COMING OUT OF THE FIRST WAVE. SOME MEDIUM-TERM EFFECTS OF COVID-19 ON INTERNATIONAL COMPANIES
HERE TO STAY FOR A WHILE
Companies have been facing operational, financial as well as strategic challenges due to Covid-19. During the lockdown they had to manage their liquidity and adapt business operations to reflect this new dynamic, maintain business continuity, and rapidly review budgets and decide on adjustments. Concerning their man- and womanpower they had to devise security and protective measures for everybody on every level under continuously evolving scientific insights and political decisions while at the same time organizing the continuation of production, processes and services.
Whereas six months ago one could still think or at least hope that the Covid-19 pandemic would be overcome by the end of the summer, it is now obvious that it won’t. More or less reluctantly we all have integrated this fact into our thinking and acting. Coming out of (the internationally different degrees of) confinement, has restored a large degree of “normality”. Yet to manage social distancing with the new perspective that it will be around for an indefinite period while restoring and maintaining efficacy and productivity will be THE challenge for all companies in the months to come. Working from home and cooperating mainly virtually – working in teams on projects or daily processes without physical presence – did work well during the lockdown. Now it has to be turned into a longer term alternative.
For internationally operating companies working over distances has always been part of their normal way of functioning. Communicating via telephone or via virtual platforms, working on projects in teams dispersed over the world has been part of the DNA of international companies. Nevertheless, physical mobility of a certain number of their staff was part of the deal. That a certain number of things had to be dealt with in person to person contact, that the physical presence of managers in subsidiaries abroad was necessary, that negociations were best concluded face-to-face – all these things went without saying.
International business relies to an enormous extent on mobility: the movement of material, parts and finished goods across the globe, but also the movement of businesspeople, that part of the international workforce who do their job by moving between countries – whether as managers, engineers, workers or sailors. Those people who make the movement of supplies and goods function by means of their proper global mobility. This has different forms: business trips, frequent travel to one destination, extended business trips for the time of a project, short- or long-term assignments as an expatriate.
Whereas the movement of supplies and commodities was partly interrupted and overall slowed down considerably, the movement of businesspeople across the globe came to an almost complete standstill. Whereas cargo transport picked up relatively soon, business travel has recovered only marginally.
For international companies the reverberations of the Covid-19 pandemic on international mobility cut deep. Borders will be re-opened and travel restrictions revoked, but this will not restore international business mobility in all its facets. The ongoing potential risk of infection and especially the risk of an exponential growth of cases and the subsequent possible lockdown of areas, will disrupt business travel for a long time.
Apart from the question whether a company will put their managers to the risk of exposure to the virus, questions will always arise if businesspeople might be blocked from returning home in some place or other around the world. In terms of cost-benefit analysis business travel might lose its usefulness for companies.
Concerning international assignments, the last years have seen a trend in the management of the global and mobile workforce towards “light-weight” corporate mobility models e.g. extended business trips for specific projects in international locations or short-term assignments. The intention, in addition to financial reasons, was to create alternatives to longer assignments the appeal of which had been on a decline for some time. They also served to increase global mobility on the whole, that is to increase the amount of people within a given international company who are willing and prepared to move around the world for business purposes, as international business was growing steadily.
But what are the options? Strategically focusing on long-term assignments might not be the alternative either. Covid-19 has meant some special challenges for expats in host countries. Staying or leaving was one of the essential questions. Both options are ridden with a number of imponderables. How can companies fulfill their duty of care if expats stay in their host country? Especially in case of those who are essential to business operation and need to be on site? And if assignees leave: will the assignment be interrupted or terminated prematurely? Where will they live in case of a sudden return? In case of prematurely terminated contracts: where will she or he find work? In view of these options the central question for many expats abroad will not so much be ‘what will happen, if I stay’ but much more ‘what will happen if I don’t’.
And there are still more aspects. Expat life is in most cases a temporary life. Home leave is more than a holiday. Elderly parents, children’s need to reconnect from time to time with friends and family, the need to see doctors – the certainty of being able to reconnect regularly, to stay in touch with the home country is essential for expats, it is part of the contract and necessary. In future it might not be available when it is needed. Even if larger scale lockdowns can be prevented, area closings, interruptions of flights, mandatory confinements, quarantine regulation and other short-term interruptions cannot be excluded. All these factors will probably have a negative effect on the willingness of staff to accept assignments. They will want to know what will happen in a future outbreak, they will want to see companies’ strategies concerning their own safety and that of their families, but, as importantly, concerning the management of subsidiaries in those periods. Companies need to be able to provide answers for a world in which travelling has once more become unsafe and unpredictable.
In these respects, Covid-19 will most probably have a long-term effect on the mobility of businesspeople in all its variations and on the functioning of international companies.
FINDING THE NEW BALANCE
Why all this talk about mobility you might think. Have we not all learned that virtual conferencing, team meetings, even townhall meetings with the entire staff do work well, astonishingly well for the majority of people who had not been in contact with those virtual collaboration tools before. Could not all short or long-term business mobility be substituted by virtual forms of cooperation? Perhaps. But, without wanting to sound cynical, that would bring up the question why businesspeople travelled so much before Covid-19. What are the reasons that seem to make corporate travel and assignments indispensable? There seems to be an overarching consensus that a lot of daily business that used to be done in person to person contact can be – successfully – transferred to online models. What seems to be hardest to build and maintain virtually are relationships, leading to a common hope in international business that corporate global mobility will be back to normal as soon as possible. Hopefully, one could add, before relationships with customers, suppliers or staff have been negatively affected.
Since there is no certainty when this will be the case, it might be more promising to look into what is needed and can be done to maintain or build relationships in virtual contacts. Now could be just the right moment for companies to evaluate their virtual experiences of the last months and learn from them. One aspect could be to investigate how communication can be changed to achieve virtually what formerly was achieved through direct conversation or over cups of coffee, during dinner or breaks. It would perhaps lead to an altered style of communication in meetings, negotiations, problem solving sessions or conflicts. Or as one (German) book title which was published recently puts it: it could be a chance to opt for more dialogue (“Mehr Dialog wagen” ). Businesses have successfully implemented a huge array of new approaches to handle the crisis. This might be a necessary next step.
Adopting a position that global mobility can more or less be substituted might be too simplistic. However, just waiting for the complete recovery of old normality in order to return to the old mode of functioning might be unrealistic as well and also detrimental to future business.
 D. Splinter, L. Wüstehuber (Hrsg.) Mehr Dialog wagen, Frankfurt a.M., 2020