The world is struggling to deal with the economic, political and social shocks caused by the Covid-19 outbreak. The pandemic and its rapid spread have placed extraordinary demands on employees’ and leaders in organisations and beyond. The humanitarian toll taken by Covid-19 has created fear among employees and other stakeholders. The massive scale of the outbreak and its unpredictability makes it challenging for businesses to respond. The unexpected sequence of events unfolding at overwhelming speed has resulted in a high degree of uncertainty that gives rise to a feeling of lost control, despair and strong emotional disturbance. Routine emergency plans and pre-defined response measures normally do not work in such situations.

The crisis is having a severe impact on economic activity and in addition to the growing human toll, is leading to the deepest global recession since the Second World War. International Monetary Fund (IMF),in their report titled ‘Global Economic Outlook June 2020’ forecast that the global economy is expected to shrink by 4.9 percent in 2020. Advanced economies are projected to shrink by 8 percent in 2020, as social-distancing norms, tightening of financial conditions, fall in global trade, and a collapse in external demand result in a subdued activity. Due to the cross-border spillovers and disruptions in their own countries, Emerging Market and Developing Economies (EMDE) GDP is expected to contract by 3 percent in 2020. The forecast assumes that the mitigation measures can be lifted by mid-year, adverse global spillovers ease during the second half of the year and disruptions in financial markets are not long-lasting. Although a moderate recovery is envisioned in 2021, with global growth reaching 5.4 percent, the output is not expected to return to its previously expected levels.
Phases of the crisis
As a result of Covid-19 pandemic, the majority of the global workforce has been affected by the lockdown and ‘stay at home’ measures. The initial priority for most organisations was crisis response and emphasising health, essential services and virtualisation of work and education. Now, as organisations emerge from the ‘response’ stage, they need to focus on strategies to deal with such pandemics or situations arising in the future. A typical crisis usually following the following three-phase cycle:
  • Respond, in which an organisation deals with the present situation and prioritises business continuity
  • Recover, during which an organisation learns, adapts and emerges stronger
  • Thrive, where the organisation prepares and designs strategies for the ‘next normal’.
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