes in the COVID-19 period on a 5-point Likert scale (from 1 to 5).
ANALYSIS

The findings are presented in two parts. The first part comprises descriptive statistics and

presents the characteristics of the businesses, the characteristics of the business managers and the

businesses’ distributions according to the following: change in revenue and the extent to which

changes or adjustments were made in the business activity during the COVID-19 period, the extent

to which there was a change in the business’ usage of open innovation tools (knowledge-

acquisition activities and external collaboration) and the extent to which there was a change in the

sharing processes that were taking place in the business and cultural processes that were

implemented in the business during the COVID-19 period as compared to the same period last

year.

Quotes from the business managers are also included to provide explanations and support for the

answers they gave in the structured questionnaire.

The second part is the main analysis. In the first stage, t-tests for independent samples were

conducted to determine whether there were any differences between the businesses whose

revenues increased or remained unchanged during the pandemic and those whose revenues

declined, as well as to investigate the differences between the businesses where changes or

adjustments were made to business activity during the pandemic and businesses where no such

changes or adjustments were made. Differences between the business groups were examined with

regard to the following research variables: business characteristics, business manager

characteristics, the extent to which there were changes in business activity aimed at identifying

and acquiring external knowledge, the extent of collaboration with external entities (Harel et al.,
2019b), the extent to which sharing processes were taking place in the business (Harel et al., 2020a)

and the extent to which there was a change in the cultural processes implemented within the

business (Harel et al., 2020b) during the pandemic.

In the second stage, Pearson correlation coefficients were used to determine the extent to

which a relationship exists between change in revenue and the extent to which changes or

adjustments were made to business activity during the COVID-19 period, and the other research

variables noted earlier.

DISCUSSION

The COVID-19 pandemic and the resulting economic shutdowns have formed an

unprecedented crisis for small businesses, forcing each company to reconsider its business

strategy, due to the vulnerable nature of small businesses. Small organizations play a heroic role

in the world’s economy, promoting technological innovation, increasing employment, and

sustaining social stability. Small organizations must develop proper strategic crisis planning to

survive and recuperate from challenging circumstances. Recent data are indicative of the economic

fact that financial conditions for small- and micro-sized enterprises have improved in the second

half of 2020 and early 2021 due to an unprecedented measure taken by countries to contain the

devastating effects of the COVID-19 pandemic. These measures range from grants to policies that

encourage lending to smaller firms. However, all these efforts are no solution to the necessities of

appropriate resilience for such economic entities. As Denyer (2017) has defined, resilience is a

strategic objective intended to support a company to survive and prosper. Therefore, a highly

resilient organization is more agile, flexible, adaptive, robust, and competitive. From this

perspective, the proposed methodology is a deductive approach in which the existing literature is

used to develop a new theoretical or conceptual framework. Our research and the proposed

resilience framework address this very need in a systematic and novel manner. Many other jolts

will have devastating effects on the livelihood of micro and small businesses, from automation to

ecosystem platforms such as Amazon or Alibaba.

Harmonious assimilation of resilience into small businesses ecosystem entails a

configuration model capable of separating domains and processes. This paper attempts to provide

a unified approach through a conceptual framework that encompasses the inherent

interrelationship of different organizational strategic development processes. This paper proposes

a conceptual framework through a Pattern Matching combined with a qualitative analysis of

existing academic resources regarding strategic resilience for small businesses operating in an

unprecedented time, such as the COVID-19 pandemic. A resilient organization is a culmination of

integrating resilience into the four organizational aspects, namely culture, strategy, structure, and

operation. These aspects are dynamically interdependent in a causal effect affected immensely by

PESTEL factors (political, ecological, sociocultural, technological, economic, and legal).

The proposed resilient organization framework is a holistic model combined with a

procedural methodology that empowers small businesses to develop and implement proper

resilience models for their organizations. As discussed in this paper, a thorough understanding of

relationships and interconnection of all aspects of a resilient organization is the most certain way

of building a required capacity to obtain business objectives. The proposed strategic resilience

framework ensures a comprehensive and systematic approach empowering the small businesses to

respond to environmental jolts such as the COVID-19 pandemic effectively and appropriately.

This attempt is a Systematic Analysis of complementary theories that possess the strategic

flexibility literature to produce a new conceptual framework. As is evident in the course of the

present literature survey, the integration of these interdependent concepts leads naturally to an

overall strategic resilience framework. This approach underpins the proposed framework by

utilizing existing theory and reasoning the proposed framework’s adequacy deductively.

One of the main drivers behind the development of the proposed resilience framework has

been the need for SMBs for a theoretical guideline to address resilience in their organization.

Empirical case studies are required to verify the effectiveness and applicability of the proposed

framework. Lack of observational data to justify the claims and inadequacy of existing applied
research into the response of SMBs to the COVID-19 jolt and surrounding economic issues related

to the management of this unprecedented crisis are some of the limitations of this study.

CONCLUSIONS AND IMPLICATIONS

The aim of the study was to empirically examine the COVID-19 pandemic’s impact on the

revenues of small businesses in the industrial sectors and the extent to which these companies

made changes in business activity, the utilization of open innovation tools and the implementation

of various managerial processes. The study also looked at the relationship between revenue from

subcontracting work/export sales and changes in revenue/the extent of changes or adjustments in

business activity during the pandemic.

The findings showed that, despite the far-reaching impact of COVID-19 in all areas of life,

and especially on the economy and the business sector, the revenues of most small businesses in

the industrial sectors were not harmed during the pandemic, and most of these businesses made no

changes or adjustments to their activity, or in the extent to which they utilized OI tools or

implemented sharing and cultural processes.

The findings pointed to a relationship between change in revenue/extent of change or

adjustments in business activity during the pandemic and revenue from subcontracting work.

Those businesses whose rate of revenue from subcontracting work was relatively high did not

suffer a decline in revenue and were not obliged to make many changes to their activities during

this period. As mentioned, large businesses in certain industrial sectors that were defined by the

authorities as essential for continuing economic conduct were allowed to continue their activities

under some restrictions. Small businesses that served as subcontractors to those businesses were
also allowed to continue their work. In addition, these small businesses continued to conduct their

business activities without physical contact with their customers, even during the lockdown

periods.

From this, we may conclude that small businesses in the industrial sectors that served as

subcontractors and, in particular, had long-term contracts with big customers, were likely to cope

better during periods of economic distress and uncertainty. Businesses whose sales were based

primarily on other businesses (B2B) and did not serve private end customers (B2C) through face-

to-face interaction coped better with restrictions and unanticipated situations.

The findings also pointed to a relationship between revenue from export sales and the

extent of the changes or adjustments made to business activities during the pandemic. The findings

showed that businesses active in the international market, whose rate of revenue from export sales

was relatively higher, succeeded to a greater extent in making changes to their business activity

and adjusting that activity to the changes underway and to the varying requirements of customers

around the world, in accordance with the trade restrictions instituted by different countries.

The present study’s theoretical contribution consists in its focus on small businesses in the

industrial sectors, with an emphasis on the work strategy of subcontracting and international

activity as a factor that enables businesses to cope with difficulties and conditions of extreme

economic uncertainty.

The study findings also make a practical contribution by suggesting that, given the

significant contributions of production subcontracting and international activity to small

businesses in the industry sectors, these strategies deserve development and policy support.
 Such support will help these businesses survive and become stable, while fostering their

ability to thrive in the future, thereby also promoting the economy’s resilience in crisis situations

and enabling it to flourish.

LIMITATION OF THE STUDY AND FUTURE RESEARCH

The findings were based on data provided by business managers during the interviews and

were based only on one manager per business.

Future research could expand the circle of research participants in each business, so as to

cross-reference the responses. Future study should also include larger sample of businesses as well

as small businesses in other industries, such as commercial, service and financial companies and

small businesses in the periphery. This would make it possible to determine whether differences

exist between the various sectors, and whether geography has an impact.

In addition, it would be interesting to compare the effects and consequences of the COVID-19

pandemic to other economic crises and recession events that have occurred in the past.