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Managing in a crisis:
lessons from the COVID-19 crisis

Emerging markets case studies

The Corona COVID-19 crisis has provided a series of challenges and opportunities for Business Schools to respond to the Global COVID-19 pandemic. In April almost 40% of the world’s population was in some form of lockdown, with restrictions on movement and contact. In turn, these restrictions impacted businesses severely and firms were faced with multiple and complex challenges including finding new business models, restructuring to adapt to the restrictions, and planning for the gradual lifting of the restrictions. It is clear at this stage that business will never be the same as it was in January 2020.

The greatest challenge facing Business Schools as the impact of the Global Pandemic of 2020 becomes clearer, is relevance and teach appropriate skills to business leaders today. Case studies provide a powerful tool for simulating decisions, but the changes in 2020 will require scholars to review what they are teaching. We may find that our theoretical models will require revisions, at best, or outright rejection as outdated. This will drive the search for new models and theories, but that process takes time and we need to respond to the new business world today. These concerns led to the Gordon Institute of Business Science producing this series of shorter cases that can be taught immediately. Our intention was to provide quality teaching materials to the broader academic community, and in particular, those interested in Emerging Markets and Africa.

These are short cases, allowing students to quickly read the case prior to a classroom discussion on the various dilemmas faced by South African business in the response to the COVID-19 pandemic. The short-cases are useful in that most are cross-disciplinary and can be used for multiple courses and topics, including decision-making, entrepreneurship, strategy and leadership.

South Africa’s COVID-19 lockdown dilemma

In March 2020 South African President Cyril Ramaphosa ordered a 21-day national “lock-down” to enable and enforce social distancing in an effort to slow the spread of the Coronavirus COVID-19. Many other countries had already taken similar steps, but in a country with an unemployment rate of about 30% and some of the highest HIV and Tuberculosis infection rates globally, South Africa’s response to only 11 COVID-19 deaths and 1071 cases was both rapid and harsh. Schools, businesses, social areas and parks were closed. Medical emergencies, essential services and weekly grocery shopping were the only permissible activities.  Alcohol and cigarettes were banned and the economy effectively shut down in an attempt to buy time for the government to add capacity to its health services.

Two weeks after lock-down there were 1845 cases and 18 deaths, a far cry from the predicted 30 000 cases and 300 deaths, estimated on the basis of the three-day doubling rate at the start of lock-down. Many businesses, pulverised by closure, daily wage earners and those fearful of losing jobs were hopeful that the lock-down would not be extended.

In a country with immense inequality, how would the masses under the age of 65, already in poverty and now with their lives pulled apart by an imported disease of the wealthy respond to extended social and economic deprivation followed by bailouts for business?

Authors: Michael Ward
Subject area: Strategy


Corona, command & capitalism

The coronavirus appears to herald a devastating blow to lives and to the world economy – its impact is yet unknown, but likely to be comparable to war and pestilence of biblical proportion.

This case focuses on the possible economic trajectories as a consequence of the virus, with emphasis on bailing-out (restructuring) struggling companies and restoring jobs. Within the framework of a world desperately in need of capital, it raises questions about accountability and responsibility. Should retrenched workers in restaurants, banks and airlines feel the consequences of their poor career choices? Must shareholders (read pensioners) shoulder losses to support the public good? Ought governments bail-out whole industries - using tax-payer money? Or do we allow central banks to conjure-up billions and hope for the best?

The case does not attempt to provide answers to these questions but presents several vignettes and offers a context in which participants can debate the merits of these problems.

Authors: Michael Ward
Subject area: Accounting and Finance


Eskom's COVID-19 force majeure

In April 2020 South Africa’s stated-owned electricity utility Eskom sent a pre-cautionary force-majeure notification to Exxaro Limited’s Grootegeluk Coal Mine. The notification, citing COVID-19 as an unforeseeable, external and irresistible event, would have disastrous consequences for the mine’s 25m tonnes pa coal contract to supply Eskom’s Medupi power station. Not only was the legality of the force-majeure questionable, it was unethical, and not in the spirit of President Ramaposa’s call to businesses to continue paying contractors.

The case briefly describes Eskom’s troubled history following South Africa’s 1994 democratic election. It examines the force majeure clause common in contracts, and questions whether or not COVID-19 meets the criteria of an “unforeseeable, external and irresistible” event.

Authors: Michael Ward
Subject area:  Management Science


Making money for COVID-19

In May 2020 South Africa’s deputy finance minister David Masondo announced that he would support the SARB’s lending to the government. This statement followed President Ramaposa’s earlier announcement of a R500bn COVID-19 stimulus package.

The case explores the economic history of money, from barter to gold to cryptos. The case examines the origins of central banks’ printing of money, initially to support the WW2 war effort and more recently the 2008 global financial crisis and now the COVID-19 crisis. In particular the case raises the question of central bank independence – “democratically-elected governments always need money, is it appropriate for central banks provide it? And are there limits?”

Authors: Michael Ward
Subject area: Accounting and Finance


All of the people, all of the time: click on the link to join the meeting

The case is based on a South African company going through emergency response conditions analogous with what many businesses are encountering during the COVID crisis. The protagonist is struggling with structural challenges imposed on the business by unpredictable and uncontrollable external pressures, and needs to make transformative decisions which might impact the culture, organisational design, and digitisation of the business.

Authors: Adrian Van Eeden
Subject area: Management Science


Granadilla swimwear: finding opportunity in times of crisis

This case study explores how two Cape Town-based entrepreneurs, Josh Meltz and Adam Duxbury responded to the COVID-19 crisis and the subsequent lockdown in South Africa. The pair had built a successful swimwear brand – Granadilla Swimwear, as well as two other businesses; a function venue and a kombucha brand sold at a well-known food market. As the COVID-19 lockdown tool effect, the entrepreneurs saw not only declining revenue in their food and function venue business but were about to enter a six-month period of negative cash flow on their seasonal swimwear business. The entrepreneurs saw an opportunity to deliver food boxes of fresh fruit, vegetables, bread, and other staples within the Cape Town metropolitan area. Their kombucha brand had a ready-made food processing and handling facility (including cold storage), and existing relationships with customers, suppliers, and other vendors at the food market gave them ready access to a range of locally produced food products available immediately and on consignment. Meltz & Duxbury quickly launched an online shop and started marketing via Instagram. Within 48 hours they were delivering food boxes, with little risk and upfront capital investment. As the lockdown continued and other competitors entered the market, the team wondered at the longevity of the pivot and whether this was a business that would sustain itself or whether it was just a short-term fix for their immediate cash flow problems.

Authors: Jonathan Marks
Subject area: Entrepreneurship

Kevin’s Kitchen & Sports Bar

Agility in any business in modern times is essential to survival – and this is particularly so for small, entrepreneurial enterprises that lack the history and resources to survive dramatic changes in the operating environment. A small restaurant in the coastal holiday village of Port Alfred, South Africa is managing to deliver a reasonable return for its owner, a former corporate financier from Johannesburg. The COVID-19 crisis requires a fundamental rethink of business strategy to ensure a future for the business.

Authors: Andy Hofmeyr
Subject area: Entrepreneurship


Uber Sub-Saharan Africa: contextual leadership for sustainable business model innovation during COVID-19

On 15 May 2020, Alon Lits, General Manager of Uber Africa was considering his dilemma of adapting their business model to the demands of COVID-19, without losing their core business model as a multi-sided technology platform business. Uber was asking their riders to stay home to ensure social distancing during the lockdown, rather than booking a ride with Uber. The question was how they could support their driver partners, while they were discouraging riders to make use of Uber. Uber had taken initiatives to create additional revenue streams for drivers. The case highlights how Alon Lits and his executive team prioritised the health and wellbeing of their Uber community and quickly adapted their technology to meet the evolving needs during the COVID-19 pandemic. They customised their offerings to the different needs in the seven Sub-Saharan Africa (SSA) countries in which they operated. Uber supported businesses by using the Uber-X sedan vehicles to deliver necessities like food, medicine and parcels to the frontline and poor communities. Uber globally offered their drivers in quarantine 14 days of financial assistance. Serving communities also involved offering free rides to women and children who were victims of domestic violence to get them to a safe space. The multi-sided platform technology business had to consciously adapt, to the ‘next normal’ as the COVID-19 era evolved.

Authors: Caren Scheepers and Jill Bogie
Subject area: Strategy


Discovery digital health strategy: COVID-19 accelerates online healthcare in South Africa

Discovery Holdings Limited is a leading financial service organisation in South Africa, and its Digital Health division is responsible for the platform which delivers telemedicine offerings to doctors and patients. The case highlights the development of the telemedicine offering and the time period that is covered spans from the launch of the Discovery DrConnect platform in 2017 to April 2020.

Adrian Moss is the protagonist in the case. He is a manager in the Special Projects, Digital Health team of Discovery Health, responsible for the DrConnect project. His challenge is how to raise more awareness of the DrConnect offering and how to enhance uptake from doctors and patients. COVID-19 and the lockdown in South Africa in March and April of 2020 presented an opportunity for both doctors and patients to use telemedicine as a new way of engagement and treatment.

Authors: Verity Hawarden and Amy Moore
Subject area:  Strategy


Nestlé South Africa: leading multi-stakeholder partnership response in the COVID-19 context

On 15 March 2020, Bruno Olierhoek, Chairman and MD, Nestlé East and Southern Africa considers his dilemma of where to focus his community support initiatives during COVID-19, which could reflect their company’s purpose of enhancing quality of life and contributing to a healthier future in their response to the crisis? Also, Creating Shared Value (CSV) was in their DNA as a company and they wanted to do more than philanthropic gestures and therefore they had to decide carefully about leveraging their strategic partnerships in the relief effort. The case highlights existing community involvement projects, pre-COVID-19, which illustrate multi-stakeholder collaboration. These existing trust relationships and partnerships are then leveraged during the COVID-19 pandemic. The case highlights unintended consequences of Nestlé’s gesture of donating food products to the 5 000 frontline healthcare workers for specific stakeholder groups, such as the positive emotional responses of Nestlé’s own employees. These events in the case relate to existing theoretical frameworks, like corporate citizenship which elicits pro-organisational behaviour in stakeholder groups.

Authors:  Ravi Pillay and Caren Brenda Scheepers
Subject area: Management Science


Nestlé South Africa and Department of Transport: response to food security during COVID-19

On 15 May 2020, Alec Moemi, Director-General of the South African Government’s Department of Transport (DoT), contemplates how his department can use the opportunity that COVID-19 presents to transform the transport system and to maintain relationships with business and the taxi industry beyond COVID-19? The nation was just reeling from a first: The President announced a ‘Lockdown’ which meant that all economic activity except ‘ESSENTIAL SERVICES’ could operate. Life almost ground to halt and South Africans faced a new reality. No movement out of your property unless it was a medical emergency or if you needed to buy food. The minibus taxi, an economic enabler to millions of South Africans also had to stop operating. The South African Department of Transport had a mammoth task of communicating to a range of stakeholders. However, the most sensitive being the minibus taxi owners, drivers and their related associations. How would they accept the news that they will not have a livelihood for the next few weeks or perhaps even months? Given the nature of industrial shift patterns and need for a more flexible transport system for workers, some organisation’s like Nestlé contracted private transport services to ensure their staff travelled to work safely. Nestlé also had their own compulsory sanitizing protocols in place to support private transporters.

Authors:  Ravi Pillay and Caren Brenda Scheepers
Subject area: Management Science


Pivot or pirouette? turning to emergency remote teaching in the COVID-19 pandemic

Gordon Institute of Business Science (GIBS), a South African based business school and the one of the top ranked business schools in Africa, faced a crisis in the midst of the COVID-19 pandemic. With the announcement of a national lock down, under strict conditions, and the immediate closure of the GIBS campus, the Academic Programmes had to radically shift their mode of delivery in order to enable students to continue with their respective programmes. When the situation was further exacerbated by the breaking of the undersea cable, the Executive Director of Academic Programmes. Professor Louise Whittaker faced the difficult decision on what to do next. The case illustrates the need for strong dynamic capabilities in order to foster organisational agility and to respond effectively in times of deep uncertainty or crises.

Authors:  Hayley Pearson, Louise Whitakker and Nicola Kleyn
Subject area: Strategy