Principal investigator: Viviane Pires Ribeiro
Article title: WILL I BE ABLE TO FUNCTION EFFECTIVELY? PANDEMIC AND ITS EFFECT ON ENTREPRENEURIAL WELL-BEING AND POST-COVID-19 FUNCTIONING
Article authors: Gul Afshan, Amjad Ali Memon and Adnan Manzoor
Location of the intervention: Countries with cases of COVID-19
Sample size: Undefined
Sector: Finances
Type of Intervention: Behavioral analysis of entrepreneurs
Primary variable of interest: Business owner well-being
Evaluation method: Others – Theoretical model
Evaluation Context
Regarding entrepreneurship, adverse events (disasters, wars, terrorist attacks, pandemics) contain a high level of uncertainty for continuing and managing existing businesses or starting a new one, and can thus negatively affect the country's Gross Domestic Product (GDP). The current adverse event is the COVID-19 pandemic, which forced many small and medium-sized enterprises to close their doors and, consequently, millions of employees lost their jobs. As a result, entrepreneurs are less interested in investing and more interested in saving their capital.
Recent research shows that the COVID-19 pandemic has affected the physical and mental health of individuals. In this context, the post-pandemic period may result in a new way of functioning at both the individual and organizational levels. Economies will begin to recover, and employees who were laid off will return to their jobs, while employees who worked from home will return to their workstations. But the restart of businesses and their operations may or may not be the same for all entrepreneurs.
Some entrepreneurs demonstrate resilience in dealing with stress and seize the opportunity. On the other hand, many companies fail to survive and manage such a crisis in such a stressful situation. Generally, crises discourage people from taking on challenging tasks. However, despite the uncertainties and affected well-being, entrepreneurs need to strive to respond to these challenges.
Intervention Details
Using stress event theory (SET), which explains entrepreneurial reactions or behaviors in response to the characteristics of a given event, Afshan et al. (2021) seek to explain a conceptual framework that describes the effect of COVID-19-induced resource constraints on entrepreneur well-being and their post-COVID-19 functioning. Stress event theory also proposes the interpretation of events to choose coping strategies that differentiate the quality of entrepreneurial well-being, social relationships, and business-related outcomes.
The authors established that the type of entrepreneur varies according to opportunity and necessity. In this sense, it is observed that the literature dealing with entrepreneurship has shown that people are heterogeneous in their perception of the environment. Two main types of entrepreneurs have been discussed in the literature: the necessity entrepreneur and the opportunity entrepreneur. The motives behind necessity entrepreneurs generally lie in satisfying a need and as an alternative to unemployment. On the other hand, when people are drawn to establishing an entrepreneurial enterprise, it is due to the recognition and exploitation of environmental opportunities.
Methodology Details
Afshan et al. (2021) proposes a conceptual framework for the relationships between COVID-19-induced resource constraints and post-COVID-19 functioning with the underlying mechanism of corporate welfare.
Following the theory of stress events, the conceptual study also proposes that opportunity entrepreneurs would be able to cope with the stressful event (pandemic), affecting their well-being, social relationships, and functioning. The well-being of entrepreneurs during COVID-19 defines their post-COVID-19 functioning in terms of behavioral and emotional functioning.
The authors therefore present a theoretical model that incorporates the predictors and outcomes of business well-being during the COVID-19 pandemic to suggest future research directions. The relationships proposed in the article can be empirically tested for a better understanding of the magnitude of such effects on post-pandemic business functioning.
Results
The analysis conducted by Afshan et al. (2021) shows that entrepreneurial well-being has important implications for business success. For example, physical and psychological well-being help entrepreneurs broaden their focus on their businesses, becoming more attentive to opportunities for growth and development. Furthermore, physical health makes entrepreneurs more creative, happier, more learning-oriented, and ultimately more successful.
In addition to the devastating effects on business operations, the pandemic has given rise to entrepreneurial opportunities to meet emerging public and governmental needs. Individuals who utilize these opportunities can help communities achieve sustainability, socially benefit the population, and mitigate prevalent environmental threats (i.e., COVID-19).
The study proposes necessity-driven entrepreneurship as an essential antecedent to entrepreneurial well-being, which differs from opportunity-driven entrepreneurship; therefore, the origin of entrepreneurship occurs through either of the two types of entrepreneurship, followed by resource constraints induced by adverse events. This suggests that COVID-19 had similar impacts, causing loss of property and human lives, inducing psychological stressors, and exposing the entrepreneur himself to health threats. However, the type of entrepreneur may have differentiating impacts on the effect of COVID-19 on well-being.
Lessons in Public Policy
Afshan et al. (2021) contributes to the literature on entrepreneurship, human resource management, and disaster management in four different ways. First, the study employs stress event theory to explain the effects of adverse events on the well-being and post-COVID-19 functioning of an entrepreneur. Second, the authors propose that these scenarios generate two types of entrepreneurs – opportunity entrepreneurs and necessity entrepreneurs; both have different implications and purposes and different effects on value creation for the environment and the community. Third, it is essential to consider the types of entrepreneurs in post-COVID-19 functioning to define a path for economic recovery. Finally, the study sets guidelines for future research in the context of COVID-19 and business well-being, followed by post-COVID-19 functioning.
Considering the two types of entrepreneurs (necessity entrepreneurs and opportunity entrepreneurs) and following the theory of stress events, the authors argue that the negative consequences of the pandemic may differ according to the type of entrepreneurship. Opportunity entrepreneurs may see this pandemic event as an opportunity to develop something necessary for the population, while necessity-driven entrepreneurs would not see the challenge as an opportunity and would only be striving to meet basic needs.
By addressing these relationships, the study contributed to the recent literature on pandemics and their effects on business well-being in three main ways. First, based on stress event theory, it is expected that the entrepreneurial response to COVID-19-induced resource constraints may positively affect post-pandemic functioning.
Secondly, entrepreneurial wellbeing – physical and psychological health in social relationships and financial stability – is expected to act as an underlying mechanism to explain the relationship between COVID-19-induced resource constraints and post-COVID-19 functioning.
Finally, it is expected that the type of entrepreneurship may determine the magnitude of pandemic-induced constraints on the well-being and post-pandemic functioning of the company. Specifically, opportunity entrepreneurs are expected to be able to utilize the shift in demands and thus be able to respond to the challenges.
Reference
AFSHAN, Gul; MEMON, Amjad Ali; MANZOOR, Adnan. Will I Be Able to Function Effectively? Pandemic and Its Effect on Entrepreneurial Well-Being and Post-COVID-19 Functioning. Pandemic and Its Effect on Entrepreneurial Well-Being and Post-COVID-19 Functioning, 2021.
