Introduction
Fear of pandemic epidemics has existed for a very long time. Pandemics appear to occur every 10 to 50 years due to the rise of novel virus strains from infection recombination. As the global population grows and humans are forced to live alongside other animals, it is probable that the spread of new viruses to humans will grow in frequency. In this regard, pandemics such as coronavirus disease 2019 (COVID-19), Ebola, and the Black Death have had the most catastrophic and visible impact on human health.
Nonetheless, the inevitable economic devastation arising from these epidemics distinguishes these pandemics from any other catastrophe in recent memory. The pandemic has resulted in the closure of numerous businesses, causing an unforeseen halt in commerce in most industry sectors. Retailers and brands encounter considerable short-term repercussions, including health and safety, distribution chain, staff, cash flow, customer demand, sales, and marketing. Substantial and long-lasting effects of epidemics on international businesses include disruptions in supply chains, decreased consumer demand, financial instability, and the need for businesses to adjust to altering conditions in order to survive and flourish.
Economic Impacts
On a global scale, epidemics have both short-term monetary and long-term economic impacts. In addition, pandemics can reduce tax revenues and increase expenditures, causing financial strain, particularly in lower-middle-income countries (LMICs), where fiscal strains are more significant and tax systems still need development (Shang et al., 2021). In China’s hotel industry, for instance, severe financial losses persisted into the first quarter, as evidenced by the financial statements of many hotel companies. In 2020’s first quarter, Jinjiang International recorded net revenues of 171 million Yuan, a reduction of 42.3% year-over-year (Hao et al., 2020). In this sense, there were no exceptions for international hotels. IHG closed 160 out of 470 hotels in China in February, and its occupancy conversion rate (OCR) plummeted by 90% to less than 10% during the same time frame (Hao et al., 2020). On the same note, Hilton shut down approximately 150 hotels in China. Equally, Marriott’s RevPAR in Greater China decreased by more than 80 percent, and Accor’s in China decreased by 67 percent (Hao et al., 2020). This sustained closure of companies disrupted the fundamental of international trade because it diminished borrowing opportunities, which as a result, lowered the value of local money, making dollar-denominated debt repayment more difficult.
Consumers usually postpone acquiring durable items such as kitchen appliances, automobiles, sports gear, and furnishings during pandemics. In fact, the outbreak of the coronavirus illness 2019 (COVID-19) significantly reduced household expenditure on durable goods. However, as time passed, spending on durable items increased dramatically. Greater expenditure on durable goods was driven by a change in customer preference from services to durable goods, as well as a rise in disposable income as a result of the economic boom. (Scopelliti, 2021). During COVID-19, the government, firms, and consumers enacted lockdown and social-distancing protections, causing a shift in customer demand from services to durable products.
Consumers limited to travel, minimized restaurant dining, and exercised at home rather than the gym by spending more time at home. These moves may have prompted customers to replace services with long-lasting items, such as updating their kitchen appliances and devices or acquiring sports equipment. As a result, disposable income increased rapidly during COVID-19, indirectly causing a surge in durable goods consumption. According to U.S. national accounts, disposable income surged by $1.18 trillion in 2020, with fiscal stimulus accounting for approximately 81% of the gain, or $957 billion (Scopelliti, 2021). During the peak of the epidemic, increased buyer ability on automobiles, leisure items, and furniture and items coincided with three rounds of government stimulus.
When the deadly Ebola virus struck, it impacted not just the West African economy but also the economies of the rest of the globe. The prolonged closure of economies wreaked havoc on internal travel, jobs, and even operations for many small enterprises, which would bear the brunt of the damage. Billing and lending are problematic for firms functioning on cash flow due to the uncertainty during the epidemic and containment procedures and a shortage of sufficient staff (Dramé et al., 2021). According to government guidelines, employees must be reimbursed for lengthy vacations or being unable to return to work owing to quarantine limitations.
Several large industrial extended their vacations for at least a week more, making it impossible for employees to resume duties. In regards to the virus’s effect so far in 2014, Ebola has slowed economic enhancement in West Africa and caused an economic penalty spanning approximately from $2.8 billion to $32.6 billion in the decreased gross domestic product (Dramé et al., 2021). This was comparable to 3.3% of the regional GDP (Dramé et al., 2021). As a result, the virus has expanded to numerous other African nations with inadequate resources, placing a substantial financial strain on their medical system and impacting the countries’ overall economies.
Pandemics frequently result in travel limitations, which can have an effect on multinational firms that depend on travel for sales, marketing, and company growth. It can also make it challenging for organizations to send personnel and executives to meetings and events in other countries. These difficulties have impacted every participant in the aviation sector. Travel desire and access to travel have decreased as a result of travel prohibitions and social distancing practices. Flights were canceled, and passenger traffic dropped precipitously at the airport. As viruses spread at an exponential pace through air travel was identified as the primary cause of the intensification of local outbreaks to worldwide epidemics. As a result of the personnel and cash shortages, aircraft restoration projects have been delayed, slowing the growth of aviation organizations (Mhalla, 2020). Many hotel owners, particularly independent hotel owners, have temporarily closed or moved their hotels to survive. This circumstance has resulted in a significant drop in the stock market’s value of hotel assets. In a nutshell, the epidemic has harmed the market as well as the efficiency of hotel companies.
Health Impacts
Epidemics have severe health consequences in the commercial arena. Over 30% of Europe’s population was wiped off throughout the Black Death epidemic (Shang et al., 2021). Conversely, pandemics have an imbalanced effect on the young and economically engaged population. Given that younger individuals have poorer immunity as compared to older people, their morbidity and death rates are greater. Therefore, the pandemic’s immediate impact is a rise in the number of years of life lost. Furthermore, such infectious illnesses have long-term repercussions, which might be exacerbated in pandemics. The collateral consequences of pandemics on health encompass declining resources for ordinary healthcare, lower children vaccination rates, and limited healthcare access due to travel incapacity.
As a result of the rise in hospital admissions induced by COVID-19, there was an increase in mortality from respiratory disorders. As a result, distinguishing between deaths caused by the pandemic and those caused by other illnesses is challenging. Such health consequences might have a global impact on enterprises. International trade was particularly affected since the supply chain was disrupted due to decreased working safety. Employees in specific occupations, such as manufacturing, may be more likely to contract COVID-19 owing to close contact with others or poor personal protective equipment. (PPE).
Employee well-being might suffer as a result of stress and fatigue, especially during a pandemic. Workers’ efficiency, for example, may suffer due to working during a crisis. Employee productivity might deteriorate when they are anxious and burned out. They may struggle to focus on work, fulfill deadlines, or develop inventive solutions. This can have an influence on the company’s overall productivity, resulting in delays, missed opportunities, and lower revenue that affects worldwide business (Adamopoulos&Syrou, 2022). Furthermore, greater absenteeism and turnover might be seen, as stressed and burned-out personnel may take more sick days or have higher turnover rates. This might result in a loss of skilled individuals as well as higher recruiting and training expenditures.
Furthermore, burnout can result in physical and mental health issues, which can raise healthcare expenditures for businesses. This is especially troublesome during a pandemic when healthcare resources are already pushed to the limit (Adamopoulos&Syrou, 2022). Similarly, decreasing employee involvement may be observed in the workplace. For example, the COVID-19 epidemic created new stressors in almost every area of life, from extended work hours to increasing responsibilities at home(Abramson, 2022). Employees that are stressed or burned out may become disconnected from their jobs and the firm. This can have an influence on morale, collaboration, and general job satisfaction, resulting in poorer retention rates, which has an impact on international companies(Leo et al., 2021). These pressures have gotten worse, and are they inevitable as the pandemic increases every employee’s risk of burnout
Digitalization Post Pandemics
The consequences and speed of technology disruption in businesses are rising, and COVID-19 has exacerbated this trend. International firms must be geared up for this obstacle, and to accomplish this, they must build a culture of innovation that includes the company’s workers in every step. In the post-COVID-19 world, new technologies are already starting to contribute to the digital transformation of many firms and industries, and this has gained growing importance in the global economic landscape. The Internet of Things (IoT), for example, is an interconnected system of tangible objects that incorporates technology and software that allow multinational traders to connect and interact intelligently through the Internet (Almeida et al., 2020). IoT has uses ranging from personal to corporate to industrial.
IoT has the ability to alter business reality and lead to considerable operational improvements, including new sorts of client services and high-quality goods. According to Almeida et al. (2020), the accessibility of data and information, as a result of monitoring and measuring all actions, allows IoT to radically revolutionize the perspective and perception of the activity. This results in several competitive benefits as well as a more complete and true understanding of the global business situation. This knowledge will be critical in overcoming the hurdles and problems given to global businesses by the growth of COVID-19. As a consequence, digitization will prevent global companies from being disrupted.
Following pandemics like COVID-19, organizations have begun to use virtual forms of recruiting, training, and socializing in place of face-to-face encounters. Increased job autonomy will lessen family-related issues that may develop in remote work situations by giving employees the resources they need to balance competing work and family obligations. As a result, this will raise organizational productivity, which will boost firm income growth. Firms’ expansion will result in increased worker output, which will provide prospects for a worldwide company. Thus, organizational leaders must improve relationship-oriented systems for human resources to prevent the possibility of unanticipated and protracted solitude among single, autonomous individuals and to equip them for emergencies (Donthu& Gustafsson, 2020). Entrepreneurship can provide insights that organizations dealing with the epidemic might use (Sharma et al., 2020). Given the current work environment dynamic, recycling such tactics to uncover missed or underutilized sources of interpersonal assistance is likely to be beneficial for employees.
Conclusion
As disease epidemics occur, they are likely to have repercussions on the financial markets, labor markets, international trades, and consumption, as well as manufacturing sectors, among others. This study aimed to investigate the effects of disease epidemics such as the present coronavirus pandemic on the global business economy. The paper analysis includes an evaluation of the impact of Ebola, the Black Death, and the COVID-19 virus on different regions of the globe. The study revealed that pandemics result in the closure of hotels, airports, and other essential economic components. As a result of such disease epidemics, there are health impacts, digitalization impacts, and financial impacts that have an effect on global business. This evidence allows us to conclude that increasing the involvement of government authorities can mitigate the effects of disease outbreaks. Equally, people and organizations should be taking action, occasionally with authority assistance. Companies of all sizes and across a wide range of sectorsshould develop innovative strategies to mitigate pandemic problems, from providing automation, vaccine innovation, and care should be considered crucial.
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