Risk categorization in Portuguese organizations in times of the COVID-19 pandemic – an exploratory statistical analysis

Abstract

PurposeThis work aims to characterize the risks companies deal with in the context of a pandemic, and to ascertain which risk type is most present in Portuguese organizations. It is also intended to verify whether there are differences in the various risk types between companies that had or did not have a plan or strategy to act in a pandemic, such as the one caused by COVID-19.Design/methodology/approachA quantitative methodology was used, based on the application of a questionnaire survey targeting the Portuguese companies. The sample is composed of 1,647 Portuguese companies, which were queried through a questionnaire survey that analyses different risk types. Then, the software R was used to treat the results.FindingsThe results show that companies are exposed and vulnerable to uncertain events, and five risk types were formed: legal, image, financial, strategic and operational. There is a bigger concern about the management of financial risks.Practical implicationsAcademics and companies can become more aware and master the concept of risk and its different branches, which consequently favours the adoption of strategies to better manage and plan risk.Originality/valueThe literature on international businesses and their risks assumes that all crises are the same. However, the COVID-19 pandemic, besides causing a recession, obliges people and companies to adapt to a new scenario. Risks become more important to companies, in a way that had not been academically studied.

How is risk different in family and non-family businesses? A comparative statistical analysis during the COVID-19 pandemic

“…In family businesses, the antiqueness of the company negatively influences the perception of financial risk ( β = −0.06 and p < 0.01), and the existence of a strategic plan to act in the face of a pandemic like COVID-19 does not significantly influence the perception of financial risk ( p > 0.05). The pandemic represents a global crisis, not only of public health but also of economic instability and on the level of family life (Prime et al , 2020; Tavares et al ., 2021a, b). According to Love et al (2020), this led to the insolvency of companies and families, which increased the perception of financial risk.…”

“…Therefore, companies needed to modify their market positioning. The corporate concept of “grow or die” was transformed into the new corporate concept of “adapt or die” (Tavares et al ., 2021b). The COVID-19 pandemic raised prevention actions that had strong impacts on people's life, health and work, for e.g.…”

“…Tavares et al (2016) understand that in Portugal there is an agreement about the contribution of risk management for the pursuit of corporate goals. Furthermore, in a study developed by Tavares et al (2021b), it was concluded that during the COVID-19 pandemic, the corporate risks of the Portuguese companies are categorized as legal, image, financial, strategic and operational risks. Companies present a greater concern with financial risks, followed by image and operational risks (ex aequo), posteriorly by strategic risks and, finally, legal risks.…”

“…This lowers some costs for the company and allows greater work flexibility. All these changes convey different risks, as it requires people to be permanently available, connected to the company and with an Internet connection (Tavares et al ., 2021b). This is particularly important for family businesses that tend to have more social capital than non-family firms that can help them survive a crisis (Ratten, 2020).…”

We versus me: Indirect conditional effects of collectivism on COVID-19 public policy hypocrisy

“…Further, different businesses experienced varying levels of pandemic risk. Researchers classified companies to have financial, legal, strategic, operational and image risks when faced with the COVID-19 pandemic (Tavares et al, 2021). Effective messaging that increases cooperation with safety measures reduces rates of infections and thereby overall risks.…”