"Business not as usual", a series of Podcasts to get you through the Coronavirus crisis
Covid-19 pandemic is hitting the world and affecting our lives in an unprecedented way. Populations all over the world are locked down, health systems have become restrained, borders are closed, and the economy begins its downward spiral into a global recession. What will be the consequences of this health crisis and its potential impact on the future of our economy, politics, society and education? They are neither doctors nor virologists, but in this this series of podcasts “Business, Not As Usual”, HEC professors provide citizens and decision-makers with keys to better understand this crisis.
"CSR is helpful during a crisis because it creates trust with important stakeholders. It strengthens relations with customers, increases employee loyalty and motivation, and it also helps firms to attract investors."
HEC Paris professor of Strategy & Business Policy, Georg Wernicke, shares his perspective on how engagement in corporate social responsibility (CSR) may affect firms’ well-being during the crisis, and in its aftermath. Based on different research, including his own, he encourages business leaders to maintain their commitment to CSR activities. He also warns them against not seeing through such engagements, and the negative impact this will have on firms’ recovery, performance and reputation.
The thing that makes severe uncertainty particularly challenging in Covid-19 is urgency. In the face of uncertainty, you might be tempted to wait until we know more. Unfortunately, in most of these cases, by the time we know enough it might be too late.
Why is the Coronavirus pandemic a particularly challenging case for decision-makers today? HEC Paris professor of Economics and Decision Sciences, Brian Hill, elucidates the meaning of severe uncertainty. Like measures to tackle climate change, governments are facing dual constraints: lack of knowledge and urgency. Brian Hill’s research provides tools for appropriate and rational decision-making through the notion of confidence in judgments.
We must accelerate our efforts to prepare the talents of tomorrow. This requires rethinking what teaching business means in the wake of the most recent health crisis.
A call for change will be necessary in the wake of the Covid-19 pandemic. But where do we begin? HEC Paris professor of Economics Jeremy Ghez places education at the heart of this question. Through HEC Paris’ Specialized Masters or MBA programs, his goal is to train and enable tomorrow’s economic actors to create new business models in a disruptive global environment. To do so, he invites us to reconsider the meaning of innovation and the measure of impact, in a world that is continuously shifting.
What matters is the scale of the use and the deployment of AI and robotics. It is not whether it is going to happen.
HEC Paris Professor Sangseok You (Information Systems and Operations Management Department) explains how the use of AI and robotics in the particular case of the COVID-19 pandemic offers many opportunities for healthcare, firms or individuals. A good example is its use in telemedecine, where robots are not threats to humans, but instead a « new type of teammate » that will be paired with human experts. Sangseok You considers that customers will get used to having AI agents responding to their questions. He also gives us his vision of the possible impact of the lockdown and social distancing on the future of work.
"I would expect during the crisis to see people defend their beliefs even more than usual, and show more bias when they select and process information. Such increase in confirmatory biases can only lead to more polarization in society, more stereotyping, more defensive judgments in general."
Anne-Sophie Chaxel, is Professor of Marketing, specialized in behavioral sciences. She talks about the consequences of the COVID-19 pandemic on judgment and the decision-making process. In her initial analysis of how the current crisis impacts governments’ decision-making, she underlines three potential biases to look out for : overconfidence, confirmatory biases and groupthink. She also raised the question on how the population may react to this crisis. Based on her research « The Impact of Future Time Perspective on Confirmatory Information Processing », Anne-Sophie Chaxel expects people to defend their beliefs even more than usual, thus leading to an increase in confirmatory biases, along with the potentially dangerous consequences that accompany them.
"Brands that will be able to deliver messages and engage in conversations that are considered valuable because they provide helpful information, relevant advice or that simply make you laugh will come out of the crisis stronger."
During a crisis like the COVID-19 pandemic, how should social media be mastered and employed in a responsible way ? HEC Paris professor of Marketing, Kristine de Valk, has been studying social media marketing since 1999 and analyses the current situation through her key research findings. She explains the particular strengths of social media when it is used for communal and conversational purposes. Due to social distancing restrictions today, social media has become a powerful tool for socialization and emotional support for individuals worldwide. For companies and marketers, social media strategies should be oriented to engage with their customers and create conversations between them, through their brands. In this context, marketers should therefore embrace the communal logic instead of promoting self-glorifying brand posts on their social media.
"The economic governance of the Euro area is very paradoxical: it relies entirely on the ECB, which at the same time has a very narrow price stability mandate. Changing this situation would require amending European treaties, which all governments have shied away from, but each new crisis illustrates that the status quo is not sustainable."
Finance professor and specialist in financial and banking regulation, Jean-Edouard Colliard reacts to the massive plan to support the European economy announced by the European Central Bank, an institution in which he worked as an economist. He believes that the ECB has the means to avoid a long and deep recession, but above all, that the current situation reveals the limits of European governance. With no significant European budget and no political steering of the euro zone, everything seems to rely on the ECB, which nevertheless has a very restrictive mandate.
"If you think that the EU is not doing enough, turn the blame to the European capitals and national political leaders, who pretend not to know that our social, economic, and political interconnectedness require EU-wide coordinated responses."
How do we make sense of such conflicting strategies by European member states, when all European citizens are equally affected by the Coronavirus Covid-19 pandemic? For Alberto Alemanno, Jean Monnet Professor of EU Law & Policy, such different strategies may not only be counter-productive in terms of health but also lead to other negative effects. In particular, he draws attention to the threat to individual freedoms and free movement within the EU.
"Each normally healthy firm is a precious part of an economic tissue that if gone induces large losses on other parts of the economy, workers and their families, local communities and the state as a whole."
Tomasz Michalski, Associate Professor of Economics and Decision Sciences, emphasizes on the microeconomic impact of the Coronavirus Covid-19 crisis on individual firms, which are essential cogs in the preservation of wider economic networks. Faced with this crisis, individual firm liquidity may be threatened into bankruptcy. Michalski calls for a solid financial plan to support these firms through this economic backlash.