Introduction

The unprecedented upsurge and spread of the coronavirus (COVID 19) world over, is without
doubt the most perplexing of its kind. At the time of its first reported case in the Wuhan
province of China on the 1st December, 2019, very few business executives could have
predicted or even prepared for the abrupt nature of the pandemic which would achieve the
status of a global phenomenon by the 11th March, 2020. Owing to its novelty, the exact
impact of the pandemic has for the large part been a matter of a great deal of speculation.

In order to clear out some of this speculation, the aim of this paper is to discuss the extent to
which the COVID 19 pandemic has affected business and to propose a panacea to address the
unwanted effects. The paper begins by briefly contextualizing the concept of business and
some of the fundamental objectives of a business. Thereafter, the paper delves into discussing
the obstacles that COVID 19 has presented to the achievement of the goals of business.
Afterwards, the paper shall propose a panacea to curb the negative effects of the pandemic.

Business as a Profit Making Enterprise

Hayes1 defines a business as an organization or enterprising entity engaged in commercial,

industrial, or professional activities. Although the term can be used to refer to both profit and
non-profit entities that operate to fulfil a charitable mission or further a social cause, it is
mostly widely used to refer to organized efforts and activities of individuals to produce and
sell goods and services that are intended to raise profits. Throughout the remainder of this
paper, the term business shall be used to designate the various range of business scales
incorporated as different business associations.

There are various modes of business associations ranging from cooperative societies;
partnerships; limited liability partnerships; sole proprietorship; and corporations. These
different types of businesses offer a diverse range of advantages and disadvantages. 2 Despite
the differences in nature, all the different modes of business association aim at creation of
profit for the owners.

Collins espouses that the profit making objective of an organisation are accomplished by the
performance of a number of activities which are collectively known as business operations. 3
Business operations refer to activities that businesses engage in on a daily basis so as to
1
Adam Hayes, Business Essentials, (New York: Cornell University Press, 2016) p24
2
RB Gates, Gates Company Law and Practice in Zambia 1st Ed, Lusaka: Reagan Blankfein Gates, 2017) p3
3
Jim Collins, Good to Great: Why Some Companies Make the Leap and others Don’t, (New York:
HarperBusiness, 2001) p43
increase the value of the enterprise and earn a profit. These operations will vary depending on
the nature and size of the business. For most business enterprises, the functions would include
marketing, accounting, and manufacturing. For instance, the main goals of an enterprise
engaged in the retail business is to ensure that there is stock of products that customers are
looking for and at a price which the customers are willing to pay for. The business must
continue to keep an accurate inventory system so that it knows what is in stock at any given
time. The business may also wish to advertise the stock in order to attract customers to buy its
stock.4

Skoglund and Chen5 observe that the competitive nature of business means that business
enterprises should always look to ways to optimize its operations and maximise profits. To
this end, a company has to assess the market environment properly and operationalise in such
a way as to cut costs in the delivery of goods and service. Often, the business with the
superior product or service will be the one that outshines its competitors. The company’s
investment in its product or service must also be taken into consideration. If the demand is
high, if it can afford the investment, if the productivity is on par with the demand, then a
business can be truly successful.

Disruption of Supply Chain

It has been widely accepted that the COVID 19 pandemic has negatively affected the supply
chains of most businesses. The supply chain of businesses ensures that raw material and
finished products are moved from one point to another. Okorie 6 points out that prior to the
pandemic, the supply chains of business relied on the rapid transportation and timely
clearance and forwarding systems. However, since the inception of the pandemic,
governments have adopted policies and measures which restrict the movement of people and
cargo. Most borders facilities have shut down completely in efforts to halt the spread of virus.
However, this has made it very difficult for businesses to obtain essential ingredients vital to
the needs of production

Dwindling Markets and Demand for Goods and Services.

4
Jim Collins, Good to Great: Why Some Companies Make the Leap and others Don’t, (New York:
HarperBusiness, 2001) pp43, 44 and 45.
5
Jimmy Skoglund and Wei Chen, Advanced Operations Management, (New Jersey: Wiley Publishers, 2015) p
121.
6
David Okorie, ‘Markets and the COVID 19 Fractal Contagion Effects’ Finance Research Letters Issue 1 Vol 38.
Available at https://www.sciencedirect.com/science/article/abs/pii/S1544612320305638.
COVID 19 protocols such the practice of social distance has caused the decline in markets
and demands for most goods and service. From the inception of the pandemic, healthy
authorities have encouraged and sometimes demanded that people stay home. This has led to
a dramatic reduction traditional shopping activities as consumers choose to stay away from
shopping malls and other traditional markets.

This trend has instigated a shift towards other alternative marketing avenues such as online
stores. Businesses have been required to move towards e-commerce which entails the
advertisement and conducting of the sale transactions using information communication
technologies.

A Shift towards Remote Working

The COVID 19 pandemic has not only just impacted on how work tasks are conducted but
also ‘where’ the work tasks shall be conducted. Prior to the pandemic, most businesses
conducted their activities from the traditional work places.7 Businesses would build or rent
office spaces where employees would be stationed as they carry out their various tasks.
However, COVID 19 has forced more and more businesses to consider alternative office
arrangements such as remote working from home or working on rotational basis. This has
particularly been the case for service industries such as the insurance markets, consultancy
services and legal services provisions, just to mention a few examples.

To fully effect the shift towards remote working arrangements, businesses have been required
to make capital investments in machinery and the latest high-tech gadgets to ensure that their
employees are reachable through the business’ virtual networks. 8 In addition to the capital
investment, businesses have had to adapt by training employees on the various aspects of
remote arrangements such as technology efficiency and cyber security. These ventures could
not be done without financial resources and have placed increased pressure on the already
strained cash reserves.

Impact on the Labour Regulatory Environment

The COVID 19 environment has also impacted severely on the legal and regulatory
environment of business. Related to the same, the Government of the Republic of Zambia
announced the compulsory closures of bars, gyms, casinos and nightclubs, with the
7
David Okorie, ‘Markets and the COVID 19 Fractal Contagion Effects’ Finance Research Letters Issue 1 Vol 38.
Available at https://www.sciencedirect.com/science/article/abs/pii/S1544612320305638.
8
Emma Parker, Tiffany Moore and Deb Worton, Impact Capita Africa Covid-19 Zambia Survey: Inside Business
Impacts and Responses, June 2020.
restaurants only allowed to operate on a take away basis. 9 The Government went further and
encouraged employers to send non-essential workers on paid leave or to work from home.
Additionally, the Minister of Labour and Social Security passed the Employment Code
(Regulations) through Statutory Instrument No 48 of 2020. This Statutory Instruments
purports to suspend some employment rights and obligations such as the right to annual leave
and annual leave benefits; right to a severance pay; and the employer’s obligation to pay an
employee for termination of employment by way of redundancy.

Opponents to the Statutory Instrument No 48 of 2020 have argued that the regulations are
illegal therefore of no legal effect. 10 This has been argued because the regulations purport to
alter the terms of the employment contracts without the consent of the employees, and
therefore amounts to a breach of contract. The legality of the regulations is yet to be
ascertained as the courts of law have not yet been invited to make a determination on the
matter. Irrespective of whether or not Statutory Instrument No 48 of 2020 has legal effect,
one can easily appreciate how the confusion threatens the stability of the already frail labour
environment.

The Ripple Effect of the COVID 19

A survey recently conducted by Impact Capital Africa11 between 11th May and 6th June, 2020
in 416 companies operating in Zambia found that 87% of the respondent businesses were
impacted in a negative way. The survey, which was conducted The data showed an extensive
negative impact across the business eco-system irrespective of size and sector operation.

The wide range of challenges which were being faced by the businesses were seen to be
crucially interconnected and present throughout the value chain. To exemplify this, there was
a falling customer demand due to lockdown restrictions and a national economic downturn.
This, compounded with impairments of the logistics resulted into supply chain disruption and
failure to fulfil any residual consumer demands. This further resulted in reduced revenue and
cash flow, forcing many businesses to lay off some of the staff, albeit temporarily. The
temporary closures and reduced revenue have forced business enterprises to delay planned
capital expenditure or fundraising ventures. This stall in growth and expansion has drastically
9
Mwenda J, ‘Lungu’s Full Address: Zambia Records 12 COVID-19 Cases’ News Diggers (2020)
https://diggers.news/local/2020/03/25/lungus-full-address-zambia-records-12-covid-19-cases-as-lockdown-
looms/accessed on 28/04/20
10
Kayula James, ‘COVID-19 and Labour Law: Zambia’ In Covid-19 and Labour Law: A Global Review, Italian
Labour Law e-Journal Issue 1 Vol 3 (2020) Available at https://illej.unibo.it/article/view/10938
11
Emma Parker, Tiffany Moore and Deb Worton, Impact Capita Africa Covid-19 Zambia Survey: Inside Business
Impacts and Responses, June 2020.
reduced the research and development, and the recruitment of top talents across all sectors.
The putting aside of expansion plans have been necessitated by the increasingly uncertain
market and regulatory environment.

Proposals to Cushion the Impact of COVID 19

Whereas there is need for an unhurried scientific process in the formulation and approval of
the COVID 19 vaccines, businesses must hasten to come with a panacea to ensure that the
negative effects of the pandemic are arrested and contained. There have been numerous
proposals from different stakeholders on how to best deal with the effects of the pandemic on
business. Each of the proposals have only sought to deal with a specific issue as observed
from a very narrow perspective of the proposer. For instance, employer associations have
called for the relaxing employer obligations by suspending part of the Employment Code Act.
Other proposals have called for the injection of relief funds so as to temporarily keep afloat
the companies that may have been hit as a result of the reduced productive outputs.

Granted, the above proposals can provide some short term relief to the challenges posed by
the COVID 19 on business. However, the purported solutions are flawed in their underlying
assumptions that COVID 19 is a temporal phenomenon. With the advent of second and even
third waves of infections in some countries, the call for proposals should aspire for a
permanent solution. There is need for a solution that appreciates that business environment
has always been changing and shall continue to do so for many years to come. The solution
proposed here is therefore adaptation.

Adapting: Welcome the New Normal

Adapting is simply the process of changing the existing products, services and operations so
as to respond to changing market conditions. This process is part of the greater change
management process that requires a sequence of steps to ensure individual transitions and the
meeting of intended outcomes.

In the wake of the COVID 19 and its devastating effects, business should ensure that it
devises new methods of doing business so as to get round the difficulties presented by
pandemic. One aspect which can be embraced by businesses everywhere is the setting up of
online stores so as to make the goods and services available to people who do not wish to use
traditional markets. Another aspect that can be adapted is the practice of remote working.
Businesses should harness the productive potential that is presented by remote work
environment. There should be capital investments in information technologies to ensure that
that the latest tech-tools and gadgets are made available to employees working from home.
Businesses can lobby for government support in acquiring the remote work facilities by
asking for tax waivers on imports meant to facilitate the transition to virtual work spaces.

The drive towards adapting to the new COVID 19 should be managed by adhering to
effective principles of change management. These principles should include involving the
employees in every step of the way and explaining to them the reasons and risks associated
with the need for the change. To achieve this, a carefully set out change management plan
should be crafted by the business management executives.

The adaptation to the new normal need not only be done by the business enterprises. Rather,
the adaptation should include the amending the regulatory framework of the entire business
environment. To cite as an example, the law governing employment rights and obligations
should be amended to meet the potential dispute areas such as the computation of working
hours, overtime allowances and transport allowance, while working from home. Another
issue that a new piece of legislation dealing with remote work arrangements would need to
clarify is where the liability is to lie in case of accidents that occur whilst working remotely.

Conclusion

This paper has shown that the novel COVID 19 had unforeseen negative impacts on
businesses. Some of these impacts include the disruption of supply chain and the reduction in
business cash flows. While acknowledging the calls for short term solutions to the problems
caused by the COVID 19 such as the suspension of some of the employment rights and
obligations for the duration of the pandemic, and the injection of capital relief by the central
government, the paper has provided adaptation to the new normal as the ultimate panacea to
the challenges. The paper has advocated for the change from the traditional methods of doing
business to modern methods such as remote working and digital marketing platforms.

References
Adam Hayes, Business Essentials, New York: Cornell University Press, 2016.
David Okorie, ‘Markets and the COVID 19 Fractal Contagion Effects’ Finance Research
Letters Issue 1 Vol 38. Available at
https://www.sciencedirect.com/science/article/abs/pii/S1544612320305638.
Emma Parker, Tiffany Moore and Deb Worton, Impact Capita Africa Covid-19 Zambia
Survey: Inside Business Impacts and Responses, June 2020.
Jim Collins, Good to Great: Why Some Companies Make the Leap and others Don’t, New
Jimmy Skoglund and Wei Chen, Advanced Operations Management, (New Jersey: Wiley
Publishers, 2015) p 121.
Kayula James, ‘COVID-19 and Labour Law: Zambia’ In Covid-19 and Labour Law: A
Global Review, Italian Labour Law e-Journal Issue 1 Vol 3 (2020) Available at
https://illej.unibo.it/article/view/10938
Mwenda J, ‘Lungu’s Full Address: Zambia Records 12 COVID-19 Cases’ News Diggers
(2020) https://diggers.news/local/2020/03/25/lungus-full-address-zambia-records-12-covid-
19-cases-as-lockdown-looms/accessed on 28/04/20
Reagan Blankfein Gates, Gates Company Law and Practice in Zambia 1st Ed, Lusaka: Reagan
Blankfein Gates, 2017