How to deal with COVID-19? A comparison between public and private organizations

This blog post is provided by Marlene Welzl, a student in the Master program Leading Innovative Organizations at the Johannes Kepler University Linz. Marlene has been working for the Austrian foreign ministry and is cofounder of the intergenerational housing platform Wohnbuddy.  

COVID-19 is definitely a challenge for the society as a whole. It does not matter how your personal circumstances look like – whether you are sitting alone or with your small children at home or whether you are staying 24/7 with your partner in a small city apartment -, the pandemic is a challenge for everybody. But COVID-19 is not only a challenge on the individual level, but also on the organizational level, whether it be a private business or a public organization. In this blogpost, I am discussing the similarities and differences of the crisis management between public and private organizations during the peak of the pandemic in Austria.

Since we have gained insight in how the company Blum managed COVID-19 through the interview Leonhard Dobusch from the University of Innsbruck conducted with Urs Bolter, a member of the management board of Blum, I will take the company Blum as an example for a private organization. Blum is an international and family-owned manufacturer of furniture hardware with its headquarters situated in the Austrian province Vorarlberg. Blum employs close to 8.000 people and, in addition to Austria, has production plants in the United States, Poland and Brazil. Regarding public organizations, I take the Austrian health ministry and the Austrian foreign ministry as examples, since these two ministries played a crucial role in dealing with the pandemic in the public sphere. My information regarding the crisis management of the Austrian health ministry is based on a newspaper article. Regarding the crisis management of the foreign ministry, I conducted an interview with an Austrian diplomat.

Installing internal taskforces as a reaction to the immediacy of the crisis

Whether it is the Blum company or the health or the foreign ministry, all the organizations were hit by the immediacy of the crisis. In order to deal with this immediacy, they have immediately installed organizational internal taskforces responsible for dealing with the pandemic. In the Blum company, this taskforce includes the majority of the top-management team, a few experts analyzing the necessary data for decision-making day by day and a communication specialist. This taskforce has stand-up meetings every morning and decides on a daily basis about the most important tasks that need to be done. “Within minutes we make decisions, under normal circumstances such a fast decision-making process is not possible”, reports Urs Bolter. 

In the Austrian health ministry, the taskforce consists of about 100 people including lawyers, epidemiologists, medical experts, mathematicians and communication experts. The taskforce includes internal staff as well as 17 external experts. The heads of the seven central administrative units of the health ministry, including communications, IT, action planning and resource management, meet twice a day. Everybody else that has to be part of the meeting joins per video-conference. Each unit uses two PowerPoint slides to report on the current situation. Questions include: How many people are infected by COVID-19? Where can we identify clusters of infections? What about our testing-capacities? What kind of information has been updated in the FAQ section of the Corona-Website?

In order to deal with the pandemic, the foreign ministry installed not a single but several taskforces with different responsibilities (e.g. crisis management, organization of return flights). These taskforces include only internal staff from various divisions. Since diplomats are trained as generalists, the workforce in the foreign ministry is very flexible. Not only taskforces were dealing with the pandemic, but also several departments of the ministry. Thus, the tasks of several departments shifted from “business as usual” (e.g. preparing briefings for high officials) to “dealing with exceptional times” (e.g. procuring medical goods; reporting on the developments regarding COVID-19 in foreign countries; doing shifts in the citizens service hotline).   

Getting used to the home-office and dealing with an unequal distribution of work

The 100 people who are part of the taskforce of the Austrian health ministry cannot work together physically. Apart from 7 people working in a 200 m2 big office, everybody is working from home. The Blum company, too, uses home-office for the employees who are able to do their jobs from home. In the foreign ministry, most people worked from home, except the taskforce “crisis management” and the officials involved in the citizens service hotline.

Furthermore, all organizations installed hotlines. The health and foreign ministry installed a citizens’ service hotline and the Blum company installed a hotline for its 8.000 employees living in 26 different countries. At peak times of the pandemic, the health ministry as well as the foreign ministry were supported by the military in order to manage the high amount of calls.

For the ministries as well as for the Blum company, it is only a small amount of the regular working force that is now working all day long and overtime, whereas the majority of the regular workforce worked less than under normal circumstances or some employees even were not able to work at all.

Different challenges for public and private organizations

Despite the fact that the main organizational structures that the Austrian ministries and the Blum company established in order to manage the crisis are similar, the main challenges these organizations are facing during the pandemic are quite different. Whereas the Blum company channels their resources towards safeguarding their employees’ jobs – Blum regards the protection of their employees´ jobs as their main responsibility during the pandemic – to prevent them from financial problems and thus suffering from additional pressure during these times, the ministries are challenged with gathering and preparing all the relevant information for the decision-makers, the senior officials and politicians responsible for acting in the interest of the people living in Austria. The taskforce of the health ministry gathers and filters information about relevant figures in regard to COVID-19 (e.g. infected people, recovered cases), test and hospital capacities, Covid-19 studies, legal issues, etc. This information is double-checked with public-health experts, lawyers, epidemiologists, social insurance organizations, other ministries and provincial authorities as well as the external experts of the Corona-taskforce. Based on the decisions of the politicians, legal regulations are issued and are communicated to the citizens. According to officials of the health ministry, issuing regulations at such a high-speed is one of the biggest challenges they are currently facing.

The foreign ministry is seriously challenged with organizing return flights to Austria and with being available on-call 24/7 for the citizens. The ten people working in this taskforce are busy with coordinating, gathering and reordering information they have received from the embassies and consulates. They need to gather the following information: What time are flights from destination x to Vienna scheduled? How many passengers can go on this flight? How many Austrians want to take the flight? In a next step, the officials prepare this information for the decision-makers of the ministry who decide upon the return flights in coordination with the Austrian airlines carrying out these flights.    

The pandemic as a serious challenge, but also opportunity for learning

“It feels like, if you would jump on a train that is driving 130 km/h and as soon as you are gaining hold, the train changes its direction”, Florian Pressl says, the head of operations of the taskforce of the health ministry. This statement illustrates how challenging it is to manage the COVID-19 pandemic, even for a high-reliability-organization like the health ministry that has emergency plans for a pandemic. At the same time, the ministries in Austria cooperate and communicate much more than before the pandemic. Thus, COVID-19 could be an opportunity for improving and intensifying the structures of the ministries‘ communication and cooperation in the long-run.

For Urs Bolter, member of the management board of the Blum company, it is in particular the unpredictable nature of the pandemic that makes it so difficult to deal with it, he feels like trying to read the crystal ball. In contrast to the financial crisis in 2008, the pandemic is much more difficult to handle due to its unpredictable nature. At the same time, Urs Bolter also values the personal and organizational learnings he had due to COVID-19. He realized how fast decisions can be made and how fast a product can be developed. Urs Bolter is amazed by the fact that an organization-internal app was produced within a week. “But these learnings can only result from being thrown into ice-cold water”, Urs Bolter emphasizes.  

How to maintain corporate ethics during a crisis?

In this podcast produced by the Nordic Business Ethics Network, business ethics professor Guido Palazzo from the University of Lausanne discusses the concept of ethical blindness, and explains why the conditions fostering ethical blindness are exacerbated during crisis situations. In high pressure situations, people tend to loose they ability to take objective decisions and these patterns of behavior are reinforced by the group. In short: unethical decisions tend to be taken by good people – but in contexts that put pressure on people and allow unethical behavior to become routinized and normalized.

Wealth concentration and inequality after a pandemic: Lessons from the plague

The people of Tournai bury victims of the Black Death, c.1353. Wikimedia Commons

Again I want to draw your attention to a great analysis of history in the light of the Covid-19 crisis, the article How pandemics past and present fuel the rise of mega-corporations by history scholar Eleanor Russell and organization scholar Martin Parker. Of course under the caveat that the world, and the economy, of the 14th century was very different from today, Russell and Parker analyze the dynamics marking the economic recovery from the bubonic plague. Today, we see small companies relying upon government support and large players – such as Amazon – benefitting from the new conditions. In the 14th century, wealthy entrepreneurs ensured a further concentration of their capital through changing their wills and, by combining scale in production with merchant networks, became crucial providers of infrastructure and strengthened their ties to governments. As a result, key markets were dominated by a handful of mega-corporations tightly interwoven with the state. As I have argued elsewhere, rising state power might actually be an opportunity for tackling society’s grand challeges, and concentrated business power, if steered in the right way, can play a key role in building a sustainable economic future. Whether these forces will be used remains one of the biggest questions of today, as also Russell and Parker conclude.

Paul du Gay podcast on bureaucracy

Many students taking this course will already have passed through class 3 with the topic “Crisis Management and Bureaucracy“. On the background reading list, they will have found a reference to Paul du Gay’s book “The Values of Bureaucracy“. Bureaucracy is probably one of the most hotly debated subject and object of organization studies, at least among the general public. While organization scholars tend to agree that bureaucracy has many merits, not least its founding on rational-legal rather than traditional or charismatic forms of authority as argued by sociologist Max Weber, the general public tends to speak about bureaucracy in negative and derogatory terms: as too much red tape and as a synonym for slow and inefficient procedures. Du Gay discusses his thoughts on the ambivalence of bureaucracy for society in his new “quarantine podcast” – a great addition to your readings for this course.

Work in and after Covid-19

Hopes are high that the Covid-19 crisis will improve working conditions for people in so-called “critical” sectors such as nurses, delivery drivers or supermarket cashiers. So far, however, it seems that the ephemeral sound of balcony applause for these workers is trailing off without any substantive improvements being reached. Instead, it seems that inequalities are being cemented further. Large digital platforms like Amazon or Instawork are offering thousands of new gig jobs with excruciating working conditions. Many workers from other sectors, such as hospitality workers, have no alternative but to take up these jobs for a living. Supermarket workers remain scarily unprotected from – sometimes abusive – customers. Worker in garment supply chains remain the weakest link in the chain despite many attempts of improving their working conditions in recent years and now face devestating conditions amid the pandemic outbreaks after many brands have refused to pay for orders, not assuming responsibility for suppliers and workers. In many developed countries, migrant workers living in overcrowded dormitories are the ones most affected by Covid-19 outbreaks, as recently evidenced in Singapore or in the German meat industry. Other developments are more ambivalent. Home work is on the rise, making it easier for some to balance family and work demands and avoiding long commutes, but Silicon Valley companies such as Facebook already announced that this shift would go along with a wage cut, whereas news abound over new and intrusive forms of surveillance of workers in the home office. There is some hope in progressive governments’ attempts to use this crisis to trial out new forms of work, such as Jacinda Arden’s call for a four-day work week to buffer the effects of Covid-19. The global attention that the #democratizework appeal by thousands of academics has received clearly shows the urgent need to rethink the way work is organized. It is now up to each one of us to – as explained in our first lecture – maintain attention to this critical issue for precarious workers at home and abroad. There are many, and each one of them deserves a fair wage and protection at work.

On the reinforcement of inequalities during a pandemic lockdown

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In their timely new article “Privilege and burden of im‐/mobility governance” published in Gender, Work and Organization, Laura Dobusch from the Radboud University und Katharina Kreissl from the university of Salzburg analyze how the Austrian lockdown has reinforced social inequalities already in place. They argue that in order to contain the COVID‐19 pandemic, governments mainly focused on regulating mobility: certain mobility restrictions were enforced, while simultaneously some forms of mobility were maintained or even enhanced in order to keep the system running in crisis mode. With a special focus on Austria, they identify specific politics of im‐/mobilities concerning the organization of paid work and show how the socio‐spatial conditions of who is permitted, denied or urged to work are inextricably linked to inequalities.

For instance, people with lower paid jobs such as supermarket cashiers or care personnel – often women and migrant workers – were urged to go to work because of their ‘system relevance’ and thereby exposed to health hazards. On the other hand, people – disproportionately men without migration background – employed in better paid knowledge work and desk jobs could stay home and work from there.

It becomes apparent that while in principle all bodies are equally dependent on collective social relations and enduring infrastructure such as health care provision, food supply or public transport, not everybody contributes equally to their maintenance. In fact, the governance of im‐/mobilities follows and reinforces already prevalent inequality regimes based on class, gender and migration relations, thereby differentiating between bodies perceived as highly valuable and worth protecting and those categorized as less valued and potentially disposable. The authors emphasize that it’s not enough to acknowledge our collective interdependence, but that forms of (political) organizing are needed that reflect and acknowledge such interdependence on egalitarian terms from the start.

Talking about Organizations: Podcast on disasters and crisis management

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I have blogged before about the 63th episode of the TaO podcast which focused on the Hudson’s Bay Company which went faced numerous pandemics during its early existence. Also the 64th episode of the podcast relates directly to the Covid-19 pandemic. With a focus on disasters and crisis management,  it discusses two management articles and their different takes on risk and resilience: one is the 1990 piece “The vulnerable system: An analysis of the Tenerife air disaster” published by Karl Weick in the journal of management studies; the other is the more recent 2009 article “Reclaiming resilience and safety: Resilience activation in the critical period of crisis” published by Edward Powley in Human Relations.  Together, by zooming on on different phases of crisis, these articles provide an processual perspective on the structures and mechanisms that make organizations vulnerable and, potentially, resilient.

Democratizing and decommodifying work after Covid-19

#demo

Under the hashtag #democratizingwork, more than 3,000 researchers from over 600 universities worldwide have united to publish an op-ed in 36 newspapers in 31 countries on the 16th of May, issuing an urgent call (here The Guardian version) for rewriting the rules of our economic system to create a more democratic and sustainable society. Spearheaded by three scholars, Isabelle Ferreras, Dominique Méda, and Julie Battilana, the call centers on the way we work and organize production: exploiting humans and the natural environment in order to maximize shareholder profits. While this model has long been criticized not just by left-leaning politicians and civil society, but also from within the business community, the Covid-19 crisis has made disturbingly clear how deeply we are in a health, social, climate and political crisis. The call paves an alternative path forward, following three core principles: democratize (firms), decommodify (work), and remediate (policies) in order to respect planetary boundaries and make life sustainable for all. Will our leaders seize this historical opportunity in the right direction?

Grand challenges and the role of government

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In this video interview, economist Mariana Mazzucatto explains her view on the role of government and public policy in shaping economy and society. Her talk links to the themes tackled in this course in several ways. First, she addresses the need for governmental decision making – not just in crisis – to be strategic and driven by missions. This is the opposite of garbage-can-like, short-term oriented decision making dominating in crisis situations as discussed in lecture 1.  Second, she clearly argues that policy makers need to think about societal grand challenges and the UN SDGs as interrelated, a point made in class 12. This also means that policy makers need to move beyond departmental silos – the dominant way of how (see class 3) public bureaucracies are organized – towards interconnected decision making, most importantly regarding public investment decisions as well as public procurement. As discussed in lecture 10, basing public procurement decisions on the basis of fair trade and environmental standards is one important mechanism of organizing our global economy towards sustainability.