Impact of COVID On Small Business in The UK

This work is submitted to as part of the partial fulfilment of the requirements for the
degree of International Master of Business Administration 2021-22
Course Work – Final Dissertation
Working Title:
Impact of COVID-19 on the Small and Medium Business in the UK
Student Name:
Student ID:
Word Count: 6500
Supervisor Name:
Submission date: 9/1/22
I, therefore, declare the content of this dissertation is the original work of the researcher and
author unless otherwise, Harvard referenced, I am fully aware, and have not at contravened the
plagiarism policy at my institution…………………………………
Impact of COVID on Business in the UK
Contents
CHAPTER 1- INTRODUCTION....................................................................................................4
CHAPTER 2- LITERATURE REVIEW.........................................................................................6
2.1 Introduction............................................................................................................................6
2.2 The Impact of COVID-19 on Businesses in the UK.............................................................6
2.2.1 Impact on Sales, Employment and Working Hour.........................................................6
2.2.2 Results by Industry.........................................................................................................8
2.2.3 COVID impact on the Small and Medium Size Enterprises..........................................9
2.3.4 Exporting and Importing Challenges............................................................................10
2.3 The Role of Smaller Businesses in the UK.........................................................................11
2.3.1 Small Business Employment Figures Impacting the Economy....................................11
2.3.2 Growth of Small Business Impact the Economy..........................................................11
2.4 Strategic Management and its Importance in Business.......................................................12
2.4.1 Importance in Business.................................................................................................12
2.5 Review of Worldwide Studies Investigating the Role of Strategic Management in smaller
businesses..................................................................................................................................13
2.5.1 Review of Theoretical Models/Frameworks....................................................................14
2.5.2 Strategic Management Theory......................................................................................14
2.5.3 The Profit Maximizing and Competition Based Theory..............................................14
2.5.4. Resource Based Theory...............................................................................................14
2.5.5 The Contingency Theory..............................................................................................15
2.6 Chapter Summary................................................................................................................15
CHAPTER 3- METHODLOGY....................................................................................................17
3.1 Introduction..........................................................................................................................17
3.2 Research Philosophy............................................................................................................17
3.3 Research Approach..............................................................................................................18
3.4 Theoretical Framework/Model............................................................................................18
3.5 Research Strategy................................................................................................................19
3.6 Data Collection method.......................................................................................................19
3.7 Data Analysis method..........................................................................................................20
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3.8 Time Horizon.......................................................................................................................20

3.9 Ethical Considerations.........................................................................................................20
3.10 Chapter Summary..............................................................................................................21
CHAPTER 4 ANALYSIS.............................................................................................................21
4.1 Introduction.....................................................................................................................21
4.2 Findings and Analysis.....................................................................................................22
4.2.1 Descriptive Statistics...............................................................................................22
4.2.2 Regression Model....................................................................................................23
4.2.3 ANOVA Table.........................................................................................................24
4.3 Discussion.......................................................................................................................25
4.4 Chapter Summary...........................................................................................................28
REFERENCES..............................................................................................................................29
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CHAPTER 1- INTRODUCTION
1.1 Background of Study
According to the study's findings, companies anticipated a sizable drop in revenue as a

result of the virus's widespread spread in the future year. Revenues were predicted to drop across
the board, but the tourism, restaurant, entertainment, and transportation industries braced
themselves for the biggest hit. According to this research, the uncertainty caused by COVID-19
is currently greater for UK firms than that caused by Brexit. The 2019 Corona virus Disease
(COVID-19) epidemic emerged in China in December. Being completely unexpected, having a
significant negative impact on the economy, and having a disproportionately bad effect on new
enterprises (Akpan et al., 2020b; Humphries et al., 2020).
1.2 Objective
The exponential expansion of COVID-19 has given businesses a new and significant
cause for concern. The findings of the latest study of UK CFOs conducted by the Decision
Maker Panel are highlighted.
1.3 Goal of Research
Sets the stage for the study of innovation in small businesses and provides some insight
into the open innovation technologies utilized by small organizations, the sharing procedures
they engage in, and the cultural characteristics they value.
Because of their smaller size and greater concentration in vulnerable areas like retail and
services, small businesses are predicted to suffer greater losses as a result of the COVID-19
reaction measures than their larger counterparts (Cao & Leung, 2020; Kumar & Francisco,
2005). The vast majority of new jobs are created by small firms, which also make up the vast
majority of all organizations (Humphries et al., 2020).
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1.4 Purpose
The purpose of this study is to determine if and how open innovation tool use or adoption
of sharing and cultural procedures that could enable innovation actually changed, as well as the
impact this change had on business outcomes. In doing so, we want to get a sense of COVID-
19's immediate and long-term impact on these businesses.
1.5 Rationale of Study
The unique characteristics of this category of small businesses prompted its selection for
investigation. Most companies in this group engage in more traditional economic activities and
invest very little in research and development. These companies are not in the high-tech or
cutting-edge technology industries, thus it is safe to conclude that technical advancements have
not had a major impact on their operations.
1.6 Significance of Study
Companies who aren't in the retail, travel, or entertainment industries haven't been struck
as severely by the consequences of COVID-19 because they don't have as much direct
interaction with their customers. These businesses rely heavily on one-on-one contacts with their
end customers. There is also a lack of personalized service at these businesses.
1.7 Summary
This analysis will incorporate data and information related to the COVID-19 epidemic.
The theoretical basis is presented in the following part, followed by a discussion of the study
methodology we employed, including detailed descriptions of the sample selection and data
collection processes. After introducing the background for the study, we will describe the results
and comment on their significance. In conclusion, we discuss the theoretical contribution,
practical application, and future research recommendation of this investigation.
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CHAPTER 2- LITERATURE REVIEW
2.1 Introduction
A comprehensive literature analysis was carried out so that a conceptual knowledge of

the role of the strategic management during the COVID-19 pandemic start up business in the
UK. The main objective of this chapter is to analyze and evaluate the impact of COVID on
businesses in the Uk, the contributing Role of small industries in the UK economy, and strategic
management under the framework of theories and models. The process of locating papers that
were pertinent to the topic started with a search through a number of highly regarded
publications to locate the key knowledge gaps in the industry. Throughout the process, the
emphasis was on journal publications that explicitly dealt with information technology (IT),
marketing strategies, AI based decision making, and typologies. As a result, the method of
identification involved searching for relevant published empirical research via the use of internet
databases such as Google Scholar, Business Source Premier, Science Direct, JSTOR etc. The
comprehensive research was carried out to figure out the impact of COVID-19 on businesses in
the UK, role of smaller businesses, strategic management and its role in worldwide business and
theoretical framework in the last.
The upcoming sections will cover impact of COVID-19 on business in the UK in 2.2, the
section 2.3 covers the role of small; businesses in the UK, the section 2.4 comprises the strategic
management and its importance in business, and the section 2.5 and 2.6 evaluate the role of
strategic management and the review of theoretical framework.
2.2 The Impact of COVID-19 on Businesses in the UK
2.2.1 Impact on Sales, Employment and Working Hour
The rapid spread of COVID-19 has given businesses a new major cause for concern. In this
paper, we provide the results of a recent study of UK chief financial officers from the Decision
Maker Panel, which found that firms anticipated a significant effect on sales over the course of
the next year due to the virus's widespread distribution (Bank of England, 2020). Businesses in
the hospitality, food and beverage, and leisure and transportation industries anticipated the
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greatest revenue declines. COVID-19 has surpassed Brexit as the greatest cause of uncertainty
for UK firms, according to the study.
According to the decision maker panel (2020), the effect of Covid on UK firms has been
considerable. Even while Q2 2020 sales were anticipated to be roughly 30% more than they
would have been in the absence of Covid, Q3 2020 sales were estimated to be 17% lower than
they otherwise would have been, while employment was 8% lower and investment was 24%
lower, according to the October DMP poll. A little uptick in sales was predicted for 2020 Q4,
although respondents still anticipated sales to be 15% lower than they otherwise would have
been. It was anticipated, however, that things would look up in the first half of 2021, with sales
dropping by just around 2% by the second quarter of that year. It was predicted that investment
would rise again, but at a slower rate and by a smaller amount than sales.The FIG 1 demonstrate
that the total working hour represent sharp decline in trend and gradually improving at the mid of
the 2021 Q2. The employment sale, unit cost, and investment all represent the significant decline
in the Q2 of the 2020. The unit cost, employment, total hour worked and investment showed the
steady growth in Q1 and Q2 in post pandemic 2021.
Figure 1: Impact of Covid on employment, sale, working hour, investment and cost (Source:
Decision making panel, 2020)
Impact of covid-19 on UK business- Evident from the decision making panel.Businesses in the
UK anticipated for significant revenue losses as a result of the COVID-19 pandemic. There were
five potential scenarios regarding how businesses will be impacted by sales in the next year, and
they were each assigned a probability in the March DMP poll. It was calculated that there was a
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71% chance of a bad outcome. A negative effect of more than 10% was predicted to occur 39%
of the time, whereas a negative effect of less than 10% occurred 32% of the time. A mere 22% of
the time would have no effect at all, while just 7% would see a favorable change. The good news
is that these effects on sales should be short-lived (Bloom et al., 2020).The fig 2 shows the large
positive value of the 0%, small negative value in the range of 4-5%, the no impact lies in the
range of 22%, small Negative is above 30 percent and large negative value of the 71%.
Figure 2: Expected impact of COVID-19 on sales over the next year (Source: Bloom et al., 2020)
2.2.2 Results by
Industry
According to the Bloom and colleagues (2020), It was anticipated that COVID-19 would
have a significant effect on profit making throughout the economic system. However, the
hospitality, hoteling, entertainment, and transportation sectors may anticipate the greatest level of
disruption. Around 60% of businesses in the hospitality, food service, and leisure and tourism
sectors expect a negative impact on sales in the coming year. After them came the transportation
and storage companies, who put the percentage at below 50%. The health and administrative and
support sectors anticipated the fewest changes.
The average probability of accommodation and food is above 60%, leisure and tourism
above 55 percent, transport and storage is 45%, whole sale manufacturing, and retail are up to
40%, construction is almost above 38%, admin& support, real estate, and health sectors represent
the above probability of above 30%.
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Figure 3: Result by different industrial sector (Source: Bloom et al., 2020. Impact of COVID on
business expectations)
2.2.3 COVID impact on the Small and Medium Size Enterprises
The United Kingdom's economy relies heavily on its thriving small and medium-sized
businesses. The declining economic prognosis is becoming a widespread problem. In the United
Kingdom, small and medium-sized firms (Small and medium businesses) employ half of the
country's workers and create half of the country's overall corporate income.
The impact of the COVID-19 crisis on small and medium-sized enterprise (SMALL AND
MEDIUM BUSINESSES) output in the UK is significant. Eighty percent of the surveyed Small
and medium businesses had flat or increasing revenues in the year before to the pandemic.
Eighty percent of Small and medium businesses today report falling profits. They further
mention a number of secondary effects (Albonico et al., 2020):
● Anxiety over missing loan payments (one of four)

● Uncertainty about keeping their supply chains going and problems with staff retention
(24%). (28 percent)
● Predictions of future workforce reductions (28 percent) and delays in expansion plans as
a result of the pandemic (36 percent)
Different industries in the United Kingdom have their own unique characteristics. More than
90% of surveyed Small and medium businesses in logistics, construction, and agriculture
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indicate income declines, but Small and medium businesses in the scientific, financial, and
insurance sectors, as well as education, claim the least impact (Albonico et al., 2020).
2.2.4 Exporting and Importing Challenges
Only 9% of presently active enterprises had exported in the previous 12 months, while
11% had imported, and both groups commented on how their respective activities deviated from
seasonal norms. In order to learn about the difficulties these companies have encountered during
international trade in the last month, we polled them (Ons Uk, 2022). The additional paperwork
and change in transportation challenges are up to 50%. There are more challenges to custom
duties for imports almost 45%. The disruption at the UK border, reduced demand for products
and services, export of services and goods etc. represent the percentage value in the range of 10-
20%.
Figure 4: Import and Export Challenges (Source: Ons Uk, 2022. Business insight and impact on
UK economy)
Sixty-six percent of presently exporting enterprises and eighty-nine percent of those doing
imports have encountered difficulties. The biggest problems for both exporting and importing are
the fluctuating transportation costs and the increased paperwork. Companies in the
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manufacturing sector reported the greatest rates of difficulty with increased paperwork (77%)
and increases in transportation costs (70%).Among the stated difficulties, and among all actively
trading enterprises, increases of 4 percentage points were observed between late November and
late December 2021 in transportation costs, the difficulty of locating information on how to
import, and the duration of border inspections.
2.3 The Role of Smaller Businesses in the UK
Smaller business plays a fundamental role in strengthening economy. Here are some
more ways in which small businesses contribute to the economy:
One of the first measures that comes to mind when trying to analyses the value a small
company adds to the economy is its annual revenue. In 2021, small and medium-sized companies
in the United Kingdom generated a total of £2.3 trillion in sales (Clark, 2021). Microbusinesses,
defined as having 10 workers or fewer, provided the largest single share of GDP growth, at £953
billion. That's already a big number, but when you consider that it represents 52% of the entire
private sector's revenue, it's truly staggering.
Since Small and medium businesses account for almost all of the United Kingdom's
active companies and provide jobs for millions of people, their combined prosperity or decline
has far-reaching consequences for the country's economy as a whole. Small and medium-sized
enterprises (Small and medium businesses) are often regarded as the primary driver of economic
growth and stability (Clark, 2021).
2.3.1 Small Business Employment Figures Impacting the Economy
There are 3.2 million single proprietors in the United Kingdom, making up 56% of all
private sector firms. Despite this, however, small and medium-sized enterprises (Small and
medium businesses) have a significant impact on employment creation in the country (National
statistics, 2021).More than 60% of all private sector jobs in the UK are held by employees of
small enterprises (National statistics, 2021).
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2.3.2 Growth of Small Business Impact the Economy
From 2000 to 2021, 2.1 million new enterprises were established, representing a 61%
growth in the company population. But the pandemic put a stop to that growth, and it contributed
to a 6.5% decline in UK commercial activity between 2020 and 2021. (Bionic, 2020).Our data
demonstrates that small and medium-sized enterprises (Small and medium businesses) have been
thriving in recent years, with employment levels at a record high and half of Small and medium
businesses planning to expand their operations this year. Even though Brexit's effects are yet
unclear, the future seems bright (Bionic, 2020).Almost 99.5% of all establishments in every
major industry are small firms (Bionic, 2020). Personal services, such as beauty and wellness,
and professional services, such as finance and consulting, have the largest concentration of small
enterprises. Small and medium-sized businesses in the United Kingdom (UK) have a symbiotic
connection with the national economy: the contributions of Small and medium businesses are
crucial to the prosperity of the economy, and the prosperity of the economy in turn affects the
expansion of Small and medium businesses (Panzone et al., 2021).
2.4 Strategic Management and its Importance in Business
To achieve its objectives, a company must engage in strategic management, which entails
constant preparation, tracking, analysis, and evaluation of all relevant factors. Due to the ever-
evolving nature of the business world, it will be necessary for companies to regularly evaluate
their tactics. The strategic management process aids businesses in assessing where they are,
developing plans to improve, putting those strategies into action, and assessing the results. There
are five core approaches to strategic management, each of which may take on a variety of forms
depending on specific circumstances. Effective strategic management is relevant for both fixed
and mobile environments.
2.4.1 Importance in Business
Most people believe that strategic management may help in monetary and intangible
ways. The primary duty of a board of directors is to assist an organization's leadership think
about and prepare for the organization's future existence, and this is accomplished via a strategic
management process. Management at the strategic level establishes goals for the company and its
workers to work toward. Effective strategic management, as contrast to one-and-done strategic
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plans, involves the ongoing planning, monitoring, and testing of an organization's actions to
ensure maximum operational efficiency, market share, and profitability.Management strategies
may be the difference between success and failure in an economy where technology
advancements are constantly upending the workplace (Xls, 2018). Business leaders who have an
in-depth understanding of both their own company's goods and services and those of their
significant rivals are better equipped to make accurate predictions and timely plans. This also
allows them to be ready for any future possibilities or threats that may arise.Strategic
management may increase morale in the workplace and bring about other benefits as well. An
increase in productivity may be achieved by the setting of attainable goals for workers and their
participation in achieving corporate goals.
2.5 Review of Worldwide Studies Investigating the Role of Strategic Management in

smaller businesses
Businesses in today's globalized world face new challenges and disruptions on a regular
basis as a result of technology advancements. When this occurs, strategic management may be a
lifeline for the company and an engine for expansion. Executives and senior management
officials who are well-versed in the company's offerings are better able to plan forward (Beaver
and prince, 2004). This is due to their use of the strategic management idea, which allows them
to predict the actions of their rivals. In order to keep their organization competitive, business
leaders must vigilantly monitor market shifts and seize emerging possibilities. They may also
fortify their business against the challenges that new entrants and other rivals may face
(Strikingly, 2021).
Strategic management techniques not only brought revenue, but also the morale of an
organization's workers (Freeman and Maccvea, 2005). They'll feel more invested in the firm as a
whole since they'll understand how their efforts benefit the company as a whole. Because of this,
communication and cooperation across divisions within the firm have improved, leading to
higher productivity for the business as a whole (Strikingly,2021).
Planning has been proved to be crucial for both big and small businesses (Muscatello et
al., 2003). The study's authors concluded that planned businesses outperformed their non-
planned counterparts financially. According to the study of Kotllovci and shala (2013), planning
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is the first step in building the high-performance strategic capabilities. Even with careful
preparation, a firm could still fail. However, it is said that the failure rate for small businesses
may be reduced if strategic planning is applied in the early stages of company growth, when
many of the contributing causes to business failures can be foreseen and efficiently addressed
(Lawlor, 2010).
A company's strategy may be defined as the activities it does to reach its goals (Feyissa et
al., 2018). A concept's or an idea's strategy may be thought of as the steps taken to take it from
the creative stage to its final placement in a competitive market. The purpose of business strategy
is to put academic knowledge into practice by assisting companies in achieving their goals
despite the inherent uncertainty of their operating environments (Teece, 2010). The strategic
process aids a company in its quest for success. In general, a company's strategy is what sets it up
for success. In the realm of entrepreneurship, growth is a crucial indicator of performance and
success (Jhonsosn and Sweonon, 2003). Our primary argument is that sound business strategy is
critical to and helpful for both the survival and expansion of any given corporation (Kotllovci
and shala, 2013).
2.5.1 Review of Theoretical Models/Frameworks
2.5.2 Strategic Management Theory
A strategic management theory is a set of hypotheses, propositions, or guiding principles

that aims to shed light on the discipline's theoretical underpinnings and practical implications.
Theories of strategic management may be traced back primarily to the systems view, the
contingency method, and the information technology approach to business.
2.5.3 The Profit Maximizing and Competition Based Theory
According to the profit-maximizing and competition-based approach, an enterprise's

primary goal should be the maximization of long-term profits and the creation of a durable
competitive advantage over competitors in the external market. The theory is grounded in the
industrial organization (I/O) perspective, which emphasizes the importance of an organization's
external market positioning in achieving and maintaining competitive advantage. To put it
another way, the traditional I/O perspective provided strategic management with a systematic
model for evaluating competition within an industry (Jaffar et a., 2010).
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2.5.4. Resource Based Theory
The management perspective that a company's competitive advantage comes from inside,
rather than from its place in the external environment, is at the root of the resource-based theory.
That is, rather of relying just on an analysis of external possibilities and threats, a company's
competitive advantage must be based on the special assets and competencies that it offers.
According to the resource based view of the company, businesses may gain an edge in the
marketplace by using the assets they already possess and develop new streams of revenue and
profits (Ainuddin et al., 2007). According to the resource based theory of strategic management,
a company's competitive advantage and high level of performance stem primarily from the
unique and difficult-to-replicate features of its resources and capabilities. It is argued that a
company has a competitive edge if it is pursuing a value creation strategy that is not being
pursued by any of its rivals. Additionally, a business is said to have a persistent competitive
advantage if it is adopting a value-creating strategy that is not being executed concurrently by
any present or future rivals and if these other companies are unable to match the advantages of
this approach (Omalaja and Eruola, 2011).A company's competitive advantage may come from a
variety of places, such as the possession of advantageous assets or a dominant market position,
the availability of favorable distribution and supply arrangements, or the possession of superior
skill, expertise, and resources in doing business. It has also been suggested that a company has to
aggressively and creatively utilize these three generic sources in order to gain and maintain a
competitive advantage, or that it needs to forestall competitors' attempts at these sources. This
contribution offers an integrated framework for analyzing the sources and effects of competitive
advantage that can be used by management professionals in their daily work (Omalaja and
Eruola, 2011).
2.5.5 The Contingency Theory
Lastly, the concept that there is no ideal method to govern an organization is derived
from the contingency theory. Based on the current circumstances, organizations should formulate
a suitable management plan. In conclusion, these primary strategic management theories will be
useful to the management of businesses as instruments to aid them in making strategic and
directed managerial decisions throughout the strategy creation, implementation, and assessmall
and medium businessesnt processes (Donaldson, 2001).
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2.6 Chapter Summary
The chapter overview the role of the strategic management during the COVID pandemic
on the small and medium enterprises including retail foods, transportation, telecommunication
business sectors. it has been concluded that the small businesses in the UK play a significant role
in UK economy. The pandemic time influence profits, and revenue of the small and medium size
enterprises. Therefore, it has been recommended in this paper to implement the strategic
management process to plan and run business accordingly. It has also been evidence from the
current literature that the COVID has adversely impacted the industrial sector in the UK. It has
impacted sales, promotion, working hour and industrial growth. The paper also highlights the
importance of the strategic management for the UK business sectors. After that, the strategic
management models such as resources based theory, profit maximizing theory, and contingency
theory has been analyzed and discussed in depth. in conclusion, it is recommended for the UK
firms to implement the strategic models framework to accelerate its industrial growth and
development.
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CHAPTER 3- METHODLOGY
3.1 Introduction
This chapter provides a detailed description of the qualitative and methodological
approaches, research strategy, and research approaches that, when combined with a sound
research philosophy, enable empirical research to be conducted in order to realize the goals and
objectives outlined in this research report. A specific focus of this chapter is on how these
approaches can help realize the research report's goals and objectives. In the United Kingdom,
various research approaches support the logics, ideas, and frameworks of strategic management.
The same is true throughout the country. Recently analysed papers, interviews, surveys, journal
articles, and government and journal reports are used in these approaches. In order to identify
relevant empirical research that has been published in the past, several ways are available,
including searching online databases (such as Google Scholar, Business Source Premier, Science
Direct, and JSTOR). One of many possible methods of identification can be used in this way.
This chapter covers the research philosophy, the research method, he data collection method, and
then the approaches and data analysis methos.
3.2 Research Philosophy
This analysis is based on the interpretivist research philosophy. Because positivism was
deemed to be incapable of fully addressing COVID' problems for startups, interpretivism was
developed to analyze the strategic management. It is focused with analyzing the complexities of
Covid by evolving existing theories with how the research view the world based on data from a
relatively small sample size. This research philosophy is applicable to my research. This research
philosophy simplified my decision-making and drawing conclusions on how Covid influenced
small and medium businesses and managed with existing frameworks in the UK. This research
philosophy assists in the examination of current concepts and the addition of my research to
existing studies (Flynn et al., 2020). This research allows for a review of the existing obstacles
encountered by startups in the UK as well as improvements to present theories. Instead of
collecting data all at once, it can be done in stages, and I can make changes along the way if
necessary. Furthermore, qualitative research allows the researcher to continue gathering and
analyzing data until no new issues are uncovered. As part of qualitative research, words or visual
images are obtained through participant observation and interaction.
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3.3 Research Approach
Research methods used in this study include two approaches. A quantitative research approach
and a qualitative research approach are both included in these research approaches. In this study,
a mixed research approach is used that combines qualitative and quantitative research
approaches.
Quantitative approaches utilize surveys to collect data, and responses are analyzed, while
qualitative approaches rely on previous studies, publications, articles, and research papers.
Beraha & Đuričin, (2020) emphasize the analysis of non-numeric data and express the
conclusions and thoughts of previous researchers. It is also possible to compare the results of this
study with those of previous studies based on the literature review (Beraha & Đuričin, 2020).
Quantitative research helps to quantify results and findings by focusing on the numerical data
that has been collected through surveys. At the same time, the quantitative research approach
includes different research techniques that are used to analyze the data collected. These
techniques include descriptive statistics, regression model, and ANOVA model. Descriptive
statistics are used to indicate the mean, maximum, minimum, skewness as well as kurtosis of the
data. The regression model is used to analyze the independent variables with the dependent
variable. The regression analysis also indicates the coefficients of the variables and indicates the
regression analysis (Albonico, Mladenov & Sharma, 2020). The ANOVA model shows the
significance of the model, and the cross-tabulation indicates the relationship between the
variables. Moreover, the procedure also includes a graphical representation of the relationship
between variables (Shafi, Liu & Ren, 2020).
Moreover, there are several advantages to quantitative research methodology regarding the
nature of the study, including the use of scientific methods for data collection and analysis to
enable generalization and the use of statistical data to save time and resources in the research
process (Beraha & Đuričin, 2020).
3.4 Theoretical Framework/Model

A conceptual theoretical framework is used in this research. It includes conceptualizing
the problem at hand. It employs the key terms and study objectives more frequently, and the
variables in the problem appear to be stated (Beraha & Đuričin, 2020). By using this conceptual
framework, this research is conducted with the ideas of other researchers, and review them for
17
the aims of my study. The model gives insight of strategic management for startups, which can
be used by any business in pandemic conditions. For example, in addition to other advantages,
strategic management may boost employee morale (Shafi, Liu & Ren, 2020). The creation of
achievable goals for employees and their involvement in accomplishing business goals can
enhance productivity. Theories are developed by researchers to explain events, identify
connections, and forecast the future (Albonico, Mladenov & Sharma, 2020). To demonstrate that
my work is founded on well-established notions, that present the current theories that support
this study in a theoretical framework.
3.5 Research Strategy
Qualitative and quantitative methodologies are used in this study. This strategy is chosen
because these methods measure the intensity of Covid damages to startups and generate reports
that can be used to thoroughly analyze the aims. In order to comprehend the reasons for
something or how people perceive certain facts or issues, these two techniques are commonly
used (Markovic et al., 2021). It contributes to the achievement of the study's objectives because it
facilitates understanding of the research topic. As a result of these approaches, the data is
collected directly from secondary sources.
3.6 Data Collection method
The data for the study is collected from yahoo finance as the equity returns of 10 random small
and medium businesses listed at United Kingdom (London) Stock exchange. This 10 random
small business, or companies are all United Kingdom based. The time duration of the data
collection is of 5 years starting from 2017 and ending at 2021. This time period includes the pre-
pandemic period and the during COVID-19 pandemic period. Whereas, on the other side, the
qualitative data for this study were acquired via qualitative methods. The data was acquired
utilizing pre-existing data, interviews, and reports from UK Small and medium businesses. This
study demonstrates numerous possibilities, including the resource-based theory. Using theme
analysis from journals regarding strategic management ideas, UK business, and corporate
development in the United Kingdom throughout the pandemic, it provides personal interpretation
of the data. The majority of publications and research are based on papers released during the
recent years, especially after the pandemic crisis (Albonico, Mladenov & Sharma, 2020).
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3.7 Data Analysis method

In this study, descriptive statistics are used, such as the summary statistics of the data, measures
of association, regression analysis, and correlation models, as well as plots and graphs. It also
includes the mean, standard deviation, sample variance, median, kurtosis, skewness, range, and
minimum values of the variables in the summary statistics. The measures of the association
represent the impact of COVID-19 on businesses in United Kingdom (Albonico, Mladenov &
Sharma, 2020). The regression model analyzes the relationship between the small businesses or
companies and the impact of COVID-19 on them. Additionally, this study will examine the
correlation between both dependent as well as independent variables through a quantitative
research approach. Based on statistical methods such as descriptive statistics, multiple plots, such
as scatter plots, trend analysis, correlation analysis, Pearson correlation coefficients, etc., are
used. Moreover, for this research study, the nonexperimental correlational design is appropriate
(Markovic et al., 2021). Moreover, this study uses the IBM SPSS Statistics for quantitative data
analysis and for statistical data analysis as it is the most effective research tool. Statistics are
analyzed using this tool for secondary data. SPSS is used to enter the data collected and perform
the required tests (Flynn et al., 2020).
3.8 Time Horizon
The data is acquired from journals at various periods using longitudinal time horizons.
The purpose of a study is to look at how models, frameworks, processes, or events change
through time of COVID-19 pandemic. The scope and time range of this investigation is not
determined at any stage. All of the descriptive journals that are used were written between 2000
and 2022. Whereas, the time horizon of the equity returns of small and medium businesses is of
pre-pandemic period as from 2017 to 2018 and during pandemic periods as from 2019 to 2021.
Therefore, the overall time horizon is of 5 years from 2017 to 2021.
3.9 Ethical Considerations
Secondary data is collected from credible sites, and data will be checked for falsification or
fabrication. In order to ensure data security, one must protect data from potential harm, ensure
secondary data is stored securely, and make sure sensitive information is protected. From an
ethical standpoint, the research will be transparent, honest, and authentic. It is necessary to
acknowledge and appreciate all the authors of sourced information. Further, the study must not
expose or embarrass any company or organization involved, and consent must not be forced. It is
19
imperative that the research is conducted in a competent, unbiased, and professional

manner. Moreover, the random 10 Small and medium businesses that are used in this study to
analyze their financial as well as non-financial performance with respect to their corporate social
responsibilities are confidential, and will not be exposed.
3.10 Chapter Summary

This chapter provides justification for the data that were used in this study. Inductive research
is combined with interpretive research philosophy in this study. The methods of this investigation are
described in the chapter. The purpose of this chapter is to clarify the methodology in relation to time
horizons and ethical considerations. In addition to providing feedback on existing policies, this
chapter will point out high points and areas for improvement, which could influence startups' existing
strategic management initiatives.
20
CHAPTER 4 ANALYSIS
4.1 Introduction
This chapter includes the data analysis, results and findings that is are analyzed on the basis of
the research questions and research objective of the study. The data analysis includes various
statistical analysis to analyze the impact of COVID-19 pandemic on the performance of small
businesses in United Kingdom. These quantitative research approaches as the statistical analysis
includes descriptive statistics, regression model analysis, correlation model analysis and the
ANOVA model analysis, as well as it is analyzed using qualitative research approach as
graphical representations and comparison of with the previous studies (Beraha & Đuričin, 2020).
Furthermore, the effectiveness of the qualitative research approach in this study is evaluated
through the literature review, whereas the effectiveness of the quantitative research approach is
analyzed using the statistical analysis, such as descriptive statistics, regression statistics,
correlation analyses, ANOVA models, and graphical representations of the results (Flynn et al.,
2020). A descriptive statistic averages and standardizes variables, and calculates variance.
Statistics that describe variables are called descriptive statistics. In addition to mean, median,
standard deviation, sample variance, kurtosis, skewness, range, and minimum and maximum
values, this data contains mean, median, standard deviation, and sample variance. In addition to
analyzing the relationship between the impact of COVID-19 pandemic and the performance of
small businesses in United Kingdom (Albonico, Mladenov & Sharma, 2020). According to the
correlation model analysis, the variables have a positive or negative correlation. Correlation
models also specify whether variables are strongly, weakly, or moderately correlated in addition
to their degree of correlation.
4.2 Findings and Analysis
4.2.1 Descriptive Statistics
The purpose of descriptive statistics is to provide brief informational coefficients about the given
data set of financial information of equity returns, which could be a representative sample from
the population or a representative representation of the entire population that are equity returns
(Shafi, Liu & Ren, 2020). The measures of central tendency and the measures of variability are
21
the two categories of descriptive statistics. The descriptive statistics include the mean, median,
kurtosis, skewness, and many other measures to analyze the data.
Table 1: Descriptive Statistics (SPSS Output)
N Minimum Maximum Mean Std. Deviation Skewness
Std.
Statistic Statistic Statistic Statistic Statistic Statistic Error
E1 60 1516.00 3430.64 2.1233E3 503.04809 .954 .309

E2 60 828.21 3101.01 1.7626E3 612.73673 .744 .309
E3 60 5384.66 15505.00 9.0562E3 3061.54755 .759 .309
E4 60 1455.55 6114.26 2.6741E3 1347.98310 1.484 .309
E5 60 1667.07 3117.17 2.2896E3 337.23475 .317 .309
E6 60 22.47 61.37 40.5957 10.70616 .189 .309
E7 60 322.02 737.28 4.8362E2 105.21187 .173 .309
E8 60 1413.07 4077.12 2.6593E3 816.59707 -.107 .309
E9 60 210.10 419.99 3.5226E2 52.81290 -1.061 .309
E 10 60 364.72 555.17 4.7425E2 45.77384 -.254 .309
Valid N
60
(listwise)
The above data indicates that summary statistics of 10 small businesses indicating as E1 to E10.
The mean indicates the average equity returns of the SMALL AND MEDIUM BUSINESSES
during COVID-19 pandemic crisis, whereas the maximum is the maximum equity returns of
equity returns and minimum is the least equity returns of small and medium businesses in United
Kingdom.
4.2.2 Regression Model
In a regression model, an independent variable such as the equity returns are related to dependent
variables, which can be measured. The overall regression model includes the model summary,
coefficients of the regression equation and regression analysis (Albonico, Mladenov & Sharma,
2020).
22
Table 2: Regression Model (SPSS Output)

Model Summary
Std. Error of the

Model R R Square Adjusted R Square Estimate
1 .991a .982 .978 78.98095
The model summary shows the R, which is 0.991 and R Square as 0.982, whereas the adjusted R
Square is 0.978. The standard error of the estimate for the regression equation is 78.98.
Table 3: Regression Coefficients (SPSS Output)
Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 42630.923 250.942 169.883 .000
E1 .095 .088 .090 1.084 .284
E2 .296 .068 .341 4.350 .000
E3 -.011 .009 -.063 -1.279 .207
E4 .067 .040 .169 1.681 .099
E5 .014 .063 .009 .230 .819
E6 17.283 4.308 .348 4.012 .000
E7 .221 .270 .044 .821 .416
E8 .060 .042 .093 1.424 .161
E9 -2.224 .567 -.221 -3.920 .000
E 10 -.043 .376 -.004 -.115 .909
The regression coefficients indicate the dependency of COVID-19 on the independent variable,
that is, the financial performance of the small and medium businesses in United Kingdom. The
23
variables as E 1, E 2, E 3, E 4, E 5, E 6, E 7, E 8, E 9, and E 10 are the equity returns of the ten

random Small and medium businesses in United Kingdom. The B indicates the beta coefficient
for the repression equation for each small business as well as the alpha coefficient for the impact
of COVID-19 pandemic of the enterprises. The standard error indicates the error between the
dependent variables and independent variables. The t-statistic is the value that shows the test
statistics of the regression model, and the significance value indicates the significance of the
model with respect to COVID-19 pandemic and its impact on small businesses in United
Kingdom.
The regression equation of the study using the formula as y = a + b x is as follow;
y = constant + equity returns χ
y=α+βχ
y = 42630.923 + [(0.095 χ) + (0.296 χ) + (-0.011 χ) + (0.067 χ) + (0.014 χ) + (17.28 χ) +
(0.221 χ) + (0.060 χ) + (-2.22 χ) + (-0.043 χ)]
y = 42630.92 + 15.76 χ
4.2.3 ANOVA Table
The ANOVA model is an analysis of variance model that is used when there are multiple data
points in a group, such as the ten random United Kingdom enterprises that are selected in this
study to analyze the impact of COVID-19 pandemic on the small businesses in United Kingdom
(Markovic et al., 2021). In the ANOVA model, a common mean value is specified for a group of
observations in a one-way model. The one-way model is analyzed using the analysis of variance
(Flynn et al., 2020). The table below indicates the ANOVA model;
Table 4: ANOVA Model (SPSS Output Result)

ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 1.637E7 10 1636843.142 262.399 .000a
Residual 305661.512 49 6237.990
Total 1.667E7 59
24
4.3 Discussion
The study found an interrelationship between the COVID-19 pandemic and the performance of
small businesses in United Kingdom. According to the findings and results indicated above, the
equity returns of small businesses have decreased in United Kingdom over the time period of
COVID-19 pandemic from 2019 to 2021 years. Small and medium businesses in United
Kingdom have a direct and positive relationship between their financial performance (Albonico,
Mladenov & Sharma, 2020).
The regression coefficients and significance of ANOVA analysis with a 2-tailed test indicate that
there is a significant association between COVID-19 pandemic and the financial performance of
small businesses in United Kingdom (Flynn et al., 2020). The COVID-19 pandemic crisis and
small and medium businesses' financial performance are positively correlated in United
Kingdom. Furthermore, both variables are significantly correlated (Shafi, Liu & Ren, 2020). In
addition, the regression analysis and ANOVA model show a significant relationship between
COVID-19 pandemic crisis and the financial performance of small and medium businesses in
United Kingdom (Flynn et al., 2020). Further, based on the results of regression analysis, there is
a significant relationship between the small businesses in United Kingdom and their financial
performance during the COVID-19 pandemic crisis. It is therefore concluded that COVID-19
pandemic crisis positively impacts the financial performance of small and medium businesses in
United Kingdom and that there is a significant link between COVID-19 pandemic crisis and the
performance of small businesses or enterprises in United Kingdom (Markovic et al., 2021).
25
Graph 1: Performance of Small and medium businesses in United Kingdom during COVID-19
Performance of Small and medium businesses in United Kingdom dur-

ing COVID-19
10000.00
9000.00
8000.00
7000.00
6000.00
5000.00
4000.00
3000.00
2000.00
1000.00
0.00
E1 E2 E3 E4 E5 E6 E7 E8 E9 E10
Pandemic (Source: FTSE 100)
The above graph indicates that the performance of small businesses in United Kingdom before
and during COVID-19 pandemic. The decreasing trend of the graph shows that during the
COVID-19 pandemic, the small businesses in United Kingdom falls in their performance, except
the one small business (Beraha & Đuričin, 2020). Overall, the COVID-19 pandemic has highly
impacted the small businesses in United Kingdom.
According to the Markovic et al., (2021) the operations and the financial performances of small
business in United Kingdom impacted during the outbreak. The percentage noted as 78 percent
small businesses are impacted due to the COVID-19 pandemic. The small businesses operating
in the United Kingdom have been affected significantly by the COVID-19 outbreak as expected.
In the study, 95.62 percent of enterprises reported a coronavirus outbreak or a lockdown has
affected their business in some way, 3.81 percent expressed no impact, and 3.01 percent were
unsure. COVID-19 outbreaks or lockdowns that was either unsure or did not affect enterprises'
businesses were excluded from further analysis (Flynn et al., 2020; Markovic et al., 2021).
The COVID-19 pandemic crisis has severely affected most small businesses. A majority of small
businesses are experiencing a severe impact on their business, with more than 41 percent
expressing this (Beraha & Đuričin, 2020). There are many types of effects on small businesses,
including different impacts of COVID-19 pandemic. This includes 10 percent financial issues for
small businesses, 21.78 percent disruptions in supply chains, 20.74 percent decreases in demand,
26
and 28.87 percent and 18.53 percent respectively reductions in sales and profit for small
businesses (Shafi, Liu & Ren, 2020), as indicated in the graph below;
Graph 2: Issues in Small Businesses in United Kingdom during the COVID-19 Pandemic Crisis
(Source: Shafi, Liu & Ren, 2020)
Impact of COVID-19 Pandemic Crisis on Small Businesses
Reduction in Profits
Reduction in Sales
Decrease in demand
Disruptions in Supply Chains
Financial Issues
0% 5% 10% 15% 20% 25% 30% 35%
The small businesses have been hit especially hard by the impact of COVID-19 due to their
higher likelihood of operating in industries that suffer from cash flow reductions such as food,
accommodation, arts, and construction (Flynn et al., 2020). A majority of businesses in logistics,
construction, and agriculture reported large revenue reductions during the period of COVID-19
pandemic crisis, while the hospitality sector recorded practically no output. According to the
study conducted by Markovic et al., (2021) the three-fourths of businesses in the accommodation
and food service industry were not confident their firm would survive three months from now.
Moreover, the fact that small businesses are less resilient than larger companies further
exacerbate the impact of the crisis. It is undeniable that the Coronavirus pandemic has harmed
small and medium businesses economically and functionally, yet it has also provided a boost to
business and provided new opportunities for those who survive (Beraha & Đuričin, 2020).
According to the study conducted by Albonico, Mladenov & Sharma (2020) and Shafi, Liu &
Ren (2020) the COVID-19 pandemic crisis in United Kingdom has impacted many small
27
businesses, and as results of this outbreak, many small businesses are financially vulnerable. In
addition, a decrease in demand may be caused by the loss of customers or buyers. In addition to
financial and supply chain disruptions, these results suggest that small businesses are vulnerable
to demand constraints.
4.4 Chapter Summary
The chapter includes the data analysis, results and findings of the impact of COVID-19
pandemic crisis on the small businesses in United Kingdom. In this chapter, the COVID-19
pandemic crisis and the performance of small businesses in United Kingdom are testing using
quantitative research approach as well as qualitative research approach. The findings of the study
indicates that the equity returns of small businesses is decreased in United Kingdom over the
time period of COVID-19 pandemic from 2019 to 2021 years. Further, the small and medium
businesses in United Kingdom have a direct and positive relationship between their financial
performance. The COVID-19 pandemic crisis and small and medium businesses' financial
performance are positively correlated in United Kingdom. There is a significant relationship
between COVID-19 pandemic crisis and the financial performance of small and medium
businesses in United Kingdom, as well as the COVID-19 pandemic crisis positively impacts the
financial performance of Small and medium businesses in United Kingdom.
28
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31

Impact of COVID On Small Business in The UK

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This work is submitted to as part of the partial fulfilment of the requirements for the

degree of International Master of Business Administration 2021-22

Course Work – Final Dissertation

Impact of COVID-19 on the Small and Medium Business in the UK

Word Count: 6500

Submission date: 9/1/22

3.8 Time Horizon.......................................................................................................................20

1.1 Background of Study

According to the study's findings, companies anticipated a sizable drop in revenue as a

1.3 Goal of Research

1.5 Rationale of Study

1.6 Significance of Study

CHAPTER 2- LITERATURE REVIEW

A comprehensive literature analysis was carried out so that a conceptual knowledge of

2.2 The Impact of COVID-19 on Businesses in the UK

2.2.1 Impact on Sales, Employment and Working Hour

2.2.3 COVID impact on the Small and Medium Size Enterprises

● Anxiety over missing loan payments (one of four)

2.2.4 Exporting and Importing Challenges

2.3 The Role of Smaller Businesses in the UK

2.3.1 Small Business Employment Figures Impacting the Economy

2.3.2 Growth of Small Business Impact the Economy

2.4 Strategic Management and its Importance in Business

2.4.1 Importance in Business

2.5 Review of Worldwide Studies Investigating the Role of Strategic Management in

2.5.1 Review of Theoretical Models/Frameworks

2.5.2 Strategic Management Theory

A strategic management theory is a set of hypotheses, propositions, or guiding principles

2.5.3 The Profit Maximizing and Competition Based Theory

According to the profit-maximizing and competition-based approach, an enterprise's

2.5.4. Resource Based Theory

2.5.5 The Contingency Theory

2.6 Chapter Summary

3.4 Theoretical Framework/Model

3.7 Data Analysis method

imperative that the research is conducted in a competent, unbiased, and professional

3.10 Chapter Summary

4.2 Findings and Analysis

4.2.1 Descriptive Statistics

N Minimum Maximum Mean Std. Deviation Skewness

E1 60 1516.00 3430.64 2.1233E3 503.04809 .954 .309

Table 2: Regression Model (SPSS Output)

Std. Error of the

1 .991a .982 .978 78.98095

Model B Std. Error Beta t Sig.

1 (Constant) 42630.923 250.942 169.883 .000

E1 .095 .088 .090 1.084 .284

E2 .296 .068 .341 4.350 .000

E3 -.011 .009 -.063 -1.279 .207

E4 .067 .040 .169 1.681 .099

E5 .014 .063 .009 .230 .819

E6 17.283 4.308 .348 4.012 .000

E7 .221 .270 .044 .821 .416

E8 .060 .042 .093 1.424 .161

E9 -2.224 .567 -.221 -3.920 .000

E 10 -.043 .376 -.004 -.115 .909

variables as E 1, E 2, E 3, E 4, E 5, E 6, E 7, E 8, E 9, and E 10 are the equity returns of the ten

Table 4: ANOVA Model (SPSS Output Result)

Model Sum of Squares df Mean Square F Sig.

1 Regression 1.637E7 10 1636843.142 262.399 .000a

Residual 305661.512 49 6237.990

Performance of Small and medium businesses in United Kingdom dur-

Impact of COVID-19 Pandemic Crisis on Small Businesses