Lessons From COVID-19

Law, Kenneth S.（羅勝強）, Hong, Ying-yi（康螢儀）, Wan, Lisa C.（尹振英）

CUHK experts weigh in on how the coronavirus outbreak has affected a range of business and economic issues

By Raymond Ma, Managing Editor, China Business Knowledge @ CUHK

The COVID-19 virus spreading around the world has ravaged economies, upended supply chains, and forced a rethink of how many businesses operate. China Business Knowledge hereby presents a selection of management expert insights into this ongoing crisis.

Organisational Behaviour

China Business Knowledge @ CUHK: What are some of most disruptive changes that organisations have had to endure as a result of the COVID-19 crisis, and how have companies responded to them?

Kenneth Law, Associate Dean (Research) and Professor at Department of Management: Organisations are composed of people, and interaction is the most important organisational function.  While internet meetings using established platforms such as Zoom can be used, it is still not the most effective interaction mechanism. From time to time, we need to compile information, refer to documents, brainstorm for ideas, etc… These can be difficult to be conducted over the internet.

Locally in Hong Kong, while the city is already typically regarded as well connected to the internet, some areas still do not have sufficient internet access speeds for large meetings. The nature of internet meetings also has built-in limitations, at least given our current technology. For example, not everyone can speak at the same time. Thus, my view is that we have still a long way to go before companies are ready to move to interact on an electronic basis completely.

CBK: Work from home has been a trend that we are seeing the workforce gradually shift into over the last few years. Now that the crisis has forced a large proportion of workers to work from home, is it here to stay?

Prof. Law: The western world has implemented home offices for some time. The COVID-19 crisis has pushed Hong Kong to a new frontier of using more flexitime. In this sense, we are progressing because of the virus outbreak. As I explained, we cannot move to a complete home office mode at the moment, although we may be moving towards less rigid work hours in the future.

CBK: Are there any other lessons that companies should learn from the current COVID-19 crisis?

Prof. Law: On top of affecting office operation, I think the COVID-19 crisis has also strengthened the pressure to move to individualized click to pay, also known as C2P, services. New business models may prevail such as quick delivery service by combining food and products sold in different stores. In the same sense, this may also push the economy towards the use of e-money and e-currencies.

Trade Relations & Politics

CBK: China and the U.S. have been embroiled in a trade war for some time now, has the current outbreak changed attitudes?

Hong Ying-yi, Choh-Ming Li Professor of Marketing: We’ve actually conducted surveys asking respondents in the U.S. that, given the COVID-19 outbreak, whether they would support a number of policies from reducing the tariff  on imported Chinese goods to giving China more leeway in the second round of trade negotiations. We carried out surveys both during the height of the outbreak in China back in early February, to the current situation where the virus is spreading in diverse countries.

What we’ve found is that although attitudes in the U.S. haven’t changed over the intervening period on average, respondents who identified themselves as being Democrats were significantly more supportive of policies for their government to provide more leeway on U.S.-China trade war as a result of the virus outbreak, compared to their Republican counterparts. This hints that political partisanship is a dividing factor underlying America’s responses toward COVID-19. The research team has also found that partisanship predicts other aspects toward the rapidly worsening COVID-19 epidemic in the U.S. For example, in a recent survey (when COVID-19 outbreak became serious in the U.S.), Democratic respondents reported stronger negative emotions (e.g., threatened, anxious) toward COVID-19 than did their Republican counterparts, reflecting differential attribution and prognosis of this pandemic.

Tourism

CBK: When the coronavirus outbreak is eventually brought under control, how long will it take for the global travel and tourism industry to return to normal? Will the coronavirus leave any lasting structural change?

Lisa Wan, Associate Professor at School of Hotel & Tourism Management and Director for Centre for Hospitality and Real Estate Research: If we used the SARS as a case study, although SARS resulted in a sharp decline in China’s GDP growth in the second quarter of 2003, the negative impact was largely offset by higher growth in the following two quarters, and the annual growth rate was about 10 percent. However, since the COVID-19 recently seems to be becoming unstoppable and is spreading to many countries around the world, it is much more severe than the 2003 SARS crisis. Therefore, it would take a longer time for the global travel and tourism industry to recover than SARS, maybe more than a year.

I think the global travel and tourism industry will become less reliant on international travel and will start to develop more domestic and trans-Tasman travel, at least in the short run. It will also become more cautious about hygiene and safety issues, and will start to focus on using smart technology and service robots to increase its operational efficiency as well as to lower the need for human contact (to lower the risk of similar virus infection). E.g., Using robots for check in service, food delivery, health screening robots to conduct temperature checks at airports, train stations, shopping malls, hotels, etc…

CBK: Do you think there will be any lasting repercussions against outgoing Chinese tourism as a result of the current coronavirus outbreak?

Prof. Wan: COVID-19 is spreading to many countries around the world now and all of us understand that it is an uncontrollable virus. When the outbreak is eventually brought under control, I think outgoing Chinese tourism will still be one of the important forces driving global travel although some countries may start to diversify their tourism sources.

Before the outbreak, Chinese tourists were big spenders in many cities, such as London, Paris, and New York. China is the fifth-largest source of foreign tourism to the U.S., behind Canada, Mexico, the U.K. and Japan. Around 3 million Chinese tourists traveled to the U.S. in 2018, spending more than US$36 billion.

Hong Kong, Thailand, and Japan are also top favorite travel destinations for Chinese tourists. For example, Mainland China is the largest source market for Hong Kong, accounting for around 78 percent (around 44 million) of the total number of visitor arrivals for the city for the entire 2019 (around 56 million). The number of Mainland Chinese in Japan has also exploded from around 450,000 in 2003 to 8.4 million in 2018, accounting for 27 percent of all inbound tourists. Chinese visitors also contributed to 27.6 percent (around 11 million) of the total number of visitors (around 39.8 million) in Thailand in 2019.