Corporate Sustainability in Times of Virus Crises 9811990786, 9789811990786

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Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application

Kıymet Tunca Çalıyurt   Editor

Corporate Sustainability in Times of Virus Crises

Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application Series Editor Kıymet Tunca Çalıyurt, Iktisadi ve Idari Bilimler Fakultes, Trakya University Balkan Yerleskesi, Edirne, Türkiye

This Scopus indexed series acts as a forum for book publications on current research arising from debates about key topics that have emerged from global economic crises during the past several years. The importance of governance and the will to deal with corruption, fraud, and bad practice, are themes featured in volumes published in the series. These topics are not only of concern to businesses and their investors, but also to governments and supranational organizations, such as the United Nations and the European Union. Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application takes on a distinctive perspective to explore crucial issues that currently have little or no coverage. Thus the series integrates both theoretical developments and practical experiences to feature themes that are topical, or are deemed to become topical within a short time. The series welcomes interdisciplinary research covering the topics of accounting, auditing, governance, and fraud.

Kıymet Tunca Çalıyurt Editor

Corporate Sustainability in Times of Virus Crises

Editor Kıymet Tunca Çalıyurt Trakya University Edirne, Türkiye

ISSN 2509-7873 ISSN 2509-7881 (electronic) Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application ISBN 978-981-19-9078-6 ISBN 978-981-19-9079-3 (eBook) https://doi.org/10.1007/978-981-19-9079-3 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Acknowledgements

As founding president of International Group on Governance Fraud Ethics and CSR (IGonGFESR), I would like to dedicate this book to our distinguished group members, authors, editorial director William Achauer and my editor Anushangi Weerakoon. Business world has experienced unbelievable and interesting developments in digitalization during the pandemic period. Accordingly, the curricula in business faculties and way of teaching had to change. Long distance education has entered our lives in such a way that it will not come out. Academics in managerial science conducted their publications without fieldwork for nearly two years so they had to rely on secondary data. In this book we try to understand how the pandemic period has affected the corporate sustainability of the companies? We discussed the question with the academic members of the IGonGFESR group. We hope to see you in our upcoming conferences in 2023. Prof. Dr. Kıymet Tunca Çalıyurt

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Contents

Part I 1

Effects of Virus Risk on Corporate Sustainability: Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Kıymet Tunca Çalıyurt

Part II 2

3

Introduction 3

Covid-19 Cases by Countries

Covid-19 CSR Activation by Malaysian Companies: Evidence from Online News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corina Joseph and Heidi Christy Mingi Michael The Impact of COVID-19 and the October 17th Revolution on Employees’ Performances: Case of Lebanese Banks . . . . . . . . . . . Walid Dagher, Akl Kayrouz, Pascal Nasrallah, Roland Shahoud, Leonie Nemer, and Rebecca Shahoud

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33

Part III Corporate Governance in Covid Times 4

5

Executive Compensation and Corporate Governance Post COVID-19: The Nordic Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mehtap Aldogan Eklund and Olof Svensson Governance Practices and Regulations for Derivative Products in Emerging Markets in the Wake of the COVID-19 Pandemic and the Subprime Global Financial Meltdown . . . . . . . . . . Mazin A. M. Al Janabi

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Part IV Accounting and Finance in Covid Times 6

The Impact of Covid-19 on the Sustainability of the Accounting Profession: Turkey Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Seval Selimo˘glu, Ali Özdemir, and Aytül Ay¸se Cengiz

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Contents

7

Sustainability Accounting in Times of the COVID-19 Pandemic . . . 107 Beata Zyznarska-Dworczak

8

The Causal Relationship Between Coronavirus (COVID-19) and Stock Indices: A Case Study for G20 Countries . . . . . . . . . . . . . . 121 Volkan Dayan

Part V 9

Recommended Management Styles during the Covid-19

The Perception of Epidemic Situation Amongst Coaching and Mentoring Professionals: An Emotional Analysis Approach . . . 169 Sezer Bozkus Kahyaoglu and Riza Kadilar

10 Changes in Working Conditions in the Light of a Primary Research During the Pandemic in Hungary . . . . . . . . . . . . . . . . . . . . . . 185 Zsuzsanna Széles, József Csernák, and Aranka Baranyi 11 AI Applications in Health Sector: Use of Artificial Intelligence in Covid-19 Crisis and Impacts of Medical Robots on Global Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203 Özlem Arzu Azer and ˙Ibrahim Bora Oran 12 Evaluation of Vaccine Supply Chain Performance Activities of Health Systems in the COVID 19 Pandemic Period with DEA: European Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225 Özlem Alada˘g Bayrak and Kadir Kaan Göncü Part VI

Sustainability in Education during the Covid-19

13 Sustainable Teaching: Teacher Readiness for Online Teaching Working from Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 Christo Joseph Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271

Editor and Contributors

About the Editor Kıymet Tunca Çalıyurt, CPA, CFE, graduated from the Faculty of Business Administration at Marmara University, Istanbul, Turkey. Her Master and Ph.D. degrees are from Accounting and Finance Programme from the Social Graduate School, Marmara University. She has worked as an auditor in Horwath Auditing Company, a manager in McDonalds and finance staff in Singapore Airlines. After vast experience in the private sector, she has started to work in academia. She is holding CFE and CPE titles. Her research interests are in accounting, auditing, fraud, social responsibility, corporate governance, finance, and business ethics, environmental sustainability with aparticular interest in aviation management, NGOs, women rights in business. She was a visiting researcher in John Molson School of Business in 2001 summer (International Centre for Aviation Management), Massachusetts University Amherst Business School in 2014 summer, 2018 summer (Accounting and Information System), University of National World and Economy in 2019 summer (Faculty of Accounting). She is the founder of the International Group on Governance, Fraud,Ethics and Social Responsibility (IGonGFE&SR) and International Women and Business Group (IWBG) in 2009, both groups organize international annual conferences and published international book series. She is a book series editor in Springer which is indexed in Scopus, with the title Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, and book series editor in Routledge with the title Women and Sustainable Business. She is the founding Chief-in-Editor for the Accounting Finance Auditing: An International Journal. She is a regular speaker in Cambridge Economic Crime Symposium and workshop organiser on the role of external auditor in fraud prevention. Some published books by Prof Caliyurt are: Emerging Fraud (with Sam Idowu), Corporate Governance: An International Perspective (with Sam Idowu), Women and Sustainability inBusiness: A Global Perspective, Sustainability and Management: An International Perspective (with Ulku Yuksel), Regulations and Applications of Ethics in Business Practice (with Dr. Jiang Bian), Ethics and Sustainability in Accounting and

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Editor and Contributors

Finance,Volume I. She is acting as a member in editorial board Journal of Financial Crime in ESCI, International Journal of Law and Management in (ESCI), Journal of Money Laundering Control in ESCI, International Journal of Climate Change Strategies and Management in SSCI. She consults as a partner in Herme Consulting located in Trakya University Technopark on sustainability, auditing, accountability, and academic quality.

Contributors Mazin A. M. Al Janabi EGADE Business School, Tecnologico de Monterrey, Mexico City, Mexico Aytül Ay¸se Cengiz Business Sciences and Economics, Anadolu University, Eski¸sehir, Turkey Özlem Arzu Azer Istanbul Atlas University, Istanbul, Turkey Aranka Baranyi Institute of Business Sciences, Eszterhazy Karoly University, Eger, Hungary Özlem Alada˘g Bayrak Trakya University, Edirne, Türkiye Kıymet Tunca Çalıyurt Trakya University, Edirne, Turkey József Csernák Institute of Business Sciences, Eszterhazy Karoly University, Eger, Hungary Walid Dagher University of Balamand, Balamand, Lebanon Volkan Dayan Department of Banking and Insurance, Uzunkopru School of Applied Sciences, Trakya University, Edirne, Turkey Mehtap Aldogan Eklund University of Wisconsin La Crosse, La Crosse, Wisconsin, USA Kadir Kaan Göncü Trakya University, Edirne, Türkiye Christo Joseph Garden City University, Bangalore, India Corina Joseph Universiti Teknologi MARA, Shah Alam, Malaysia Riza Kadilar EMCC Global, Brussels, Belgium Sezer Bozkus Kahyaoglu Accounting and Finance Department, Izmir Bakircay University, Izmir, Turkey Akl Kayrouz Notre Dame University, Zouk Mosbeh, Lebanon Heidi Christy Mingi Michael Institut Pendidikan Guru Kampus Gaya, Sabah, Malaysia

Editor and Contributors

xi

Pascal Nasrallah University of Balamand, Balamand, Lebanon Leonie Nemer University of Balamand, Balamand, Lebanon ˙ Ibrahim Bora Oran Faculty of Business and Management Sciences, Logistics Management Department, Istanbul Esenyurt University, Istanbul, Turkey Ali Özdemir Business Sciences and Economics, Anadolu University, Eski¸sehir, Turkey Seval Selimo˘glu Business Sciences and Economics, Anadolu University, Eski¸sehir, Turkey Rebecca Shahoud University of Balamand, Balamand, Lebanon Roland Shahoud University of Balamand, Balamand, Lebanon Olof Svensson Nordic Entertainment Group, Stockholm,, Sweden Zsuzsanna Széles Institute of Business Sciences, Budapest Metropolitan University, Budapest, Hungary Beata Zyznarska-Dworczak Department of Accounting and Financial Audit, Poznan University of Economics and Business, Pozna´n, Poland

List of Figures

Fig. 1.1 Fig. 1.2 Fig. 1.3 Fig. 4.1 Fig. 4.2

Fig. 4.3

Fig. 4.4

Fig. 4.5

Fig. 4.6

Fig. 4.7 Fig. 6.1 Fig. 6.2 Fig. 6.3 Fig. 6.4 Fig. 9.1

Economic global risk (Source WEF 2022) . . . . . . . . . . . . . . . . . . Biontech’s financial results for the years ended 2020–2021 . . . . The world economy is slowing more than anticipated (Source OECD [2022]) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sector representation (percentages) of the Nordic sample (Source WillisTowersWatson [2020]) . . . . . . . . . . . . . . . . . . . . . . Reduction of the base salary for any of the executives (Source WillisTowersWatson [2020], Note Percentages may not add up to 100 percent due to rounding) . . . . . . . . . . . . . . Estimated Covid-19 impact on their businesses over the coming 2 years-2021 and 2022 (Source WillisTowersWatson [2020], Note Percentages may not add up to 100 percent due to rounding) . . . . . . . . . . . . . . . . . . Has your organization moved its salary review date as a result of COVID-19? (Source WillisTowersWatson [2020]) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Will or have your 2020 annual bonus (short-term) plans for executives and broader employees been impacted by COVID-19? (Source WillisTowersWatson [2020]) . . . . . . . . . Has COVID-19 changed the 2020 design of performance-based long-term incentive vehicles (e.g., PSUs, PRSUs, performance cash) at your organization? (Source WillisTowersWatson [2020]) . . . . . . . . . . . . . . . . . . . . . . Fair and holistic compensation framework (Source Eklund [2020], derived from Eklund [2019]) . . . . . . . . . . . . . . . . . . . . . . . The relationship between occupational stress and sustainability of professions . . . . . . . . . . . . . . . . . . . . . . . . . . Path of the research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hierarchic model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pairwise comparison question sample . . . . . . . . . . . . . . . . . . . . . . Most frequent words used by participants . . . . . . . . . . . . . . . . . . .

4 5 11 56

57

57

58

59

59 61 95 96 99 100 176 xiii

xiv

Fig. 9.2 Fig. 9.3 Fig. 9.4 Fig. 10.1 Fig. 10.2

Fig. 10.3 Fig. 10.4 Fig. 10.5 Fig. 10.6

Fig. 10.7

Fig. 10.8

Fig. 10.9

Fig. 11.1 Fig. 11.2 Fig. 11.3 Fig. 11.4 Fig. 13.1

List of Figures

Top ten frequent words by used by participants . . . . . . . . . . . . . . Cluster dendrogram . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Word cloud of participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The location of the place of work (in percentage) (Source Own research 2020, n = 250) . . . . . . . . . . . . . . . . . . . . . . . . . . . . How did your employer respond to the emergency situation? [The work conditions, rules could easily be modified] (Source Own research 2020, n = 250) . . . . . . . . . . . . . Restrictions to earning income during the pandemic (person) (Source Own research 2020, n = 250) . . . . . . . . . . . . . . Displaying the size of groups formed in the cluster analysis (Source Own research 2020, n = 250) . . . . . . . . . . . . . . . . . . . . . . Clusters and their characteristics (Source Own research 2020, n = 250) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Crosstabulation ‘How did your employer react to the altered circumstances? [Continuously controlled work at home]’ and ‘Size of workplaces based on the number of employees’ (Source Own research 2020, n = 250) . . . . . . . . . . . . . . . . . . . . . . Crosstabulation ‘How did your employer react to the emergency situation? [The circumstances and rules of teleworking were formulated easily]’ and ‘Size of workplaces based on the number of employees’ (Source Own research 2020, n = 250) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Crosstabulation ‘How did you experience the period of restriction in connection with your work? [Technical conditions were not provided at the beginning but later I made up for the loss on my own]’ and ‘Gender’ (Source Own research 2020, n = 250) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Crosstabulation ‘How did you experience the period of restriction in connection with your work? [Technical conditions were not provided at the beginning but later my employer made up for the loss]’ and ‘What major do/did you study?’ (Source Own research 2020, n = 250) . . . . . . . . . . . Artificial intelligence’s characteristics and importance (Pollock 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Artificial intelligence’s areas of utilization . . . . . . . . . . . . . . . . . . Classification of robots used for social distance in health . . . . . . Classification of medical robots . . . . . . . . . . . . . . . . . . . . . . . . . . . Venn diagram representing the interplay of online teaching, readiness of teachers, and work from home (Source Author) . . .

177 177 178 189

190 191 195 196

197

198

199

200 209 210 211 214 254

List of Tables

Table 2.1 Table 2.2 Table 2.3 Table 2.4 Table 3.1 Table 3.2 Table 3.3 Table 3.4 Table 3.5 Table 3.6 Table 6.1 Table 6.2 Table 6.3 Table 6.4 Table 7.1 Table 8.1 Table 8.2 Table 8.3 Table 8.4 Table 8.5 Table 8.6 Table 8.7 Table 8.8 Table 8.9 Table 8.10 Table 8.11 Table 8.12 Table 8.13

Type of companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Company’s business activities . . . . . . . . . . . . . . . . . . . . . . . . . . CSR activation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ‘Others’ CSR activation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reveals the description of main participants . . . . . . . . . . . . . . Clients’ perception 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chi-square tests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Clients’ attitude towards Banks . . . . . . . . . . . . . . . . . . . . . . . . . Chi-square tests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Correlations among perception and attitude towards Bank 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Descriptive statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pairwise comparison example . . . . . . . . . . . . . . . . . . . . . . . . . . Overall pairwise comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . Factor weights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Research on sustainability accounting in times of the corona virus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Data used in the research and the sources of these data . . . . . . Unit root tests of total cases, total deaths and 000001.SS . . . . Causality tests of total cases, total deaths and 000001.SS . . . . Unit root tests of total cases, total deaths and AXJO . . . . . . . . Table causality tests of total cases, total deaths and AXJO . . . Unit root tests of total cases, total deaths and BSESN . . . . . . . Causality tests total cases, total deaths and BSESN . . . . . . . . . Unit root tests of total cases, total deaths and BVSP . . . . . . . . The regression analysis of COVID-19 data and BVSP . . . . . . Causality tests total cases, total deaths and BVSP . . . . . . . . . . Unit root tests of total cases, total deaths and CAC40 . . . . . . . Causality tests of series total cases, total deaths and CAC40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unit root tests of total cases, total deaths and FTSE100 . . . . .

24 26 26 28 40 42 43 44 45 45 98 100 101 101 113 126 127 128 129 130 131 132 133 134 134 135 136 137 xv

xvi

Table 8.14 Table 8.15 Table 8.16 Table 8.17 Table 8.18 Table 8.19 Table 8.20 Table 8.21 Table 8.22 Table 8.23 Table 8.24 Table 8.25 Table 8.26 Table 8.27 Table 8.28 Table 8.29 Table 8.30 Table 8.31 Table 8.32 Table 8.33 Table 8.34 Table 8.35 Table 8.36 Table 8.37 Table 8.38 Table 8.39 Table 8.40 Table 8.41 Table 8.42 Table 8.43 Table 8.44 Table 8.45 Table 8.46 Table 10.1 Table 10.2 Table 11.1 Table 11.2 Table 12.1

List of Tables

The regression analysis of COVID-19 data and FTSE100 . . . Causality tests of total cases, total deaths and FTSE100 . . . . . Unit root tests of total cases, total deaths and FTSEMIB . . . . Causality tests of total cases, total deaths and FTSEMIB . . . . Unit root tests of total cases, total deaths and FTWIZAFL . . . Causality tests of total cases, total deaths and FTWIZAFL . . . Unit root tests of total cases, total deaths and GDAXI . . . . . . . Causality tests total cases, total deaths and GDAXI . . . . . . . . Unit root tests of total cases, total deaths and GSPTSE . . . . . . Causality tests of total cases, total deaths and GSPTSE . . . . . Unit root tests of total cases, total deaths and JKSE . . . . . . . . The regression analysis of COVID-19 data and JKSE . . . . . . . Causality tests of total cases, total deaths and JKSE . . . . . . . . Unit root tests of total cases, total deaths and KS11 . . . . . . . . Causality tests of series of total cases, total deaths and KS11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unit root tests of total cases, total deaths and MERVAL . . . . . Causality tests of total cases, total deaths and MERVAL . . . . . Unit root tests of total cases, total deaths and MOEX . . . . . . . The regression analysis of COVID-19 data and MOEX . . . . . Causality tests of series total cases, total deaths and MOEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unit root tests of total cases, total deaths and MXX . . . . . . . . Causality tests of series total cases, total deaths and MXX . . . Unit root tests of total cases, total deaths and NIKKEI225 . . . The regression analysis of COVID-19 data and NIKKEI225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Causality tests of series total cases, total deaths and NIKKEI225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unit root tests of total cases, total deaths and SP500 . . . . . . . . Causality tests of total cases, total deaths and SP500 . . . . . . . Unit Root Tests of Total Cases, Total Deaths and TASI . . . . . . The regression analysis of COVID-19 data and TASI . . . . . . . Causality tests of series total cases, total deaths and TASI . . . Unit root tests of total cases, total deaths and XU100 . . . . . . . The regression analysis of COVID-19 data and XU100 . . . . . Causality tests of total cases, total deaths and XU100 . . . . . . . Displaying the factors generated . . . . . . . . . . . . . . . . . . . . . . . . Cluster formation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Matching of Covid-19 management steps by using robotic solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Literature about Covid-19 impact on Artificial Intelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Variables of decision-making units . . . . . . . . . . . . . . . . . . . . . .

138 138 139 140 141 142 143 144 145 146 147 148 148 149 150 151 152 153 154 154 155 156 157 158 158 159 160 161 162 162 163 164 164 193 194 217 219 238

List of Tables

Table 12.2a Table 12.2b Table 12.3 Table 12.4 Table 13.1 Table 13.2 Table 13.3

xvii

Output oriented analysis results (CCR-OUTPUT BY EMS) . . . . . . . . . . . . . . . . . . . . . . Output oriented analysis results (BCC-OUTPUT BY EMS) . . . . . . . . . . . . . . . . . . . . . . Scale activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Target values and improvement rates . . . . . . . . . . . . . . . . . . . . Definitions and perspectives on e-learning . . . . . . . . . . . . . . . . Selected studies on readiness for OLT . . . . . . . . . . . . . . . . . . . Sample Excel spreadsheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

239 239 239 241 251 252 255

List of Charts

Chart 6.1 Chart 11.1 Chart 11.2

Distribution of participants by city . . . . . . . . . . . . . . . . . . . . . . . Sales and utilizations of industrial robots in the world (IFR 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Robots in professional utilization (World Robotics 2020) . . . . .

98 212 215

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Part I

Introduction

Chapter 1

Effects of Virus Risk on Corporate Sustainability: Literature Review Kıymet Tunca Çalıyurt

Abstract COVID-19 prompted scientists, experts, and health professionals to join efforts in an attempt to find effective ways to mitigate risks, curb the consequences, and balance the trade-offs in a dynamic business environment characterized by sudden changes in market demand unpredictability, financial crashes, and profound adversities (van Barneveld et al. in Econ Labour Relat Rev 31:133–157, 2020). Inflation rates and energy costs have increased all over the world. While education has evolved into distance education with the COV˙ID announcement, unfortunately, two years have gone down in history as a loss for students who do not have computers, smart phones and internet facilities. In this study, recent published articles about the effects of COVID-19 on different sectors and economy were examined. It seems that while health and information technologies have profited from the COVID period, the tourism sector has taken a big hit. Keywords COVID-19 · Pandemic · Sector · Corporate sustainability · Economic effect

1.1 Introduction The theory of business (Drucker 1994) states that all organizations have to take into consideration three types of assumptions affecting their way of doing work: • assumptions relating to the organizational environment, • assumptions relating to the accomplishment of the mission, and • assumptions about the competencies and resources enabling the fulfillment of the mission. Further on though, the theory has to be rethought, especially when the organization has experienced a great success or failure. The COVID-19 pandemic has exposed K. T. Çalıyurt (B) Trakya University, Edirne, Turkey e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 K. T. Çalıyurt (ed.), Corporate Sustainability in Times of Virus Crises, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-19-9079-3_1

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K. T. Çalıyurt

great flaws in the current business models and operations of many SMEs. The theory of business enables organizations to rethink their three elemental assumptions when the business environment becomes chaotic (Daly and Walsh 2010). The COVID 19 outbreak has had a significant pressure on the global economy since the first months of its occurrence and continues to do so. The pandemic has not yet ended and it is unclear when it will end. Therefore the effects of the pandemic are not clear. But all economic units are struggling to get out of the negative effects of the pandemic with minimal damage. Each country tries to support this struggle under its own economic structure and opportunities and announces incentive packages (E¸ssiz and Durucan 2021). World Economic Forum announced a report on global risk in 2022 which is scoped over next 10 years. WEF defined global risk as “the possibility of the occurrence of an event or condition that, if it occurs, could cause significant negative impact for several countries or industries” (WEF 2022). The virus risk (biological risk), which was understood to be extremely important especially for international industrial companies producing in March 2020, was not included in the 2022 Global Risk report (Fig. 1.1). However, Bill Gates, who made warnings long before the risk of COVID-19 started, made a new virus risk warning with his statements in May 2022. After more than two years of COVID-19, plenty of people are lowering their guards. But the pandemic isn’t over yet—and, Bill Gates warns, the worst might still be ahead. Gate says “We’re still at risk of this pandemic generating a variant that would be even more transmissive and even more fatal,” the billionaire Microsoft co-founder and public health advocate told the Financial Times on Sunday. “It’s not likely, I don’t want to be a voice of doom and gloom, but it’s way above a 5% risk that

Fig. 1.1 Economic global risk (Source WEF 2022)

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Fig. 1.2 Biontech’s financial results for the years ended 2020–20211

this pandemic, we haven’t even seen the worst of it” (CNN 2022). Biontech has announced on September 4, 2019 that (Biontech 2022) a clinical-stage biotechnology company focused on patient-specific immunotherapies for the treatment of cancer and other serious diseases, announced today that it has signed an agreement with the Bill & Melinda Gates Foundation (the Gates Foundation) to develop HIV and tuberculosis programs, further expanding the Company’s infectious disease portfolio. This partnership includes an initial equity investment of $55 million, which is expected to close within the next week. The funds will be used to develop preclinical vaccine and immunotherapy candidates to prevent HIV and tuberculosis infection as well as to lead to durable antiretroviral therapyfree remission of HIV disease. Total funding under the collaboration could reach $100 million through potential future grant funding from the Gates Foundation that would be used to underwrite the evaluation of these candidates in the clinic and support the initiation of new infectious disease projects. Professor Tim Spector, co-founder of the King’s College ZOE symptom tracker app, said some two third of people who have COVID experience a sore throat as their first warning sign. Prof Spector also said there are currently around three times as many people with colds as with COVID in the UK (ECHO 2022). Almost every industry suffered with it as countries were confined in quarantine attempting to maintain physical distancing and mitigate the propagation of the virus (Piccinelli et al. 2021). While many sectors suffered losses during the virus period, the tremendous profitability in health researches reflects the righteousness of those who invest in this sector, even the voicing of the virus risk (Fig. 1.2).

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Biontech (2021).

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1.2 Recent Articles on the Effects of COVID-19 on Corporate Sustainability and Sectors 1.2.1 The Effects of COVID-19 on Corporate Sustainability Sustainability is very popular due to its benefits and regulatory obligations. Interest in sustainability from the corporate sector is evidenced by over 13,000 companies in 160 countries (UNGC 2019), up from 7,700 in 130 countries in 2010 (UNGC 2010), that have signed the UN Global Compact. Biological risk is an emerging risk factor in business life. Multiple indicators in early 2022 point to an increase in biodiversity risk. In the twenty-first century, the global rate of species extinction is tens to hundreds of times higher than the natural rate over the past 10 million years. In January 2022, the World Economic Forum in the 17th edition of its Global Risks Report ranked biodiversity loss as one of the three most potentially severe risks for the next decade along with climate action failure and extreme weather. In February 2022, the UN Intergovernmental Panel on Climate Change (“IPCC”) published the second of four reports in its sixth assessment cycle, called Climate Change 2022: Impacts, Adaptation and Vulnerability, which projects that 9–14% of terrestrial and freshwater species will be at very high risk of extinction even under the most ambitious climate target of 1.5°C warming. In the future corporate managements should take into consideration more on virus risk. Su and others (2022) revises the ample empirical and theoretical literature on sustainable organizational growth and strategic leadership relating to the critical aspects of the ongoing pandemic, including poverty, social responsibility, public health, and organizational and managerial innovation. Drawing from available COVID-19, management, and sustainable leadership publications released from 2020 to 2021. Their paper considers influential studies exploring core business concepts, principles, philosophies, and activities for accelerating, stimulating, and nurturing social and corporate sustainability. The study analyzed the characteristics and interrelation of 133 articles through bibliometric and literature systemization techniques. We shed light on the significant influence COVID-19 has had on financial, operational, and psychological solvency and organizational health to elucidate expectations and implications for businesses worldwide concerning the long-term financial and functional impact of COVID-19. An overview of the relevant studies on the individual, organizational, and external factors relating to novel disease’s relation to sustainability are provided. They emphasize the need for digital transformation following the COVID-19 upheaval and throughout the upcoming years. Some of the generally employed techniques in response to adversity entail portfolio diversification, service delivery innovation, product redesigning, new market development, partnering with competitors and/or complementary service providers, synergizing with other stakeholders, and open innovation (Su et al. 2022). Benson and Fortune (2022) examined the sensitivity analysis of the impact of COVID-19 on Corporate Sustainability and Company Performance of South African listed companies. The study employed secondary data retrieved from the annual

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reports of the selected companies. Stakeholder Theory and the Traditional Theory of Economics and Finance from the theoretical foundation of this study. Data retrieved from 40 companies for the period 2010–2021 was analyzed using panel fully modified ordinary least squares (FMOLS) and dynamic ordinary least square (DOLS) methods, representing all sectors with the help of a convenience sampling method. Findings revealed a strong relationship between corporate sustainability performance and company performance with other explanatory variables. This study also implied that the impact of the Covid-19 pandemic was so sensitive on South African companies and companies must pay strong attention to recovery strategies suggested to reduce the severity of the impact on them and ensure a quick recovery (Kola Benson and Fortune 2022).

1.2.2 The Effect of COVID-19 on Education Sector COVID-19 pandemic is the first and the foremost a health crisis. The World-Wide lockdowns because of the global pandemic have affected many important sectors adversely, one of them being the education sector. The pandemic forced many schools, colleges and universities to keep it closed abruptly. In a short span of time, the students were exposed to online learning. The sudden change of classroom learning to digital learning impacted the learning of the children belonging to low-income families. As they were not able to afford smart phones, computers or laptops, wi-fi etc. came to become their immediate disadvantage (Newsroom Post 2022). Kuhfeld and Tarasawa have mentined that the Northwest Evaluation Association is a global nonprofit organization that provides research-based assessments and professional development for educators. A team of researchers at Stanford University evaluated Northwest Evaluation Association test scores for students in 17 states and the District of Columbia in the Fall of 2020 and estimated that the average student had lost one-third of a year to a full year’s worth of learning in reading, and about three-quarters of a year to more than 1 year in math since schools closed in March 2020 (Kuhfeld and Tarasawa 2020). In another research by Hoofman and Secord have stated that: • Learners and educators at all levels of education have been affected by COVID-19 restrictions with rapid adaptations to virtual learning platforms. • The impact of COVID-19 on learners is not evenly distributed and children of racial minorities, those who live in poverty, those requiring special education, and children who speak English as a second language are more negatively affected by the need for remote learning. • Math scores are more impacted than language arts scores by previous school closures and thus far by these shutdowns for COVID-19. • Anxiety and depression have increased in children and particularly in adolescents as a result of COVID-19 itself and as a consequence of school changes.

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• Pediatricians should regularly screen for unmet needs in their patients during the pandemic, such as food insecurity with the loss of school meals, an inability to adapt to remote learning and increased computer time, and heightened anxiety and depression as results of school changes (Hoofman and Secord 2021). According to Krishnamurthy (2020) stated that “Covid-19 forced changes in the university system at a scale that is likely to be unprecedented. This event coincides with the increase in capabilities of information technology due to the advent of artificial intelligence, machine learning and automation. The result will be a reshaping of the university. I firmly believe that business schools will rise to the occasion and will adopt a leadership role within the university” (Krishnamurthy 2020).

1.2.3 The Effect of COVID on Manufacturing Sector Ardolino et al. (2022) has stated that pandemics and epidemics may have severe impacts on manufacturing and industrial operations (Dubey et al. 2021; Dwivedi et al. 2020; Ivanov and Dolgui 2021; Wang and Wang 2021). Social distancing, remote work imposition and lockdowns are examples of the drivers for the adaptation of the manufacturing activities to a “new normal” (Belhadi et al. 2021; Aldrighetti et al. 2021). According to Nirmala and coauthors have mentioned that as a consequence of Corona Virus unroll; humans faced uncertainty in income and changes in lifestyle. Due to lockdown, the spending attitude changed, as there was no way to have outings, expensive purchases like gold, real estate, car, etc. Most of the decisions are based on the circumstances faced. The circumstances are like walls, putting a limit around us. Behavioural Finance shows the financial activity of an individual based on his or her mental stability. In their paper, the savings and investment decisions before and after the COVID-19 pandemic of the people related to the manufacturing sector in Tamil Nadu are observed by a survey. A study was made on circumstances created by COVID-19 pandemic which brought change in savings behaviour and investment behaviour of individuals in manufacturing sector. An analysis was made based on the survey conducted to know the impression of the pandemic on manufacturing sector peoples’ financial attitudes in Tamil Nadu (TN). The participants belonged to the working community of manufacturing sector. The association between the circumstances formed by corona virus and change in savings and investment options of the people related to the manufacturing sector in Tamil Nadu was studied. There is association between the actions undertaken by the Government (like lockdown and travel restrictions) and person’s earnings, directly impacted savings and investment pattern of the individuals in manufacturing sector. Savings is not to be considered light, savings of each individual has prevented the whole country from being pushed to poverty.

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• Savings and investment pattern had significant relationship with the COVID-19 pandemic. • Basically people show less awareness and risk adverse behaviour for the various investment options. The arrival of COVID-19 has laid a negative impression in the minds of the people towards investing in mutual funds and stock market. • In current scenario, investors have become increasingly risky, and opt for secure investment methods that offer limited and low-risk profits. • Awareness must be created among the people about Gold ETFs, when to move in and out from the stock market, and affiliate fund plans.2

1.2.4 The Effect of COVID on Energy Sector Meiryani and coauthors aim to determine the effect of global price movements for energy sector commodities, especially Crude Oil and Natural Gas Prices, on cryptocurrency price movements. Their study focuses more on the Bitcoin cryptocurrency and uses quantitative methods, and the data collection used is secondary data with weekly data and the period from January 1, 2020 to July 31, 2021. The number of observations used in the study amounted to 79 observations. Secondary data sources are obtained through the website finance.yahoo.com. The data processing technique carried out using Stata and SPSS software, the Multiple Linear Regression method, and the Classical Assumption Test. The results of this study show that global prices for energy sector commodities, especially Crude Oil, Natural Gas, have a positive effect on Bitcoin price movements. These results indicate a link between energy and Bitcoin caused by Bitcoin miners who are mining Bitcoin using energy so that when the price of Bitcoin rises, the price of energy will also increase.3

1.2.5 The Effect of COVID on Transportation Sector Rita and coauthors aimed to understand how airline companies are addressing the crisis generated by the COV˙ID-19 pandemic and handling issues like cancellations and customer (dis)satisfaction. Research on online reviews from the most popular tourism website, TripAdvisor, was conducted through the collection of review posts from the leading 10 worldwide airline groups by number of passengers. These reviews were extracted from the sector’s most impacted period during the pandemic—from the date where the first travel restrictions were imposed until the date where they began to be lifted again (from March to May 2020), which consequently led to a greater number of posted and shared reviews. A total of 885 reviews were collected and analysed with the help of the Python-based sentiment analysis tool VADER. 2 3

Nirmala et al. (2022). Meiryani et al. (2022).

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Results showed a very negative trend, which was mainly caused by issues related to refund policies and process, confirming the reported pandemic impact on this sector. Low-cost airlines revealed a lower customer satisfaction rate when compared to traditional ones, while most of the posts were related to Loyalty/Competitiveness, which affected brands’ overall equity. This study enables to better understand, from the customers’ perspective, how airlines were able to deal with the severe impact of the COVID-19 pandemic. Through such knowledge and subsequent critical discussion, authors unveil the critical issues that have led to unsatisfied customers, helping to build up the body of knowledge on airlines’ recovery after the pandemic.4 Piccenelli and coauthors aim to assess air travelers’ concerns affected by the Coronavirus pandemic, expressed in the comments they wrote online. A sample of 639 comments written on the Italian National Consumer Union website and related to the airline industry was assessed through an automated sentiment analysis in this study. The achieved results showed that travelers’ concerns were directed mainly towards compensations, cancellations, and COVID-19 and at the same time, they had mixed and unpredictable feelings. This element suggests that consumers may have understood that airline companies are facing unsustainable cash-flow and revenue situations. Moreover, all hypotheses, grounded on existing literature, were refuted. Accordingly, authors argue that the actual context prevents assessments based on previous assumptions, and studies related to the impact of COVID-19 need to be conducted anew.5

1.3 Discussion After March 2020, none of countries, none of companies and none of individual’s plans have worked. The COV˙ID-19 adventure, where all sectors except health and informatics sectors were adversely affected, left behind a world with a slowed economy. In the OECD Economic Outlook, Interim Report September 2022 stated that despite a boost in activity as COVID-19 infections drop worldwide, global growth is projected to remain subdued in the second half of 2022, before slowing further in 2023 to an annual growth of just 2.2%. Compared to OECD forecasts from December 2021, before Russia’s aggression against Ukraine, global GDP is now projected to be at least USD 2.8 trillion lower in 2023. There are many costs to Russia’s war, but this gives some sense of the worldwide price of the war in terms of economic output (Fig. 1.3).

4 5

Rita et al. (2022). Piccinelli et al. (2021).

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Fig. 1.3 The world economy is slowing more than anticipated (Source OECD [2022])

References Aldrighetti R, Battini D, Ivanov D, Zennaro I (2021) Costs of resilience and disruptions in supply chain network design models: a review and future research directions. Int J Prod Econ 235(May):108103. https://doi.org/10.1016/j.ijpe.2021.108103 Ardolino M, Bacchetti A, Ivanov D (2022) Analysis of the COVID-19 pandemic’s impacts on manufacturing: a systematic literature review and future research agenda. Oper Manag Res 15:551–566. https://doi.org/10.1007/s12063-021-00225-9 Belhadi A, Kamble S, Jabbour CJC, Gunasekaran A, Ndubisi NO, Venkatesh M (2021) Manufacturing and service supply chain resilience to the COVID-19 outbreak: lessons learned from the automobile and airline industries. Technol Forecast Soc Chang 163(February):120447. https:// doi.org/10.1016/j.techfore.2020.120447 Biontech (2021) BioNTech announces fourth quarter and full year 2021 financial results and corporate update. https://investors.biontech.de/news-releases/news-release-details/biontech-announ ces-fourth-quarter-and-full-year-2021-financial/. Accessed 16 Oct 2022 Biontech (2022) Press release, BioNTech announces new collaboration to develop HIV and tuberculosis programs, Bill & Melinda Gates Foundation invests $55 million in an infectious disease collaboration that could reach up to $100 million in total funding. https://investors.biontech.de/ static-files/986b445a-1fde-4be0-b23d-57ca27be9d35 Accessed 16 Oct 2022 CNN (2022) Bill Gates on covid: ‘I don’t want to be a voice of doom and gloom,’ but ‘the worst’ could still be ahead. https://www.cnbc.com/2022/05/02/why-bill-gates-says-the-worstof-covid-could-still-be-ahead.html. Accessed 4 Jun 2022 Daly P, Walsh JS (2010) Drucker’s theory of the business and organisations: challenging business assumptions. Manag Decis 48:500–511 Drucker PF (1994) Theory of the business. Harvard Business Review. https://hbr.org/1994/09/thetheory-of-the-business Dubey R, Bryde DJ, Blome C, Roubaud D, Giannakis M (2021) Facilitating artificial intelligence powered supply chain analytics through alliance management during the pandemic crises in the

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B2B context. Ind Mark Manage 96(July):135–146. https://doi.org/10.1016/j.indmarman.2021. 05.003 Dwivedi YK, Laurie Hughes D, Coombs C, Constantiou I, Duan Y, Edwards JS, Gupta B et al (2020) Impact of COVID-19 pandemic on information management research and practice: transforming education, work and life. Int J Inf Manage 55(December):102211. https://doi.org/10.1016/j.iji nfomgt.2020.102211 ECHO (2022) Covid symptoms October 2022: Latest coronavirus warning signs. https://www.liverp oolecho.co.uk/news/uk-world-news/covid-symptoms-october-2022-latest-25240510. Accessed 16 Oct 2022 E¸ssiz FP, Durucan A (2021) Covid-19 Salgınının Seçilmi¸s Sektörler Üzerindeki Etkileri: Türkiye Ekseninde Bir De˘gerlendirme. Int J Public Finance 6(2):193–210 Hoofman J, Secord E (2021) The effect of COVID-19 on education. Pediatr Clin North Am 68(5):1071–1079. https://www.pediatric.theclinics.com/article/S0031-3955(21)00086-9/ fulltext Ivanov D, Dolgui A (2021) OR-methods for coping with the ripple effect in supply chains during COVID-19 pandemic: managerial insights and research implications. Int J Prod Econ 232(February):107921. https://doi.org/10.1016/j.ijpe.2020.107921 Kola Benson, A., & Fortune, G. (2022). Sensitivity analysis of the impact of Covid-19 on corporate sustainability and company performance: recovery strategy for companies and nations around the world. Int J Res Bus Soc Sci (2147–4478) 11(3):16–26. https://doi.org/10.20525/ijrbs.v11i3. 1704 Krishnamurthy S (2020) The future of business education: a commentary in the shadow of the Covid-19 pandemic. J Bus Res 117:1–5. https://doi.org/10.1016/j.jbusres.2020.05.034. Kuhfeld M, Tarasawa B (2020) The COVID-19 slide: what summer learning loss can tell us about the potential impact of school closures on student academic achievement. NWEA Meiryani M, Tandyopranoto CD, Emanuel J, Lindawati ASL, Fahlevi M, Aljuaid M, Hasan F (2022) The effect of global price movements on the energy sector commodity on bitcoin price movement during the COVID-19 pandemic. Heliyon 8(10):e10820. https://doi.org/10.1016/j. heliyon.2022.e10820 Newsroom Post (2022). Impact of covid-19 on education sector. https://newsroompost.com/educat ion/impact-of-covid-19-on-education-sector/5085764.html. Accessed 2 Aug 2022 Nirmala AR, Bhalaji RKA, Kumar SB, Gnanaraj SJP, Appadurai M (2022) Study on the effect of COVID-19 pandemic on the savings and ınvestment pattern of the manufacturing sector. Mater Today Proc. https://doi.org/10.1016/j.matpr.2022.06.354 OECD (2022) The world economy is slowing more than anticipated. https://www.oecd.org/eco nomic-outlook/september-2022/ Piccinelli, S, Moro, S, Rita, P (2021) Air-travelers’ concerns emerging from online comments during the COVID-19 outbreak. Tour Manage 85:104313 https://doi.org/10.1016/j.tourman. 2021.104313 Rita P, Moro S, Cavalcanti G (2022) The impact of COVID-19 on tourism: analysis of online reviews in the airlines sector. J Air Trans Manage 104. https://doi.org/10.1016/j.jairtraman.2022.102277 Su R, Obrenovic B, Du J, Godinic D, Khudaykulov A (2022) COVID-19 pandemic implications for corporate sustainability and society: a literature review. Int J Environ Res Public Health 19(3):1592. https://doi.org/10.3390/ijerph19031592 van Barneveld K, Quinlan M, Kriesler P, Junor A, Baum F, Chowdhury A, Junankar PN, Clibborn S, Flanagan F, Wright CF et al (2020) The COVID-19 pandemic: lessons on building more equal and sustainable societies. Econ Labour Relat Rev 31:133–157. https://doi.org/10.1177/103530 4620927107 UNGC (2010) Overview of the UN global compact [Online]. http://www.unglobalcompact.org/ AboutTheGC/index.html

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UNGC (2019) Our participants, UN Global Compact, New York, 2019 Wang XV, Wang L (2021) A literature survey of the robotic technologies during the COVID-19 pandemic. J Manuf Syst. https://doi.org/10.1016/j.jmsy.2021.02.005 WEF (2022) The global risks report 2022, 17th edn, WEF

Kıymet Tunca Çalıyurt Prof. Dr. Kıymet Tunca Çalıyurt, CPA, CFE, graduated from the Faculty of Business Administration at Marmara University, Istanbul, Turkey. Her Master and Ph.D. degrees are from Accounting and Finance Programme from the Social Graduate School, Marmara University. She has worked as an auditor in Horwath Auditing Company, a manager in McDonalds andfinance staff in Singapore Airlines. After vast experience in the privatesector, she has started to work in academia. She is holding CFE and CPE titles.Her research interests are in accounting, auditing, fraud, socialresponsibility, corporate governance, finance, and business ethics, environmental sustainability with aparticular interest in aviation management, NGOs, women rights in business. She was a visiting researcher in John Molson School of Business in 2001 summer (International Centre for Aviation Management), Massachusetts University Amherst BusinessSchool in 2014 summer, 2018 summer (Accounting and Information System), University of National World and Economy in 2019 summer (Faculty of Accounting). She is the founder of the International Group on Governance, Fraud, Ethics and Social Responsibility (IGonGFE&SR) and International Women and Business Group (IWBG) in 2009, both groups organize international annual conferences and published international book series. She is book series editor in Springer which is indexed in Scopus, with the title Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, andbook series editor in Routledge with the title Women and Sustainable Business. She is founding Chief-in-Editor for the Accounting Finance Auditing: An International Journal. She is a regular speaker in Cambridge Economic Crime Symposium and workshop organiser on the role of external auditor in fraud prevention. Some published books by Prof Caliyurt are: Emerging Fraud (with Sam Idowu), Corporate Governance: AnInternational Perspective (with Sam Idowu), Women and Sustainability inBusiness: A Global Perspective, Sustainability and Management: An InternationalPerspective (with Ulku Yuksel), Regulations and Applications of Ethics in Business Practice(with Dr Jiang Bian), Ethics and Sustainability in Accounting and Finance, Volume I. She is acting as member in editorial board Journal of FinancialCrime in ESCI, International Journal of Law andManagement in (ESCI), Journal of Money Laundering Control in ESCI, International Journal of Climate Change Strategies and Management in SSCI. She consults as a partner in Herme Consulting located in Trakya University Technopark on sustainability, auditing, accountability and academic quality.

Part II

Covid-19 Cases by Countries

Chapter 2

Covid-19 CSR Activation by Malaysian Companies: Evidence from Online News Corina Joseph

and Heidi Christy Mingi Michael

Abstract The novel Coronavirus (Covid-19) has badly affected individuals and organizations all around the globe. There are many efforts undertaken by organizations to assist governments in combating the pandemic. This include spending funds to curb the Coronavirus which is the corporate social responsibility (CSR) activities. This paper aims to investigate the extent of CSR activation by Malaysian companies in battling the Covid-19 pandemic via content analysis of online news during the implementation of the Movement Control Order by the government using the legitimacy theory and coercive isomorphism under the umbrella of institutional theory. The analysis includes the examination of online news which was captured from a Google search from a period 18 March to 17 May 2020. There were 95 online news captured during the period. The results found out that the types of CSR activation were classified into: monetary, non-monetary and both. It is also found that the CSR activation reported on online news is part of the companies’ legitimation strategies in addition to the on-going business’s marketing strategies. Several implications and limitations are also provided in this paper. Keywords Legitimacy · Online news · Corporate social responsibility · Covid-19 · Coercive isomorphism

2.1 Introduction All sectors are being upended as Covid-19 sweeps across the world. The private sector is vulnerable, particularly in the United States. The impact on local, national and global economies takes a negative turn due to this pandemic’s unpredictable nature. C. Joseph (B) Universiti Teknologi MARA, Shah Alam, Malaysia H. C. M. Michael Institut Pendidikan Guru Kampus Gaya, Kota Kinabalu, Sabah, Malaysia

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 K. T. Çalıyurt (ed.), Corporate Sustainability in Times of Virus Crises, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-19-9079-3_2

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It is highlighted by Gafni (2020) that during this crisis, there are: (1) Corporate social innovation strategies that are able to leave a positive impact on society aside from the bottom lines of businesses; (2) From stimulating the wellness of the mental state to guaranteeing employees are secure in terms of finance in the midst of the outbreak, corporations such as Starbucks and Microsoft making a move ahead in response to the catastrophe; (3) Other business leaders, namely Amazon and Google, are making efforts to find ways to show support upon small businesses in their local areas. In history, corporations backed off when crises hit. Be that as it may, businesses are taking the challenge due to the role of business in society that continues to progress and bring on the entrepreneurship into a common practice. It is uplifting to see how, despite of going through arduous times, corporate social innovation remains relevant. Corporate social innovation involves the various approaches in which leave a positive effect on businesses (Gafni 2020). When it comes to philanthropy, corporations offer direct donations as well as in-kind support; whereas for advocacy, corporations are capable in shaping the public policy. As for the corporate social responsibility (CSR) programmes, corporations utilize their numerous resources to benefit the society; and through shared value creation, firms come up with new products and services that are profitable which address the unfulfilled societal necessities. Integrating these four supports into a coherent approach, the corporate social innovation delivers a positive effect on society, along with businesses’ bottom lines. The focus of assessing Fortune 500 companies is to understand how the companies utilize their services, equipment, infrastructure, expertise and products in order to go against the Covid-19 pandemic and aid their employees and customers in overcoming this outbreak (Seetharaman and Galucci 2020). On this list, the Fortune 500 companies have committed in carrying out at least one of the following: • Donating personal protective equipment (PPE) or other important supplies, whether those consist of face masks, plane, or even a portable cell tower • Donating infrastructure, logistics, expertise, manufacturing equipment, transportation, or space • Altering assembly lines and/or manufacturing supplementary crucial supplies • Executing clinical research • The sharing of technology and data • Taking actions to ensure the workers are employed, paid, and insured • Helping customers to obtain the products and financial assistance needed • Carrying out things beyond the usual workflow and what are essential for the survival of the company. The companies that spent on funds in India to fight against the novel coronavirus (Covid-19) are labelled as the CSR activity. This has been carried out as the World Health Organisation (WHO) has acknowledged the coronavirus as a pandemic and is treated as an alerted tragedy by the government, according to an issued statement by the Ministry of Corporate Affairs. According to Ani (2020), “Funds may be spent for various activities related to Covid-19 relating to the promotion of health care, including preventive health care and sanitation, and disaster management.”

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In Malaysia, the Movement Control Order (MCO) and its incoming second phase, following the Covid-19 pandemic occurrence comprehends several parties including corporate bodies, non-governmental organisations (NGOs) and individuals carrying on to provide help (The Sun 2020). Corporations are urged by the government to make contributions to the ones who are affected by the MCO through their CSR program (The Star 2020). Few months ago, the federal government made a promise in providing critical assistance to the community. Although the government is still able to provide extra aid, the resources are inadequate. Joining forces with the government however, will help change the society after the corona days are lessened. Individuals, corporates, social entrepreneurs, non-governmental community-based organisations, and others in this new landscape are able to take on a bigger role in social responsibility, in cooperation, in reciprocity, equality, in social justice, and harmony in this diverse nation. Therefore, the social responsibility of business organizations is especially emphasized. So as to achieve in building a long-lasting social economic atmosphere here, it is essential to support what the corporate world could contribute more in CSR (Yee 2020). Still and all, a few companies have voluntarily managed the CSR. There are several local companies that have represented themselves to challenge the issue by contributing manpower and transportation to make sure that neglection of the underserved and unprivileged do not occur. It all depends on the businesses, no matter how small or large, to take over and help the community (Yeng and Yap 2020). The 2020 Movement Control Order or generally known as MCO or PKP, is a cordon sanitaire that the Malaysian federal government employed as a precautionary measure against the Covid-19 outbreak in the nation last 18 March 2020. Based on social platforms where the news of local as well as worldwide issues are disclosed, it was discovered that the order was classified as a “lockdown” or “partial lockdown”. On 16 March 2020, an official speech was presented by Malaysia’s Prime Minister and it was quoted that the MCO was legitimately announced under the Prevention and Control of Infectious Diseases Act 1988 and the Police Act 1967. Based on several restrictions, the order consisted of: (1) Movements and gatherings where a large clump of people is present nationwide including sports, religious, social and cultural activities being strictly prohibited; (2) Permissions for all Malaysians travelling outside the country; (3) Limiting entry of all travellers and visitors outside Malaysia into the country; (4) Halting activities and closing all kindergartens, government and private schools such as boarding schools, daily schools, international schools, tahfiz centres (religious) and other primary, secondary and pre-university institutions; (5) Closing all public and private higher education institutions along with the skills training institutes across the nation; and (6) Excluding those involved in necessary services, closing all government and private premises. From 27 March 2020, there were particular locations that were placed under a stricter order called the “Enhanced Movement Control Order” (EMCO or Enhanced MCO). In a period of 14 days, if there was a large cluster distinguished within the area where the government was to execute an in-depth Covid-19 examination towards all the locals living there, this

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specific order is commenced. Among the orders are: shutting down all businesses and all residents and guests within the area are not allowed to exit their homes. On 1 May 2020, the Prime Minister declared the Conditional Movement Control Order (CMCO or Conditional MCO), an order in which the regulations associated with the MCO are less strict, with its main objective which was to rebuild the national economy in a meticulous way. On 7 June 2020, it was declared that the Conditional Movement Control Order would be put to an end on 9 June 2020, followed by the nation proceeding into the Recovery Movement Control Order (RMCO) stage between 10 June and 31 August 2020. Consequently, this Covid-19 pandemic possibly symbolizes if not, in the modern marketing history, one of the most noticeable environmental variations, which has the potential in leaving a philosophical effect on CSR, consumer ethics, and basic marketing philosophy. Because of the lockdown and social distancing procedures worldwide, the temporary impression of Covid-19 is sensed at an instant and with no effort at all. Nonetheless, the pandemic will be put to an end, and it is already secured to leave permanent deep economic, social, political, and cultural effects (He and Harris 2020). In this paper, the link between marketing strategies and CSR activation will be explored. In this paper, CSR activation refers to carrying out CSR events as the role of companies which is socially held accountable in response to the Covid-19 outbreak that is occurring worldwide as part of the legitimizing strategy or as a response to coercive pressures by the government. By analysing the CSR activation in Malaysia, this paper adds to the knowledge as the examination covers the online news from a period 18 March to 17 May 2020 (during MCO and CMCO). Additionally, it was suggested by Szántó (2018) that the examination of the online communication medium is needed including online news, apart from websites as the unit of analysis. This provides a new insight from the developing nation in the midst of the Covid-19 pandemic.

2.2 Literature Review This section reviewed the recent literature on online news content analysis all around the globe. It is examined by Dikeocha (2019) on how two energy corporations in Nigeria have used the online newsletter platform to report statistical results regarding their CSR performance. Based on the study, it is suggested that, ExxonMobil (Nigeria) and SPDC (Nigeria) should persist in becoming constant when publishing in their online newsletter. The alarming explanation of stealing oil and spillage should be understated by SPDC (Nigeria) whereas the people within their host communities in the human capacity development should be emphasized more instead. This is important as highlighted in the literature, that the legitimacy theory is used to explain the firm’s stakeholders’ relationship via adherence to society’s norms and values.

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Szántó (2018) executed a longitudinal research on the 200 largest Hungarian companies’ online CSR communication. A content analysis methodology was utilized in this study: searching for patterns and consistencies, pre-given categories and themes were required on corporate websites. Compared to 8 years ago, more companies have their own specific CSR segments on their corporate website in which they normally converse more regarding the principles and practices of their CSR. A few crucial matters become the main issues of CSR communication such as CSR principles, philanthropy initiatives, values, and environmental management systems, whereas the others like the green office programs, responsible governance or responsible marketing are brought up less often. Pérez et al. (2018) study’s aim was to make sure the companies comprehend on how they can take the opportunity in covering the media of CSR by recognizing the most important stakeholder groups and CSR issues discoursed in business news, the constructive/unconstructive/mixed tone of the reporting, and depending on the scrutinized industry, the changes that actually exist in discoursing the media CSR. Under the pivotal stakeholder theory framework, the results are clarified. It was studied by Jain and De Moya (2017) on how Indian news media and corporations were able to describe CSR in terms of communication using the stakeholder theory. In the 242 news articles and 200 corporate websites’ content analysis, it is shown that the news media and corporate discourse continue to disregard existing matters and appropriate encounters to Indian society despite having indicators of an advancing CSR attitude. By researching on disclosure and its elements as well as the interactivity and acceptability of CSR posts, Suárez-Rico et al. (2019) has analysed CSR communication through the Latin American Integrated Market companies by benefiting on social platforms such as Facebook. Being able to comprehend CSR communication, companies may have the chance to relate with their stakeholders more efficaciously and might even make a change in their practices ultimately due of the provided responses. In the Egyptian context, El-Bassiouny et al. (2018) has self-examined into CSR communication patterns, involving the top ten companies in the Egyptian Stock Exchange–Environmental, Social and Governance Index (EGX-ESG). Based on the results, it is shown that the “stakeholder information” strategy is popular as it is highly used among most companies whereas the “stakeholder involvement” strategy is utilized the least. Regardless of business size, industry or culture, in order to secure the companies’ success, CSR communication is vital and should not be overlooked. A study on the corporations with good reputations are being explored by Cho et al. (2016) to determine what means of communications they are on, namely communication media. This research discovered that from a subject analysis of 46 corporate Facebook pages from Fortune’s “World’s Most Admired Companies,” compared to CSR messages, corporations more often use communicate noncorporate social responsibility messages. It is discovered that the corporations worked on an updating strategy frequently rather than an interacting strategy when communicating CSR activities, as well as more actively involving internal publics’ activities compared to

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external publics. It is also found in this research that non-corporate social responsibility messages are engaged more by the public than CSR messages, in which as a result, may reflect the pessimism of the public regarding CSR communication. The analysis associated with the top 50 Indian companies expresses their comments towards Covid-19 outbreak along with their areas of focus in combatting against the pandemic (Karthick et al. 2020). Based on an observation, the top 50 Indian companies have contributed as much as INR.6,916 Crores, including INR.3,570 towards the PM Cares Fund and approximately INR.3,346 Crores towards other relief resources, i.e., State Disaster Relief Funds, State Disaster Management Authorities and other instant relief programs through the CSR partners (implementing agencies). It was reported that: (1) The implementation of the relief programs through the CSR partners had more associations with the Covid affected areas’ holding sanitation and disinfecting programs and supplying free PPEs to the frontline healthcare workers (33%); (2) Giving support to the region management in acquiring ventilators and other medical equipment besides expanding healthcare amenities (31%); (3) Supplying instant relief to the migrant employees and public that were affected including food and ration kits (25%); (4) Involving Self Help Groups (SHG) in livelihood promotion programs (5%); Awareness of health programs (5%) and (5) other programs (1%).

2.3 Theoretical Framework This paper used two theories to explain the CSR activation by Malaysian companies reported on online news i.e. legitimacy theory and the coercive isomorphism tenet under the institutional theory. Based on the legitimacy theory, the concept of social contract is the nexus between the society and the organization in which it functions (Deegan and Unerman 2011). Organizations are putting in all their efforts in being genuine, under this theory, by operating in bounds and their respective societies’ customs (Khan et al. 2013). Given that the activities held at a large scale would not bring any harm and benefit the society instead, the sustainability of the corporations and firms would not be negatively affected. Nevertheless, if the society’s values and norms are not respected and followed by the firms, the legitimacy gap will ascend (Janang et al. 2020). A legitimacy gap is present when there is an inequality between the organization and societal values, where the society’s perception and the organization’s undertaken actions do not match up. This gap can be classified in many approaches, through the strategies of legitimacy such as CSR disclosures, for instance (Omran 2015). It is argued by Gray et al. (1995) that the legitimacy theory has the upper hand compared to other theories given that the organizations disclose the strategies in which they have adopted to be still considered as genuine. Based on Deegan (2002), when it comes to examining CSR disclosures, the highly used theory is the legitimacy theory. The reason for this is that, through CSR reports, the society members have a chance in evaluating the efforts of the firms in legitimizing their presence by following and respecting the norms and societal values. Through

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this theory, the firms can commit in guaranteeing that social contact would not be jeopardized and the legitimacy gap would be conveyed well, which will then maintain the sustainability of firms. It is found by Ellerup and Thomsen (2018) that the imperative kinds of legitimizing communicative practices expressed in the four types of researches had relations to: through insight, effect and promotion events, striving to obtain knowledge regarding stakeholders; taking control as well as monitoring the environment through image and reputation activities; through collaboration and engagement, producing the value of the stakeholder; through concepts and rhetoric CSR models, convincing and persuading stakeholders. It is also discussed in the research that the most effective way for corporations in attempting to construct or sustain legitimacy is by practices and activities that are associated with observing the expectations of the stakeholders, needs and requirements. One other theory that supported Deegan (2007)’s legitimacy point of view in terms of comprehending how organizations identify and act on altering the social and institutional pressures and expectations is the institutional theory. The isomorphism conception is able to clarify the homogenization towards the social values and norms’ conformance under the institutional theory. Isomorphism is a process that drives a unit to follow other units in the population with comparable conditions (DiMaggio and Powell 1983). One of the isomorphism conceptions which this paper uses is coercive isomorphism, utilized in the online disclosure studies e.g. Joseph et al. (2019) and Midin et al. (2017).

2.4 Methodology The data collected in this study were based on a content analysis of inclusion or exclusion of CSR activation on Malaysian companies’ self-reported release and media news exposure during the Movement Control Order and Conditional Movement Control (18 March–17 May 2020) implementation. This is due to various calls of CSR made by the Malaysian government during this duration (The Star 2020). This study specifically covered all types of companies in Malaysia and did not restrict to public companies or top companies as conducted by other studies (e.g. Abbas et al. 2020; Karthick et al. 2020). Since this is the first study that examines the extent of Malaysian companies’ CSR activation reported on online news, hence, it is important to evaluate the companies’ response on the calls by the government to be socially responsible. The content analysis technique has been used extensively in disclosure studies and is still relevant till present (see Joseph et al. 2019; Midin et al. 2017). The data collection started with the Google search with the keywords ‘Malaysian company Covid-19 CSR’. The relevant online news or articles were then downloaded and read for several times. In some cases, the URL link provided was directly referred to the website of individual company. Next, the information was classified into: type of company, type of business activities and type of CSR activation. There are three categories of CSR activation i.e. monetary (e.g. relief fund), non-monetary

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fund and both. Referring to few studies by Abbas et al. (2020) and Karthick et al. (2020), the sub-categories for non-monetary CSR activation used in this paper are: 1. 2. 3. 4.

Providing medical supplies and vehicles Distributing, nutrition products, face masks, and sanitizer Supplying food Others.

After the categorization, the data is entered into the Social Package for Social Science (SPSS) version 20.0 and the frequency count is performed to achieve the objective of this paper.

2.5 Results and Discussion From the data collection, originally there were 91 online news captured including the social media and websites of the companies. After filtering for relevancy i.e. eliminating news on CSR activation by conducted by government, religious organizations, NGOs, individual entrepreneur i.e. fashion designer, the final sample covered 59 news, resulting in 95 companies under the final analysis. A further observation was made during the data collection process: • One news may include a story about one company; • One news may include a story about several companies; • Several companies’ news was reported in different online platforms, for example, Coway, Petronas, Western Digital, Sunway and Carlsberg; • Company updates CSR activities daily on website for example, Mr DIY with the heading ‘MR.DIY COVID-19 Daily Updates: Aiding the Nation Through CSR’ from 26 March 2020 to 4 May 2020 • This paper focused on the communication of CSR activation to external stakeholders and not the internal stakeholder, for example, staff. Table 2.1 presents the type of companies in this study. Table 2.1 Type of companies

Type

No.

Percentage

Public limited company

28

29.5

Private limited company

17

17.9

6

6.3

Government linked company Foreign company

44 95

46.3 100

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As a whole, the involvement of CSR activation is very low.1 This finding is in line with the companies’ attitude in India (Jain and De Moya 2017) that proved that the news media and corporate discourse continue to disregard existing matters and appropriate encounters to society despite having indicators of an advancing CSR attitude. Table 2.1 presents that the highest CSR activation is contributed by foreign companies (46.3%). This is reported by an online news which reported that 30 American companies in Malaysia i.e. members of the American Malaysian Chamber of Commerce (AmCham) pledge RM5 million donations in cash and kind. The second contributor is public limited company (29.5%) and followed by private limited company (17.9%) and finally government linked companies (6.3%). The minimal involvement by government linked companies is quite surprising despite the urge by government to ensure the strong assistance in battling the COVID-19 pandemic. As stated by the Prime Minister Tan Sri Muhyiddin Yassin: The role of government-linked companies (GLCs) is important in helping the government formulate a comprehensive economic strategy during and after the Movement Control Order (MCO … I have also asked the GLC to play a more proactive role and to be an example to other companies or industries in implementing corporate social responsibility (CSR) to help the people cope with the difficulties during COVID-19 outbreak. (Prime Minister Office of Malaysia 2020)

Although there is a push or force as identified under coercive isomorphism by the government for companies in Malaysia to be involved in the CSR, the extent of involvement is low. There is a possibly due to the lack of enforcement for the Malaysian companies to be involved in CSR activation. Further, the company’s information is categorized into type of principal business activities as presented in Table 2.2. As can be seen from Table 2.2, most of the companies are involved in the manufacturing activities (25.3%). Upon checking with the type of company’s information, these companies are registered as foreign companies. The lowest involvement in CSR activation came from plantation, services and oil and gas respectively (2.1%). For the purpose of achieving the objective in this paper, the frequency count is made. Table 2.3 presents the frequency of CSR activation. As can be seen from Table 2.3, 30 companies contributed cash donation. Out of this number, 26 companies contributed directly to the government. The highest contributor was Petronas, a public listed company with a contribution amounted to more than RM39 million as reported in the websites involving both categories of monetary and non-monetary. The cooperation with the Ministry of Health and the National Disaster Management Agency aided to the CSR by contributing RM20mil worth of medical equipment and supplies and Personal Protective Equipment (PPE) to healthcare frontliners in Malaysia and abroad, as well as senior citizens at selected homes. Petronas staff have come together to donate RM6.4 million through a voluntary salary contribution initiative to be channelled to the Covid-19 Fund under National Disaster 1

Based on the statistic issued by the Companies Commission of Malaysia (2019), the number of local companies registered as at 31 December 2018 is 1,293,715 companies. Meanwhile, the total for foreign companies = 4,803.

26 Table 2.2 Company’s business activities

C. Joseph and H. C. M. Michael Business activities

No.

Finance

13

13.7

Technology

16

16.8

Logistics

3

3.2

Consumer

7

7.4

Plantation

2

2.1

Oil and gas

2

2.1

Service

2

2.1

Construction

8

8.4

24

25.3

Manufacturing

Percentage

7

7.4

Others

11

11.6

Total

95

Health and wellness

100

Table 2.3 CSR activation CSR activation

No.

Monetary

30

31.6

Both monetary and non-monetary

10

10.5

Percentage

Non-monetary Providing medical supplies and vehicles

54

56.8

Distributing, nutrition products, face masks, and sanitizer (ESSENTIALS)

46

48.4

Supplying food

11

11.6

Others

11

11.6

Management Agency (NADMA). Most companies in this paper contributed RM1 million to the government. It is also interesting to note that public listed companies under state jurisdiction donated to the state government to support the State Disaster Relief Fund (SRFP) in support of the state government’s efforts to curb COVID-19 pandemic. This is evidenced in two public listed companies based in Sarawak i.e. Naim Berhad and Ta Ann Berhad. From Table 2.3, under the non-monetary category, it was revealed 56.8% of the companies contributed to the CSR activation by providing medical supplies and vehicles. This finding is consistent with Karthick et al. (2020) that reported the highest frequency in this category. Meanwhile, 48.4% of the companies distributed essentials such as nutrition products, face masks, and sanitizers. This contribution is mostly given to the group in need in line with the government’s aspiration to achieve the Shared Prosperity Vision 2030. An example of a quote by the Group CEO of FGV Holdings Bhd when distributing a total of 13,000 bags containing basic foods

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such as rice, cooking oil, sugar and other sundries under the FGV Food Relief Bag (FGV FreB) programme: We understand the needs of the community, especially for families in this trying time to ensure that food is always available. Being involved directly in the food supply chain industry, this contribution is very close to the heart and part of the group’s continuous effort to support the Shared Prosperity Vision 2030. (Kamel 2020)

An interesting finding from this paper is that the contribution to both non-monetary categories (Providing medical supplies and vehicles and distributing essentials such as nutrition products, face masks, and sanitizers) is made by 30 American companies in Malaysia i.e. members of the American Malaysian Chamber of Commerce (AmCham). The US Ambassador Kamala Shirin Lakhdhir has shown appreciation towards Malaysians for the strong cooperation in addressing various needs that have arisen during the pandemic crisis. The American companies has proven that they have played their part in contributing back to the Malaysian community. Lakhdhir added: During these challenging times, I am inspired by watching how Malaysians are rallying to support one another and their communities. American businesses and their employees are doing their part as well… And as always, I am proud by this display of CSR – the hallmark which sets American businesses apart. (New Strait Times 2020)

The CSR activation in terms of supplying food is contributed by 11.6% of the companies. The food supply is given to the needy group and frontliners. An example of the company which is involved in this activity is Principal Asset Management Berhad,—a joint venture between Principal Financial Group, a member of the Fortune 500 and a Nasdaq-listed global financial services and CIMB Group Holdings Berhad, one of Southeast Asia’s leading universal banking groups. Principal Asset Management Berthed has distributed food to all Kuala Lumpur Hospital medical personnel on the front lines of Malaysia’s battle against COVID-19 in March 2020. Meanwhile, for the ‘Others’ category, the CSR activities are more inclined towards the marketing strategies and reflected in the business activities to improve brand and customer’s loyalty. The summary of ‘others’ CSR activation is presented in Table 2.4. As for the ‘Others’ non-monetary CSR activation, it appears that the CSR activation is closely linked to the marketing strategies to enhance the brand customer’s loyalty and maintain the competitiveness in the market. In this way, the win–win situation is taking place i.e. the company is still maintaining the social contract with customers while at the same time ensuring the sustainability of the firm during the pandemic crisis. This is in line with Ellerup and Thomsen (2018) that corporations try to construct or sustain legitimacy by practices and activities that are associated with observing the expectations of the stakeholders, needs and requirements. There are several examples from this paper that explain how the win–win situation is developed between firms and customers to maintain legitimacy. The first example is a foreign investment company i.e. Manulife is giving a special financial assistance to customers diagnosed with coronavirus disease (COVID-19) 26 February until 30 September 2020. This will definitely give an impression that the company is giving

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C. Joseph and H. C. M. Michael

Table 2.4 ‘Others’ CSR activation Type of CSR activation

Frequency

Technology aid

1

Transportation

1

Internet plan and data plan

2

Selling cheap food during Ramadhan holy month

1

Financial service

1

Insurance coverage plan and financial assistance to customers diagnosed with coronavirus disease (COVID-19)

2

Set up donation drive

1

Drone service

1

Accommodation

1 11

its best to fulfil the expectations of the stakeholders, needs and requirements (Ellerup and Thomsen 2018) i.e. in line with the legitimacy theory. The second example of non-monetary of CSR activation under the “Others’ category is in the form of free stay or accommodation. In this instance, the ECM Libra Foundation and the Ormond Group (Tune Hotels) have expressed generosity by providing free accommodation and breakfast at Tune Hotel PWTC for a period of 30 days starting from 24 March 2020 to the medical staff of the General Hospital of Kuala Lumpur. This charitable effort permits medical staff who have just ended their shifts to rest at any of the 130 rooms at the hotel without having to travel back home and report back for duty the next day (Nazma 2020). By communicating this CSR activation on online news, the legitimacy will be maintained or improved. Following Deegan (2002), through reporting CSR activation via online news, the society members have a chance in evaluating the efforts of the firms in legitimizing their presence by following and respecting the norms and societal values. Through this theory, the firms can commit in guaranteeing that the social contact would not be jeopardized and the legitimacy gap would be conveyed well, which will then maintain the sustainability of firms. The third example is relating to the setting of donation drive which can serve as an excellent marketing strategy. QSR Brands has established a donation program via KFC and Pizza Hut by working together with several NGOs. The proceeds from donation will be distributed to a group of people in need including underserved people and medical community during the months of Syawal and Ramadhan. The purpose of this donation initiative is to foster the spirit as caring Malaysians among customers while still enjoying fresh, hygienic and safe-to-eat KFC food. The RM1 will be donated to the CSR campaign ‘Kita Fight COVID-19’ when customers purchase KFC Mix Bucket. At the same time, customers are encouraged to donate directly KFC’s Tabung Add Hope (Lim 2020). This donation held especially during the Muslim holy

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months is a unique CSR activation and not found in other studies (Karthick et al. 2020; Seetharaman and Galucci 2020). The fourth example is related to the use of innovative tool i.e. drone in the CSR activation. One company that is involved in helping to purchase food and essential medical supplies during the MCO is Aerodyne. The company has assisted the Malaysian authorities in enforcement of the MCO and completed 1,000 h of drone flights time. During the MCO, the private and public organizations dealt with nonessential has been closed and only allow with limited travel to purchase food and essential medical supplies within a 10-km radius. According to the Aerodyne Group’s Founder and CEO, Kamarul A. Muhamed: We are excited by this 1,000-hour milestone and honoured to be part of the authorised team, doing our part in keeping the Malaysian people safe. Drones and data technology have proven to be a powerful and effective tool for battle against Covid-19. And we’re proud of our team whose dedication and performance have been exemplary. (Digital News Asia 2020)

The above four examples clearly explain the role of companies in promoting CSR activation via online news. This indicates the importance of CSR activation promotion via online news. As stated by Suárez-Rico et al. (2019), being able to comprehend CSR communication, companies may have the chance to relate with their stakeholders more efficaciously and might even make a change in their practices ultimately due of the provided responses. The findings from this study is similar to past studies in developing countries i.e. India and Indonesia in terms of the type of CSR activation undertaken. Companies in Malaysia did not thus far conduct CSR activation by Fortune 500 companies i.e. executing clinical research and carrying out things beyond the usual workflow and what are essential for the survival of the company (Seetharaman and Galucci 2020).

2.6 Conclusion The objective of this paper is to investigate the extent of CSR activation by Malaysian companies in battling the Covid-19 pandemic via content analysis of online news from a period 18 March to 17 May 2020. Using the coercive isomorphism tenet, it appears that the lack of CSR activation among companies (for example, government linked companies) is due to lack of enforcement by the higher authorities. However, the legitimacy theory can explain the CSR activation via online news in terms of fulfilling to society’s expectation, needs and requirement alongside with implementing the marketing strategies. It was revealed 56.8% of the companies contributed to the CSR activation by providing medical supplies and vehicles to the government and the needy groups i.e. a way of sustaining legitimacy. Regardless of business size, industry or culture, in order to secure the companies’ success, CSR communication is vital and should not be overlooked. This paper is not without any limitations. This paper covers all types of companies and represents a very minimal involvement in the CSR activation in Malaysia.

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This would not be presenting a true picture of corporate involvement in CSR activation in Malaysia due to different characteristics, requirements and others. Hence, future research may examine only a specific type of company as the unit of sample, for example, on public limited companies to obtain a better generalization. The low involvement of CSR activation reported online news during Covid-19 pandemic does not necessarily reflect the actual CSR discourses. Hence, this paper provides an avenue for future research opportunities by examining the CSR activation before, during and post Covid-19. Despite the limitations, this paper has successfully provided a preliminary overview of Covid-19 during the MCO and CMCO period. There are several implications from this paper. Due to minimal involvement in the CSR activation, the government can introduce more policies to encourage firms in taking up CSR initiatives in battling the Covid-19 outbreak. However, this notion may not be applicable especially for small and medium-sized enterprises (SMEs). Cruz (2020) suggested that several initiatives could be introduced on smaller firms, for example, pooling in resources and tax incentives. Working together among various parties in the CSR activation is important. Other types of non-monetary CSR activation should be promoted in Malaysian companies, for example, economic inclusion in offering employment opportunities to the poorer strata of people; supporting social entrepreneurs in experience sharing, social scalability and even business partnership; giving resources (beside taxes) for the common good; strengthening the green economy together with government and the society at large (Yee 2020). Companies must be proactively involved in the CSR activation as the resources from the federal government are not adequate. At the same time, this can help to achieve the government’s aspiration i.e. Shared Prosperity Vision 2030.

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Prime Minister Office of Malaysia (2020) Role of GLCs important in formulating economic strategy during MCO – PM Muhyiddin. Available at https://www.pmo.gov.my/2020/04/role-of-glcs-imp ortant-in-formulating-economic-strategy-during-mco-pm-muhyiddin/ Seetharaman M, Galucci J (2020) How global 500 companies are utilizing their resources and expertise during the coronavirus pandemic. Retrieved from https://fortune.com/2020/04/13/glo bal-500-companies-coronavirus-response-covid-19-pandemic/ Suárez-Rico YM, García-Benau MA, Gómez-Villegas M (2019) CSR communication through Facebook in the Latin American integrated market (MILA): disclosure, interactivity and legitimacy. Meditari Acc Res 27(5):741–760. https://doi.org/10.1108/MEDAR-03-2018-0313 Szántó R (2018) Tendencies in online communication of CSR – a longitudinal study tendencies in online communication of CSR – a longitudinal study. Proceedings of the 6th international conference innovation management, entrepreneurship and sustainability, May 31–June 1, 2018, Prague The Star (2020) Covid-19: companies urged to contribute to those affected by MCO. Retrieved from https://www.thestar.com.my/news/nation/2020/03/19/covid-19-companies-urged-to-con tribute-to-those-affected-by-cmo The Sun (2020) Covid-19: corporate companies, NGOs continue to provide aid. Retrieved from https://www.thesundaily.my/local/covid-19-corporate-companies-ngos-continue-to-provideaid-YC2206472 Yee LS (2020) Corporate social responsibility can be game changer. Retrieved from https:// www.nst.com.my/opinion/columnists/2020/06/597232/corporate-social-responsibility-can-begame-changer Yeng KW, Yap E (2020) 10 Malaysian companies that give back to the community during Covid-19. Retrieved from https://www.optionstheedge.com/topic/people/10-malaysian-companies-giveback-community-during-covid-19

Corina Joseph Dr. Corina Joseph is a full Professor at the Faculty of Accountancy, UniversitiTeknologi MARA, Sarawak Branch. She is an Associate Member of the Malaysian Institute of Accountant. Her research interests are in CSR and Sustainability, Corporate Governance, Public Sector Accounting and Financial Criminology. Corina is an advisory member for the Social Responsibility Asia (SR Asia) Global Certification Program for Professionals in Sustainability Repoting. She is currently the Co-Chief Editor of International Journal of Service Management and Sustainability. She also serves as the Editorial Advisory Board Member of several Scopus and international refereed journals. She has received numerous national and international awards throughout her 26 years’ service in UiTM.

Chapter 3

The Impact of COVID-19 and the October 17th Revolution on Employees’ Performances: Case of Lebanese Banks Walid Dagher, Akl Kayrouz, Pascal Nasrallah, Roland Shahoud, Leonie Nemer, and Rebecca Shahoud Abstract This research aims to identify clients’ perception toward employees’ performances, attitude towards banks’ procedures and to review their consideration of switching banks due to the October 17th revolution, and COVID-19 catastrophic outbreak. In this study, Lebanon was chosen as an ideal background and more specifically Lebanese Banks’ clients. This research opens the opportunity to test their level of approval of employees’ performance, banks’ procedures, and bank switching possibility. Data was collected, by gathering primary and secondary information, through a quantitative approach. Required data were gathered from surveying Lebanese clients dealing with different banks, and coming from diverse backgrounds and regions through an online survey. The main findings revealed that the October Revolution coupled with the outbreak of the Corona Virus had a tragic impact on Lebanese banks. Further results indicated that clients are not satisfied with employees’ performance. Consequently, the majority was considering switching banks in search of more satisfactory job performance by employees. Keywords October 17th revolution · Covid 19th · Lebanese · Banking sector

3.1 Introduction The advance of technology is based on making it fit so that you don’t even notice it, for it is part of everyday life. Bill Gates, Co-founder of Microsoft

In recent years, the developments in the internet and technologies developed new systems accessible to businesses. Social media like online communities are good W. Dagher (B) · P. Nasrallah · R. Shahoud · L. Nemer · R. Shahoud University of Balamand, Balamand, Lebanon e-mail: [email protected] A. Kayrouz Notre Dame University, Zouk Mosbeh, Lebanon © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 K. T. Çalıyurt (ed.), Corporate Sustainability in Times of Virus Crises, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-19-9079-3_3

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examples (Smits and Mogos 2013). The general availability of the internet made it possible for individuals to use social media from Twitter to Facebook and email, achieving a high level of communication without physical meetings (Gruzd et al. 2011). Nowadays, social media is being used in work areas. Many organizations are increasingly interested in adopting technologies for their work operations. The Lebanese banks form samples of those organizations. Because of the Lebanese revolution, Lebanese banks found themselves at risk and this affected the employees and put them under pressure. As for the Corona epidemic- COVID-19, some people thought that this virus is a normal illness, while others took it seriously and tried hard to protect themselves and their surrounding environment. The common advice to be continuously heard is that citizens ought to “stay home”. Social media consequently played an important role in individual personal life and work.

3.2 Background This study concentrates mainly on the Lebanese banking sector in this time of crisis. In Lebanon’s banking sector, more than 22,000 bank employees, distributed over 65 banks with 1,079 branches were affected (Ishrakieh et al. 2020). These employees recognized the importance of social media and the internet during these hard times. Normally, since the creation of modern social networks, a new age of productivity has emerged, so individuals can share information and experience with others in an easy way. This contributed to higher job satisfaction that affected in turn job performance (Gilmore 2017; Hendricks 2013). This project focuses on analyzing the clients’ perception relating to employee performance and their attitude towards banks’ procedures (Edwards and Kudret 2017). In today’s world, the banking system still plays a very important and key role in economic development (Elhajjar 2020); in addition, many banks around the world focus on using social media taking into consideration their employees’ productivity and potentials. In a time where job satisfaction is very important, banks should access the needs of the employees because this can lead to higher performance (Bailey et al. 2016; Dagher 2019). During crises, banks act quickly to advance their plans, reconfigure facilities, and change in employment arrangements (Park and Shin 2020). Although banks may remain open, they are nevertheless taking many steps to protect their clients and workers.

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3.3 Research Objectives The research seeks often on answering essential questions. The three research questions formulated in this study are as follow: • Question 1: How do Lebanese banks clients’ overview Lebanese banking sectors in times of COVID-19 and October revolution? • Question 2: Do Lebanese banks clients’ perception and attitude impact employees’ performance? • Question 3: What are the Lebanese banks clients’ views about bank switching? This research aims at examining the level of Lebanese banks clients’ perception of employees’ performances, and attitude towards banks’ procedures, and bank switching. Knowing that theory without practice is of no value, the research follows the main three objectives: Objective 1: Examine and evaluate the perception of Lebanese banks customers toward employees’ performances in times Objective 2: Check Lebanese banks respondents’ perception and attitude toward the banks’ procedures Objective 3: Examine Lebanese banks clients’ consideration of switching banks.

3.4 Literature Review 3.4.1 Introduction The paper will investigate four parts: • The first denotes literature associated to customers’ perceptions and attitudes. • The second refers to existing literature related to perceived employees’ job performance.

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• The third evaluates the overall circumstances relating to October 17 Revolution. • The fourth investigates the effects of COVID-19 upon the citizen’s life. 3.4.1.1

Customers’ Perceptions and Attitudes

Many scholars had supported the proposition that customer satisfaction is one of the most significant variables for evaluation in bank marketing management (Moutinho and Smith 2000). “Significant relationships were reported between branch employees’ perceptions of organizational human resources practices and branch customers’ attitudes about service. Employee attitudes and customer attitudes were related to their own and one another’s turnover intentions” (Schneider and Bowen 1985). Poolthong and Mandhachitara (2009) found that customers have a habit to trust enterprises and organizations as a consequence of positive perception towards the quality of products/services offered. Researchers acknowledged that customer perception of quality is based on one or more cues (Andreassen and Lindestad 1998). The Perceptions and attitudes of Lebanese bank customers were altered by the bad quality of service due to the COVID-19 and October Revolution. The quality of service refers to customers’ perceptions of their interpersonal interactions with bank employees (Manser Payne et al. 2018).

3.4.1.2

Perceived Employee Job Performance

Research related to consumers’ perception of quality has progressed steadily over the years. (Andreassen and Lindestad 1998) have discussed that perceived performance is influenced by the consumers’ perception of quality, marketing mix, brand name and company image. “Job performance is associated with the ability of the employees to fully grasp assigned targets, fulfill expectations, and achieve targets following a standard of outlined tasks for the organization” (Motowidlo and Kell 2012). To achieve high job performance, employees need to be motivated and pushed to the highest potential of their abilities to give all their best and serve the organization they are working for in an acceptable performance (Sek´sci´nska et al. 2016). Training courses are important and serve as an advantage in this case. The benefits for both, the organization and the employees are massive. Taking training courses contributes to better collaboration among colleagues working in the same organization (Charbaji et al. 2020). Furthermore, development courses serve the organization by making a more productive environment, decreasing turn- over of employees, and ensuring development and survival (Aguinis and Kraiger 2009; Bell et al. 2017).

3 The Impact of COVID-19 and the October 17th Revolution …

3.4.1.3

37

Customer Satisfaction and Bank Switching

Bank customer satisfaction has direct effects on switching their banks. Previous research, (Manrai and Manrai 2015) specified in their model the nature of the relationship that exists between satisfactions with the likelihood of switching to another bank. “Satisfaction with a particular banking service used is negatively related to the likelihood of switching to another bank”. In addition, researchers stated that bank customers’ attitudes towards the human provision of services and subsequent level of satisfaction will impact on bank switching (Moutinho and Smith 2000).

3.4.1.4

COVID-19

Wuhan, China, is the first city to report the outbreak of the virus. On 11 February 2020, the World Health Organization) announced a new name for the coronavirus disease: COVID–19 (World Health Organization 2020). Currently, Lebanon has reached total cases of 120,341 along with 950 cases of deaths, last updated on November 26, 2020 (WHO 2020). Due to the outbreak of the Corona Virus, Lebanon was one of the most affected countries economically, socially, and in the health system (Bizri et al. 2020; Nasser et al. 2020; Saadeh et al. 2020). The government imposed a total lockdown. Lebanese banks were dispensed from shutting down. They kept up the operations day by day “at lowest level”, without determining any future guidelines”. Furthermore, testing for the virus privately became a problem for almost two million citizens below the poverty level. They could not bear the cost of 150,000 Lebanese pounds. The government then stepped in by providing free testing at public hospitals only if symptoms were valid.

3.4.1.5

The 17 October Revolution

The protests first erupted on 17 October 2019. Protesters came from different social classes, regional backgrounds, ages, religions, and political affiliations. Amazingly they cast aside their political and religious taboos. They united forces to become one hand motivated to successfully overcome this crisis. The protesters yelled two main chants: “The people want the downfall of the regime” and “All of them means all of them”, meaning political leaders (Kairouz and Dagher 2020). Also, the protest movement is seeking to change or renew the political system to create a new non-sectarian cabinet that can improve the country’s fighting against corruption. One of the demands was reached through the resignation of Prime Minister Saad Hariri due to the pressures from the protestors on the streets. This didn’t stop the protesters’ movement; instead, they became more motivated and encouraged to continue until reaching their desired demands and reforms.

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There is no doubt that this crisis led to an interruption in Lebanese Banking Systems work routines. Employees were forced to bear clients’ anger. As a result, several banks were damaged by angry and violent protesters. This led to the closure of Lebanese Banks for several days because of safety and security (Hubbard 2019). “Indeed we are afraid of a panic mode once they open, claimed” Fouad Zmokhol, president of the Worldwide Association of Lebanese Business people, in an interview with CNBC from Beirut (Turak 2019). Until today, the protesting movement continues but not as powerful as before due to the epidemic of Corona Virus that compelled citizens to stay at home for days for their safety and protection, and caused a total or partial national closure.

3.5 Research Methodology 3.5.1 Introduction The first section in this paper determines the research approach, and then the next section describes the design and format of this research including method, process, and description of main respondents (Hair et al. 2016). Finally, the last section reveals the survey’s questions structure and how data has been collected and conducted, followed by a study of ethical considerations.

3.5.2 Research Approach Surveys are used to collect reliable data as a source of information (Hudson and Pletcher 2020; Smith 1987). It exposes the client’s point of view facing specific issues. They provide information related to specific crises. The most appropriate approach is the quantitative one for it helps scrutinize issues in depth. This approach will be applied to some of the Lebanese Banks by distributing an online survey to be filled. By taking a sample from the population, the survey questions can be answered and results can be concluded. Furthermore, the use of surveys helps in reaching higher large sample collect information in a faster way.

3.5.3 Research Design There are several types of research designs in quantitative methodology; such as surveys, experiments, interviews and so many others. Within the last decade, numerous online populations, such as Survey Monkey and Amazon’s Mechanical

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Turk (MTurk), have been established allowing researchers to gather data involving diverse populations. These resources offer an alternative to traditional laboratory settings hosted at universities, where many studies utilize students as the available and accessible population. The study takes a quantitative approach where online surveys are sent to random banks’ clients coming from different regions and backgrounds (Rice et al. 2017). The study approach is to examine the perception of the banks’ clients toward its employee job performance, attitude towards banks’ procedures, and check their consideration of switching banks.

3.5.4 Online Survey Method Data in this paper are collected by conducting an online survey to amass data and execute the quantitative analysis. The online forms of surveys were selected mainly for • Accuracy: participants check their preferred answer. • Quickness in analysis: online responses are recorded online. • Easiness in participation: participants easily can access emails or messages online during their free time for response. The survey questionnaire was written in English and was translated into Arabic. In order to ensure the uniformity and equivalence of the meaning, the survey questionnaire was then back-translated by a second bilingual instructor. Both translators were instructors at the University of Balamand.

3.5.5 Sampling The participants in this study are Banks’ Clients coming from different biographical background and dealing with different Lebanese Banks. Respondents are selected on the basis of their knowledge and relationship with the Lebanese Banks in time of crisis (Mason 2010; Ritchie et al. 2003). Two hundred and six were randomly selected to participate by filling a specially designed questionnaire. The purpose and the content of the study were clearly explained to them securing their approval. When distributing the online survey, the free time of the respondents to submit their responses was taken into consideration (Ilieva et al. 2002; Lefever et al. 2007). They are allowed to complete and fill out the form during their free and convenient time.

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3.5.6 Description of Respondents In this part, an overview of the main respondents for quantitative research is shown in the Table 3.1.

3.6 Data Collection Techniques Data collection is the “process of gathering, measuring, and analyzing information on variables of interest, in an established systematic fashion that enables one to answer stated research questions, test hypotheses, and evaluate outcomes” (Rahi 2017; Schoonenboom and Johnson 2017). Due to the current circumstances of “Corona Virus”, unstable conditions, and the difficulties that Lebanon and its entire people are facing, it was preferred to collect data using digital tools. Information was compiled from two sources, a secondary source, and a primary source. Information was amassed on stage one, using online surveys to determine how much the participants are aware of the study’s value. Collectible was used in gathering needed answers and data. The collectible data is also derived from several banks’ clients from different areas and banking sectors.

3.7 Survey’s Questions Structure “Likert Scale Questions” were selected and responses ranged from strongly disagree to strongly agree (Avella 2016). Participants got to choose between: strongly disagree, disagree, neutral, agree, or strongly agree depending on their level of agreement and perceptions. Table 3.1 Reveals the description of main participants

Respondents

Banks’ clients

Nationality

Lebanese

Randomly selected participants

206

Area of residence

Lebanon

Research case

Lebanese banks

Bold significance is number of the people

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3.7.1 Data Analysis Data are then conducted into SPSS software to present more accurate results and provide tangible analysis (Rahman 2016). SPSS consequently would highly explain the impact of employees’ performances on clients’ consideration toward switching banks.

3.7.2 Ethical Considerations Ethics refers to a system of principles that can critically modify previous concerns. Relating to making decisions, and take action. It is said that ethics and moral issues are related to the concept of what is wrong, and what is right. Scientific research work, as all human activities, is ruled by the individual, community, and social values. Research ethics involve the protection of the dignity of subjects and also the publication of data findings within the research. Preserving the privacy and confidentiality of respondents when distributing online surveys were strictly honored and observed.

3.8 Research Results 3.8.1 Introduction The results from the quantitative data analysis are shown below. They involve testing the clients’ perception, level of employees’ performances, banks’ procedures, and consequently consideration of switching banks. The primary data are collected from the questionnaire that is designed for testing. Throughout this project, descriptive analysis is conducted.

3.8.2 Demographics The characteristics of the sample, shown in Table 3.1, reveal that the mean age of the respondents was 28.32 years ranging from 18 to 52 years old. The final sample includes 206 respondents. The majority of these respondents are males (53.4%), where the females constituted (46.6%). Answers to all questions were required so participants could not skip questions. Data shows that most of the respondents are from Akkar (21.4%), where the others are located in several cities/villages. For the marital status, 57.3% are single having no children, and (37.9%) of the respondents hold a Bachelor’s degree, where the

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majority selected the “other” option (40.8%). In reference to the social class to which respondents belong, the majority of the respondents belong to the lower middle class (63.1%). Concerning the current employment position, data shows that (41.7%) of respondents are unemployed, where (33%) are. Management positions number (9.7%) and (5.8%) working as teachers (Tables 3.2, 3.3, 3.4, and 3.5). Table 3.2 Clients’ perception 1 I find customer service satisfying Agree Female

Male

Total

Disagree

Neutral

Strongly agree

Total Strongly disagree

Count

30

30

26

4

6

96

Expected count

3.8

35.4

18.6

4.6

6.6

96.0

% within gender

31.3

31.3

27.1

4.2

6.3

100.0

% within I find customer service satisfying

45.5

39.5

65.0

40.0

42.9

46.6

% of total

14.6

14.6

12.6

1.9

2.9

46.6

Count

36

46

14

6

8

110

Expected count

35.2

40.6

21.4

5.4

7.4

110.0

% within gender

32.7

41.8

12.7

5.5

7.3

100.0

% within I find customer service satisfying

54.5

60.5

35.0

60.0

57.1

53.4

% of total

17.5

22.3

6.8

2.9

3.9

53.4

Count

66

76

40

10

14

206

Expected count

66.0

76.0

40.0

10.0

14.0

206.0

% within gender

32.0

36.9

19.4

4.9

6.8

100.0

% within I find customer service satisfying

100.0

100.0

100.0

100.0

100.0

100.0

% of total

32.0

36.9

19.4

4.9

6.8

100.0

3 The Impact of COVID-19 and the October 17th Revolution … Table 3.3 Chi-square tests

43

Value

df

Asymp. Sig. (2-sided)

Pearson Chi-Square

3.641a

4

0.457

Likelihood Ratio

3.667

4

0.453

N of Valid Cases

206

The majority of customer service is not effective at 36.9% a The exponential “a” in the Chi-square test table refers to the level of significance (or alpha level) chosen for the test. It is typically represented by the Greek letter alpha (α). In hypothesis testing, the alpha level represents the maximum probability of making a Type I error, which is rejecting a true null hypothesis. The common values of alpha used in statistical analyses are 0.05 or 0.01, which correspond to 5% or 1% probabilities of making a Type I error, respectively. The Chi-square test is a statistical test used to determine whether there is a significant difference between the expected frequencies and the observed frequencies in one or more categories of a contingency table. The test statistic is a Chi-square value, which is calculated based on the observed and expected frequencies and the degrees of freedom. The Chi-square distribution is a family of probability distributions that depend on the degrees of freedom and is used to calculate the p-value associated with the Chi-square test. The p-value is the probability of observing a test statistic as extreme as or more extreme than the observed value, assuming that the null hypothesis is true. The Chisquare table shows critical values of the Chi-square distribution for different levels of significance (α) and degrees of freedom. The critical values are used to determine whether the calculated Chisquare value is statistically significant at the chosen level of significance. If the calculated Chi-square value is greater than the critical value, the null hypothesis is rejected, and it is concluded that there is a significant difference between the expected and observed frequencies

3.9 Correlations As Table 3.6 shows, there is a significant correlation between employees’ performance and bank switching. So, clients are affected by employees’ performance, driving them to choose whether to change the bank or not. This is essential for the conclusion. The results reveal how much employees’ performances contribute to forming clients’ perception toward banks’ switching There is a significant relationship between employees’ performances and bank switching; due to poor performance, consequently harming the bank they deal with. In this way, the main research objectives would be answered. • What are the banks’ clients’ perceptions of employees’ performances? • How do clients’ overview the banks’ procedures? • What is the response of clients toward bank switching?

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Table 3.4 Clients’ attitude towards Banks Employees provide me with a fast service

Female

Male

Total

Total

Agree

Disagree

Neutral

Strongly agree

Strongly disagree

Count

28

30

24

4

10

96

Expected count

26.0

37.2

17.8

5.6

9.4

96.0

% within gender

29.2

31.3

25.0

4.2

10.4

100.0

% within employees provide me with a fast service

50.0

37.5

63.2

33.3

50.0

46.6

% of total

13.6

14.6

11.7

1.9

4.9

46.6

Count

28

50

14

8

10

110

Expected count

30.0

42.8

20.2

6.4

10.6

110.0

% within gender

25.5

45.5

12.7

7.3

9.1

100.0

% within employees provide me with a fast service

50.0

62.5

36.8

66.7

50.0

53.4

% of total

13.6

24.3

6.8

3.9

4.9

53.4

Count

56

80

38

12

20

206

Expected count

56.0

80.0

38.0

12.0

20.0

206.0

% within gender

27.2

38.8

18.4

5.8

9.7

100.0

% within employees provide me with a fast service

100.0

00.0

100.0

100.0

100.0

100.0

% of total

27.2

38.8

18.4

5.8

9.7

100.0

3.10 Conclusion The way users or customers are treated, and how you personally present yourself through social media, differentiate yourself from your competitors. Alexis Ohanian, Reddit Cofounder

3.10.1 Summary of the Main Research Results This research explores through primary and secondary data the topic of “The Impact of COVID-19 and the October 17th Revolution on Employees’ Performances: Case of Lebanese Banks”. It also aims at identifying clients’ perception toward employees’

3 The Impact of COVID-19 and the October 17th Revolution … Table 3.5 Chi-square tests Pearson Chi-Square

45

Value

df

Asymp. Sig. (2-sided)

4.025a

4

0.403

Results show that the majority of 33% are not pleased with employees’ performances Results show the majority of 33% are considering the option of switching banks a The exponential “a” in the Chi-square test table refers to the level of significance (or alpha level) chosen for the test. It is typically represented by the Greek letter alpha (α). In hypothesis testing, the alpha level represents the maximum probability of making a Type I error, which is rejecting a true null hypothesis. The common values of alpha used in statistical analyses are 0.05 or 0.01, which correspond to 5% or 1% probabilities of making a Type I error, respectively. The Chi-square test is a statistical test used to determine whether there is a significant difference between the expected frequencies and the observed frequencies in one or more categories of a contingency table. The test statistic is a Chi-square value, which is calculated based on the observed and expected frequencies and the degrees of freedom. The Chi-square distribution is a family of probability distributions that depend on the degrees of freedom and is used to calculate the p-value associated with the Chi-square test. The p-value is the probability of observing a test statistic as extreme as or more extreme than the observed value, assuming that the null hypothesis is true. The Chisquare table shows critical values of the Chi-square distribution for different levels of significance (α) and degrees of freedom. The critical values are used to determine whether the calculated Chisquare value is statistically significant at the chosen level of significance. If the calculated Chi-square value is greater than the critical value, the null hypothesis is rejected, and it is concluded that there is a significant difference between the expected and observed frequencies Table 3.6 Correlations among perception and attitude towards Bank 1 and 2 Correlations

I am pleased with employees’ performances I am thinking of switching banks

I am pleased with employees’ performances Pearson Correlation

1

Sig. (2-tailed) N

I am thinking of switching banks 0.048 0.630

206

206 1

Pearson Correlation

0.048

Sig. (2-tailed)

0.630

N

206

206

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performances, and attitude towards banks’ procedures, and consequently examines consideration of bank switching. The objectives have been reached by testing clients’ judgment. As a result of this research, it can be concluded that the majority of clients are not pleased with employees’ job performances (33%); plus, the majority (36.9%) are not satisfied with customers’ services for they waste much time to be served. It is deduced that clients do significantly impact employees in front of their head manager (27.2%). As for the banks’ procedures, the majority (34%) were not satisfied. It is important to mention that 33% of clients are ready to switch banks, which provokes a negative impact on the current banks they are dealing with. It is important to mention that the majority of clients (35.9%) are with the perception of “Employees are talented enough to face long arguments with clients”. One cannot ignore the occurrence of Revolution 17 October where the majority of respondents agree (41.7%) that it provoked a severe impact on the Lebanese banking sector along with its employees. Besides the Revolution, the outbreak of COVID-19 became a part of this research study where results show that most of the respondents do agree with the idea that it also impacted employees’ job performances (35.9%). This research shows the significance of clients who had a tremendous impact on the banking sector; (27.2%) and its employees. In this manner way, they may be able to give credits and importance to the bank they are dealing with. It ensures that the banking sectors are affected by the clients’ will to switch or change their banks. The research provides an ideal background for improving employees’ performance in Lebanese Banks hoping to gain more satisfied clients (Buttle 2009; Long and Khalafinezhad 2012).

3.10.2 Concluding Remarks and Recommendations As for a final remark, one would be glad to provide several effective and efficient recommendations that hopefully may contribute to improving circumstances where clients feel satisfied and reconsider their option of switching banks. 1. Empower employees by providing essential and productive alternatives that lead to higher job performances. 2. Supply clients with self-service opportunities where they would be able to solve their issues before referring to upper management. 3. Implement better systems regarding bank procedures; such as adding mobile and online banking, smarter ATMs, and any other new systems.

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Ishrakieh LM, Dagher L, El Hariri S (2020) A financial stress index for a highly dollarized developing country: the case of Lebanon. Central Bank Review 20(2):43–52. https://doi.org/10.1016/ j.cbrev.2020.02.004 Kairouz A, Dagher W (2020) The impact of social media upon the Lebanese Revolution of October 17, 2019. Int J Mech Prod Eng Res Dev 10(3): 7737–7748. Retrieved from www.tjprc.org Lefever S, Dal M, Matthíasdóttir Á (2007) Online data collection in academic research: advantages and limitations. Br J Edu Technol 38(4):574–582. https://doi.org/10.1111/j.1467-8535.2006. 00638.x Long S, Khalafinezhad R (2012) Customer satisfaction and loyalty: a literature review in the perspective of customer relationship management. J Appl Bus Fin Res 1(1): 6–13. Retrieved from https:// pdfs.semanticscholar.org/3c95/3748639ce67d9e173b4455b8a33cefb06c6f.pdf Manrai AK, Manrai LA (2015) Consumer switching behavior of banking services: a conceptual model. Springer, Cham, pp 106–110. https://doi.org/10.1007/978-3-319-17323-8_27 Manser Payne E, Peltier JW, Barger VA (2018) Mobile banking and AI-enabled mobile banking: the differential effects of technological and non-technological factors on digital natives’ perceptions and behavior. J Res Interact Mark 12(3):328–346. https://doi.org/10.1108/JRIM-07-2018-0087 Mason M (2010) Sample size and saturation in PhD studies using qualitative interviews. Forum Qual Sozialforschung 11(3). https://doi.org/10.17169/fqs-11.3.1428 Motowidlo SJ, Kell HJ (2012) Job performance. In: Handbook of psychology, second edition. John Wiley & Sons, Inc., Hoboken, NJ, USA https://doi.org/10.1002/9781118133880.hop212005 Moutinho L, Smith A (2000) Modelling bank customer satisfaction through mediation of attitudes towards human and automated banking. Int J Bank Market 18(3):124–134. https://doi.org/10. 1108/02652320010339699 Nasser Z, Fares Y, Daoud R, Abou-Abbas L (2020) Assessment of knowledge and practice of dentists towards Coronavirus Disease (COVID-19): a cross-sectional survey from Lebanon. BMC Oral Health 20(1):1–9. https://doi.org/10.1186/s12903-020-01273-6 Park CY, Shin K (2020) Contagion through national and regional exposures to foreign banks during the global financial crisis. J Financ Stab 46:100721. https://doi.org/10.1016/j.jfs.2019.100721 Poolthong Y, Mandhachitara R (2009) Customer expectations of CSR, perceived service quality and brand effect in Thai retail banking. Int J Bank Market 27(6):408–427. https://doi.org/10. 1108/02652320910988302 Rahi S (2017) Research design and methods: a systematic review of research paradigms, sampling issues and instruments development. Int J Econ Manag Sci. https://doi.org/10.4172/2162-6359. 1000403 Rahman MS (2016) The advantages and disadvantages of using qualitative and quantitative approaches and methods in language “Testing and Assessment” research: a literature review. J Edu Learn 6(1):102. https://doi.org/10.5539/jel.v6n1p102 Rice S, Winter SR, Doherty S, Milner M (2017) Advantages and disadvantages of using Internetbased survey methods in aviation-related research. J Aviation Technol Eng 7(1):58–65. https:// doi.org/10.7771/2159-6670.1160 Ritchie J, Lewis J, Elam G (2003) Designing and selecting samples. Retrieved from https://books. google.com/books?hl=en&lr=&id=KdneDQAAQBAJ&oi=fnd&pg=PA79&dq=sample+mem bers+are+selected+on+the+basis+of+their+knowledge&ots=gOLqGpzabV&sig=2AIOd0Zzn Wj2h2ayXFDa0zJ3upk Saadeh D, Sacre H, Hallit S, Farah R, Salameh P (2020) Knowledge, attitudes, and practices toward the coronavirus disease 2019 (COVID-19) among nurses in Lebanon. Persp Psychiatr Care, ppc.12676. https://doi.org/10.1111/ppc.12676 Schneider B, Bowen DE (1985) Employee and customer perceptions of service in banks. Replication and extension. J Appl Psychol 70(3): 423–433. https://doi.org/10.1037/0021-9010.70.3.423 Schoonenboom J, Johnson RB (2017) How to construct a mixed methods research design. Kolner Zeitschrift Fur Soziologie Und Sozialpsychologie 69(2):107–131. https://doi.org/10.1007/s11 577-017-0454-1

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Sek´sci´nska K, Maison DA, Trzci´nska A (2016) How people’s motivational system and situational motivation influence their risky financial choices. Front Psychol 7(AUG): 1360. https://doi.org/ 10.3389/fpsyg.2016.01360 Smith TW (1987) The art of asking questions, 1936–1985. Retrieved November 27, 2020, from https://www.jstor.org/stable/2749191?seq=1#metadata_info_tab_contents Smits M, Mogos S (2013) The impact of social media on business performance. Retrieved from https://aisel.aisnet.org/cgi/viewcontent.cgi?article=1348&context=ecis2013_cr Turak N (2019, October 23) Lebanon protests: fears of a cash crisis as banks remain shut. Retrieved November 27, 2020, from https://www.cnbc.com/2019/10/23/lebanon-protests-fears-of-a-cashcrisis-as-banks-remain-shut.html WHO (2020, November 26) WHO Coronavirus Disease (COVID-19) Dashboard. Retrieved November 26, 2020, from https://covid19.who.int/table

Walid Dagher is an assistant Professor and Chairman of Business Management and Administration at University of Balamand, Lebanon. He is a member of the Academy of Marketing Science (AMS). He is a key Member and Coordinator with European NGOs and specialists for CLERH (Lebanese Council for Experts for Human Resources). He is a dedicated instructor and Life coach: “Girls leading the next century”. His research interests are in Management, Marketing, Managerial Economics, Employees Performance, CSR, Organizational Innovativeness, Leadership, social media and Business Administration. He is a team player that possess strong team leadership capabilities, very good communication skills, and good project management skills Akl Kayrouz is a Professor Ameritus at Notre Dame University 1995 – Present. He accomplished professional with a solid experience in teaching Business courses, Political Science and public management courses including Human resources, coaching and training. Proven ability to provide consultation in Business Administration, Education, Good Governance and Ethical Issues. Expert in Management, Human Resource and International Business. Currently he is working as a Consultant, Business Trainer and Coach at JKCCI, Beirut Lebanon; in addition to holding the stellar record of teaching as Professor Emeritus at Notre Dame University since1995. Previously, CEO, running companies in the United States, Saudi Arabia and Abu Dhabi for 15 Years. Dr. Kairouz was appointed as Chairperson for the Faculty of Political Science, Public Administration and Diplomacy 2000-2002 He received his Ph.D. in Political Science (Public Management & Int. Relations) 1969 from University of Utah, Salt Lake City, USA. His research interests are Economic Chaos, Sustainability and Public Management, Social Media, E-Government and Public Administration and Reforms. Pascal Nasralla is a hardworking person who recently graduated with a bachelor degree in Business Management & Administration. She dedicated herself to continuous improvement, building career foundation and offering administrative skills. Her skills involve print production, microsoft office suite, team collaboration, scheduling as well as customer service. She did two internships in FransaBank where she demonstrated enthusiasm, and completed assigned duties independenlty as well as with the assistance of the office staff. She is a young entrepreneur and continuing her studies in Canada. Roland Shahoud received his first degree in Business Management and Administration in 2019– 2020 from the University of Balamand. He is working on my Master’s degree in Marketing at the Lebanese International University. Leonie Nemer received her bachelor’s degree in business management and Administration in 2021 from University of Balamand, and currently she’s completing her master’s degree in business management and Administration (MBA) at the University of Balamand. She’s working as

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License/Permit coordinator at Nouria Energy Retail, Inc. In the United States. Leonie Nemer has many certificates from University of California, Irvine, INSEAD, Ecole Polytechnique, University of Michigan & University of California, Davis. In addition, she participated in Taras shevchenko 6th international congress on social sciences, Kyiv, Ukraine, and her name was published in their book. Rebecca Shahoud received her first degree in Business Management and Administration in 2017– 2018 from the University of Balamand. She obtained her Master’s degree in Human Resources Management in 2020 from the Lebanese International University. She has been working as a faculty member at the University of Balamaand—Issam Fares Faculty of Technology (IFFT). In addition she has one journal publication under the title: “Corporate Social Responsibility Practices in the Aviation Industry”—International Journal of Research in Business Studies and Management 2018.

Part III

Corporate Governance in Covid Times

Chapter 4

Executive Compensation and Corporate Governance Post COVID-19: The Nordic Perspective Mehtap Aldogan Eklund

and Olof Svensson

Abstract COVID-19 outbreak has re-designed business activities and changed the priorities in our lives. Since the pandemic is a sign of overexploitation of our habitat, it has stressed the importance of sustainable and resilient businesses and ‘stakeholderism’. A recent survey conducted by Willis Towers Watson (WTW) revealed that 74 percent of the American companies proceed with their executive compensation frameworks widely consistent with last year’s; only 12 percent stated that they will make substantive changes in their corporate governance and remuneration structures. Surprisingly, the survey result does not alter too much in the Nordic countries which are egalitarian and stakeholder-oriented. Three-fifth (57 to 61 percent) of the employers in Norway, Sweden, Denmark, and Finland expressed that they are not planning to change the structure of the executive schemes and that one-fourth (24 to 26 percent) are still unsure. Therefore, this book chapter, as a commentary, aims to disclose and interpret the survey results from the Nordic countries perspective and guide the practitioners and academics on how the corporate governance systems and executive compensation schemes should be modified to reach fair, resilient, and sustainable businesses based on the key takeaways from the COVID recession and stakeholder theory. Keywords COVID-19 (Coronavirus) · Sustainability · Environment social and governance (ESG) · Corporate governance · Executive compensation · Stakeholder theory

M. A. Eklund (B) University of Wisconsin La Crosse, La Crosse, Wisconsin, USA e-mail: [email protected] O. Svensson Nordic Entertainment Group, Stockholm,, Sweden © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 K. T. Çalıyurt (ed.), Corporate Sustainability in Times of Virus Crises, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-19-9079-3_4

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4.1 Introduction The unprecedented ongoing pandemic, Coronavirus (COVID-19), has impacted the vast majority of the countries and businesses in the world. Not all sectors have been equally impacted by this global crisis. For instance, pharmaceuticals, health care, cybersecurity, e-commerce, and technology sectors have boosted their gains up while airlines, hotels, transportation, oil, and gas, and service sectors, e.g., restaurants, museums, etc. were the losers of the COVID-19 recession (Podstupka 2020; Ogg and Lange 2020; Eklund 2021). Besides, the negative impact of the COVID-19 crisis is not the same on all economies. For instance, the economies of the collectivist and stakeholder-oriented countries, such as Japan and Finland, have not been hit as hard as those of individualistic and shareholder-oriented countries, e.g., the USA and the UK (Tashiro and Shaw 2020; Vries 2020; Eklund 2021). In simpler terms, it can be implied that COVID-19 has shifted the focus from “shareholderism” to “stakeholderism”. The practitioners, scholars, and policymakers have emphasized the importance of environmental, social, and governance (ESG) based performances of the businesses rather than merely financial performances. Human capital governance (HCG), sustainable corporate governance, and executive pay for sustainability (ESG based compensation) are the notable concepts in research and practice (Eklund and Stern 2021; Albuquerque et al. 2020). As a result, the goal of this book chapter–agenda– setting commentary study—is to find an answer to the research question as to ‘what are the key takeaways for a sustainable and fair compensation scheme based on the stakeholder theory and the COVID-19 lessons learned from the Nordic perspective’. The remainder of the paper is structured as follows. Section 4.2 introduces the theoretical framework of the chapter. Section 4.3 discusses the methodology, and Sect. 4.4 outlines the result. Finally, Sect. 4.5 presents the conclusion.

4.2 Theoretical Framework The theoretical background of this chapter is derived by stakeholder theory (stakeholderism). Stakeholder theory, grounded in ethics and sustainability concepts, holds that organizations should strive for sustainable performance and growth by doing right to all stakeholders (Donaldson and Preston 1995; Jackson 2011; Jensen 2002; Pesqueux and Damak-Ayadi 2005). The concept of sustainability formulates the developments in the three areas: economic development, ecological development, and social equity (Gomez-Mejia et al. 2010; Eklund and Kutuk 2020). The purpose of the shareholder primacy is to maximize the shareholder value and the companies do not pursue strong ESG practices at the expense of profit maximization. On the other hand, the fundamental tenet of “stakeholderism” is that corporations need to consider all stakeholders and that ESG adds value and reduces the risk on a long-term sustainable basis (Delves et al. 2020).

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Sustainability and income equality are the concepts of “stakeholderism”. Nordic countries are exemplary cases for both. For sustainability, for instance, two Nordic countries- Denmark and Finland- were the best-placed nations to transition towards a cleaner energy mix on the Global Competitive Index (GCI) prepared by the World Economic Forum (WEF). Moreover, Denmark was one of the high ranked countries for the number of environment-related inventions (“green patents”) (Schwab 2019). For income inequality, over the past decades, income inequality has increased both in advanced and in emerging countries. However, Scandinavian countries, e.g., Sweden, was one of the lowest-ranked counties in the income inequality index of GCI (Schwab 2019). Thus, this book chapter aims to reveal the post-COVID-19 situation about the executive rewards in Nordic countries and provide the readers with some key takeaways for a sustainable and fair compensation scheme from the Nordic perspective.

4.3 Methodology The methodology of this chapter is a commentary that is an agenda-setting and fresh perspectives offering for actions and road maps for sustainable and fair executive compensation frameworks based on the lessons learned from COVID-19, the WTW survey on Nordic countries, and stakeholder theory. In the following sections, the WTW’s online COVID-19 pulse survey on human capital governance (HCG) is introduced and elaborated, and the findings will be discussed.

4.3.1 Data In April 2020, Willis Towers Watson (WTW) conducted an online COVID-19 pulse survey about HCG in the USA and Western Europe, including Nordic countries (Denmark, Norway, Sweden, and Finland). This paper focuses on the ‘Nordic perspective’, so merely the Nordic companies’ findings are reported henceforward. The online survey was emailed to the Human Resources (HR) departments of the publicly traded companies in the Copenhagen, Oslo, Stockholm, and Helsinki stock exchanges. The respondents to the survey are from the HR unit of the companies. 39 companies (4 percent) responded to the survey. The sector representation of the sample is illustrated in Fig. 4.1 and it is spread over eight industries. Most of the sample is from the IT & Telecom (25 percent), and Manufacturing (23 percent) sectors. Then, it is followed by general services (17 percent), financial (13 percent), and health care services (12 percent). Lastly, energy and utilities, wholesale and retail, and public sector and education sectors are represented by 7 percent, 2 percent, and 1 percent respectively (Fig. 4.1).

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Fig. 4.1 Sector representation (percentages) of the Nordic sample (Source WillisTowersWatson [2020])

4.3.2 Survey The survey is divided into five sections regarding HCG: talent implications, flexible working, managing labor cost, rewards, and HR policies and practices. Due to the scope of this chapter, the rewards section is examined below. The rewards section discloses how the Covid-19 pandemic has impacted the executive compensation systems and procedures in the respondent companies. The survey results are interpreted by the Nordic executive compensation expert at the WTW by having it cross-referenced to the publicly disclosed statistics during the year. Thus, survey results are robust and reliable although the response rate is low. As a limitation of the study, the low response rate impedes us to generalize the survey findings to a wider Nordic population, but it provides us with a reliable result from a sample of the population.

4.4 Results and Discussion The WTW’s COVID-19 pulse survey illustrates how the American and Nordic companies have been affected by the unprecedented pandemic and it discusses the plans of those companies regarding the existing compensation schemes. For the change in the compensation structures, three-fifth (57–61 percent) of the employers in Norway, Sweden, Denmark, and Finland stated that they are not planning to change the structure of the executive schemes, and almost one-fourth (24– 26 percent) are still unsure (Fig. 4.2). Similarly, Marshall et al. (2020) reported that 74 percent of the American companies proceed with their executive compensation

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frameworks widely consistent with last year’s; only 12 percent expressed that they make substantive changes in their corporate governance and remuneration structures. For the moderate to the large negative impact of the uncharted pandemic, 60 percent of the Nordic companies believed that their business will be negatively impacted by the Covid-19 pandemic during the six coming months, 47 percent addressed that the negative impact may extend into 12 months and 21 percent of the companies expressed that the negative impact may last over the coming 2 years (Fig. 4.3). About 41 percent of the companies have either decided to postpone the salary review date (31 percent) or considered doing so (10 percent), as depicted in Fig. 4.4. In detail, based on our further investigation with one of the experts in the Nordic executive compensation at WTW, we have been informed that one in three of the

Fig. 4.2 Reduction of the base salary for any of the executives (Source WillisTowersWatson [2020], Note Percentages may not add up to 100 percent due to rounding)

Fig. 4.3 Estimated Covid-19 impact on their businesses over the coming 2 years-2021 and 2022 (Source WillisTowersWatson [2020], Note Percentages may not add up to 100 percent due to rounding)

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Fig. 4.4 Has your organization moved its salary review date as a result of COVID-19? (Source WillisTowersWatson [2020])

companies postponing the salary review date is unsure of a new date for the review, and around half of the companies expect it to be in 4 to 5 months. For Swedish-based companies, the decision is influenced by the collective bargaining agreement process. As around 90 percent of the employees in Sweden are covered by the collective bargaining agreement, and many companies are forced to postpone the salary revision dates. As of April 2020, only a few of the companies have imposed salary cuts for their CEO and executive committee and the average level of the salary cut was between 10 and 20 percent. As depicted in Fig. 4.5 42 percent of the companies have stated that their shortterm incentive plans for executives will be/have been influenced by the Covid-19 pandemic, so they have either made or planned to make adjustments to the financial performance targets. The rest (58 percent) have not yet planned to adjust their executives’ short-term incentives and companies’ financial performance targets (Fig. 4.5). Based on our further discussion with the compensation expert at the WTW, we have been informed that 24 percent have planned to apply for a discretionary review after the year-end of 2020. Overall, it is observed that boards are likely to use discretion to adjust bonus payouts of the executives in 57 percent of the Nordic companies. Figure 4.6 shows the results about the change in the design of the executives’ longterm incentives that was caused by COVID-19. 15 percent of the Nordic companies have noted a direct impact from Covid-19 and 44 percent have not reported any impact. The rest of 41 percent has declared no impact in April 2020 (Fig. 4.6), but they have planned on reflecting any potential future impact through discretion at vesting. As a result of further investigation, it is observed that overall 25 percent of the responding companies are not sure how to approach the 2020 LTI grant because of the fluctuations in the stock markets. It is also discovered that 15 percent of the companies are likely to use board discretion to adjust the long-term incentives of the executives.

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Fig. 4.5 Will or have your 2020 annual bonus (short-term) plans for executives and broader employees been impacted by COVID-19? (Source WillisTowersWatson [2020])

Fig. 4.6 Has COVID-19 changed the 2020 design of performance-based long-term incentive vehicles (e.g., PSUs, PRSUs, performance cash) at your organization? (Source WillisTowersWatson [2020])

4.5 Conclusion The objective of the chapter is to inform the readers of key takeaways for a sustainable and fair compensation scheme based on the stakeholder theory and the COVID-19 lessons learned from the Nordic perspective. The WTW survey has illustrated the Nordic approach and responses to the COVID-19 crisis. The respondents of the survey are mainly from the manufacturing, IT & Telecom sectors, in line with the structure of the Nordic markets. Overall, the majority of the respondents stated that their businesses have been somewhat negatively impacted by COVID-19 and only 4 percent were positively affected in 2020. Moreover, 41 percent of the companies have decided/considered postponing the salary review date to reach a collective bargaining agreement, and only a few of them has cut the executives’ salary by an average of 10 to 20 percent. 42 percent of the companies have stated that they have either made or planned to make adjustments to the financial performance targets regarding their short-term incentive plans for executives. It is also discovered that 39 percent and 21 percent of the companies are likely to use board discretion to adjust the short-term and

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long-term incentives of the executives respectively, which indicates the importance of say-on-pay in Nordics. In the following sections, first, the overall COVID-19 lessons learned are discussed. Then, the specific takeaway from the Nordic sample is summarized.

4.5.1 Key Takeaways from COVID-19 for Sustainable and Resilient Compensation and Corporate Governance Systems The overall takeaway from COVID-19 (an uncharted economic and health crisis) is that the companies should re-design their incentive systems, find the right balance between financial and non-financial performance targets, and structure a resilient, sustainable, stakeholder-oriented holistic, and fair compensation framework for their executives to be prepared for similar crises in the future. Eklund (2020) has suggested the framework for fair, resilient, and sustainable compensation schemes, as illustrated, in Fig. 4.7. In addition to ‘pay for financial performance’, pay for non-financial performance and pay for sustainability should be considered in the compensation schemes. It means that CEO compensation plans should include targets both for financial and environmental, social, and governance (ESG) performances. Furthermore, it is advised that companies should understand the stakeholders’ expectations on pay-out levels, given each company’s unique situation (say on pay for stakeholders). Pay for resilience is the key factor during the crises, such as social and financial indicators measuring the CEO’s performance to protect the health of the employees and to make a resilient organization at the same time. Thus, human capital governance (HCG) should be part of the corporate governance system and companies should disclose their actions taken on behalf of HCG in their annual reports, as well. HCG helps to create and preserve the value and mitigate the risk. The board’s new role should be discovering how to incorporate the HCG targets into executive pay programs and incentive plans (Delves et al. 2020). Pay according to a strategy indicates that the CEO compensation and its structure should be in line with the long-term goals and strategy of the organization, and CEO should be rewarded if the strategy and long-term goals are accomplished. Pay according to culture means that CEO remuneration should be pertinent to corporate and national culture. Pay according to risk presents that the variable pay of a CEO should depend on the systematic and unsystematic firm risk. Pay according to integration is related to concepts of the pay gap within the management level, internal fairness, and equity in the pay levels in the organization (Eklund 2019, 2020). In addition to incorporation among HCG and corporate governance systems and executive pay programs, the corporate governance system of the organization should be based on a stakeholder (relationship-based cooperation) approach. To develop fair, resilient, and sustainable systems, nomination and remuneration committees should not be isolated from each other, and governance structure should consider

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Pay for Non-Financial

Pay for Financial

Pay for Resilience

Pay for Sustainability

Holistic and Fair Compensation Pay according to Peers

Pay according to Firm Risk

Framework

Pay according to Culture Pay for Integration

Pay according to Strategy Pay for CCIP- Characteristics, Competence, and Individual Performance

Fig. 4.7 Fair and holistic compensation framework (Source Eklund [2020], derived from Eklund [2019])

the differences in corporate culture, industries, and nations. In simpler terms, the governance system should consider diversification and differentiation, and it should not be mainly financially driven (Hilb 2016).

4.5.2 Takeaways from Nordic System and Companies The CEOs working in Nordic companies are not paid as much as those in North America due to the egalitarian or equality approach that can be found in the socialist countries, such as the Scandinavian countries (Rost and Weibel 2013). Moreover, the United States has a shareholder-oriented system, but Nordics have a stakeholderoriented one (Martinez-Ferrero and Garcia-Sanchez 2017). Thus, the compensation schemes and pay levels in the USA are not comparable to those in the Nordics. For instance, the annual mean of the CEO compensation in S&P 500 companies is $14,255,567 as of 2017. On the other hand, the annual mean of the CEO compensation in the listed companies in Nordics is $1,923,339 in 2017 (Eklund 2019). Thus, we should evaluate the survey results from this perspective. The WTW’s COVID-19 pulse survey results indicated that neither companies in the USA or Nordics are ready for the substantial change in their compensation structures yet because only 12 percent of the respondents in the USA are planning to make substantive changes in their remuneration structures and 60 percent of the respondents in Nordics are not planning to change the structure of the executive

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schemes as of April 2020. However, the main reason for this result is that in the Nordic companies, the trade unions are strong and are very involved in the salary and compensation review process. Therefore, it needs a longer process of collective bargaining and detailed planning to re-structure the compensation schemes and change the pay levels. The more specific takeaways from Nordic companies would be the followings: • It is proved that the existence of sound salary review processes is essential to respond quickly to the changing environment. In 2020, Nordic companies first postponed the salary revision, and then they accelerated it at the end of the year. • Investors’ and stakeholders’ views (say on pay) matter and they expect wellfunctioning incentive plans to reward executives fairly, even in times of uncertain market conditions. With regards to this, it might be frowned upon by investors if companies decide to use discretion at pay-out. Especially, the new regulation of the Shareholders’ Rights Directive (SRD II) requires an increased disclosure in terms of bonus pay-out targets and calculations. • For long-term incentives, many companies should have learned a valuable lesson to question how their targets function in a volatile environment. It is not unlikely that we will see an increased use of targets that are set in relation to the market or peer companies. Acknowledgements The permission is granted from the Willis Towers Watson (WTW), Sweden, to share the COVID-19 Pulse survey results for the Nordic companies in Sweden, Norway, Denmark, and Finland in this chapter.

References Albuquerque R, Koskinen Y, Yang S, Zhang C (2020) Resiliency of environmental and social stocks: an analysis of the exogenous covid-19 market crash. Rev Corp Finance Studies. https://doi.org/ 10.1093/rcfs/cfaa011 COVID-19 versus Japan’s culture of collectivism (2020) Japan Times Delves D, Tewani R, Walsh A, Poirier W, Huddleston, B, Resch R (2020) Beyond pay: the expanding human capital governance responsibilities for compensation committees. https://engage.vevent. com/rt/towerswatson~05132020. WillisTowersWatson(WTW) Donaldson T, Preston LE (1995) The stakeholder theory of the corporation: concepts, evidence, and implications. Acad Manag Rev 20(1):65–91 Eklund MA (2019) Fairness of CEO compensation. https://www.springer.com/gp/book/978303033 5533, 1st edn. Cham: Switzerland: Springer Eklund MA The holistic framework for the economically and socially fair ceo compensation. In international online conference: corporate governance: examining key challanges and perspectives, Online, 2020. VirtusInterpress. https://www.virtusinterpress.org/IMG/pdf/1.6._the_hol istic_framework_for_the_economically_and_socially_fair_ceo_compensation.pdf

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Eklund MA (2021) The COVID-19 lessons learned for business and governance. SN Bus Econ 1(25). https://link.springer.com/article/https://doi.org/10.1007/s43546-43020-00029-43542.10. 1007/s43546-020-00029-2 Eklund MA, Kutuk Y (2020) Cevresel Yonetim Muhasebesi ve Surdurulebilir Kurumsal Karne In Zor U, Kutuk Y (eds) Yonetim Muhasebesinde Yenilikci Yaklasimlar, Istanbul: Beta Publishing, pp 142–163 Eklund MA, Stern HJ (2021) How COVID-19 reshapes businesses and executive pay for sustainability. Corp Gov Sustain Rev 5(1, Special Issue):107–119. https://doi.org/10.22495/cgsrv5 i1sip2 Gomez-Mejia LR, Berrone P, Franco-Santos M (2010) Compensation and organizational performance: theory, research, and practice: M.E Sharpe Inc Here are 40 Solid Stocks of Companies Thriving through the Coronavirus Recession (2020) USA Today Hilb M (2016) New corporate governance: successful board management tools, 4th edn, Cham: Switzerland: Springer Jackson KV (2011) Towards a stakeholder-shareholder theory of corporate governance: a comparative analysis. Hast Bus LJ 7:309 Jensen MC (2002) Value maximization, stakeholder theory, and the corporate objective function. Bus Ethics Q 12(2):235–256 Marshall H, Mordente D, Boyce M (2020) Unanswered questions remain about executive incentives in 2020. https://www.willistowerswatson.com/en-us/Insights/2020/06/Unanswered-questi ons-remain-about-executive-incentives-in-2020?utm_source=email&utm_medium=Outlook& utm_content=GBL-EXECPAYMATTERS&utm_campaign=GBL-TnR-EC Martinez-Ferrero J, Garcia-Sanchez I-M (2017) Sustainability assurance and assurance providers: corporate governance determinants in stakeholder-oriented countries. J Manag Organ 23(5):647– 670. https://doi.org/10.1017/jmo.2016.65 Ogg JC, Lange C (2020) Here are 40 solid stocks of companies thriving through the coronavirus recession. https://www.usatoday.com/story/money/2020/05/15/40-solid-stocks-of-com panies-thriving-through-the-covid-19-recession/111701046/ Pesqueux Y, Damak-Ayadi S (2005) Stakeholder theory in perspective. Corp Gov: Int J Bus Soc 5(2):5–21 Podstupka S (2020) Real-time oil & gas industry executive pay actions at-a-glance. https://www. pearlmeyer.com/blog/real-time-oil-and-gas-industry-executive-pay-actions-at-a-glance Rost K, Weibel A (2013) CEO pay from social norm perspective: the infringement and reestablishment of fairness norms. Corp Gov Int Rev 21(4):351–372 Schwab K (2019) The global competitiveness report. World Economic Forum (WEF) Insight report. http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf Tashiro A, Shaw R (2020) COVID-19 pandemic response in Japan: what is behind the initial flattening of the curve? Sustain 12(13). https://doi.org/10.3390/su12135250 Vries Gd (2020) Culture in the sustainable development goals: the role of the European Union, 2nd ed. (ifa-Edition Kultur und Außenpolitik). ifa (Institut für Auslandsbeziehungen), Stuttgart. https://doi.org/10.17901/AKBP1.06.2020 WillisTowersWatson (2020) 2020 COVID-19 pulse survey—Great Britain (GB) and Western Europe. https://www.willistowerswatson.com/en-GB/Insights/2020/04/covid-19-pulse-surveyreport-gb-and-western-europe

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Mehtap Aldogan Eklund is an assistant professor in accounting at the University of WisconsinLa Crosse (UWL), the USA. She holds a Ph.D. degree in accounting and corporate governance from the University of St Gallen, Switzerland and she is a regional governance partner at Board Foundation (BF), Switzerland. Her area of interest is accounting, auditing, corporate governance, and entrepreneurship. Olof Svensson is a Nordic compensation & benefits specialist currently working at Nordic Entertainment Group. Olof has worked in the field for 6 years, starting as a consultant at Willis Towers Watson after finalizing his master’s degree in Financial Economics at Linköping University. Olof’s primary focus is corporate governance and executive remuneration.

Chapter 5

Governance Practices and Regulations for Derivative Products in Emerging Markets in the Wake of the COVID-19 Pandemic and the Subprime Global Financial Meltdown Mazin A. M. Al Janabi Abstract This chapter discusses some of the key obstacles for the launching of successful derivative products in emerging economies and proposes some policy measures, governance practices and regulations with the objective of setting unambiguous operational platforms, sound regulations and effective oversights within financial markets and institutions. In this regard, key regulatory and operative processes and guidelines, which should be carefully evaluated prior to starting the operational aspects of formal derivatives securities markets, are reviewed and tailored to the particular requirements of emerging markets ecosystem. This chapter will appeal to those concerned in launching of coherent and reliable operational platforms for the trading of derivatives products in emerging markets, primarily in the wake of the outcomes of the 2007–2009 global financial meltdown and the COVID-19 health crisis. Keywords Governance · Derivative products · Emerging markets · COVID 19

5.1 Introduction The markets of derivative securities have grown very fast, partly due to the increased volatility in the fina ncial markets which has raised the demand for instruments that will protect borrowers and lenders against interest rate and exchange rate uncertainties. The increase in volatility in the financial markets, after the break down of the

This chapter is a collated, but largely extended version, of the author previous research works published by Emerald, and Palgrave Macmillan (Springer Nature), under the following titles: Al Janabi 2006, 2008a, 2008b, 2012a). M. A. M. Al Janabi (B) EGADE Business School, Tecnologico de Monterrey, Santa Fe Campus, Mexico City, Mexico e-mail: [email protected]; [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 K. T. Çalıyurt (ed.), Corporate Sustainability in Times of Virus Crises, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-19-9079-3_5

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Bretton-Woods exchange rate system and the global inflation spree of the 1960s and 1970s, exposed corporations and investors to rising risks. Financial derivatives allow interest and exchange rate risks to be hedged, thereby limiting the effect of adverse price movements on a user’s financial asset or borrowing costs. A second factor behind the growth of derivatives has been the new insights in financial theory, accompanied by new information processing and communications technologies that make the new theories more practical. The evaluation of complex derivatives and diversified portfolios depends heavily on simulation techniques and correlation analysis, which require heavy dataset processing and computing power. Finally, the lower transactions cost and price-effectiveness of derivatives products quickly made them a favored vehicle for professional investors, arbitrageurs and speculators. In fact, recently the transactional view of derivatives solutions by corporations, which are trying to repair one risk problem at a time, have given way to a new view, one that envisions regular strategic uses of derivatives in order to hedge ongoing risk exposures. In addition, corporate officers have become increasingly aware of how hedging (and sometimes unwinding of pre-established hedging structures) can contribute to the stability of the corporation’s earnings and cash flows. The recent year’s surge in the use of derivatives securities along with large and widely-reported losses by well-known corporations and financial institutions have given rise to many concerns and alarms, debates and confusions on the appropriate use of derivatives products (see for instance, Boyle and Boyle 2001; Steinherr 2000).1 Indeed, this seems like a paradox—instruments that should reduce financial risks are accused themselves of introducing new risks (Al Janabi 2012a). But are these losses caused by derivatives, or just by the improper use of derivatives products? In fact, the mistreatment and abuse in derivatives securities was evident during the 2007–2009 subprime global financial crisis, and particularly within credit derivatives products. In other words, the issue was not with the derivatives securities per se, but more exactly how they were manipulated and exploited in practice, by certain market players, in the course of the 2007–2009 global financial meltdown (Acharya et al. 2009). As such, due to the publicly declared and professed losses and misuses, this revolution in derivatives products has not run its course.

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Derivative securities derive their value from their connected underlying assets; and are traded on organized exchanges and over-the-counter (OTC) markets. Nevertheless, organized exchanges have significantly grown; however, OTC derivatives still account for a large portion of the total market value of derivative products. In essence, there are two major classifications of derivative products, depending on whether the client has the right (options contracts) or the obligation (forwards, futures, and swap contracts). In line with Das (2010): ‘Derivatives are used to speculate, manufacture exotic risk cocktails, keep dealings off-balance sheet and out-of-sight, increase leverage and arbitrage regulatory or tax rules. The reality that industry participants will not acknowledge is that hedging and risk management is secondary to the other uses’ (Das 2010). ‘For companies, the ability to use derivatives trading to supplement traditional earnings, which are under increased pressure, is irresistible. For institutional and retail investors, the use of derivatives to improve returns through leverage and access to different risks is now a vital part of the investment process’ (Das 2010).

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To date, different categories of institutional and retailers’ investors are still prevented from trading and dealing in derivatives products or are strictly restricted by local regulatory bodies. As a result, many portfolio managers are reluctant to use these securities for investment and hedging purposes and various financial executives are not fully aware of the ways in which derivatives products may be used to streamline and restructure their business balance-sheets and also of the embedded risk/return profiles of these relatively misunderstood products (Boyle and Boyle 2001; Steinherr 2000; Al Janabi 2012a). On balance, what is most desired is a greater understanding of derivatives products and the embedded risks they do not eliminate, especially that some key financial entities (such as Lehman Brothers, Bears Stearns and AIG, to name only a few) have become insolvent, nearly failed, or required government intervention as a result of the upshots of the 2007–2009 subprime global financial crisis. This without a doubt can be accomplished by striking a number of institutional modifications that can aid in lessening the uncertainties in dealing with derivatives products. As such, in the swiftly changing and gradually integrated financial markets, better management and closer supervision of the derivatives positions being taken will better ward against the risks they pose than prescribed regulations, which center on specific markets, securities, or market participants. Obviously, this has to go together with flawless business legal environment, enterprise-wide risk management processes and accounting standards governing their use and limitations, as well as greater disclosure and transparency of derivatives transactions. As a result, this will make managers and users, dealers, regulators and policymakers well-off and can improve their assessments of all categories of risks they may come across. In this backdrop, the aim of this chapter is to provide practical and operational guiding principles, as well as governance practices and regulations for launching of effective derivative products in emerging markets. As such, this chapter discusses some of the central barriers to launching of rewarding derivatives products in emerging economies and proposes some possible responses and coherent solutions with the objective of setting unambiguous operational regulations and oversights to deter misconducts, frauds, manipulations, abusive practices and rogue-trading within financial markets and institutions. This chapter can be of interest to those involved in the design of consistent, coherent and reliable operational platforms for the trading of derivatives products in emerging markets, predominantly in light of the aftermaths of the 2007–2009 subprime global financial crunch and the COVID-19 health crisis. The remainder of this chapter is organized as follow. In the following core section, key issues related to the structuring of sound derivative products in emerging markets are examined and certain obstacles, market observations, misconducts (including, but not limited to, markets and regulatory concerns) are then acknowledged. This is followed with a comprehensive dialog that highlights the main hurdles and complexities for the development of reliable derivatives products in emerging markets and then recommends effective governance practices and responses to efficient regulatory challenges in the wake of the 2007–2009 subprime global financial crunch and the COVID-19 pandemic. The final section concludes the chapter.

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5.2 Structuring of Sound Derivatives Securities in Emerging Economies—Obstacles, Market Observations, Misconducts, Governance Practices, and Responses to Efficient Regulatory Challenges The key elements of a comprehensive risk management process should entail an across-the-board system for classifying and quantifying the different kinds of risk; a structure for overseeing risk-taking (that is, incorporating optimum limits and risk-budgeting structures, bylaws, guidelines and procedures); and an appropriate management information system for inspecting traders’ actions, reporting of trading positions and controlling risks (Al Janabi 2008a). To that end, below we highlight some of the key issues related to the management of the different kind of risks associated with the operations of derivatives products in emerging markets, and provide certain recommendations on the operational, regulatory and supervisory aspects along with proposals and responses to efficient regulatory challenges. In the next paragraphs, our goal is to discuss and emphasize the importance of key risk factors as well as the influence of some other embedded risk such as liquidity risk, counterparty risk, event risk and their role in the 2007–2009 global financial meltdown and the COVID-19 health crisis. Moreover, we debate on some of the main issues that were raised in the trading of derivative products, particularly credit derivatives in over-the-counter operations during the course of the 2007–2009 global financial crunch, detailed along these lines: 1.

2

Illiquid securities such as bonds, equities and foreign exchange rates are very familiar in emerging markets. Typically, these instruments are traded infrequently (with very low volumes as well as widespread bid-ask spreads).2 This of course implies a real problem to anybody who tries to assess the market risk of these instruments with techniques that is built on correlation matrices and historical volatilities. Therefore, the selection of the time horizon (or the required number of days to unwind a position) is a crucial aspect and has critical influence on Value-at-Risk (VaR) measures (Al Janabi 2012a).

For further discussion on liquidity risk and Liquidity-Adjusted Value-at-Risk (LVaR) literature using Al Janabi model, we can refer the readers to Madoroba and Kruger (2014) and Al Janabi (2011, 2012b, 2013, 2014) research papers. In their paper, Madoroba and Kruger (2014) review and compare ten liquidity risk VaR models, including Al Janabi model. In his research papers Al Janabi (2011, 2012b, 2013, 2014) present a robust and novel machine learning technique and optimization algorithms, which is based on Al Janabi model (Madoroba & Kruger 2014; Al Janabi 2008c), for the computational process of a closed-form parametric LVaR. Indeed, Al Janabi model and its related optimization algorithms can be used in machine learning processes for a direct computational process of market and asset liquidity trading risks, and within a multivariate context for multipleassets portfolios. In addition, the robust Al Janabi model (Madoroba and Kruger 2014; Al Janabi 2008c) is quite simple to implement even by very large financial institutions with multiple assets and risk factors. For other relevant literature on liquidity risk, internal risk models, and portfolio selection one can refer as well to Asadi and Al Janabi (2020), Al Janabi (2020), Arreola-Hernandez and Al Janabi (2020), Grillini et al. (2019), Al Janabi et al. (2017), Al Janabi et al. (2019), Madoroba and Kruger (2014), Arreola-Hernandez et al. (2017), Arreola-Hernandez et al. (2015), among others.

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It is quite essential the starting of liquid cash markets for the trading of common stocks, foreign exchange transactions and debt instruments. In fact, the lack of continuous liquidity in these markets can lead to complications in the hedging of the related risks arising from the operations of derivatives products. Indeed, these difficulties in the hedging processes played a key role in the course of the 2007–2009 global financial crisis. Emerging markets are distinguished by low investment in information technology systems and the shortage of competent employees that have cuttingedge technical credentials. Bearing in mind the importance of up-to-date risk management capabilities for the efficient operation of any financial and nonfinancial entity, public and private organizations should be advised to make the needed investments in risk management systems and human resources with large emphasis on technical and specialized competencies. There is certain misconception in the media of emerging markets regarding the full usefulness of derivatives securities. Every now and then, one can find in the press certain opinion posts highlighting the issue that derivatives securities are meant for hedging purposes only. Indeed, this is a very old perception and school of thoughts regarding risk management. The classical school of risk management states the following: “if a corporation has risk exposures, then the entity should hedge it”. However, it is important to realize that hedging has costs, and entities can lose big moneys on the hedge. For instance, if an American import company expects the US dollar to devalue against the British pound, then it may hedge its foreign exchange exposure using a long forward contract against the British pound. Well, how about if the US dollar revalues against the British pound and the company decides to maintain the forward hedge. If this is the case, then the American company would lose money on the forward hedge, and may wish it had not done the hedge. However, it is too little too late! In addition, it is crucial to understand that risk itself is not bad. What is bad is risk that is incorrectly priced, mishandled or misinterpreted, and in the end, risk management is as much an art as a science. For this reason, it is essential to invest in the development of the four trading roles of market participants that any derivatives exchange requires. These four trading roles include entities with different kinds of risk exposures and speculators with opposite markets views. For instance, with foreign exchange contracts, it is essential to have export/import companies and speculators (with both long/short positions) and with different expectations and views on the markets. To that end, different market´s participants can shift the risk exposures to each other, thus providing sufficient and continuous liquidity to the derivatives markets. It is always recommended to start first with over-the-counter (OTC) markets for the trading of derivatives products of debt securities, foreign exchange contracts and stock market indices. This introductory stage can help in the design of the basic building blocks for standard derivatives exchanges afterwards. The OTC derivatives products are tailored to the individual customer needs, often combining currency and interest rate settings. The most common forms of OTC

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derivatives products are forwards, interest rate swaps, and currency swaps. International banks and securities firms that offer to buy and sell specific contracts at the posted prices make the market for OTC derivatives. The income of these intermediaries is derived from the spread between the bid and offer prices. These dealers or market-makers also use derivatives to hedge their own positions and to take positions in order to profit from expected price changes. However, OTC operations are prone to some malpractices and abuses as a result of the lack of transparency within the system. Unlike in the case of exchange-traded contracts (with a well-established central clearinghouse), nobody knows exactly what the total notional exposure is, what the market values of such derivatives contracts are, where it is concentrated, and so forth. Indeed, these problems have always existed but hardly surface provided that the sizes of trading positions are relatively small. Nevertheless, when the size of positions becomes enormous, and the overall joint commitments are many times bigger than the traded underlying assets, the absence of transparency makes the system susceptible to a systemic failure, as was evident during the 2007–2009 global financial crisis (for further discussion on this issue, see Acharya et al. 2009). The benefit of OTC traded contracts is that they are tailor-made, which is essential to entities that need to be completely hedged. In this sense, entities can trade large size custom-made contracts, with full anonymity, and without having a market impact. On the other hand, this attribute unfortunately also labels the key complications that these counterparties may encounter, including but not limited to: (1) a possible shortage of market liquidity if they want to liquidate (unwind) their holding positions; (2) potential counterparty risk exposure, and (3) the lack of transparency within the system. The selection of the different types of derivatives products to be traded in a resultant standard derivatives securities exchange. This can aid in measuring the benefits and advantages of the chosen securities and to decide whether local market participants are enthusiastic enough about developing local derivatives securities exchanges. The obtained outcomes should be judged against the risks and benefits of using already recognized derivatives exchanges—largely in developed foreign nations that are trading derivatives products on key local market variables and indicators—that are more liquid and emphasize prudential regulations and oversights. In fact, derivatives exchanges challenge and compete with one another to list futures and options contracts that have the likelihood of turning into actively traded product, hence the first-mover-effect (i.e., which exchange lists first a potential contract), in my judgment, plays a fundamental role in the likely outcome of any derivatives products’ listing tactic. In addition, the first-mover-effect can have more impact than trading-platform selections— electronic trading versus open-outcry trading—in defining the usefulness and success of introducing equivalent derivatives products (for further details on this issue, one can refer to Holder et al. 1999).3

Because of the “first-mover-effect”, derivative exchanges in emerging markets need to design innovative and competitive products combined with long-term-planning.

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8.

Basically, new derivative product exchanges with electronic trading platforms that provide almost similar and/or competing versions of existing derivatives products contracts may have hard times competing and, therefore, prospering.4 Based on a number of prior observations and opinions in emerging markets, I have noticed that the majority of these countries have started first with the trading of foreign exchange forward contracts. This is followed by the introduction of equity-based derivatives on local stock market indices (such as options and warrants) and thereafter interest-rate-based derivatives (Al Janabi 2012a). Furthermore, I have recognized that emerging economies’ participants are keener to trade derivatives products that are associated with equities and equity market indices. In view of the fact that it takes more time to introduce derivatives contracts in emerging markets than in developed markets, it would perhaps be an advantageous strategy to launch first derivatives products linked to equities (such as OTC options contracts on local stock market indices) as well as foreign exchange forward contracts.5 Indeed, the idea of introducing indexbased derivatives falls also in line with the results of other researchers (see for instance, Tsetsekos and Varangis 2000). In fact, there are more chances of success if index-based derivatives products are introduced first in an emerging market because it takes less time to set up the required microstructure and architecture of these products (Tsetsekos and Varangis 2000). 9. The process and procedure of assets prices gathering and dissemination should guarantee maximum transparency among users and dealers and with the appropriate processing infrastructure in place. This data collection phase will ultimately aid in supporting the final goals for the firms’ reporting and risk management decisions, micro-prudential supervision and finally financial stability monitoring processes (Glasser 2013). 10. In addition to speculation, leverage, and hedging, derivatives products provide imperative benefits to the economy such as price discovery, risk management, and supply of liquidity. Hence, providing useful financial datasets, research reports and analysis is very essential to the development of the market. As such, it fundamental to establish the role of a Managing Director and Chief Economist to provide commentaries, research reports and analysis on domestic, regional, 4

In the media of certain emerging markets, which are infamously recognized as illiquid standardized derivatives exchanges, there were some bragging press interviews with senior management regarding the development of new contracts on electricity, inflation and gasoline, etc. with the objective of competing with other very well recognized derivatives houses, such as, the Chicago Mercantile Exchange (CME). These self-delusion attempts must be examined carefully and compared with the experiences of other regional derivatives markets because of the “first-mover-effect”. In addition, it is important to emphasis that the trading of derivatives contracts on electricity is not an easy ride, as it requires considerable infrastructure to deal with this kind of contracts, such as pricing and valuation and regulations, etc. These contracts are notoriously known to have huge volatility (due to the different peak hours for electricity consumption during the day), let alone the peculiarity of electricity as an asset since it is generated instantaneously and cannot be stored like many commodities. 5 For further discussion on the development and implementation of derivatives securities in other emerging markets such as Chile, one can refer to Fernandez (2006).

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and global markets. This may include practical research reports and analysis, datasets, and videos, etc. Furthermore, it is essential for emerging markets to invest sufficiently in marketing and improving their images via the development of suitable websites that include insightful information, research reports and market data. To cite an example, see for instance the wealth of information (research reports, videos and commentaries) of the Managing Director and Chief Economist of the Chicago Mercantile Exchange (CME), Prof. Bluford (Blu) Putnam at www.cmegroup.com. 11. Derivatives contracts are valued on a mark-to-market (MTM) basis. This necessitates valuation of the derivatives contracts based on current market prices. On the other hand, OTC derivatives products are privately traded contracts and, as such, market prices for specific transactions are not directly obtainable and this can put heavy reliance on pricing models. In addition, there are substantial differences in the intricacy of the employed models and the potential to validate and calibrate input variables. Model discrepancies and small variations in input parameters can regularly give rise to great fluctuations in the values for some complex structured derivatives products. In effect, more complex derivatives products commonly use advanced state-of-the-art financial models, often derived from science, engineering or statistical methodologies and techniques as well as different users and dealers may employ unlike models. In reality, some desired input parameters for the used models are accessible from markets sources. Nevertheless, the nature of the OTC derivatives market and the thin trading in certain products indicate that key input parameters must regularly be appraised or bootstrapped from whatever available of datasets. This basically means that in some derivatives products, given the limited number of active dealers, market prices are, every now and then, no more than the dealer’s own quote being fed back after being collated and polished by an external data provider (Das 2010). 12. Several commentators and policymakers have put the blame on derivatives products for causing or aggravating the 2007–2009 subprime financial crunch. We believe the case for holding the whole culpability on these incorrectly understood financial instruments is grounded on a pure misinterpretation and misjudgment. As discussed in the succeeding sections of this paper, derivatives products provide important benefits to the economy such as risk management, price discovery and enhancement of liquidity, thus, why are derivatives products, and mainly credit derivatives, looked at so negatively during the 2007–2009 global financial crunch? We believe this judgment on derivatives products is ill-advised; and the dilemma is not with derivatives securities as instruments, but rather with (1) the manner in which they were traded and cleared in overthe-counter (OTC) operations, and (2) how these instruments were used by certain financial institutions to raise their exposure and leverage to particular asset classes (for further discussion on this issue, one can refer to Acharya et al. 2009). The fact that financial and non-financial institutions have invested in derivatives products is not the root of the trouble. Indeed, the causes of the financial crisis are far more multifaceted with the tremendous debt at the heart of the

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global financial system and institutions. In fact, the degree of financial leverage and the short-term nature of debts of these financial institutions is the problem. At large, financial institutions have managed the risks of derivatives product quite well. Certainly, they have long used derivatives products to manage risks related to other financial and non-financial investments. However, in the year 2008, these financial institutions (such as Lehman Brothers, Bearn Stearns, and AIG) faced systemic counterparty risk exposures in over-the-counter derivatives products (specifically credit derivatives) that they had never factored into their risk calculations and assessment. Indeed, the failure of Lehman Brothers and other key financial institutions during the 2007–2009 global financial crisis have underlined the glitches of counterparty risk in derivatives products trading. In fact, counterparty risk is intricate because the payment obligations between the associated parties are contingent (Das 2010). In fact, the insolvency filing of Lehman Brothers, offered a test of counterparty risk in derivatives products trading. In essence, the considerable amount of credit risk from derivatives operations was much greater than risk model-based estimates as market volatility built up and correlations coefficients between risk factors moved unpredictably. As a result, legal enforceability, management and control of collateral likewise experienced serious problems (Das 2010). 13. The negligence of the “nonlinear-payoffs” of some of these complex instruments, the misuse of sophisticated valuation models and software, the lack of contemporary regulations, in addition to board of directors’ ignorance of the relevant categories of risks these instruments can carry, had led to immense loses and red-numbers balance sheets. Moreover, corporate executives for most of the important firms that were mentioned earlier have ignored basic rules of finance and statistics. Indeed, by converting their company treasury department into a profit center (without the establishment of basic rules of risk management to measure and set limits of their exposures), they have added volatility to their exposure instead of limiting it. Also, they have treated low probability events (such as devaluation of a hard currency, or the default of a AAA corporation) as being impossible. Financial investment theory is clear: one cannot expect to make huge profits without taking the risk of big losses. To have a choice between a certain loss and a speculation with derivatives instruments, one should set his organization objectives and decisions utilizing modern financial risk measurement tools to estimate worst case scenery. Thereafter, the level of the measured risk should be compared with the entity risk-appetite to find out if the risk falls within its pre-set risk limits; and also to reveal if there is enough economic-capital cushion to withstand unforeseen surprises. 14. Given the leverage of derivatives securities, a single trader can easily bankrupt a large financial institution—the Barings case may be an exceptional one, but it is far from being a confined case. When derivatives are used for hedging purposes, their price movements should offset opposite movements in the underlying financial position, leaving no market risk for the combined position. Certainly, there are few perfect hedges, so the key issue is to keep careful track of the risks left over. For instance, the response of option prices to changes in the price of

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the underlying asset is generally not proportional. This may result in an imperfect hedge (i.e., convexity or Gamma risk) that may become serious if prices change a lot. The problem can be dealt with by adjusting the combined position continuously (that is, dynamic-hedging of options positions). Finally, because market risks for a single instrument and those for a portfolio of derivatives and underlying instruments differ substantially, users must assess market risk over the whole portfolio, or at least the most critical parts. In such a case, it is essential to recognize that some of the losses which are attributed to derivatives securities reflect a failure to report the offsetting gains due to the other constituents of the portfolio. 15. One of the classical tales in this regard is the bankruptcy case of Barings Brothers. Indeed, it is one of the typical case studies taught in many business programs and is related to the fraudulent action of Nick Leeson at Barings in 1995, which was converted later on to a movie called “rogue trader”. In effect, in February 1995 Barings Brothers, a British merchant bank, became insolvent and the reason which was given is that one of the rogue traders Nick Leeson has lost $1.4 billion speculating with futures and options contracts on the Japanese stock market index—Nikkei 225. Nick Leeson, was very famous among the Asianmarket’s traders as one of the “hall of fame figures” (nicknamed “masters of the universe”) that many traders are eager to follow. Since he was a “star-performer” and was “making-money” his direct bosses spoiled him even further by offering him control of both front-office transactions (trading desks) and back-office operations (where all paperwork of payments and settlements of transactions occur). This kind of organizational structure is in fact, against the very fundamental rules of risk management that state very clearly the obligations for the separations of duties and set responsibilities for the personnel of front and back offices. The British bank was bankrupted and soon was taken by the Dutch group ING, and so the name was transformed later to ING-Barings—Coincidently, the author of this chapter has had the valuable opportunity to work in 1996 with ING-Barings as a trading risk manager (precisely, some months after the takeover) and met some of the people who survived the buyout. Indeed, his main task was to enforce “trading risk management” practices in Mexico and within other Latin American trading units. 16. In fact, Nick Leeson took big bets—with fairly basic derivatives—on the Japanese market and he was able to use Barings’ capital to finance his speculations. He assumed that the Japanese market index Nikkei 225 would rise; hence he invested in futures contracts on the market index. Eventually the Japanese market fell strongly during the first months of 1995—partly due to the Kobe earthquake. In order to recover some of his losses, Nick took on further risky positions. One of strategies he used throughout 1994–1995 period was the selling of straddles options spreads (that is, selling call and put options with the same strike price on the Nikkei 225 index). The straddle’s strategy is useful if one believes that the Japanese market will remain fairly constant, however at the same time it is a very vulnerable tactic to any large movements—either an increase or a decrease—in the level of the Japanese market. Likewise, the

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straddle’s positions are very vulnerable to any increase in the implied volatility of the market. Certainly, after the Kobe earthquake, the market became more uncertain about the future of Japanese stocks and this, of course, was reflected by an increase in the market volatility and hence in options prices. Since Leeson had sold options contracts to build the straddle strategy, he lost money (as a result of the increase in options prices) and his strategy led eventually to the failure of the entire bank. 17. Many commentators put the blame for the failure of Barings on Nick Leeson, the then 28-year-old head trader in the bank’s Singapore office. For sure, Lesson played an important role in the collapse of the bank, but it is naïve to burden him with all the culpability. In fact, his trading activities were free from supervision and internal controls and went undetected as a consequence of the failure of management and its policies. Leeson was able to create (in the bank’s computer system) a special account (bogus account 88,888) in July 1992, as an error account for customer’s trading activities. All his losses were booked on that account, although Barings’ managers were unaware of its existence—despite huge positions and losses, this bogus account failed to attract attention. Leeson was able to conceal his losses because, as noted earlier, in addition to his trading activities, he was also in charge of handling the paperwork in the back-office. Indeed, somebody entirely independent of the trading function, to verify that the trades indeed took place and to prevent unauthorized trading, should have instead dealt with this paperwork. As a matter of fact, Barings’ internal auditors had recommended in August 1994 that these dual-functions should be segregated. They also pointed out that Leeson had too much influence and power in his hand and that there was a clear conflict of interest—Barings’ senior managers failed to execute these recommendations. 18. On another front, the role of the “masters of the universes” in the 2007–2009 financial crisis is debated in many literatures. Indeed, one of remarkable literatures in this regard is the book of Satyajit Das “Extreme Money: masters of the universe and the cult of risk”. This literature (namely, Das 2011) is a social critique of how so many people have come to chase endless financial reflections of the real economy. It describes the causes of the financial crisis with the insight and understanding of a financial expert and then explains what went wrong during the 2007–2009 credit crunch. Furthermore, it includes detailed account of how fools and swindlers, camouflaged as investment professionals and bankers, pillaged the world economy, and how people making crazy decisions can ruin us all. One of the interesting literatures in this respect, which readers can refer to, is the book of Satyajit Das “Trader, Guns and Money: Knowns and unknowns in the dazzling world of derivatives”. This literature (i.e., Das 2006) explains the derivatives industry and how it operates and what it does. Indeed, the book does not attempt to make a case for and against derivatives securities. It just shows what really goes on in the trading rooms on day-to-day basis in major financial institutions and the real-life dramas that shape modern markets.

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19. Specific considerations should be dedicated to the peculiarities, particular attributes and characteristic for the trading of options and options-like securities in emerging markets. These contracts have several embedded risk-factors and effects (that in many cases are not noticeable by many novice traders and other naïve markets’ participants) such as non-linear payoffs and the dependence of full option’s valuations on several Greeks factors—of the first and second mathematical derivative orders, which are known in the financial markets as delta, gamma, theta, vega, and rho, etc., for the valuation options contracts. As a result of their non-linear payoffs, special importance should be given to the evaluation and pricing of options (for both simple and complex options structures), the various hedging methods and techniques as well as the effectiveness of modern portfolio theory for day-to-day positioning management. To that end, the concept of “delta hedging” is commonly used in derivatives markets to hedge short options positions. This is done by measuring the degree of variation in the option price relative to the underlying asset (i.e., the delta sensitivity factor). As such, to perform dynamic delta hedging, it is essential to have liquid cash markets in the underlying assets, otherwise it would not be feasible for market-makers to dynamically delta hedge their risk exposures in short positions. 20. In fact, the values of options premiums (prices) are made up of two components, namely, intrinsic value and time value. The intrinsic value is the component that reflects the difference between the strike price and the current (spot) price of the underlying asset if the option is In-The-Money (ITM) and it is zero for the case of Out-Of-The-Money (OTM) and At-The-Money (ATM) options. For example, if the price of the underlying asset is above the strike price for a call option, exercising the option would net the call buyer the difference between the two prices; this difference is the intrinsic value. If the price of the underlying asset is below the strike price of the call option, the buyer would not exercise the option (let the option expires worthless) because the cash (current spot) market is lower; consequently, the intrinsic value is zero. Time value component of the option premium, which represents the option’s seller (writer) compensation for the assumed risk, varies according to several factors, such as time to maturity, volatility, strike price, stock cash dividends and interest rates. Specifically, the longer the time remaining before exercise the greater the probability of the option being ITM, so the higher the value of the option. Further, the higher the volatility of the underlying asset, the greater the range and number of potential scenarios for the option premium. The existence of time value component means that the price of an option will generally be greater than the intrinsic value and only towards the expiration date of option contract the total price will converge to intrinsic value only. 21. The concepts underlying management of other derivatives products such as swaps and forwards can generally apply with equal force to the management of options contracts. The difference is not in the fundamental principles, but in the behavior of options contracts. The characteristics of the behavior of options make market risk measurement more complex than other derivatives

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instruments. Below, we summarize some of the main characteristics of options contracts that make it different from other derivatives products, detailed as follows: a. Optionality—it is uncertain whether or when an option will be In-TheMoney (ITM) and therefore exercised. b. Asymmetry of payoff—an option is only exercised if it is ITM; otherwise the option holder can leave it to expire worthless if it ends up Out–Of–TheMoney (OTM). c. Non-linearity—the relationship between market movements and option values is not constant. These characteristics indicate that, in measuring the market exposure of options, it is normally necessary to determine the sensitivity of options prices to several Greeks alphabets that are known in the options markets as delta, gamma, theta, vega, and rho, etc. 22. It is crucial for emerging markets to set educational and training processes for markets’ participants on the risk-return tradeoffs of the diverse derivatives securities. In fact, markets’ participants need to understand the complex nonlinear payoffs of many contracts, such as options contracts. For instance, the premium of options contracts on common stocks depend on six variables (namely: spot price, strike price, time to maturity, volatility of the underlying asset, market interest rate and stock cash dividends). As such, for these relatively complex contracts, it is fundamental to comprehend the sensitivity of options prices to these multiple-variables. 23. Likewise, specific attention should be devoted to the newly structured derivatives on natural disasters, weather conditions and forecasts, etc. For instance, nowadays, derivatives products can be used for both speculation and hedging on natural disasters such as earthquakes, extreme weather conditions, etc. Some of the recent innovations are the trading of forward agreements and future contracts on electricity and other kinds of structured products on different energy and greenhouse-effects underlying variables. In the case of electricity agreements, these contracts calling for the delivery of and payment for electric power in a future period and are used much like oil derivatives contracts to fix or hedge energy costs. However, in fact, electricity derivatives contracts are quite different and complex than other commodities contracts, because: a. Firstly, electricity cannot be stored in bulk like other commodities but it must be generated instantaneously at the time it is required. b. Secondly, prices of electricity can change dramatically with vast swings during any trading day with extreme volatility. This is in view of the enormous variation in demand combined with fluctuation in the generating capacity. 24. We do believe that the 2007–2009 global financial crunch and the COVID-19 health crisis had underlined some inadequacies in the trading platforms and infrastructure of derivatives products—especially the relatively newer ones,

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such as credit derivatives. These shortcomings call for timely regulatory attentiveness and intervention. As discussed earlier in the chapter, regulations for the trading of derivatives products are indispensable elements, and the shortcoming of reinforcement of these components had led to widespread scandalous misconducts, insolvencies, collapses and crises. These regulations have to include several items such as accounting standards and settlement processes, legal business environment, risk management systems, transparency, oversights, operational platforms, pricing & valuation of diverse derivatives and structured products. 25. The Financial Stability Board (FSB), which coordinates financial rules for the Group of 20 leading economies (G20), has set regulatory mandates and policy & procedures after the 2007–2009 global financial crisis to make trading in derivative products more efficient and transparent. This global regulator has issued several regulatory mandates, peer review reports, and frequent implementation progress reports among the G20 counties for the clearing of transactions in the trillions of dollars over-the-counter (OTC) derivatives markets. These regulatory measures became mandatory after the 2007–2009 global financial meltdown to make trading in OTC derivative securities more transparent, and with tighter scrutiny for clearinghouses to withstand extreme stress as well as to hold enough funds to deal with big losses. 26. The Financial Stability Board (FSB) published three recent documents in the year 2020 regarding the financial stability implications and policy measures taken during the period of enhanced economic uncertainty arising from the COVID-19 pandemic. In the first report of the Financial Stability Board (2020b), the FSB publishes report on international cooperation to address the financial stability implications of COVID-19. This FSB published report (COVID-19 pandemic: Financial stability implications and policy measures taken (Financial Stability Board 2020c) delivered to the G20 economies and includes an overview of the types of measures taken by FSB member jurisdictions as well as policy measures for international cooperation and coordination to address the financial stability implications from COVID-19. Below are some excerpts and highlights from the first report: • ‘The COVID-19 pandemic represents the biggest test of the post-crisis financial system to date. The global financial system faces the dual challenge to sustain the flow of credit amidst declining growth and manage heightened risks. Nevertheless, the global financial system is more resilient and better placed to sustain financing to the real economy as a result of the G20 regulatory reforms in the aftermath of the 2008 global financial crisis’ (Financial Stability Board 2020c). • ‘The FSB is closely monitoring the resilience of key nodes in the financial system that are critical for financial stability. These include: the ability of financial institutions and markets to channel funds to the real economy; the ability of market participants around the world to obtain US dollar funding, particularly in emerging markets; the ability of financial intermediaries, such

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as investment funds, to effectively manage liquidity risk; and the ability of market participants and financial market infrastructures (including central counterparties) to manage evolving counterparty risks’ (Financial Stability Board 2020c). • ‘The report sets out five principles that underpin the official community’s rapid and coordinated response to support the real economy, maintain financial stability and minimize the risk of market fragmentation. Using these principles, authorities will: monitor and share information on a timely basis to assess and address financial stability risks from COVID-19; recognize and use the flexibility built into existing financial standards to support our response; seek opportunities to temporarily reduce operational burdens on firms and authorities; act consistently with international standards, and not roll back reforms or compromise the underlying objectives of existing international standards; and coordinate on the future timely unwinding of the temporary measures taken’ (Financial Stability Board 2020c). • ‘On the basis of these principles, the FSB is supporting international cooperation and coordination on the COVID-19 response in three ways. First, the FSB is regularly sharing information among financial authorities on evolving financial stability threats, on the policy measures that financial authorities are taking or are considering, and on the effects of those policies. Second, the FSB is assessing potential vulnerabilities in order to better understand the impacts of COVID-19 on financial markets in individual jurisdictions and across the globe and inform discussions of policy issues. Third, FSB members are coordinating on their responses to policy issues, including measures that standard-setting bodies and national authorities take to provide flexibility within international standards or reduce operational burdens’ (Financial Stability Board 2020c). The second FSB report (Guidance on financial resources to support CCP resolution and on the treatment of CCP equity in resolution: Consultative document (Financial Stability Board 2020b). This public consultation report will assist central counterparty (CCP) resolution authorities is issues related to the operations of OTC derivatives markets. Below are some excerpts and highlights from the second report: • ‘Central clearing of standardized over-the-counter (OTC) derivatives is a key pillar of the G20 Leaders’ commitment to reform OTC derivatives markets in response to the 2008 financial crisis. Increased central clearing has simplified the previously complex and opaque web of derivatives exposures. In addition, more collateral is in place to reduce counterparty credit risks. At the same time, CCPs’ criticality to the overall safety and soundness of the financial system means that authorities must take steps to ensure that CCPs do not themselves become a source of systemic risk and that they can be successfully resolved without exposing taxpayers to loss’ (Financial Stability Board 2020b). • ‘Part I of the guidance proposes five steps to guide the authorities in assessing the adequacy of a CCP’s financial resources and the potential financial stability implications of their use. The authorities should:

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Step 1: identify hypothetical default and non-default loss scenarios (and a combination of them) that may lead to a resolution of a CCP. Step 2: conduct a qualitative and quantitative evaluation of existing resources and tools available in the resolution of the CCP. Step 3: assess potential resolution costs. Step 4: compare existing resources and tools to resolution costs and identify any gaps. Step 5: evaluate the availability, costs and benefits of potential means of addressing any identified gaps’ (Financial Stability Board 2020b). • ‘Part II of the guidance addresses the treatment of CCP equity in resolution. It provides a framework for resolution authorities to evaluate the exposure of CCP equity to losses in recovery, liquidation and resolution and how (where it is possible) the treatment of CCP equity in resolution could be adjusted’ (Financial Stability Board 2020b). The third FSB report (COVID-19 pandemic: Financial stability implications and policy measures taken—Report to the G20 (Financial Stability Board 2020a). This report, delivered to G20 Finance Ministers and Central Bank Governors for their virtual meeting on 18 July, assesses COVID-related financial stability developments, details policy measures taken and sets out work to assess their effectiveness. Below are some excerpts and highlights from the third report: • ‘Since the FSB last updated the G20 in April 2020, financial markets have continued to recover from the COVID-19 shock on the back of this decisive policy action. While improving market sentiment has lifted risky asset prices, this may not fully reflect the fact that the pandemic continues and the path of recovery remains highly uncertain. As a result, risky assets remain vulnerable to shifts in the economic outlook’ (Financial Stability Board 2020a). • ‘The report notes that credit provision to the real economy has held up, but lenders face a challenging combination of deteriorating credit quality and rising credit demand. There has been a notable increase in bank lending to non-financial corporates. Capital markets—assisted by determined policy actions—have remained open and enabled firms to raise new and longer-term financing. However, virus containment measures, sharp reductions in supply capacity and falling commodity prices have led to a broad-based reduction in corporate earnings. This, together with relatively high levels of indebtedness and more relaxed underwriting standards in certain market segments in recent years, is weighing on credit quality’ (Financial Stability Board 2020a). • ‘The FSB Principles have guided national responses to COVID-19 to date. The international standards adopted through the G20 reforms have discouraged unilateral actions that would distort the level playing field and lead to market fragmentation. Most measures taken by FSB members to deal with the COVID-19 shock have used the flexibility available in international standards by design, including in

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the form of system-wide and firm-specific buffers. In a few cases individual temporary measures went beyond the flexibility of those standards, in order to respond to extreme financial conditions and provide operational flexibility to financial institutions’ (Financial Stability Board 2020a).

5.3 Concluding Remarks The growth in derivatives markets gave birth to the new career of financial engineering. Financial engineers are the specialists who deal with the quantitative aspects of the derivatives and risk management businesses. These individuals usually have backgrounds in quantitative disciplines such as engineering, physics, mathematics and financial economics. Specifically, the employment opportunities in this domain are frequently attractive to physicists and the nicknames “rocket scientists” or “quants” (short for quantitative analyst) is now broadly used to describe individuals who work as quantitative analysts in the derivatives or risk management fields. In fact, these day’s financial engineers are armed with sophisticated financial/computational tools to price complex financial instruments and to create new hybrid instruments by combining the features of existing securities and sometimes just creating entirely new ones. As long as you can convince investors of the attractions of your new instruments and assure them that it complies with all legal, expenses and marketing aspects—who knows? Think about combinations of cash flows and try to “estimate” a price (that is, “present value”) of these cash flows and your newly created instrument might generate considerable interest among investors. Variety is intrinsically good. People have different tastes, levels of wealth, and tradeoffs of risk /return and so on. Why not offer them a choice? On the other hand, regulators need to keep up with the pace of development in these new structured and hybrid products with the objective of designing contemporary regulations to improve ethical standards and corporate governance, otherwise fraudulent actions and scandalous misconducts can increase proportionally. The growth and development of derivatives products will carry on in spite of the surge of losses, bankruptcies and misconducts reported in their use. However, these losses and misuses do not modify the fact that many prospective users of these adaptable and inexpensive financial instruments have not yet acknowledged their full usefulness and value. The continued success of derivatives products markets, as well as the satisfaction of each end-user, relies on a clear understanding, assessment and awareness of what derivatives products can and cannot do. Compliance with Ethical Standards Conflict of Interest The author declares no conflict of interest in this chapter. Funding This research study did not receive any funding from any entity or organization.

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References Acharya VV, Brenner M, Engle RF, Lynch AW, Richardson M (2009) Derivatives: The ultimate financial innovation. In: Acharya VV, Richardson M (eds) Restoring financial stability: how to repair a failed system. John Wiley, New Jersey Al Janabi MAM (2006) On the inception of sound derivative products in emerging markets: realworld observations and viable solutions. J Financ Regul Compliance 14(2):151–164 Al Janabi MAM (2008a) Internal regulations and procedures for financial trading units. J Bank Regul 9(2):116–130 Al Janabi MAM (2008b) On the appropriate function of trading risk management units: principal objectives and adequate use of internal models. J Bank Regul 10(1):68–87 Al Janabi MAM (2008c) Integrating liquidity risk factor into a parametric value at risk method. J Trading, summer issue, 76–87 Al Janabi MAM (2011) A generalized theoretical modeling approach for the assessment of economic capital under asset market liquidity risk constraints. Serv Ind J 31(13 & 14):2193–2221 Al Janabi MAM (2012a) Derivatives securities in emerging MENA markets: structuring lessons from other financial markets. J Bank Regul 13(1):73–85 Al Janabi MAM (2012b) Optimal commodity asset allocation with a coherent market risk modeling. Rev Financ Econ 21(3):131–140 Al Janabi MAM (2013) Optimal and coherent economic-capital structures: evidence from long and short-sales trading positions under illiquid market perspectives. Ann Oper Res 205(1):109–139 Al Janabi MAM (2014) Optimal and investable portfolios: an empirical analysis with scenario optimization algorithms under crisis market prospects. Econ Model 40:369–381 Al Janabi MAM (2020) Multivariate portfolio optimization under illiquid market prospects: a review of theoretical algorithms and practical techniques for liquidity risk management. J Modell Manage (in press) Al Janabi MAM, Arreola-Hernandez JA, Berger T, Nguyen DK (2017) Multivariate dependence and portfolio optimization algorithms under illiquid market scenarios. Eur J Oper Res 259(3):1121– 1131 Al Janabi MAM, Ferrer R, Shahzad SJH (2019) Liquidity-adjusted value-at-risk optimization of a multi-asset portfolio using a vine copula approach. Phys A 536:122579 Arreola-Hernandez J, Al Janabi MAM (2020) Forecasting of dependence, market and investment risks of a global index portfolio. J Forecast 39(3):512–532 Arreola-Hernandez J, Hammoudeh S, Khuong ND, Al Janabi MAM, Reboredo JC (2017) Global financial crisis and dependence risk analysis of sector portfolios: a vine copula approach. Appl Econ 49(25):2409–2427 Arreola-Hernandez J, Al Janabi MAM, Hammoudeh S, Nguyen DK (2015) Time lag dependence, cross-correlation and risk analysis of U.S. energy and non-energy stock portfolios. J Asset Manage 16(7):467–483 Asadi S, Al Janabi MAM (2020) Measuring market and credit risk under Solvency II: evaluation of the standard technique versus internal models for stock and bond markets. Eur Actuar J. https:// doi.org/10.1007/s13385-020-00235-0 Boyle P, Boyle F (2001) Derivatives: the tools that changed finance. Risk Books Das S (2006) Trader, guns and money: knowns and unknowns in the dazzling world of derivatives. FT Prentice Hall, Pearson Education, Harlow Das S (2010) Regulation and the derivatives markets, Financial Times. https://www.ft.com/markets, Published on June 7, 2010. Das S (2011) Extreme money: masters of the universe and the cult of risk. FT-Pearson Education, UK Fernandez V (2006) Emerging derivatives markets: the case of Chile. Emerg Mark Financ Trade 42(2):63–92

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Financial Stability Board (2020a) COVID-19 pandemic: Financial stability implications and policy measures taken—Report to the G20. Basel. https://www.fsb.org/wp-content/uploads/P1507202.pdf. Published on July 15, 2020a Financial Stability Board (2020b) Guidance on financial resources to support CCP resolution and on the treatment of CCP equity in resolution: consultative document. Basel. https://www.fsb. org/wp-content/uploads/P020520.pdf. Published on May 4, 2020b Financial Stability Board (2020c) COVID-19 pandemic: financial stability implications and policy measures taken. Basel. https://www.fsb.org/wp-content/uploads/P150420.pdf. Published on April 15, 2020c Glasser TD (2013) Leveraging data for financial stability monitoring. J Bank Regul 14(3 and 4):195–208 Grillini S, Sharma A, Ozkan A, Al Janabi MAM (2019) Pricing of time-varying illiquidity within the Eurozone: evidence using a Markov switching liquidity-adjusted capital asset pricing model. Int Rev Financ Anal 64:145–158 Holder ME, Thomas III MJ, Webb RI (1999) Winners and losers: recent competition among futures exchanges for equivalent financial contract markets. Deriv Quarter, Winter Issue Madoroba SBW, Kruger JW (2014) Liquidity effects on value-at-risk limits: construction of a new VaR model. J Risk Model Valid 8:19–46 Steinherr A (2000) Derivatives the wild beast of finance: a path to effective globalisation? John Wiley, New York Tsetsekos G, Varangis P (2000) Lessons in structuring derivatives exchanges. World Bank Res Obs 15(1):85–98

Mazin A. M. Al Janabi is a Full Research-Professor of Finance & Banking and Financial Engineering. He is a research fellow at the Economic Research Forum (ERF). The ERF is a regional think tank committed to supporting high quality economic research to contribute to sustainable development in the Middle East and North Africa (MENA) countries. Professor Al Janabi worked for many years as a Full Research-Professor of Finance & Banking and Financial Engineering at EGADE Business School, Tecnologico de Monterrey, Mexico, UAE University (UAEU) in Abu Dhabi, UAE, and at Al Akhawayn University in Ifrane (AUI), Morocco, among other academic institutions. He holds a Ph.D. degree in Nuclear Engineering from the University of London, UK, and has more than 30 years of real-world experience in science & technology think tanks, engineering enterprises, financial markets, and academic institutions and in many different roles. He has worked for top international financial groups (e.g., ING-Barings and BBVA) where he held several senior management positions, such as Director of Global Market Risk Management, Head of Trading Risk Management, and Head of Derivative Products. Prof. Al Janabi has strong interest for research and developments within emerging economies and has several publications in international refereed journals, books, and chapters in books. Furthermore, his research and developments in quantitative finance have been formally classified in the academic literatures as “Al Janabi Model” for Liquidity Risk Management (Liquidity Adjusted Value– at-Risk, LVaR Model). Prof. Al Janabi has published in top-tiered journals such as: European Journal of Operational Research, Journal of Forecasting, International Review of Financial Analysis, Physica A: Statistical Mechanics and its Applications, European Actuarial Journal, Annals of Operations Research, Complexity, International Journal of Finance & Economics, Applied Economics, Economic Modelling, Review of Financial Economics, Journal of Asset Management, Service Industries Journal, Journal of Modelling in Management, Studies in Economics and Finance, Emerging Markets Finance and Trade, Studies in Economics and Finance, Journal of Risk Finance, Journal of Banking Regulation, Annals of Nuclear Energy, among others.

Part IV

Accounting and Finance in Covid Times

Chapter 6

The Impact of Covid-19 on the Sustainability of the Accounting Profession: Turkey Case Seval Selimo˘glu , Ali Özdemir , and Aytül Ay¸se Cengiz

Abstract Nowadays, where the relations between business and society change under the influence of various factors, society expects businesses to create social and environmental values as well as economic value. From this point of view, sustainable business success; in addition to following economic policies aimed at increasing shareholder profits in enterprises, it requires the monitoring and measurement of the effects of business activities on the environment and society, and the use of tools and methods to fulfill these transactions. At this point, the duty of accounting is to provide information about economic activities as well as to provide information to its stakeholders about the social and environmental performance of the enterprise. As of 2019, it is important to reconsider the issue of accounting profession and sustainability in the face of the COVID-19 pandemic affecting the world and the changes experienced and to address the responsibilities of the accounting profession in this process. In this period, which is called the epidemic period caused by COVID-19 and affected all countries of the world, social and economic orders, companies and professions faced many positive and negative effects. This period accelerated the digital transformation, brought services to the agenda, and many professions had to adapt to this digital transformation. There are also professional accountants among these professions. Moreover, accounting professionals are the most important stakeholders and indispensable actors of companies, which are the smallest dynamos of economies. In this context, it is aimed to reveal the relationship between sustainability, the role of accounting and the COVID-19 outbreak in this study. In this study, regarding the professional accountants who assume such a big task in social and economic terms; COVID-19—to determine how the professional accountants are affected positively and negatively during the pandemic period. It is aimed to identify S. Selimo˘glu (B) · A. Özdemir · A. Ay¸se Cengiz Business Sciences and Economics, Anadolu University, Eski¸sehir, Turkey e-mail: [email protected] A. Özdemir e-mail: [email protected] A. Ay¸se Cengiz e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 K. T. Çalıyurt (ed.), Corporate Sustainability in Times of Virus Crises, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-19-9079-3_6

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how these effects change business lives and office environments, and in this context, to present a roadmap for the future sustainability of the accounting profession. The study consists of three parts; In the first part, literature research, in the second part, the need for the profession, and in the third part, a survey study was conducted for accounting professionals across Turkey, and the positive and negative situations they experienced during the COVID-19 period and the ways they adapted to these situations were investigated. As a result, when such epidemic periods are encountered again, solutions have been suggested for what kind of a road map to follow in terms of the sustainability of the profession. Keywords Covid-19 · Accounting profession · Sustainability · Turkey Jel codes M40 · M49

6.1 Introduction Corporate sustainability is one of the most important concepts for businesses in recent years. From this point of view, the concept of corporate sustainability is not only sufficient for businesses to carry out their activities in the twenty-first century, but also means being sustainable while growing. In today’s global and competitive business world, businesses are in a period when they should not neglect social and environmental issues in their activities if they want to exist in the long term. Nowadays, when the interaction between businesses and society changes day by day, businesses need to create value for the society not only economically but also environmentally and socially. Therefore, while performing the new duties of businesses towards the society, the traditional understanding of accounting is not sufficient and has led to the emergence of a new accounting approach that takes environmental and social factors into account. In this context, it can be said that sustainability accounting is the main tool especially for businesses to realize their corporate sustainability goals. As a matter of fact, the initiation of sustainability accounting in the evaluation and measurement phase of the activities carried out by businesses in line with sustainability can be expressed as the intersection of sustainability of enterprises and accounting professionals. Considering the period of the COVID-19 pandemic, business activities are affected economically, socially and environmentally, and it is necessary to reflect these impacts on the sustainability reports of the enterprises in terms of decision makers. At this point, reflecting economic, environmental and social changes in sustainability reports reliably, clearly and clearly is about accounting. In this context, it is aimed to reveal the relationship between sustainability, the role of accounting and the COVID-19 outbreak in this study.

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6.2 Literature Review Although there are many national and international studies on the role of accounting within the scope of corporate sustainability, there are no studies evaluated within the scope of the COVID-19 epidemic process. When the literature is reviewed, although there are many studies regarding sustainability, corporate sustainability, and sustainable reporting related to accounting, the studies that examine the concepts of corporate sustainability and accounting relationship, the role of accounting professionals in sustainability are summarized below. • The study titled “Corporate Sustainability and Its Reflections on Accounting: Sustainability Accounting” conducted by Kayahan (2014) is to examine the accounting structure required to ensure corporate sustainability in enterprises from a theoretical framework. In the study; What sustainability accounting means, what needs it emerged in response to, the comparison of traditional and environmental accounting, and what the effects of corporate sustainability in the field of accounting are discussed. • The study conducted by Özsözgün Çalı¸skan (2012) includes the role of accounting professionals in corporate sustainability, literature review, and semi-structured interviews with professionals who carry out sustainability practices in businesses through questions created based on this literature review. • In the study conducted by Senal and Ate¸s (2012), the requirements of the sustainable accounting structure and the changes that should be made in the traditional accounting process in this direction are presented. • The study conducted by Saban et al. (2017) discusses the sustainability, sustainable development and corporate sustainability issues theoretically and explains some reporting frameworks related to sustainability reporting and the role of accounting in sustainability reporting.

6.3 The Concept of Sustainability and Its Importance Sustainable development has been regarded as an increasingly important strategic issue for both the public and private sectors since the beginning of the twenty-first century. Although the term sustainable development, which became widespread with the publication of the “Brundtland Report” of the United Nations World Environment and Development Commission in 1987, initially included environmental issues, over time the concept developed and included the social dimension, which is an integral part of development. The idea of being more sensitive and careful in the transfer of natural, economic and social capital to future generations underlies sustainable development, which is defined as the evaluation of social, environmental and economic issues together in order to make balanced decisions in the long term (Garriga and Mele 2004, p. 61; Sarıkaya and Kara 2007, p. 221).

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When sustainable development, which can also be defined as making the ability to meet human needs continuous, is considered in terms of commercial enterprises, the concept of corporate sustainability can be mentioned. Corporate sustainability, a concept that has been emphasized in recent years, includes a part of sustainable development and mostly refers to the continuity of commercial enterprises (Saban et al. 2017, pp. 103–104). The increasing role of businesses in society has led to the concept of sustainable development being increasingly addressed in the business world in recent years. Nowadays, it is accepted that the society cannot achieve sustainable development without the support of businesses, as businesses are one of the main productive resources of the economy. For this reason, sustainable development requires enterprises to adopt a corporate sustainability approach in order not only to create economic value, but also to reduce different environmental and social problems caused by their activities (Sarıkaya and Kara 2007, p. 225). Corporate sustainability of the economic, social and environmental issues, including the three dimensions mentioned (Dyllick and Hockerts 2002, pp. 131–132). The first dimension of corporate sustainability is economic sustainability. Economic sustainability is related to the financial, tangible and intangible capital of the enterprise and emphasizes that these types of capital must be managed effectively. In other words, economic sustainability; Equity requires an optimal balance between various types of capital such as financial capital such as debt, tangible capital such as land, machinery, stocks, intangible capital such as corporate reputation and technical knowledge. In this respect, in order to ensure the economic sustainability of enterprises, they should always provide above-average earnings to their shareholders and on the other hand, they should always ensure cash flow in a way that they do not experience liquidity shortage (Dyllick and Hockerts 2002, pp. 132–133). The second dimension of corporate sustainability is environmental sustainability. Natural resources regenerative capacity of the waste caused by keeping and business operations into consideration, the lowest level of pollution effects such as degassing download businesses is considered sustainable businesses circumferentially (Hernádi 2012, p. 25). These types of enterprises are enterprises that consume resources to the extent that the natural system can handle or cause as much waste and emissions as the natural system can absorb. Therefore, environmentally sustainable businesses are organizations that do not harm the services provided by the ecological system to people with their activities (Dyllick and Hockerts 2002, p. 133). The last dimension of corporate sustainability is social sustainability. Social sustainability requires the development of human and social capital. While human capital is concerned with the individual aspects of employees and business partners such as talent, motivation, loyalty, social capital focuses on the quality of public services such as a good education system, infrastructure or supporting entrepreneurship. From this point of view, socially sustainable enterprises are enterprises that contribute to the development of social capital by both developing the human capital of their partners and supporting social goals. Social sustainability will enable stakeholders to understand the goals of the enterprise and to be in harmony with the value system of the enterprise to a great extent (Dyllick and Hockerts 2002, p. 134).

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Having a more environmentally friendly and social understanding of enterprises that adopt corporate sustainability will allow the business to have a better image, low cost, high efficiency and satisfied shareholders, as well as enabling the operations to be carried out within the framework of the understanding specified in the definition of sustainable development (Memi¸s 2019, p. 136). Considering all these benefits, developments have made it necessary to create a sustainable structure in enterprises. However, a sustainable accounting structure is also needed in order to ensure transparency and accountability, which are the most important dimensions of sustainable structure (Senal and Ate¸s 2012, p. 84). In summary, accounting constitutes the set of rules regarding the responsibilities of businesses towards society. Therefore, it plays an important role in corporate sustainability and sustainable development. Another factor that strengthens this role of accounting is that it is the most important information system presenting the data that constitutes the basis for the decisions to be taken by the managers (Saravanamuthu 2004, p. 296).

6.4 The Importance of Sustainability for the Accounting Profession and the Relationship Between Sustainability and Accounting in the Covid-19 Period Corporate sustainability forces businesses to choose a specific sustainability strategy and to have an accounting information system that can facilitate business management to make decisions on issues related to the sustainability of the business. In other words, the accounting process related to the sustainability of criteria to fulfill the wait is MEK (was Hernádi 2012, p. 25). For many years, businesses had only one focus: Reaching high profits. But reducing the cost will get a competitive advantage and so on. The damage to the environment has been overlooked as a result of using the developing technology in order to gain advantage in these matters. At the same time, due to the awareness of the society in the name of sustainable development and the increase in the importance it attaches to the subject, it has made it necessary for businesses to continue their activities by taking into account economic, social and environmental factors. Because sustainable businesses have become the subject of consideration in decisionmakers’ decisions (de Souza and de Carvalho 2000). Therefore, at this point, it is seen that the importance of presenting non-financial information has increased in addition to the presentation of financial information. Therefore, financial information next to sustainability, including the presentation of information non-financial, reporting and possible to say that a new application and pursuit of accounting which undertake the task of producing information for people concerned (the Özsözgün Çalı¸skan Hardworking 2012, p. 133). Two of the generally accepted basic concepts of accounting can be directly related to sustainability. One of them is the concept of “social responsibility”, which states that while carrying out the accounting activities of a business, not only the interests of

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the enterprise but the whole society should be considered, the other is the concept of “continuity”, which requires the assumption that operating life of businesses is infinite under normal conditions. Those who perform the accounting profession should act responsibly towards society and the environment while carrying out their activities. In this context, professional accountants need to develop skills to include environmental, social and governance issues in decision-making processes. These skills are a process that can only take place if they are able to recognize the risks and opportunities related to sustainability and are ready to impact them. Since businesses are held responsible for their negative impact on the environment, it is necessary to carry out proactive studies in order to prevent sustainability problems before they arise. As noted above, companies, managers, and accountants have traditionally been interested in a single indicator of actual earnings, “Profit”, for years. However, business leaders now have to give the same importance not only to financial performance but also to non-financial issues. Sustainability, which has to be measured, reported and evaluated, naturally requires expertise that falls within the scope of an accountant’s duty. However, sustainability reporting is a more difficult activity than measuring how much money a business earns or loses (Memi¸s 2019, p. 137). The sustainability approach needs the assistance of accounting in the following issues (Özsözgün Çalı¸skan 2012, pp. 140–141); • Determining the sustainability positions of businesses, • Determining the sustainability goals of enterprises and structuring the business infrastructure towards these goals, • Sustainable reporting and audit, and • Sustainability training. The accounting function plays a very important role in terms of sustainable reporting, both in the process of producing or determining the information for the sustainability reports of the enterprises and in the process of ensuring the reliability of this information thanks to its audit function. In this respect, it can be said that the government benefits corporate sustainability. It is possible to say that sustainability is a multidisciplinary understanding and information for sustainability or sustainable reporting will be produced through the accounting system. However, the Özsözg hardworking (2012) by the required professional accountants, as well as accounting and finance scholars, especially reporting in terms of ensuring the trust of new and better sustainability management practices necessity to support the development is expressed (the Özsözg Hardworking 2012, p. 156). As of December 2019, the COVID-19 epidemic, which emerged in Wuhan, China and affected the world, directly affected businesses. Therefore, it is clear that in this process, it will affect the process and quality of information sharing about sustainability reports by enterprises. Considering the three dimensions of sustainability, the COVID-19 outbreak closely affects these three dimensions, so it is important for decision makers to include these effects in sustainability reports. In this reporting phase, accounting has a major role to play, as stated above. Therefore, those who are asked to include sustainability reports to be prepared by businesses after the COVID-19 outbreak can be listed as follows (Fishman et al. 2020):

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1. Consistency and completeness: Investors still want comparable data from year to year, and this year especially in the company of this unexpected situation will be interested in measuring the resistance while managing the immediate impacts of COVID-19 remains a top priority for many publicly traded companies, reporting past Environmental, Social and Governance (ESG) data and performance remains essential. While a slight delay in reporting is understandable in 2020, companies should still strive for the same level of coverage as in previous years and continue to improve their forward disclosures with the expectation that their performance on key social issues will be more thoroughly reviewed. 2. Accountability during the new reality: Reports should provide a lasting explanation of how companies are responding to the COVID-19 crisis. The extent to which companies will do this now or in the future depends on where they are in their reporting cycle: reports that are about to be completed by 2020 (by companies operating on a calendar year basis), compared to those with more time (companies whose fiscal year does not fit into the calendar year and report later in the year) it will provide less perspective. Regardless of the reporting schedule, companies will need to explain the decisions made during this time and provide forward-looking statements on how they will help “build better” in the future. Sustainability reports will become an important place for accountability when looking back at company actions during COVID-19. 3. Figures backed by narrative: The reductions in business operations and travel as a result of COVID-19 will likely reduce companies’ greenhouse gas emissions and other environmental impacts and, in many cases, accelerate progress towards sustainability goals. Similarly, COVID-19 will affect many other metrics such as diversity, employee engagement and supply chain workforce complex. In the future, companies will need to provide a narrative that identifies what change in past performance was related to COVID-19 factors and what changes from pre-existing plans. Because the numbers alone will be impossible for readers to interpret. It will also be important to provide a forward-looking narrative explaining its potential trajectories when COVID-19 is lagging behind. 4. The annual reporting cycle to meet the information needs of stakeholders outside: honest and timely communication is more important than ever. Reporting is about meeting the information needs of external stakeholders, and the current crisis may require disclosure beyond the confines of the official sustainability / annual report, such as dedicated COVID-19 websites. Also to not keep the location of the official reporting, well-designed websites and other sensitive communications, stakeholder to the most important information to offer can be a powerful tool, which allows them to make decisions based on their knowledge and provide feedback to the company in the short term will be years. As a result, Sustainability reporting is available so that stakeholders can make an informed judgment about how companies affect the world around them and understand how the changing world affects companies’ sustainability performance. In this sense, sustainability reporting is more important than before, and looking ahead, it will be critical to understand how COVID-19 can affect sustainability reporting

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over the long term. The most important point to consider in Sustainability Reporting during and after the COVID-19 crisis is to ensure the reliability of the reported information. To stakeholders; (complete) information should be given that is not token, transparent, balanced and does not contain significant deficiencies. As conditions change, stakeholders’ interests may change accordingly. It is possible for companies that can keep up with this change to succeed in rebuilding and maintaining the trust of key stakeholders, thereby enabling businesses to develop well (Fishman et al. 2020; KPMG 2020). Therefore, it can be said that the duty of accounting professionals is quite high in this process.

6.5 The Challenges Faced by Accounting Profession Through Covid-19 COVID-19 has a tremendous effect in working life, as well as in public life. Each profession according to its work intent and work qualifications, have try to find the new ways of doing jobs and trying to adapt itself new, chaotic and imbalanced conditions. This change, created by pandemic, is not a choice or involving a willingness. This change comes from external conditions which the professionals have no other choice than accept it. This unexpected change involves ambiguity and force professions to renew the system they have used or the style they used. According to the stress literature, change itself is one the most stressful factor in people’s life. The risk it involves and the ambiguity it embraces challenge people and increase the level of stress. Occupational stress is defined as “a physiological and psychological response to events or conditions in the workplace that is detrimental to health and well-being. It is influenced by such factors as autonomy and independence, decision latitude, workload, level of responsibility, job security, physical environment and safety, the nature and pace of work, and relationships with coworkers and supervisors” (APA Dictionary of Psychology). The research made in Greece on accountants has shown that the new measures taken by government, working remote, role overload were the main stress factors in COVID-19 (Papadopoulou and Papadopoulou 2020). In this chapter, we assume that professions in accounting can suffer from occupational stress as a result of new, undefined ways of doing their jobs. We try to understand which stress factors they have experienced while doing their jobs in COVID-19. These results are important because the main result of stress is burnout which leads to individuals loosing their psychological capital and drawning from the profession. If the new conditions facing accountant professions do not uncovered, the sustainability of the profession would get into a risky position. It is critical to understand the psychology of sustainability to sustain the profession. In line with this argument, to set up the relationship between occupational stress and psychological capital is a key element for the recovery of the professions from this pandemic as well as for the business. PsyCap is a higher order construct which encompasses

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Fig. 6.1 The relationship between occupational stress and sustainability of professions

psychological capacities like optimism, self-efficacy, resilience and hope (Pathak and Joshi 2020). These individual sources not only beneficial in combating with stressful events but also provide courage to find novel solutions to the crises. As Bandura stated, self-efficacy is the belief one encompasses in his/her capacity to perform a task. High level of self-efficacy is deemed essential to cope with stress and control unexpected disasters like COVID-19. The study on tourism sector indicate that irrespective of the uncertainty caused by the COVID-19, the owners and managers of small hotels with high hopes were able to reset their organizational goals and were continuously working in the direction of finding new pathways to reach those goals (Pathak and Joshi 2020) (Fig. 6.1). Sustainability of the professions needs well-being of individuals; it centers around the idea that psychological capital of individuals regenerate and optimize new solutions. Our assumption in this chapter is to analyze the stress factors while the accountants perceive in COVID-19 and try to show these stress factors as the risk factors for sustainability of the accounting profession.

6.6 Turkey Case 6.6.1 Methodology of Survey In this study, a combined exploratory research design in which qualitative and quantitative methods are used together was applied. In the exploratory mixed method research design (transferred from Creswell et al. 2016, p. 47), qualitative data are collected first and then a questionnaire based on the analysis of qualitative data is created. This research method is often used when little is known about a particular population or topic. The qualitative data obtained are used to investigate and define the topic in order to create a survey tool to collect data from a larger sample. There is a similar situation in determining the factors that may affect the sustainability of the accounting profession during the COVID-19 process. In the extraordinary situation caused by COVID-19, no previous study has been found in the relevant literature regarding the factors related to the sustainability of the accounting profession. For this reason, exploratory mixed method has been adopted as a research method. The case study approach was used in the qualitative research part of the study. A cse study is an empirical inquiry that investigates a contemporary phenomenon (Merriam and Tisdell 2015, p. 37). The findings obtained from the qualitative research part were used in structuring the quantitative research. The analytical hierarchy process technique was used to reveal the importance of the factors affecting this

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Fig. 6.2 Path of the research

purpose, with the aim of sustaining the accounting profession. Analytical hierarchy process was developed by Saaty to solve hierarchical decision problems. The path followed in the study is shown in Fig. 6.2.

6.7 Determining the Factors Affecting the Sustainability of the Accounting Profession in the COVID-19 Process It is obvious that COVID-19 makes it difficult for accounting profession to do business. Determining these factors is important first in the period when the pandemic process continues, and then in terms of ensuring the sustainability of the profession in similar extraordinary situations. Qualitative analysis was carried out to determine these factors. Semi-structured interview technique was used to collect data for determining factors. Before starting the interviews, pilot interviews were made with an experienced professional group and the questions were revised. This research was conducted with a total of 5 financial advisors in Eski¸sehir (4) and Konya (1) provinces by interviewing technique. As a result of the interviews written down, a total of 7968 words were output. Content analysis approach has been adopted in the analysis of the data. The main purpose of content analysis is to reveal the concepts that explain the data obtained.

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In the qualitative part of the study, a total of six factors effective in sustaining the profession were determined. These factors are respectively determined as follows: I. II. III. IV. V. VI.

The desire to maintain classic (Old-Fashioned) business on the customer side Workload created by customers without technological infrastructure Extra burden and uncertainties brought about by legal regulations Disruption in physical document traffic Slowdown in the speed of public transactions System-induced glitches in incoming applications due to pandemic.

6.8 Determining the Importance of the Factors Affecting the Sustainability of the Accounting Profession in the COVID-19 Process In the first stage of the study, after the factors related to the sustainability of the accounting profession were identified in the COVID-19 process, the importance of these factors in the creep of the profession was determined in the second stage. Determination of the severity AHP technique was used. This technique is used in the solution of decision problems that can be modeled hierarchically. The analytic hierarchy process should not be seen as a technique used alone in choosing one of the alternatives. The way he deals with the problem, the measurement theory he offers, takes the technique beyond this limitation. The problem solving stages of the analytical hierarchy process are built on three basic principles. Saaty (1996) defines these principles as; development of hierarchical structure, pair comparison of preferences and synthesis. Since the aim of the study is to determine the importance weights of the factors affecting the purpose, it is not possible to compare the alternatives, so there is no process in the synthesis phase of the technique.

6.8.1 Participants In this study of the leading provinces in Turkey’s industrialization it has recruited 79 members of the profession on a voluntary basis. Questionnaires of 49 of 79 participants were found valid. Among the ten provinces in which 63.3% of the industrial enterprises are involved in the research; Istanbul (31%), Bursa (8%), Ankara (7%), Izmir (5%), Konya (4%), Gaziantep (3%), Adana (2%), Balıkesir (1.5%), Antalya (1%), Eskisehir (0.8%) were achieved professional (Turkey 81 Provincial Industry Status Report, 2014). The distribution of the participants by provinces is given in Chart 6.1. Descriptive statistics for the participants are given in Table 6.1. The average age of the participants is 51.97 and the standard deviation is 9.45. Participants have high

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Chart 6.1 Distribution of participants by city

Table 6.1 Descriptive statistics Minimum

Maximum

Mean

Age

32

75

51.97

9.45

Professional experience

5

54

23.04

10.78

Woman (%)

Man (%)

22.44

77.56

YMM(%)

SMMM(%)

40.81

59.19

Undergraduate

Postgraduate

71.43

28.57

Sex Professional title Educational status

Standart deviation

professional experience (mean = 23.04) and the majority (77.56) are male. While the rate of Certified Public Accountant (CPA) participants is 40.81%, the rate of Sworn-in CPAs is 59.19%. 28.57% of the participants have a postgraduate education.

6.8.2 Developing the Hierarchical Structure At this stage, the transition from the complex structure of the decision problem to hierarchical homogeneous clusters is made. While creating the hierarchical structure, the elements of the decision problem (goal, criteria, alternatives) are defined. Homogeneous sets and subsets of the elements of the problem are identified and the relationship between them is shown in a hierarchical structure. With the help of the hierarchical structure, it is also ensured that the decision problem is decomposed into

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Fig. 6.3 Hierarchic model

sub-problems so as to reach the goal. In the hierarchical order, there is purpose at the top. There are criteria under the goal that will affect the decision. At the bottom of the hierarchy, there are alternatives. Since there are no alternatives in our research, the model consists of goals and criteria. The criteria correspond to the factors that affect the maintenance of the accounting profession during the COVID-19 process (Fig. 6.3)

6.8.3 Pairwise Comparison of Preferences This principle consists of comparing the elements in the hierarchy according to the strength of their influence on the next level element. Pairwise comparison is made with the help of matrices and is used to determine the priority distribution of the elements. The second step of the technique is the creation of pairwise comparison matrices. Pairwise comparison matrices form the input data in AHP technique. A questionnaire has been created in order to reach pairwise comparison matrices. An example of the paired comparison question used in this questionnaire is given in Fig. 6.4. Pairwise comparisons and demographic variables questionnaire composed

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of Turkey’s workers were sent to leading professionals in the industrial city. The survey consisting of. pairwise comparisons and demographic variables was sent to accounting profession working in Turkey’s leading industrial cities. The input for each cell of the pairwise comparison matrices is the answers given to the questions in the questionnaire. An example of the representation of the binary comparison matrix in tabular form is given in Table 6.2. After the paired comparisons matrix is created, the analysis is performed. In this analysis, the relative importance vector of the relevant elements is obtained from the comparison matrices. In the third step of the solution of analytical hierarchy process, the relative importance weights of the elements in each level are found. In paired comparisons, the inconsistency shown by the person making judgments in the evaluation is expressed as the consistency rate. If the inconsistency is below

Fig. 6.4 Pairwise comparison question sample

Table 6.2 Pairwise comparison example C1

C2

C3

C4

C5

C6

C1

1.000

0.788

0.566

0.663

0.436

0.402

C2

1.270

1.000

0.875

1.021

0.740

0.695

C3

1.767

1.143

1.000

1.182

0.928

0.940

C4

1.509

0.979

0.846

1.000

0.718

0.703

C5

2.292

1.352

1.077

1.394

1.000

0.933

C6

2.489

1.438

1.064

1.422

1.072

1.000

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a certain rate (10%), it can be accepted and significance weights can be calculated (Utomo et al. 2009). When it exceeds this ratio, the decision maker is asked to review the pairwise comparison judgments or the pairwise comparison is removed from the analysis. In this study, the consistency of the paired comparison matrices of the 49 participants whose questionnaire was valid was checked. After all matrices were found to be consistent, the geometric mean of the answers given for each question was taken to reveal the group judgment of the participants. Geometric mean is used in order to integrate individuals’ judgments and to create a common choice matrix for the group (Sun and Greenberg 2006). In order to obtain the relative importance vector w = (w1,…, wn) T, first the normalization process is performed by dividing each column value separately by the respective column total in the matrix. Each row is then averaged in the normalized matrix. These values give the relative importance of the compared elements. The integrated pairwise comparison matrix of the 49 participants is given in Table 6.3. An Excel spreadsheet was prepared for AHP technique analysis. Necessary transactions were carried out and the weights of the factors defined regarding the sustainability of the accounting profession in the COVID-19 process were found as in Table 6.4. The results obtained show that the most effective factor in the sustainability of the profession during the COVID-19 process is “System-induced glitches in incoming applications due to pandemic”. “The slowdown in the speed of execution of public transactions” ranked second, and “The extra burden and uncertainties brought by Table 6.3 Overall pairwise comparison C1

C2

C3

C4

C5

C6

C1

1.000

0.788

0.566

0.663

0.436

0.402

C2

1.270

1.000

0.875

1.021

0.740

0.695

C3

1.767

1.143

1.000

1.182

0.928

0.940

C4

1.509

0.979

0.846

1.000

0.718

0.703

C5

2.292

1.352

1.077

1.394

1.000

0.933

C6

2.489

1.438

1.064

1.422

1.072

1.000

Table 6.4 Factor weights Factors

Weight

The desire to maintain classic (Old-Fashioned) business on the customer side

0.099

Workload created by customers without technological infrastructure

0.148

Extra burden and uncertainties brought by legal regulations

0.182

Disruption in physical document traffic

0.149

Slowdown in the speed of public transactions

0.206

System-induced glitches in incoming applications due to pandemic

0.216

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legal regulations” ranked third. “The workload created by customers without technological infrastructure” and “the disruption in the physical document traffic” are almost equally important. The least influential factor was found to be the “The desire to continue doing business on the client’s side.” They showed the system-related problems experienced in the new applications they experienced in this process as the most difficult factor in the COVID-19 process in the continuation of the profession. This factor is the first factor to be addressed in order to make the accounting profession sustainable during the pandemic process. The improvement to be made here can be expected to have the greatest impact on the sustainability of the profession. The least important factor has the least importance in maintaining the profession.

6.8.4 Synthesis In the process of analytical hierarchy, synthesis is the last of the solution steps in which the combined weights of the options are calculated. In this step, the weight values obtained by analyzing the paired comparison matrices are combined to be used in obtaining the priority values of the options. Since there are no alternatives in the hierarchical model, no action has been taken at this stage.

6.9 Result of Survey The purpose of this study is to determine the factors that affect the sustainability of the accounting profession in the COVID-19 process and the importance of these factors. It is important for the sustainability of the profession to analyze the factors that make the profession difficult or to make improvements in these areas in this period, which we define as extraordinary by considering their importance. It is important to discover the effective factors in the continuation of the profession, not only during the pandemic period, but also in terms of determining what should be done under extraordinary conditions that may be experienced from now on. Regardless of the conditions, we believe that determining the factors that make it difficult for the members of the profession to do their profession and producing solutions for these factors can prevent disruption of financial transactions throughout the country. However, it is expected that the results of working for the policy makers that regulate the working life of the profession and the professional chamber, which has an important place in the working life of the members, will be beneficial.

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6.10 Concluding Remarks Professional accountants, especially many managers, see them as an expensive additional burden and they have not always given the necessary value in business life. Because the company managements only saw the accountant as a way of keeping track of expenses and filing year-end accounts. But when faced with the COVID-19 pandemic, they faced important planning, cost management, financial reporting, and taxation issues in the context of the continuity of the company, and they found that these problems could be solved by a good client who understands his business. A good accountant is the best solution partner for a company in the context of the continuity of the company. Education to become an accountant is incredibly rigorous. After completing a degree, accountants must pass increasingly difficult exams for three years to qualify; Business owners need to wake up and take advantage of this expertise to grow their business. The reasons why a good accountant is now more important than ever during the COVID-19 pandemic can be determined as follows; Researching opportunities for access to government funding; The government support package for businesses has multiple components, so understanding the best plans and processing the application can be difficult. A good accountant will know ways about different options and be able to advise on the best choice. Plan for Sustainability and Success; A good accountant not only keeps points, but also helps you plan for the future. The correlation between detailed financial planning and business success is clear: companies that understand their financial condition and key drivers of success outperform their competitors. Budgeting not only opens a clear path to success, it also focuses on the minds of key decision makers. With a good plan, every decision can be weighed against the financial results. This is even more important during the COVID-19 pandemic. However, many managers panic and envision the worst-case scenario. A clear financial plan not only reduces fears but also helps management to think about solutions. Access to Tax Exemptions and Advantages; Governments have multiple tax breaks and schemes that can help facilitate cash flow, save money, and even provide a capital support to support businesses. A good accountant will help you review which programs might be right for your business. Improves Processes in terms of Efficiency; One of the main reasons businesses fail is poor financial management; Many businesses do not have a clear view of their finances and have no plans for the future. Many of them pray every day so that their cash does not run out. Many companies, like zombies, only work to pay the interest on the loan, but do not pay their debts. Since these companies operate on a knife-edge, they do not have the resources to recover from a decline in income. Bad debt is predicted to double this year as supply chains break and the economy slows. An accountant is critical in isolating businesses from future shocks; however, some companies may be beyond savings. A good accountant helps managers choose the best way forward and develop processes to execute the plan.

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Raising Awareness Against Unexpected Change; By recognizing the change, companies will struggle with this change and create a situation that will see the opportunity in this situation and turn them in their favor. The COVID-19 era can be a period that can be managed successfully from this point of view. Accountants can assist in seizing growth opportunities, developing plans, and ensuring capital is in place. They also have the experience of seeing hundreds of different businesses, so they’ll be in a good position to offer business advice. As a result, accounting professionals companies are indispensable people who will be able to go through difficult periods such as the COVID-19 epidemic period without any trouble with the least loss and will draw road maps for them during this period. The professional accountant offers a service that advises and creates assurance to the management of the company. The epidemic period has brought many difficulties and difficulties for both companies and all stakeholders. Accounting professionals were also heavily affected by these difficulties. This effect has emerged as particularly high stress. The sustainability of public finance and businesses depends on the services offered by financial advisors. Financial advisors, who are silent fighters of the process, who have been working non-stop since the day COVID-19 Pandemic, unfortunately, suffer serious losses in the fight against the epidemic. Due to our increasing losses day by day, it has become necessary to implement some measures strictly. In recent days, the number of patients has increased rapidly throughout the country and COVID-19 cases have started to be seen very frequently, especially among professionals. Members of the profession have always stood by businesses and public institutions in this process, and quietly applied every new application without any problems. In applications such as short-time working allowance, Unemployment Fund payments, epidemic loans, withholding and premium service declaration, declarations and notifications, works and transactions were completed quickly and effectively in order to prevent businesses from being victimized. Our ability to carry out the business and transactions of the customers and be with them depends on the protection of the health of the professionals and office employees and the control of the possible contamination risk. For this, the contact should be reduced to the lowest level and must comply with the measures. It should not be forgotten that a member of the profession is a human being, has a family and is a public servant working for the public good. It is the profession that creates the greatest added value in increasing the welfare level of a country. It is a necessity for the members of the accounting profession to support all stakeholders (TURMOB, Ministry of Finance, KGK) in cooperation in a way to reduce the high stress they experienced during the COVID-19 period. With the healthy, peaceful and happy working environments of the accounting professionals, we can easily overcome the epidemic periods in cooperation with the country.

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References APA Dictionary of Psychology. https://dictionary.apa.org/occupational-stress. 20 Feb 2021 Creswell JW, Poth CN (2016) Qualitative inquiry and research design: choosing among five approaches. Sage publ., USA de Souza Ribeiro M, de Carvalho LN (2000) The accounting information as a support to sustainable development. In: Brebbia CA, Ferrante A, Rodiguez M, Terra B (ed) WIT Transactions on Ecology and the Environment, pp 139–149 Dyllick T, Hockerts K (2002) Beyond the business case for corporate sustainability. Bus Strateg Environ 11(2):130–141 Fishman A, Hatch N, Allison-Hope D (2020) Early sustainability reporting lessons from COVID-19. https://www.greenbiz.com/article/early-sustainability-reporting-lessons-covid-19. Access date 8 Mar 2021 Garriga E, Mele D (2004) Corporate social responsibility theories: mapping the territory. J Bus Ethics 53:51–71 Hernádi BH (2012) Green accounting for corporate sustainability. Theory Methodol Pract 8(2):23– 30 Kayahan T (2014) Kurumsal sürdürülebilirlik ve muhasebeye yansımaları: Sürdürülebilirlik muhasebesi. Akademik Yakla¸sımlar Dergisi 5(1):58–82 KPMG (2020) “COVID-19 Gündemi -Yeni gerçeklikte makro trendler”, https://assets.kpmg/con tent/dam/kpmg/tr/pdf/2020/07/covid-19-gundemi.pdf. Eri¸sim Tarihi. 8 Mar 2021 Memi¸s MÜ (2019) Kurumsal sürdürülebilirlikte muhasebe ve denetimin önemi. Çukurova Üniversitesi Sosyal Bilimler Enstitüsü Dergisi 28(3):130–142 Merriam SB, Tisdell EJ (2015) Qualitative research: a guide to design and implementation. John Wiley & Sons, USA Özsözgün Çalı¸skan A (2012) ˙I¸sletmelerde sürdürülebilirlik ve muhasebe mesle˘gi ili¸skisi. Mali Çözüm 112:133–160 Papadopoulou S, Papadopoulou M (2020) The accounting profession amidst the COVID-19 Pandemic. Int J Account Financ Report 10:39–59 Pathak D, Joshi G (2020) Impact of psychological capital and life satisfaction on organizational resilience during COVID-19: Indian tourism insights. Curr Issues Tour 1–18 Saban M, Küçüker H, Küçüker M (2017) Kurumsal sürdürülebilirlik ile ilgili raporlama çerçeveleri ve sürdürülebilirlik raporlamasında muhasebenin rolü. ˙I¸sletme Bilimi Dergisi 5(1):101–115 Saravanamuthu K (2004) What is measured counts: harmonized corporate reporting and sustainable economic development. Critical Perspect Account 15:295–302 Sarıkaya M, Kara FZ (2007) Sürdürülebilir kalkınmada i¸sletmenin rolü: Kurumsal vatanda¸slık. Yönetim Ve Ekonomi 14(2):221–233 Senal S, Aslanta¸s Ate¸s B (2012) Kurumsal sürdürülebilirlik için muhasebe ve Raporlama. Muhasebe Ve Denetime Bakı¸s 36:83–97 Saaty TL (1996) Decision making with dependence and feedback: the analytic network process, vol 4922. RWS Publications, Pittsburgh Sun L, Greenberg BS (2006) Multicriteria group decision making: optimal priority synthesis from pairwise comparisons. J Optim Theory Appl 130(2):317–339 Utomo C, Idrus A, Napiah M, Khamidi MF (2009) Agreement options on multi criteria group decision and negotiation. Int J Comput Inf Eng 3(2):310–314

Seval Selimo˘glu Anadolu University Faculty of Economics and Admini’strative Sciences in 1984 (˙I˙IBF), graduated from the Department of Business Administration. In 1986, Anadolu University Faculty of Economics and Administrative Sciences, Department of Business Administration Accounting and Finance She started academic life as a research assistant in the Department of Business. She received his master’s degree from Anadolu University Institute of Social Sciences

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in 1987, She completed it in the Accounting Department. In The United States in 1990 (OHIOCleveland) Second in IMBA at Baldwin-Wallace University. She received her master’s degree. She completed his doctoral studies at Anadolu University in 1995. Graduated from the Institute of Social Sciences, Department of Accounting. Her Ph.D. thesis published by Capital Market Board. Assistant Professor in Accounting-Finance Department in 1995, She received the title of associate professor in 2002 and professor in 2007.The areas in which her academic studies are concentrated; International Independent Audit and Assurance Standards, Independent Audit, Ethics, Accounting Frauds, Internal Control, Internal Audit, International Financial Reporting Standards, Financial Statements Analysis, Integrated Reporting and Risk Management. National and International level books, chapters, articles, notifications, EU project works She has many publications. Within institutions such as Public Oversight, Accounting And Auditing Standards Authority of Turkey and the Union of Chambers of Certified Public Accountants Turkey, she undertook various duties in various commissions. In 2019 She has been appointed as a member of Public Accounting Standards Board and is currently working continues. Also, Sworn-in Certified Public Accountant and Independent Auditor has certificates. Ali Özdemir is an Associate Professor at Anadolu University, Faculty of Economics and Administra-tive Sciences, Department of Quantitative Methods. He completed his Ph.D. in the field of Quantitative Methods at Anadolu University. His research interests include “Statistical Analysis”, “Multiple Criteria Decision Making”. He teaches statistics, operations research and data analysis at the undergraduate and graduate level. Aytül Ay¸se Cengiz is an Associate Professor of Management and Work Psychology at Faculty of Economics and Administrative Sciences in Anadolu University, Eskisehir, Turkey. She obtained her Ph.D. in Management and Organization at Anadolu University. Her research interest include “Narcissistic Leadership”, “Femicide”, “Women and Entrepreneurship”. She teaches Organizational Behavior, Organizational Psychology, and also Advanced Women Research, Leadership at the undergraduate and graduate level.

Chapter 7

Sustainability Accounting in Times of the COVID-19 Pandemic Beata Zyznarska-Dworczak

Abstract COVID-19 pandemic has caused a remarkable change in the corporate accountability process, determining the development of accounting and its role in sustainable decision making. This research contributes to understand the role of sustainability accounting in times of the COVID-19 pandemic. The thesis is that sustainability accounting may strengthen corporate responsibility and accountability during a crisis situation, like a pandemic. In this perspective there are presented crucial sustainability accounting fields, like valuation of sustainable development goals, managerial control and sustainability reporting. The research methodology is based on descriptive and comparative analysis, and the inductive and deductive reasoning helps to reach the presented conclusions. The paper presents scientific achievements in the area of sustainability accounting in times of the COVID-19 pandemic. The research results indicate the directions of sustainability accounting development against business conditions during the pandemic and new expectations of stakeholders. They may be important for sustainability management in uncertain times of the pandemic. Since limited study exists that examine accounting in times of corona virus pandemic, little is known about the role of sustainability accounting during this period. This paper contributes to filling this gap. Keywords Accountability · Accounting · COVID-19 · Pandemic · Sustainability · Sustainability accounting

7.1 Introduction COVID-19 pandemic opened a new chapter in the business world, characterized by uncertainty and unpredictability, non-linearity and turbulence. As the Covid-19 crisis highlights the fragility and volatility of the global economy, sustainability gets B. Zyznarska-Dworczak (B) Department of Accounting and Financial Audit, Poznan University of Economics and Business, Al. Niepodległo´sci 10, 61-875 Pozna´n, Poland e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 K. T. Çalıyurt (ed.), Corporate Sustainability in Times of Virus Crises, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-19-9079-3_7

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a boost. This pandemic has proved the need for a resilient economy and business, which treat equally social and environmental performance as financial performance. The world still faces enormous challenges in securing a sustainable future, and the COVID-19 crisis strengthened the need to strive corporate sustainability, and thus to protect business against future crisis. COVID-19 pandemic has caused a remarkable change in the corporate accountability and sustainability. It requires to change corporate strategy into one based on a better understanding of the sustainability goals and effectively support to company’s transformation. This phenomenon also affects and determines the development of accounting and its role in sustainable decision making. Contemporary research on sustainability accounting results from practical reasons about the growing corporate sustainability in different industries, like construction and energy industry (i.e. Xia et al. 2018; Szczepankiewicz and Mu´cko 2016; Zyznarska-Dworczak and Rudžionien˙e 2022), engineering (i.e. García-Serna et al. 2007; Zavadskas et al. 2020), banking (i.e. Fijałkowska et al. 2018; Fijałkowska and Zyznarska-Dworczak 2018). Sustainability accounting is to measure, analyze and report a company’s social and environmental impacts, so crucial in post-pandemic recovery. The science problem of this study relates the support of sustainability accounting in corporate accountability in times of the coronavirus pandemic. The paper aims to contribute to understand the importance of sustainability accounting in COVID-19 crisis. This theoretical- conceptual study is based on appropriate research methods, including the analysis of scientific literature. The inductive and deductive reasoning helps to reach the presented conclusions. The structure of the paper is as follows: the introduction presents the research problem and research methodology, and in the next part it is provided the practical background for research study—practical premises for changes in the business world under the influence of COVID-19 and their impact on the sustainability and sustainability accounting. This third section presents the bibliometric test, which shows the key research problem in the analyzed field. The bibliometric data presents amount of accounting research, its geographical origin, its research areas, and the journals where the research was published. Nevertheless, the novelty of the situation implicates little scientific research on this subject. The conducted literature review enabled the author to present the key sustainability accounting tasks in the light of shareholders’ expectations influenced by COVID-19 crisis. The final section of the paper provides the main conclusions, and a path avenue for future research. The research results may help in the understanding of the directions of sustainability accounting development against business conditions during the pandemic and new expectations of stakeholders. In this perspective there are presented crucial sustainability accounting fields, like valuation of sustainability goals, management control and sustainability reports. The paper presents scientific achievements in the area of sustainability accounting in times of the corona virus. They may be important for sustainability management in such crisis, because it highlights how sustainability accounting research can support a more sustainable post-COVID-19 recovery in business. Since limited study exists that examine the importance of accounting in

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this recent unstable times, little is known about the role of sustainability accounting during this period. This paper contributes to filling this gap, which may be valuable for accounting theory and accounting practice.

7.2 Practical Premises for Changes Sustainability Accounting in Times of COVID-19 Accountancy word is extremely affected by the COVID-19 pandemic. Professional accountants have shown adjustability and flexibility, as well persistence and determination to provide corporate response towards changes of business conditions. Moreover they have been expected to help management to decide how to reset the consequences of these changes and how to aid recovery. The main accounting considerations related to COVID-19 are following: • book keeping during lockdown, • adapt to working in a virtual environment, • interpret and record all transactions according to new regulations rolled out by governments to help businesses survive, • apply for grants, • enter in the accounts untypical transaction resulting from a pandemic situation, like government assistance, material judgements and uncertainties, impairment of non-financial assets, onerous contracts provisions, insurance recoveries, lease contracts, defined benefit plans, going concern, events after the end of the reporting period, • forecast in uncertainty, • develop restructuring plan and help to implement it. As soon as the pandemic began, the accounting, reporting and auditing solutions were needed immediately and many international accounting institutions and accounting bodies have published various guides, educational material instructions or recommendations both for accountants and auditors f.e. AICPA, ACCA, CIMA, Chartered Accountants Ireland, CPA Canada, HKICPA, ICAEW, ICAS IDW IFAC, JICPA, SAICA, and in Poland PIBR and SKWP. According the A4S’s interview among 12 members of A4S’s Accounting Bodies Network accountancy bodies support companies to maintain standards in bookkeeping and financial reporting by providing relevant guidance (A4S 2020, p. 3). Moreover, while some professional institutions were focused on short term financial survival in the beginning of the pandemic, many of them had continued to support programs for sustainability, preparing for their next step: rebuilding a sustainable economy (A4S 2020, p. 13). This approach is confirmed by Sue Coffey, the executive vice-president in Association of International Certified Professional Accountant, who stated that the coronavirus

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with immense environmental and social risks has highlighted stakeholder requirement, and thus it has motivated more and more entities to disclose precise and faithful ESG data that extends beyond financial information (Goldstein 2020). Nowadays, there are still no commonly adopted standards for how organizations are expected to measure and disclose their sustainability performance. Thus, there is a large number of NGOs developing independently standards for sustainability reporting, and it results in complexity and disorientation for both shareholders and stakeholders (Barker et al. 2020). Thus, a sustainability standards board under the IFRS Foundation may be seen as the answer to this niche of harmonization and unification of the meaning of sustainable information reported by companies. Thus, if IFRS proposal of sustainability standards is adopted, all stakeholders would quickly get a much more reliable and accurate assurance for company’s sustainability performance—just as they do its financial performance (Barker et al. 2020). This would be a milestone in corporate sustainable business based on accountability and performance comparability to all stakeholders. It also would be an important revolution in accounting and an essential early step to sustainability accounting development. All the more, such approach would be crucial in a pandemic situation, because many enterprises focus only on survival, analyzing only their financial results, giving up their environmental and social commitment. However, measuring of activities dedicated to sustainable development goals can strengthen management awareness of making sustainable decisions. Thus, sustainability accounting may be at the core of any corporate recovery in times of COVID-19. Considering the intergenerational dimension of sustainability, coronavirus compels decision-makers to plan in the long-term perspectives (Hörisch 2021). Moreover decision-makers are expected to understand how the Maslow hierarchy of social needs (Ryan et al. 2020), and thus how to balance economic and social corporate goals, as well as environmental ones. So, the pandemic may be threaten the sustainability goals if only because of the difficulties in ensuring the financial stability of enterprises (Yoshino et al. 2021). Nevertheless there are still opportunities concerning selected sustainable development goals—the crisis situation cause the need to deal the negative consequences of the recent crisis. In such perspective professional accountants are expected to help shift corporate thinking from traditional one to an integrated approach based on value creation and key stakeholders’ participation. Accountants may play a strategic role in companies’ transition towards a more sustainable business. According Ramanauskaité and Kanelli (2019) there are seven ways for accountants to help companies in the implementation of sustainable development goals, as follows: • • • • • •

to report relevant information about the company, to ensure independent assurance, to allocate costs to negative environmental and social impacts, to follow regulations of sustainability reporting, to monitor and measure sustainability performance, to determine means of rewarding sustainable strategies.

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So COVID-19 raised the profile of accountants (A4S 2020, p. 23). Accountants may assist in corporate sustainability management, from formulating strategy to improving processes of the performance measuring and its reporting. Accountants may also help comply with existing laws and prepare for upcoming legislation, more and more focused on ESG factors (f.e. Directive 2014/95/EU). Thus accountants may support companies to benefit from sustainable activities by increasing worker retention and client contentment, as well as receiving funds and grants to support sustainable development goals (Ramanauskaité and Kanelli 2019). Thus, sustainability accounting may be a substantial tool for any reset and for sustainable recovery plans. These expectations are due to the fact that accounting has always a settlement function, and over time, sustainability accounting has developed to support corporate settlement in the accountability concept (Zyznarska-Dworczak 2019a). In the recent crisis, sustainability accounting expectations become even more complex.

7.3 Theoretical Justification of Changes in Sustainability Accounting (Literature Review) The world of accounting science has not reacted as quickly as practitioners towards the pandemic and its implications to business. The novelty of the business conditions implicates little scientific research on this subject. There is still a niche in the literature related the influence of corona virus on sustainability research (Leal Filho et al. 2021). Thus, new business conditions caused by COVID-19 have not been significantly reflected in accounting research and publications. Therefore, it has been applied a bibliometric method to indicate the research potential of sustainability accounting against the increasing impact of COVID-10 on business. The Web of Science (WoS) has been selected as the data source for this study, allowing to analyze worldwide research from the years 1945–2020. Due to the novelty of the situation and little scientific research on this subject the build local databases contains only 32 publications (relating in topic with “sustainability accounting” and “COVID”) relating to accountability vs accounting subject. On the day of the test the local database contains 6 papers from 2021 and 26 from 2020. Most research come from Australia, Italy, England and Spain (over 70% of local database). In the USA and Canada there is much less interest. Furthermore, the bibliometric test showed that most publications appeared in journals such as Sustainability (19%), Meditari Accountancy Research (6%) and Sustainability Accounting Management and Policy Journal (6%). The analyzed publications are written from different perspectives, and cover the following areas: • environmental sciences ecology (34%), • business economics (31%), • science technology (25%),

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whereas according to the WoS’s areas—in environmental studies (28%), environmental sciences (25%), green sustainable science technology (22%), and business finance (22%). This proves the interdisciplinary character of the sustainability accounting and its role in the pandemic. At the same time, it proves the need for interdisciplinary collaboration and teamwork in a company, which seeks any reset and recovery programs in time of the COVID-19 pandemic. Moreover, an in-depth analysis of all the articles reveals that six papers of the Web of Science local database are most strictly related to sustainability accounting in the crisis. The details of these are presented in the Table 7.1. As presented in the Table 7.1, post-pandemic recovery needs corporate accountability, which is gradually evolving along with the business environment and the expectations of corporate stakeholders (Zyznarska-Dworczak 2019a). As follows from the studies presented in the table, accounting, as the elementary system of an enterprise, may assist in corporate accountability development. Nevertheless, traditional accounting still consider in general direct costs and exclude external costs to others in the accounts and reports. As the Covid-19 pandemic reveals, the external costs have become extremely high and have highlighted responsibility of regulators to develop standards to allow monitoring, assessment, reporting and planning of external costs (Schaltegger 2020). As indicated in the Table 7.1, non-financial reporting plays very important role in the pandemic. Nevertheless, corporate sustainability reporting seems unable to rebuild trust between companies, investors and society. The needed communication process by performing the indicated accounting functions may be the main way to corporate sustainability (La Torre et al. 2020). Moreover, it is just sustainability reporting to identify long-term business risks and build resilience into the corporate strategy, and therefore needs legislative activities towards a more sustainable economy. Thus accounting for sustainability needs to support governments, international organizations and corporate management to avoid pandemics and other risks for crisis (Schaltegger 2020). So, for this purpose sustainability accounting development should be targeted to: • • • •

calculate corporate impact on the environment and the society, asses and control corporate sustainability goals, stakeholders’ participation, build political, social and institutional relationships with shareholders and stakeholders.

Accounting may be treated as a tool of corporate accountability. Therefore there is the need to treat it as an integrated system of financial measurement of sustainability goals. Moreover, accounting can also be used as a strategy instrument of corporate sustainability management (Zyznarska-Dworczak 2020), as well as a communication way with key internal and external stakeholders (Zyznarska-Dworczak 2019b, pp. 245–246). Such approach to sustainability accounting may determine its support for business in times of the pandemic, especially in terms of corporate accountability. This approach is due to the fact that nowadays corporate accountability is influenced by the current situation derived from the epidemic, focused on adapting their strategy

• A critique about the relevance of the frameworks, considering the needs that must be covered towards all implications of corona virus

Research limitations/implications

• By indicating accountability • Considering the recent crisis, in the context of obligatory this study opt for further non-financial reporting and its studies relating the dialogical link with trust, this research accountability sustaining presents arguments in favour non-financial reporting of shifting the attention from accounting-based standards towards accountability-based accounting model (continued)

Meditari Accountancy Research

La Torre et al. (2020)

• To research if the accountability within the context of the Directive 2014/95/EU offers a critique view for future reporting research

• To research if organizations • To construct standard or are to comply with corporate framework, a private reporting laws using standards standard-setter needs the (towards claims that the support of regulators to International Integrated mandate it in a specific Reporting Framework can be national jurisdiction used to comply with Directive 2014/95/EU

Meditari Accountancy Research

Biondi et al. (2020)

The main findings

Research goals

Journal

Authors

Table 7.1 Research on sustainability accounting in times of the corona virus

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Journal

Accounting & Finance

Sustainability

Journal of Accounting & Organizational Change

Authors

Bui and de Villiers (2020)

Park et al. (2020)

Schaltegger (2020)

Table 7.1 (continued) The main findings

• To indicate implications of epidemic for management, accounting and reporting

• To investigate if recognized accounts receivable (AR) factoring is more value relevant than disclosed AR factoring

• The findings are drawn for organizational change presented as consequences accounting and reporting development

• After the coronavirus crisis, the importance of AR factoring is more crucial

• To examine how accounting • The authors develop a technologies are implicated in framework to explicitly the climate science, and how integrate accounting accounting technologies are technologies in stimulus used in the design of corona packages, thereby enabling virus stimulus packages sustainability growth around the world; • To explore the accounting technologies to deliver positive climate benefits by being integrated into Covid-19 stimulus packages

Research goals

• Sustainability accounting as accounting for ecosystems and ecosystem management should play more important role to combat key sources of the coronavirus pandemic (continued)

• Companies are to use AR factoring to overcome this financial status

• The research presents only the costs of climate change and carbon mitigation

Research limitations/implications

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Research goals • To investigate the necessity for enhanced data sources for coronavirus and climate-related risk scenario investigation in primary production

Journal

Sustainability Accounting, Management and Policy Journal

Authors

Tingey-Holyoak and Pisaniello (2020)

Table 7.1 (continued) Research limitations/implications

• The research demonstrates the • Primary manufacturers and necessity for farm data to be their accounting departments integrated with data for need accounting-integrated scenario analysis for farm data and systems to coronavirus and other estimate the coronavirus and uncertainties other risks

The main findings

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and actions to current health, economic, and social needs. Thus corporate accountability can be perceived in two ways. On the one hand today’s business is being placed under unprecedented pressure relating companies’ high orientation towards legitimizing and protecting shareholders’ and stakeholders’ interests. On the other hand, the crisis has caused a changed corporate approach to the economic, social, and environmental objectives, giving greater importance to the business role in society. Organizations are expected to adopt sustainability strategies to establish a business commitment to society and other target groups of stakeholders (García-Sánchez and García-Sánchez 2020). The unpredictability of business life caused by the pandemic has not yet made it possible to clearly identify the role of sustainability accounting in the recent crisis. Nevertheless, it is expected to support the accountability process by measuring and communicating the results of the operational and strategic levels of sustainability goals’ implementation. Sustainability accounting may be perceived as a crucial instrument in providing nonfinancial and financial information to report sustainable corporate performance, which can help in particular to verify the implementation of the sustainable strategy. Thus, accountants may provide transparency of corporate performance and thus contribute to a shift from short-term investments towards long-term decisions about sustainable growth. Such approach may also deter unethical reporting practices like whitewashing, bluewashing or greenwashing (more f.e. Lau et al. 2017, pp. 48–61; Roberts and Koeplin 2007; Zyznarska-Dworczak 2016, 2019a, 2020). To fulfill the forecasted tasks of sustainability accounting, it is necessary to reconstruct its existing system of corporate accounting or to build a new one. To equip it with integrated system will be particularly important, allowing a multidimensional and multifaceted analysis of measurable and non-measurable information (Zyznarska-Dworczak 2018). So the main challenge for accounting science is to create the framework of traditional accounting methods supplemented by the sustainability impact.

7.4 Conclusions Nowadays, companies must continuously adapt to new and uncertain market conditions and respond uniquely to the COVID-19 crisis. All business may perceive this crisis from the perspective of its response to new situation, possible reset and a sustainable recovery. These business actions towards the pandemic are undertaken by most departments of the enterprise, including in particular accounting. As this research shows, COVID-19 has significantly raised the profile of accountants, by setting new tasks, together with those related to sustainable development. This study aims to present the impacts of the pandemic on sustainability accounting development. It shows that the crisis has posed new requirements both for sustainability accounting practice and science. This research reveal three perspectives of sustainability accounting reaction towards the crisis caused by corona virus:

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accountants’ response, possible reset by sustainability accounting and a sustainable recovery supported by accounting. In each bearing, sustainability accounting may be treated as the basic instrument of corporate responsibility and accountability. As stated in the paper, professional accountants have been responding uniquely to the COVID-19 crisis and have been obligated to continuously adapt to new and uncertain market conditions and government assistance. The first part of paper reveals that the crisis has forced a significant extension of accountants’ obligations, so they are responsible not only for book keeping during lockdown and working in a virtual environment, but also interpret and record all transactions according to new regulations rolled out by governments, apply for grants, analyze untypical transactions, and help businesses survive. So the practical premises indicate they have been responsible not only for traditional accounting duties, but they also have faced expectations to help management for company’s reset and its sustainable recovery. Thus, sustainability accounting goals highlight the differences between what the profession was before the pandemic and what it needs to be now to be part of the sustainable recovery. Moreover, the research reveals that there is a need for sustainability accounting development to support sustainability reporting, based on appropriate calculation and evaluation of corporate sustainability results. The importance of accounting in sustainability reporting in the pandemic is confirmed by initiatives of many international accounting institutions and accounting bodies dedicated to issue sustainability accounting standards. The most important initiative has been taken by IFRS Foundation and may be a step forward in the development of sustainability reporting and sustainability accounting. The analysis of practical premises for the sustainability accounting development in the pandemic is supplemented by an analysis of scientific research in this area. Due to the novelty of the situation and the lack of scientific experience in this field there is little scientific research on the subject. The existing research reveals that decisionmaking is often inadequate to the new circumstances, due to lack of necessary tools. This points out the importance of corporate information systems, including sustainability accounting, supporting managerial decisions. Thus, in this unstable time, it is necessary to state the key tasks for sustainability accounting to help that support management in new conditions resulting from a crisis situation. This research has several theoretical and practical implications that must be valued. The practical implications, related to accountants’ tasks, arise from its utilitarian character. This approach suggest to make accounting as an assist of corporate accountability, especially in its reporting dimension, managerial control and assurance. This research also contributes to the literature allowing to know in depth the response of accounting practice and accounting science towards the crisis caused by corona virus.

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7.5 Limitations Now, when the paper is writing, the pandemic is ongoing and it’s impossible to anticipate whether the pandemic enables most organizations to implement recovery strategies in a sustainable way. Moreover, the study presents only a micro perspective of sustainability accounting development, nevertheless it is worth noting that the pandemic situation increases the importance of macro accounting too. According to Haynes (2020) supporting decision-makers with accurate information to adress poverty, age, race, sex and disability discrimination, inequality is an crucial driver for macro accounting metrics and research.

References A4S. (2020). Building a better future—the role of the accounting community report. Accounting for Sustainability, Accounting Bodies Network. www.accountingforsustainability.org/en/kno wledge-hub/reports/building-a-better-future-covid.html. Accessed 14 Feb 2021 Barker R, Eccles RG, Serafeim G (2020) The future of ESG is … accounting? Harvard Business Review, Sustainability, 3 Dec 2020 Biondi L, Dumay J, Monciardini D (2020) Using the international integrated reporting framework to comply with EU directive 2014/95/EU: can we afford another reporting façade? Meditari Accountancy Res 28(5):889–914. https://doi.org/10.1108/MEDAR-01-2020-0695 Bui B, de Villiers C (2020) Recovery from Covid-19 towards a low-carbon economy: a role for accounting technologies in designing, implementing and assessing stimulus packages. Acc Finance 61(3):4789–4831, Jan 2021. https://doi.org/10.1111/acfi.12746 Fijałkowska J, Zyznarska-Dworczak B (2018) Sustainability reporting of Polish banks—a step towards greater accountability. Entrepreneurship Manage 19(1):47–61 Fijałkowska J, Zyznarska-Dworczak B, Garsztka P (2018) Corporate social-environmental performance versus financial performance of banks in Central and Eastern European countries. Sustainability 10(3):772 García-Sánchez IM, García-Sánchez A (2020) Corporate social responsibility during COVID-19 pandemic. J Open Innov Technol Market Complex 6(4):126 García-Serna J, Pérez-Barrigón L, Cocero MJ (2007) New trends for design towards sustainability in chemical engineering: Green engineering. Chem Eng J 133(1–3):7–30 Goldstein E (2020) Association sets out 2021 sustainability road map for accountants. Financial Management, 24 Nov 2020 Haynes K (2020) Structural inequalities exposed by COVID-19 in the UK: the need for an accounting for care. J Account Organ Chang 16(4):637–642 Hörisch J (2021) The relation of COVID-19 to the UN sustainable development goals: implications for sustainability accounting, management and policy research. Sustain Acc Manage Policy J 12(5):877–888. https://doi.org/10.1108/SAMPJ-08-2020-0277 IFRS (2020) Sustainability reporting—current stage. International Financial Reporting Standards. https://www.ifrs.org/projects/work-plan/sustainability-reporting/ La Torre M, Sabelfeld S, Blomkvist M, Dumay J (2020) Rebuilding trust: sustainability and nonfinancial reporting and the European Union regulation. Meditari Accountancy Res 28:701–725 Lau CL, Fisher CD, Hulpke JF, Kelly WA, Taylor S (2017) United Nations global compact: the unmet promise of the UNGC. Soc Responsib J 13(1):48–61 Leal Filho W, Azul AM, Wall T et al (2021) COVID-19: the impact of a global crisis on sustainable development research. Sustain Sci 16:85–99. https://doi.org/10.1007/s11625-020-00866-y

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Park JM, Lee HY, Park SH, Han I (2020) Value relevance of accounts receivable factoring and its impact on financing strategy under the K-IFRS after COVID-19 from the Perspective of Accounting Big Data. Sustainability 12(24):10287 Ramanauskaité V, Kanelli E (2019) 7 ways accountants can help companies get more sustainable, Accountancy Europe. Access on https://www.accountancyeurope.eu/good-governancesustainability/7-ways-accountants-can-help-companies-get-more-sustainable/ Roberts DH, Koeplin JP (2007) Sustainability reporting practices in Portugal: greenwashing or triple bottom line? Int Bus Econ Res J 6(9). https://doi.org/10.19030/iber.v6i9.3403 Ryan BJ, Coppola D, Canyon DV, Brickhouse M, Swienton R (2020) COVID-19 community stabilization and sustainability framework: an integration of the Maslow hierarchy of needs and social determinants of health. Disaster Med Public Health Prep 14(5):623–629 Schaltegger S (2020) Unsustainability as a key source of epi-and pandemics: conclusions for sustainability and ecosystems accounting. J Account Organ Chang 16(4):613–619. https://doi.org/10. 1108/JAOC-08-2020-0117 Szczepankiewicz EI, Mu´cko P (2016) CSR reporting practices of Polish energy and mining companies. Sustainability 8(2):126 Tingey-Holyoak JL, Pisaniello JD (2020) The need for accounting-integrated data streams for scenario-based planning in primary production: responding to COVID-19 and other crises. Sustain Acc Manage Policy J. https://doi.org/10.1108/SAMPJ-07-2020-0258 Xia B, Olanipekun A, Chen Q, Xie L, Liu Y (2018) Conceptualising the state of the art of corporate social responsibility (CSR) in the construction industry and its nexus to sustainable development. J Clean Prod 195:340–353 Yoshino N, Taghizadeh-Hesary F, Otsuka M (2021) Covid-19 and optimal portfolio selection for investment in sustainable development goals. Financ Res Lett 38:101695 Zavadskas EK, Pamuˇcar D, Stevi´c Ž, Mardani A (2020) Multi-criteria decision-making techniques for improvement sustainability engineering processes. Symmetry 12(6):986 Zyznarska-Dworczak B (2016) Determinanty rozwoju sprawozdawczo´sci niefinansowej w s´wietle pozytywnej i normatywnej teorii rachunkowo´sci. Prace Naukowe Uniwersytetu Ekonomicznego We Wrocławiu 436:307–315 Zyznarska-Dworczak B (2018) Legitimacy theory in management accounting research. Problemy Zarz˛adzania 16(1):195–203. https://doi.org/10.7172/1644-9584.72.12 Zyznarska-Dworczak B (2019a) The impact of the accountability on accounting development as the essence of sustainability accounting. Prob Manage 21st Century 14(1):73. https://doi.org/ 10.33225/pmc/19.14.73 Zyznarska-Dworczak B (2019b) Rachunkowo´sc´ zrównowa˙zona w uj˛eciu kognitywno-teoretycznym. Wydawnictwo Uniwersytetu Ekonomicznego w Poznaniu, Pozna´n Zyznarska-Dworczak B (2020) Sustainability accounting—cognitive and conceptual approach. Sustainability 12(23):9936. https://doi.org/10.3390/su12239936 Zyznarska-Dworczak B, Rudžionien˙e K (2022) Corporate COVID-19-related risk disclosure in the electricity sector: evidence of public companies from Central and Eastern Europe. Energies 15(16):5810

Beata Zyznarska-Dworczak (Ph.D.) is a professor at the Department of Accounting and Financial Audit, Poznan University of Economics and Business. She is a certified auditor—a member of Polish Chamber of Statutory Auditors. She is an ordinary member of the Polish Association of Accountants and also a member of the Polish Economic Society. She is a lecturer of subjects such as Financial Reporting, Advanced Financial Accounting and Financial Auditing. She is an author of more than 70 papers relating accounting, corporate reporting and financial audit. Her current academic interests are: non-financial disclosures in corporate reporting, sustainability accounting and sustainability assurance.

Chapter 8

The Causal Relationship Between Coronavirus (COVID-19) and Stock Indices: A Case Study for G20 Countries Volkan Dayan

Abstract Coronavirus (COVID-19 or SARS-CoV-2) spreads rapidly around the world. Coronavirus reached 8,000 cases on Jan 30, 2020. When the cases that lost their lives were examined, the majority of them were found to be elderly patients or patients diagnosed with chronic heart, lung and kidney, Parkinson’s, and Diabetes. The number of cases worldwide was 509,164, the number of deaths worldwide was 23,335 while analyzing this study. COVID-19 also affected many economic variables in the world. Some of these variables are stock indices. In this study, it is aimed to discover the causal relationship between stock indices and coronavirus. Daily data were used in the research. Stock indices and total deaths and total cases of coronavirus are matched for each country. Unit root tests, Pairwise Granger Causality Tests, and regression analysis were made. The stationarity and level of significance were calculated. Causality Tests used to test hypotheses regarding the presence and the direction of causality. Keywords Covid-19 · Coronavirus · Stock indices · G20 · Causality

8.1 Introduction COVID-19 not only harmed human health. COVID-19 refers to an economic recession that may happen across the world economy. COVID-19 threatens the global economy. Many products or spacers are made in China, but some of the factories in the country are closed. Not only the production but also the service sector is under the risk of coronavirus. The world’s most crowded tourist group, the Chinese, cannot go out of the country. The impact of the outbreak on the global economy is estimated to V. Dayan (B) Department of Banking and Insurance, Uzunkopru School of Applied Sciences, Trakya University, Edirne, Turkey e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 K. T. Çalıyurt (ed.), Corporate Sustainability in Times of Virus Crises, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-19-9079-3_8

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be $ 1.1 trillion (The Guardian 2020). The IMF, on the other hand, lowered China’s growth rate to 5.6%. Food, toy, automotive industry, tourism, cinema, technology, smart devices industry, chip production, aviation, cinema, shopping, many more products and services depend on China. Production stopped due to the epidemic that started in China. Therefore, oil prices dropped due to low demand and surplus production. Airlines stopped flights to China. COVID-19 affected tourism very radically due to travel restrictions and prohibitions. In this study, first of all, the information about the data set will be given. Unit root tests, regression analysis and causality tests were made. Naturally, it is aimed that the number of deaths and cases that are expected to decrease the stock indices.

8.2 Literature Review Since the Covid-19 pandemic process is new, studies on this subject were not published. Only one article has been found on this subject. Besides, there are several studies on other pandemics and stock indices. Delisle (2003), in this study, proposed that the cost of the SARS with GDP and financial markets equity. Lee and McKibbin (2004), in their studies, provided an assessment of the global economic impacts of severe acute respiratory syndrome (SARS) as well as to provide a more comprehensive approach to estimating the global consequences of major disease outbreaks. Siu and Wong (2004), in their studies, described the spread of the SARS disease in Hong Kong and discussed its impact on the economy. Nippani and Washer (2004), in their studies, the impact of SARS on the stock markets of Canada, China, Hong Kong Special Administrative Region of China, Indonesia, the Philippines, Singapore, Thailand, and Vietnam, was examined. Baker et al. (2012), in their studies, constructed indexes of investor sentiment for six major stock markets and decompose them into one global and six local indexes. Wang et al. (2013), in their studies, investigated how such outbreaks can affect the performance of biotechnology stocks. In the past ten years, major statutory infectious diseases in Taiwan have included ENTEROVIRUS 71, DENGUE FEVER, SARS, and H1N1. Bai (2014), in this study, investigated different aspects of investor sentiment impact by differentiating the scope of influence of the sentiment. Macciocchi et al. (2016), in their studies, presented an analysis on economic outputs for assessing the current impact of ZIKV on markets. Giudice and Paltrinieri (2017), in their studies, considered 78 equity mutual funds that are geographically specialized in African countries and observed monthly flows and performance for the period of 2006–2015. Liu et al. (2020), in this study, evaluated the short-term impact of the coronavirus outbreak on 21 leading stock market indices.

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8.3 Econometric Method In this study, unit root tests performed. Least squares regression was used to predict the behavior of dependent variables and Granger causality analysis has been used.

8.3.1 Unit Root Tests In the unit root test estimations used in this study, if the δ = 0 space hypothesis is established and the δ test statistic value is greater than the McKinnon critical value as absolute value, if H1 is accepted, there is no unit root and the series is stationary. Otherwise, if H0 is accepted, there is a unit root in the series and it is decided that the series is not stationary (Gujarati 2004). If deviations in the national economies are not taken into account in the context of regression models, some deviant results can be seen in the results of the empirical studies for the time series. In this case, it is important to take into account the breaks that occur with the level and trend effect of the series, which are normally static. According to the unit root test developed by Dickey-Fuller (Dickey and Fuller 1979), it can be seen that the series is stationary when it is known that the refraction time developed by Perron is still stable (Perron 1989; Erdogan and Dayan 2019).

8.3.2 Least Squares Regression Method In this study, the Least Squares Regression Method is used. This method is the most common regression methods in the literature. The purpose of choosing this method is to measure in which direction and how much the number of cases and deaths affect the stock indices. In this method, the estimated values of β0 and β1 parameters are determined. The univariate regression equation for LSM is given as follows: 





Yi = β0 + βi Xi , i = 1, 2, . . . , n

(8.1)

The error term shown in formula (8.2) consists of the difference between the real and the estimated value. 



ε = Yi − Y i

(8.2)

The error terms given in Formula (8.2) have both positive and negative values together with zero, and the sum of these differences should be zero as given in Formula (8.3) (Dirican 2012).

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V. Dayan n 



εi =

i=1

n  

 Yi − Y i = 0 

(8.3)

i=1

As given in Formula (8.4), the main purpose of the LSM is to make the sum of the squares of the difference between the actual value and the estimated value of the dependent variable to a minimum. n 



εi =

i=1

n  

 Yi − Y i = 0 

(8.4)

i=1

If all observations are collected by taking the squares of the generated error term, the sum of the error squares is obtained. In order to minimize the sum of squares in the LSM method, derivatives of the above expression according to β0 and β1 predictions are taken and equalized to zero, resulting in the equation systems β0 and β1 (Alma and Vupa 2008; Unvan 2020).

8.3.3 Causality Analysis In the economics, causality tests among the variables are examined. These tests, developed by Granger, are widely used for long-term time series (Granger 1969). In econometric literature, causality tests are divided into two as classical and Granger causality. In classical causality, variables’ number of lag in the analysis may be different, Granger is considered to be the same in causality (Tari 2005). Representation of causality analysis will be explained by the equations given below. Xt =

n 

αi X t−i +

i=1

Z Xt =

n  i=1

n 

∂i Z X t−i + e1t

(8.5)

i=1

αi Z X t−i +

n 

∂i X t−i + e2t

(8.6)

i=1

According to the these equations, only the ∂i parameter in the equation is significant in the parameters of the equations in the determination of the one-way causality relationship. In the determination of the bi-directional causation relationship, the αi and ∂i parameters in the equations are all significant (Kutlar 2009).

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8.4 G20 Countries and Data Sources The G20 (or Group of Twenty) is made up of 19 countries and the European Union. The 19 countries are Argentina, Australia, Brazil, Canada, China, Germany, France, India, Indonesia, Italy, Japan, Mexico, the Russian Federation, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the United States (Lansford 2017). The following Table 8.1 lists the data used and its sources. According to Table 8.1, stock indices are dependent variables. They are 000001.SS from China, AXJO from Australia, BSESN from India, BVSP from Brazil, CAC40 from France, FTSE100 from the United Kingdom, FTSEMIB from Italy, FTWIZAFL from South Africa, GDAXI from Germany, GSPTSE from Canada, JKSE from Indonesia, KS11 from South Korea, MERVAL from Argentina, MOEX from the Russian Federation, MXX from Mexico, NIKKEI225 from Japan, S&P500 from the United States. TASI from Saudi Arabia, XU100 from Turkey, and The data collected from Yahoo finance stock historical prices for Jan 21, 2020–Mar 27, 2020. Total cases and total deaths are independent variables and data were collected from World Health Organization, Coronavirus disease 2019 Situation Reports from Jan 21, 2020 to Mar 27, 2020 (who.int).

8.5 Econometric Analysis In this part of this study, all econometric analysis was made and was interpreted. Dependent variables are determined as stock indices, independent variables as total case and total number of deaths. The days of stock exchanges and the days of cases and deaths were matched.

8.5.1 Relationship Between COVID-19 Data and China SSE Composite Index (000001.SS) Table 8.2 expresses unit root tests of series. According to Table 8.2, P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of 000001.SS stock indices is less than 0.05. 000001.SS is stationary at 5% level of significance. Trend effects of Total Cases and Total Deaths series are eliminated and series were made stationary according to results of unit root tests. Regression coefficients are not statistically significant; therefore; it is not included in this study. Causality tests of series, as can been seen in Table 8.3. As shown in Table 8.3 corresponding P-value for total cases is 0.0541 which is approximately equal to 0.05. Total cases does cause 000001_SS stock indices. On

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Table 8.1 Data used in the research and the sources of these data Name of stock Stock indices exchange

Source

Name of stock exchange

Stock indices

Source

Shanghai Stock Exchange, China

SSE Composite Index (000001.SS)

finance. yahoo. com

Jakarta Stock Exchange, Indonesia

Jakarta Composite Index (^JKSE)

finance. yahoo. com

Australia Stock Exchange

S&P/ASX 200 (^AXJO)

finance. yahoo. com

Korea Stock Exchange

KOSPI Composite Index (^KS11)

finance. yahoo. com

Bombay Stock S&P BSE SENSEX Exchange (^BSESN) Sensex, India

finance. yahoo. com

Buenos MERVAL Aires Stock (^MERV) Exchange, Argentina

finance. yahoo. com

Sao Paulo Stock Exchange, Brasil

IBOVESPA (^BVSP)

finance. yahoo. com

Moscow Stock Index, Russia

MOEX Russia (IMOEX)

invest ing.com

Euronext Paris, France

CAC 40 (^FCHI)

finance. yahoo. com

Mexico Stock Exchange

IPC MEXICO (^MXX)

finance. yahoo. com

London Stock Exchange, United Kingdom

FTSE 100 (^FTSE)

finance. yahoo. com

Osaka Exchange, Japan

Nikkei 225 (^N225)

finance. yahoo. com

Borsa Italiana, FTSEMIB Italy

invest ing.com

New York Stock Exchange, United States

S&P 500 (^GSPC)

finance. yahoo. com

Johannesburg Stock Exchange, South Africa

FTSE South Africa (FTWIZAFL)

invest ing.com

Saudi Arabia Stock Market

Tadawul All Shares Index (^TASI.SR)

finance. yahoo. com

Frankfurt Stock Exchange, Germany

DAX PERFORMANCE-INDEX (^GDAXI)

finance. yahoo. com

Borsa Istanbul, Turkey

BIST 100 (XU100.IS)

finance. yahoo. com

Toronto Stock Exchange, Canada

S&P/TSX Composite index finance. (^GSPTSE) yahoo. com

Total Cases of Covid-19 Total Deaths of Covid-19

who.int

Prob.*

−4.226815

−3.536601

−3.200320

1% level

5% level

10% level

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test −0.563601 0.9754 statistic

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.200320

−3.536601

−4.226815

−0.694798 0.9661

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Table 8.2 Unit root tests of total cases, total deaths and 000001.SS

10% level

Test critical 1% level values: 5% level

Augmented Dickey-Fuller test statistic

−3.192902

−3.523623

−4.198503

−6.076336 0.0001

Null Exogenous: Lag Length: 0 hypothesis: constant, (Automatic—based on 000001_SS linear trend SIC, maxlag = 9) has a unit t-Statistic Prob.* root

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V. Dayan

Table 8.3 Causality tests of total cases, total deaths and 000001.SS Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause _000001_SS

41

3.16627

0.0541

_000001_SS does not Granger Cause TOTALCASES

1.17387

0.3207

TOTALDEATHS does not Granger Cause _000001_SS

2.43782

0.1016

1.31284

0.2816

41

_000001_SS does not Granger Cause TOTALDEATHS

the other hand corresponding P-value for total deaths is 0.1016 which is more than 0.05. Total deaths does not cause 000001_SS stock indices.

8.5.2 Relationship Between COVID-19 Data and Australia S&P/ASX 200 (AXJO) The following Table 8.4 shows unit root tests of series. P-values of Total Cases, Total Deaths are more than 0.05. These series are nonstationary at 5% level of significance. But P-value of AXJO stock indices is less than 0.05. AXJO is stationary at 5% level of significance as illustrated in Table 8.4. Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests. Regression coefficients are not statistically significant; therefore; it is not included in this study. Table 8.5 expresses causality tests of series. According to the Table 8.5 corresponding P-value for total cases is 0.04219 which is less than 0.05. Total cases does cause AXJO stock indices. On the other hand corresponding P-value for total deaths is 0.1164, which is more than 0.05. Total deaths does not cause AXJO stock indices.

Prob.*

−4.192337

−3.520787

−3.191277

1% level

5% level

10% level

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test −0.318204 0.9875 statistic

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.191277

−3.520787

−4.192337

0.351535 0.9983

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9

Table 8.4 Unit root tests of total cases, total deaths and AXJO

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.185512

−3.510740

−4.170583

−9.461589

Null Exogenous: Lag Length: 0 hypothesis: constant, (Automatic—based on AXJO has linear trend SIC, maxlag = 9) a unit root t-Statistic Prob.* 0.0000

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Table 8.5 Table causality tests of total cases, total deaths and AXJO Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause AXJO

46

3.40309

0.0429

AXJO does not Granger Cause TOTALCASES

3.06647

0.0574

TOTALDEATHS does not Granger 46 Cause AXJO

2.26758

0.1164

AXJO does not Granger Cause TOTALDEATHS

0.65931

0.5226

8.5.2.1

Relationship Between COVID-19 Data and India S&P BSE SENSEX (BSESN)

Unit root tests of series, as can been seen in Table 8.6. Table 8.6 expresses P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of BSESN stock indices is indices is less than 0.05. BSESN is stationary at 5% level of significance.Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests. Regression coefficients are not statistically significant; therefore; it is not included in this study. The following Table 8.7 shows causality tests of series. As shown in Table 8.7 corresponding P-value for total cases is 0.0473, which is less than 0.05. Total cases does cause BSESN stock indices. P-value for total deaths is 0.0250, which is less than 0.05. Total deaths does cause BSESN stock indices.

8.5.3 Relationship Between COVID-19 Data and Brazil IBOVESPA (BVSP) Unit root tests of series as illustrated in Table 8.8. Table 8.8 shows P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of BVSP stock indices is less than 0.05. BVSP is stationary at 5% level of significance. Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests. The following Table 8.9 shows the regression analysis of COVID-19 data and BVSP. Trend removal has shortened the data. Therefore, the first data is used. According to Table 8.9 corresponding P-value for total cases is 0.0201 which is less than 0.05. Total cases variable is significant. The coefficient is negative. For every additional total cases the expected unit of BVSP decreases by 0.408979 holding all other variables constant.

Prob.*

−4.198503

−3.523623

−3.192902

1% level

5% level

10% level

0.363600 0.9984

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test statistic

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.192902

−3.523623

−4.198503

1.077342 0.9999

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9

Table 8.6 Unit root tests of total cases, total deaths and BSESN

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.186854

−3.513075

−4.175640

−8.124022 0.0000

Null Exogenous: Lag length: 0 hypothesis: constant, (automatic—based on BSESN linear trend SIC, maxlag = 9) has a unit t-Statistic Prob.* root

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Table 8.7 Causality tests total cases, total deaths and BSESN Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 1 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause BSESN

46

4.17057

0.0473

BSESN does not Granger Cause TOTALCASES

0.88988

0.3508

TOTALDEATHS does not Granger 46 Cause BSESN

5.39845

0.0250

BSESN does not Granger Cause TOTALDEATHS

0.42966

0.5156

P-value for Total Deaths is no significant. Corresponding P-value for total cases is 0.0980 which more than 0.05. Causality tests of series as shown in Table 8.10. As can been seen in Table 8.10 corresponding P-value for total cases is 0.0425 which is less than 0.05. Total cases does cause BVSP stock indices. P-value for total deaths is 0.0858 which is more than 0.05. Besides, total deaths does not cause BVSP stock indices.

8.5.4 Relationship Between COVID-19 Data and France (CAC40) The following Table 8.11 shows unit root tests of series. According to Table 8.11, P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of CAC40 stock indices is indices is less than 0.05. CAC40 is stationary at 5% level of significance. Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests. Regression coefficients are not statistically significant; therefore; it is not included in this study. Causality tests of series, as shown in Table 8.12. Corresponding P-value for total cases is 0.0518, which is approximately equal to 0.05. Total cases does cause CAC40 stock indices. P-value for total deaths is 0.0818, which is more than 0.05. Total deaths does not cause CAC40 stock indices, as illustrated in Table 8.12.

Prob.*

−4.205004

−3.526609

−3.194611

1% level

5% level

10% level

0.493434 0.9989

t-Statistic

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 10)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.194611

−3.526609

−4.205004

1.320684 0.9999

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Table 8.8 Unit root tests of total cases, total deaths and BVSP

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.188259

−3.515523

−4.180911

−9.066776 0.0000

Null Exogenous: Lag length: 0 hypothesis: constant, (automatic—based on BVSP has linear trend SIC, maxlag = 9) a unit root t-Statistic Prob.*

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Table 8.9 The regression analysis of COVID-19 data and BVSP Dependent variable: BVSP

Sample: 1/21/2020 3/27/2020

Method: Least squares

Included observations: 46

Variable TOTAL_CASES TOTAL_DEATHS C

Coefficient

Std. error

t-Statistic

Prob.

−0.408979

0.169389

−2.414444

0.0201

6.251600

3.695578

1.691643

0.0980

118,882.4

3549.217

33.49540

0.0000

R-squared

0.678734

Akaike info criterion

Adjusted R-squared

0.663791

Durbin-Watson stat

0.229901

Prob (F-statistic)

0.000000

F-statistic

45.42272

21.51800

Table 8.10 Causality tests total cases, total deaths and BVSP Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause BVSP

44

3.42712

0.0425

BVSP does not Granger Cause TOTALCASES

2.34785

0.1089

TOTALDEATHS does not Granger 44 Cause BVSP

2.61688

0.0858

BVSP does not Granger Cause TOTALDEATHS

1.70316

0.1954

8.5.5 Relationship Between COVID-19 Data and United Kingdom (FTSE100) Unit root tests of series, as can been seen in Table 8.13. According to Table 8.13, P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of FTSE100 stock indices is less than 0.05. FTSE100 is stationary at 5% level of significance. Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests. The following Table 8.14 expresses the regression analysis of COVID-19 data and FTSE100. Table 8.14 shows the results of the analysis for COVID-19 data and FTSE100. Trend removal has shortened the data. Therefore, the first data is used. Corresponding P-value for total cases is 0.0115 which is less than 0.05. Total cases variable is significant. The coefficient is negative. For every additional total cases the expected unit of FTSE100 decreases by 0.023315 holding all other variables constant.

Prob.*

−4.186481

−3.518090

−3.189732

1% level

5% level

10% level

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test −0.161355 0.992 statistic

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 10)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.189732

−3.518090

−4.186481

0.530401 0.9991

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 10)

Table 8.11 Unit root tests of total cases, total deaths and CAC40

10% level

Test critical 1% level values: 5% level

Augmented Dickey-Fuller test statistic

−3.184230

−3.508508

−4.165756

−6.338153 0.0000

Null Exogenous: Lag length: 0 Hypothesis: constant, (automatic—based on CAC40 has linear trend SIC, maxlag = 10) a unit root t-Statistic Prob.*

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Table 8.12 Causality tests of series total cases, total deaths and CAC40 Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause CAC40

47

3.17842

0.0518

CAC40 does not Granger Cause TOTALCASES

1.09107

0.3452

TOTALDEATHS does not Granger 47 Cause CAC40

2.65937

0.0818

CAC40 does not Granger Cause TOTALDEATHS

0.85467

0.4327

P-value for total deaths is 0.0515 which is approximately equal to 0.05. Total deaths variable is significant. Coefficient is positive. For every additional total cases the expected unit of FTSE100 increases by 0.386158 holding all other variables constant. It gives opposite results with the expectations of this study. Causality tests of series as illustrated in Table 8.15. Table 8.15 shows corresponding P-value for total cases is 0.0105 which is less than 0.05. Total cases does cause FTSE100 stock indices. P-value for total deaths is 0.0201 which is less than 0.05. Total deaths does cause FTSE100 stock indices.

8.5.6 Relationship Between COVID-19 Data and Italy (FTSEMIB) The following Table 8.16 shows unit root tests of series. According to Table 8.16, P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of FTSEMIB stock indices is less than 0.05. FTSEMIB stationary at 5% level of significance. Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests. Regression coefficients are not statistically significant; therefore; it is not included in this study. Table 8.17 illustrates causality tests of series. According to Table 8.17, corresponding P-value for total cases is 0.0111, which is less than 0.05. Total cases does cause FTSEMIB stock indices. P-value for total deaths is 0.0281, which is less than 0.05. Total deaths does cause FTSEMIB stock indices.

Prob.*

−4.186481

−3.518090

−3.189732

1% level

5% level

10% level

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test −0.161355 0.9920 statistic

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 10)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.189732

−3.518090

−4.186481

0.530401 0.9991

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 10)

Table 8.13 Unit root tests of total cases, total deaths and FTSE100

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.184230

−3.508508

−4.165756

−6.499043 0.0000

Null Exogenous: Lag length: 0 hypothesis: constant, (Automatic—based on FTSE100 linear trend SIC, maxlag = 10) has a unit t-Statistic Prob.* root

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Table 8.14 The regression analysis of COVID-19 data and FTSE100 Dependent variable: FTSE100

Sample: 1/21/2020 3/27/2020

Method: Least squares

Included observations: 49

Variable TOTAL_CASES TOTAL_DEATHS C

Coefficient

Std. error

t-Statistic

Prob.

−0.023315

0.008859

−2.631675

0.0115

0.386158

0.193175

1.999004

0.0515

7618.670

186.7007

40.80686

0.0000

R-squared

0.607124

Akaike info criterion

Adjusted R-squared

0.590042

Durbin-Watson stat

0.138732

Prob (F-statistic)

0.000000

F-statistic

35.54263

15.62623

Table 8.15 Causality tests of total cases, total deaths and FTSE100 Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause FTSE100

47

5.08780

0.0105

FTSE100 does not Granger Cause TOTALCASES

0.52528

0.5952

TOTALDEATHS does not Granger 47 Cause FTSE100

4.29260

0.0201

FTSE100 does not Granger Cause TOTALDEATHS

0.35178

0.7055

8.5.7 Relationship Between COVID-19 Data and South Africa (FTWIZAFL) The following Table 8.18 shows unit root tests of series. P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of FTWIZAFL stock indices is less than 0.05. FTWIZAFL is stationary at 5% level of significance, as can been seen in Table 8.18. Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests. Regression coefficients are not statistically significant; therefore; it is not included in this study. Tablo 8.19 shows causality tests of series. According to Table 8.19, corresponding P-value for total cases is 0.0301, which is less than 0.05. Total cases does cause FTWIZAFL stock indices. P-value for total deaths is 0.0689, which is more than 0.05. Total deaths does not cause FTWIZAFL stock indices.

−3.518090

−3.189732

5% level

10% level

10% level

5% level

1% level

Test critical values:

−4.186481

1% level

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test statistic Augmented Dickey-Fuller test statistic

Prob.*

Prob.*

−3.189732

−3.518090

−4.186481

0.530401 0.9991

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 10)

−0.161355 0.992

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 10)

Table 8.16 Unit root tests of total cases, total deaths and FTSEMIB

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.184230

−3.508508

−4.165756

−6.962969 0.0000

Null Exogenous: Lag length: 0 hypothesis: constant, (automatic—based on FTSEMIB linear trend SIC, maxlag = 10) has a unit t-Statistic Prob.* root

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Table 8.17 Causality tests of total cases, total deaths and FTSEMIB Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause FTSEMIB

47

5.02233

0.0111

FTSEMIB does not Granger Cause TOTALCASES

2.91974

0.0650

TOTALDEATHS does not Granger 47 Cause FTSEMIB

3.89170

0.0281

FTSEMIB does not Granger Cause TOTALDEATHS

2.35110

0.1077

8.5.8 Relationship Between COVID-19 Data and Germany (GDAXI) Table 8.20 expresses unit root tests of series. According to Table 8.20, P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of GDAXI stock indices is less than 0.05. GDAXI is stationary at 5% level of significance. Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests. Regression coefficients are not statistically significant; therefore; it is not included in this study. Causality tests of series, as can been seen in Table 8.21. Table 8.21 shows corresponding P-value for total cases is 0.0073, which is less than 0.05. Total cases does cause GDAXI stock indices. P-value for total deaths is 0.0110, which is less than 0.05. Total deaths does cause GDAXI stock indices.

8.5.9 Relationship Between COVID-19 Data and Canada (GSPTSE) Table 8.22 illustrates unit root tests of series. According to Table 8.22, P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of GSPTSE stock indices is less than 0.05. GSPTSE is stationary at 5% level of significance.Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests. Regression coefficients are not statistically significant; therefore; it is not included in this study. Table 8.23 expresses causality tests of series.

Prob.*

−4.186481

−3.518090

−3.189732

1% level

5% level

10% level

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test −0.161355 0.992 statistic

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 10)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.189732

−3.518090

−4.186481

0.530401 0.9991

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 10)

Table 8.18 Unit root tests of total cases, total deaths and FTWIZAFL

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.184230

−3.508508

−4.165756

−6.619147 0.0000

Null Exogenous: Lag length: 0 hypothesis: constant, (automatic—based on FTWIZAFL linear trend SIC, maxlag = 10) has a unit t-Statistic Prob.* root

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Table 8.19 Causality tests of total cases, total deaths and FTWIZAFL Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause FTWIZAFL

47

3.81097

0.0301

FTWIZAFL does not Granger Cause TOTALCASES

4.99820

0.0113

TOTALDEATHS does not Granger Cause FTWIZAFL

2.85264

0.0689

1.54675

0.2248

47

FTWIZAFL does not Granger Cause TOTALDEATHS

Corresponding P-value for total cases is 0.0250, which is less than 0.05. Total cases does cause GSPTSE stock indices. P-value for total deaths is 0.0595, which is approximately equal to 0.05. Total deaths does cause GSPTSE stock indices as illustrated in Table 8.23.

8.5.10 Relationship Between COVID-19 Data and Indonesia (JKSE) Table 8.24 shows unit root tests of series. According to Table 8.24, P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of JKSE stock indices is less than 0.05. JKSE is stationary at 5% level of significance. Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests. The following Table 8.25 shows the regression analysis of COVID-19 data and JKSE. Table 8.25 expresses the results of analysis for COVID-19 data and JKSE. Trend removal has shortened the data. Therefore, the first data is used. Corresponding P-value for total cases is 0.0028, which is less than 0.05. Total cases variable is significant. The coefficient is negative. For every additional total cases the expected unit of JKSE decreases by 0.016347 holding all other variables constant. P-value for total deaths is 0.0341 which is less than 0.05. Total deaths variable is significant. Coefficient is positive. For every additional total cases the expected unit of JKSE increases by 0.246636 holding all other variables constant. It gives opposite results with the expectations of this study. Causality Tests of Series as can been seen in Table 8.26.

Prob.*

−4.186481

−3.518090

−3.189732

1% level

5% level

10% level

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test −0.161355 0.992 statistic

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 10)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.189732

−3.518090

−4.186481

0.530401 0.9991

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 10)

Table 8.20 Unit root tests of total cases, total deaths and GDAXI

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.184230

−3.508508

−4.165756

−6.340998 0.0000

Null Exogenous: Lag Length: 0 hypothesis: constant, (Automatic—based on GDAXI linear trend SIC, maxlag = 10) has a unit t-Statistic Prob.* root

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Table 8.21 Causality tests total cases, total deaths and GDAXI Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause GDAXI

47

5.53957

0.0073

GDAXI does not Granger Cause TOTALCASES

0.90601

0.4119

TOTALDEATHS does not Granger 47 Cause GDAXI

5.03504

0.0110

GDAXI does not Granger Cause TOTALDEATHS

0.64629

0.5291

As shown in Table 8.26, corresponding P-value for total cases is 0.0048 is less than 0.05. Total cases does cause JKSE stock indices. P-value for total deaths is 0.0030, which is less than 0.05. Total deaths does cause JKSE stock indices.

8.5.11 Relationship Between COVID-19 Data and South Korea (KS11) Table 8.27 expresses unit root tests of series. According to Table 8.27, P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of KS11 stock indices is less than 0.05. KS11 is stationary at 5% level of significance. Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests.Regression coefficients are not statistically significant; therefore; it is not included in this study. Causality tests of series as illustrated in Table 8.28. According to Table 8.28 corresponding P-value for total cases is 0.0040 which is less than 0.05. Total cases does cause KS11 stock indices. P-value for total deaths is 0.0027, which is less than 0.05. Total cases does cause KS11 stock indices.

Prob.*

−4.192337

−3.520787

−3.191277

1% level

5% level

10% level

0.044458 0.9956

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test statistic

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.198312

−3.533083

−4.219126

1.980432 1.0000

t-Statistic

Null hypothesis: Exogenous: Lag length:9 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Table 8.22 Unit root tests of total cases, total deaths and GSPTSE

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.185512

−3.510740

−4.170583

−9.040788 0.0000

Null Exogenous: Lag Length: 0 hypothesis: constant, (Automatic—based on GSPTSE linear trend SIC, maxlag = 9) has a unit t-Statistic Prob.* root

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Table 8.23 Causality tests of total cases, total deaths and GSPTSE Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause GSPTSE

46

4.04340

0.0250

GSPTSE does not Granger Cause TOTALCASES

0.62194

0.5419

TOTALDEATHS does not Granger 46 Cause GSPTSE

3.02447

0.0595

GSPTSE does not Granger Cause TOTALDEATHS

0.31574

0.7310

8.5.12 Relationship Between COVID-19 Data and Argentina (MERVAL) Table 8.29 shows unit root tests of series. As shown in Table 8.29, P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of MERVAL stock indices is less than 0.05. MERVAL is stationary at 5% level of significance.Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests. Regression coefficients are not statistically significant; therefore; it is not included in this study. Causality tests of series, as can been seen in Table 8.30. As shown in Table 8.30 corresponding P-value for total cases is 0.3907, which is more than 0.05. Total cases does not cause MERVAL stock indices. P-value for total deaths is 0.4261, which is more than 0.05. Total cases does not cause MERVAL stock indices.

8.5.13 Relationship Between COVID-19 Data and Russia (MOEX) Unit root tests of series as can been seen in Table 8.31. According to Table 8.31, P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of MOEX stock indices is less than 0.05. MOEX is stationary at 5% level of significance. Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests. The following Table 8.32 shows the regression analysis of COVID-19 data and MOEX.

Prob.*

−4.192337

−3.520787

−3.191277

1% level

5% level

10% level

0.990052 0.9998

t-Statistic

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.191277

−3.520787

−4.192337

2.244205 1.0000

t-Statistic

Null hypothesis: Exogenous: Lag length:5 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Table 8.24 Unit root tests of total cases, total deaths and JKSE

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.185512

−3.510740

−4.170583

−4.850523 0.0015

Null Exogenous: Lag length: 0 hypothesis: constant, (automatic—based on JKSE has a linear trend SIC, maxlag = 9) unit root t-Statistic Prob.*

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Table 8.25 The regression analysis of COVID-19 data and JKSE Dependent variable: JKSE

Sample: 1/21/2020 3/27/2020

Method: Least squares

Included observations: 48

Variable TOTAL_CASES TOTAL_DEATHS C

Coefficient

Std. error

t-Statistic

Prob.

−0.016347

0.005160

−3.167779

0.0028

0.246636

0.112847

2.185571

0.0341

6208.568

108.4110

57.26880

0.0000

R-squared

0.763230

Akaike info criterion

Adjusted R-squared

0.752707

Durbin-Watson stat

0.253433

Prob (F-statistic)

0.000000

F-statistic

72.52905

14.54027

Table 8.26 Causality tests of total cases, total deaths and JKSE Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 1 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause JKSE

47

8.84527

0.0048

JKSE does not Granger Cause TOTALCASES

1.76517

0.1908

TOTALDEATHS does not Granger 47 Cause JKSE

9.84680

0.0030

JKSE does not Granger Cause TOTALDEATHS

0.80286

0.3751

Table 8.32 reports the results of the analysis for COVID-19 data and MOEX. Trend removal has shortened the data. Therefore, the first data is used. Corresponding P-value for total cases is 0.0137 which is less than 0.05. Total cases variable is significant. The coefficient is negative. For every additional total cases the expected unit of MOEX decreases by 0.009006 holding all other variables constant. P-value for total deaths is 0.0535 which is approximately equal to 0.05. Total deaths variable is significant. Coefficient is positive. For every additional total cases the expected unit of MOEX increases by 0.151683 holding all other variables constant. It gives opposite results with the expectations of this study. Table 8.33 illustrates causality tests of series. According to Table 8.33 corresponding P-value for total cases is 0.0313 which is less than 0.05. Total cases does cause MOEX stock indices. P-value for total deaths is 0.0556, which is approximately equal to 0.05. Total cases does cause MOEX stock indices.

−3.523623

−3.192902

5% level

10% level

10% level

5% level

1% level

Test critical values:

−4.198503

1% level

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test statistic

Augmented Dickey-Fuller test statistic

Prob.*

Prob.*

−3.192902

−3.523623

−4.198503

0.153992 0.9968

t-Statistic

Null hypothesis: Exogenous: Lag length:5 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

−0.457045 0.9817

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Table 8.27 Unit root tests of total cases, total deaths and KS11

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.186854

−3.513075

−4.175640

−6.276879 0.0000

Null Exogenous: Lag length: 0 hypothesis: constant, (automatic—based on KS11 has a linear trend SIC, maxlag = 9) unit root t-Statistic Prob.*

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Table 8.28 Causality tests of series of total cases, total deaths and KS11 Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause KS11

45

6.37258

0.0040

KS11 does not Granger Cause TOTALCASES

7.06412

0.0024

TOTALDEATHS does not Granger 45 Cause KS11

6.90565

0.0027

KS11 does not Granger Cause TOTALDEATHS

8.59459

0.0008

8.5.14 Relationship Between COVID-19 Data and Mexico (MXX) Table 8.34 shows unit root tests of series. Table 8.34 expresses P-values of Total Deaths are more than 0.05. Total Deaths is non-stationary at 5% level of significance. But P-value of Total Cases and MXX are less than 0.05. Total Cases and MXX are stationary at 5% level of significance. Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests.Regression coefficients are not statistically significant. Therefore; it is not included in this study. Table 8.35 illustrates causality tests of series. According to the Table 8.35, corresponding P-value for total cases is 0.1676, which is more than 0.05. Total cases does not cause MXX stock indices. P-value for total deaths is 0.2771, which is more than 0.05. Total cases does not cause MXX stock indices.

8.5.15 Relationship Between COVID-19 Data and Japan (NIKKEI225) Table 8.36 expresses unit root tests of series. According to Table 8.36, P-values of Total Cases is less than 0.05. Total Cases is stationary at 5% level of significance. Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. P-value of NIKKEI225 stock indices is less than 0.05. NIKKEI225 is stationary at 5% level of significance. Trend effects of Total Deaths are eliminated and series were made stationary according to results of unit root tests. The following Table 8.37 shows the regression analysis of COVID-19 data and NIKKEI225.

Prob.*

−4.211868

−3.529758

−3.196411

1% level

5% level

10% level

1.978087 1.0000

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test statistic

t-Statistic

Null hypothesis: Exogenous: Lag length: 5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.196411

−3.529758

−4.211868

2.457611 1.0000

t-Statistic

Null hypothesis: Exogenous: Lag length:5 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Table 8.29 Unit root tests of total cases, total deaths and MERVAL

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.189732

−3.518090

−4.186481

−7.261745 0.0000

Null Exogenous: Lag Length: 0 hypothesis: constant, (Automatic—based on MERVAL linear trend SIC, maxlag = 9) has a unit t-Statistic Prob.* root

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Table 8.30 Causality tests of total cases, total deaths and MERVAL Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause MERVAL

43

0.96343

0.3907

MERVAL does not Granger Cause TOTALCASES

1.92316

0.1601

TOTALDEATHS does not Granger 43 Cause MERVAL

0.87253

0.4261

MERVAL does not Granger Cause TOTALDEATHS

1.84601

0.1717

Table 8.37 reports the results of analysis for COVID-19 data and NIKKEI225. Corresponding P-value for total cases is 0.0000 which is less than 0.05. Total cases variable is significant. The coefficient is negative. For every additional total cases the expected unit of NIKKEI225 decreases by 0.014399 holding all other variables constant. P-value for Total deaths is no significant. Corresponding P-value for total deaths is 0.1707 which more than 0.05. Table 8.38 shows causality tests of series. Corresponding P-value for total cases is 0.0059 which is less than 0.05. Total cases does cause NIKKEI225 stock indices. P-value for total deaths is 0.1661 which is more than 0.05. Total deaths does not cause NIKKEI225 stock indices as illustrated in Table 8.40.

8.5.16 Relationship Between COVID-19 Data and United States (SP500) Table 8.39 expresses unit root tests of series. According to Table 8.39, P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of SP500 stock indices is less than 0.05. SP500 is stationary at 5% level of significance. Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests. Regression coefficients are not statistically significant; therefore; it is not included in this study. Causality tests of series as can been seen in Table 8.40.

−4.198503

−3.523623

−3.192902

1% level

5% level

10% level

0.35382

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test statistic

0.9983

Null Exogenous: Lag Length: 5 Hypothesis: constant, (Automatic—based on TOTAL_CASES linear trend SIC, maxlag = 9) has a unit root t-Statistic Prob.*

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.192902

−3.523623

−4.198503

1.077047 0.9999

t-Statistic

Null Hypothesis: Exogenous: Lag Length:5 TOTAL_DEATHS constant, (Automatic—based on has a unit root linear trend SIC, maxlag = 9)

Table 8.31 Unit root tests of total cases, total deaths and MOEX

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.186854

−3.513075

−4.175640

−6.362768 0.0000

Null Exogenous: Lag Length: 0 hypothesis: constant, (Automatic—based on MOEX has linear trend SIC, maxlag = 9) a unit root t-Statistic Prob.*

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Table 8.32 The regression analysis of COVID-19 data and MOEX Sample: 1/21/2020 3/27/2020

Dependent variable: MOEX Method: Least squares Variable TOTAL_CASES TOTAL_DEATHS C

Included observations: 47 Coefficient

Std. error

t-Statistic

Prob.

−0.009006

0.003506

−2.568993

0.0137

0.151683

0.076459

1.983842

0.0535

3173.661

72.98753

43.48223

0.0000

R-squared

0.588324

Akaike info criterion

Adjusted R-squared

0.569611

Durbin-Watson stat

0.144134

Prob (F-statistic)

0.000000

F-statistic

31.44007

13.74736

Table 8.33 Causality tests of series total cases, total deaths and MOEX Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTAL_CASES does not Granger Cause MOEX

45

3.78115

0.0313

MOEX does not Granger Cause TOTAL_CASES

2.13143

0.1320

TOTAL_DEATHS does not Granger 45 Cause MOEX

3.10855

0.0556

MOEX does not Granger Cause TOTAL_DEATHS

1.83250

0.1732

Table 8.40 shows corresponding P-value for total cases is 0.0249, which is less than 0.05. Total cases does cause SP500 stock indices. P-value for total deaths is 0.0501 which is approximately equal to 0.05. Total deaths does cause SP500 stock indices.

Prob.*

−4.175640

−3.513075

−3.186854

1% level

5% level

10% level

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test −4.318111 0.0069 statistic

t-Statistic

Null hypothesis: Exogenous: Lag length:0 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−2.610263

−2.943427

−3.621023

3.329571 1.0000

t-Statistic

Null hypothesis: Exogenous: Lag length:9 TOTAL_DEATHS constant, (Automatic—based on has a unit root linear trend SIC, maxlag = 9)

Table 8.34 Unit root tests of total cases, total deaths and MXX

10% level

Test critical 1% level values: 5% level

Augmented Dickey-Fuller test statistic

−3.186854

−3.513075

−4.175640

−6.687366 0.0000

Null Exogenous: Lag length: 0 hypothesis: constant, (automatic—based on MXX has a linear trend SIC, maxlag = 9) unit root t-Statistic Prob.*

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Table 8.35 Causality tests of series total cases, total deaths and MXX Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTAL_CASES does not Granger Cause MXX

45

1.86850

0.1676

MXX does not Granger Cause TOTAL_CASES

3.38103

0.0440

TOTALDEATHS does not Granger 45 Cause MXX

1.32557

0.2771

MXX does not Granger Cause TOTALDEATHS

2.61124

0.0859

8.5.17 Relationship Between COVID-19 Data and Saudi Arabia (TASI) Table 8.41 illustrates unit root tests of series. According to Table 8.41, P-values of Total Cases and Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. But P-value of TASI stock indices is less than 0.05. TASI is stationary at 5% level of significance. Trend effects of Total Cases, Total Deaths are eliminated and series were made stationary according to results of unit root tests. Regression analysis of COVID-19 data and TASI as can been seen in Table 8.42. Table 8.42 illustrates the results of analysis for COVID-19 data and TASI. Trend removal has shortened the data. Therefore, the first data is used. Corresponding P-value for total cases is 0.0004 which is less than 0.05. Total cases variable is significant. The coefficient is negative. For every additional total cases the expected unit of TASI decreases by 0.026100 holding all other variables constant. P-value for total deaths is 0.0057 which is less than 0.05. Total deaths variable is significant. Coefficient is positive. For every additional total cases the expected unit of TASI increases by 0.440957 holding all other variables constant. It gives the opposite results with the expectations of this study. Table 8.43 shows causality tests of series. Corresponding P-value for total cases is 0.7429, which is more than 0.05. Total cases does not cause TASI stock indices. P-value for total deaths is 0.4046, which is more than 0.05. Total deaths does not cause TASI stock indices, as illustrated in Table 8.43.

Prob.*

−4.180911

−3.515523

−3.188259

1% level

5% level

10% level

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test −4.797925 0.0019 statistic

t-Statistic

Null hypothesis: Exogenous: Lag length:0 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.200320

−3.536601

−4.226815

−1.532984 0.7996

t-Statistic

Null hypothesis: Exogenous: Lag length:7 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Table 8.36 Unit root tests of total cases, total deaths and NIKKEI225

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.188259

−3.515523

−4.180911

−5.105040 0.0008

Null Exogenous: Lag Length: 0 hypothesis: constant, (Automatic—based on NIKKEI225 linear trend SIC, maxlag = 9) has a unit t-Statistic Prob.* root

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Table 8.37 The regression analysis of COVID-19 data and NIKKEI225 Dependent variable: NIKKEI225

Sample: 1/21/2020 3/27/2020

Method: Least squares

Included observations: 46

Variable

Coefficient

Std. error

t-Statistic

Prob.

TOTAL_CASES

−0.014399

0.002101

−6.854887

0.0000

TOTALDEATHS

0.576283

0.413625

1.393251

0.1707

C

23,054.19

340.6212

67.68278

0.0000

R-squared

0.524722

Akaike info criterion

Adjusted R-squared

0.502616

Durbin-Watson stat

0.151603

Prob (F-statistic)

0.000000

F-statistic

23.73664

17.81324

Table 8.38 Causality tests of series total cases, total deaths and NIKKEI225 Pairwise Granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null Hypothesis:

Obs

F-Statistic

Prob.

TOTAL_CASES does not Granger Cause NIKKEI225

44

5.88191

0.0059

NIKKEI225 does not Granger Cause TOTAL_CASES

1.61708

0.2115

TOTALDEATHS does not Granger Cause NIKKEI225

1.88038

0.1661

0.09062

0.9136

44

NIKKEI225 does not Granger Cause TOTALDEATHS

8.5.18 Relationship Between COVID-19 Data and Turkey (XU100) Table 8.44 shows unit root tests of series. P-values of Total Cases is less than 0.05. Total Cases is stationary at 5% level of significance. Total Deaths are more than 0.05. These series are non-stationary at 5% level of significance. P-value of XU100 stock indices is less than 0.05. XU100 is stationary at 5% level of significance as illustrated in Table 8.44. Trend effects of Total Deaths are eliminated and series were made stationary according to results of unit root tests. The following Table 8.45 shows the regression analysis of COVID-19 data and XU100.

Prob.*

−4.192337

−3.520787

−3.191277

1% level

5% level

10% level

0.044458 0.9956

t-Statistic

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test statistic

Null hypothesis: Exogenous: Lag length:5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.198312

−3.533083

−4.219126

1.980432 1.0000

t-Statistic

Null hypothesis: Exogenous: Lag length:9 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Table 8.39 Unit root tests of total cases, total deaths and SP500

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.185512

−3.510740

−4.170583

−10.52774

0.0000

Null Exogenous: Lag length: 0 hypothesis: constant, (automatic—based on SP500 has linear trend SIC, maxlag = 9) a unit root t-Statistic Prob.*

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Table 8.40 Causality tests of total cases, total deaths and SP500 Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause SP500

46

4.04464

0.0249

SP500 does not Granger Cause TOTALCASES

0.11486

0.8918

TOTALDEATHS does not Granger 46 Cause SP500

3.22435

0.0501

SP500 does not Granger Cause TOTALDEATHS

0.01889

0.9813

Table 8.45 reports the results of the analysis for COVID-19 data and XU100. Corresponding P-value for total cases is 0.0000 which is less than 0.05. Total cases variable is significant. The coefficient is negative. For every additional total cases the expected unit of XU100 decreases by 0.090007 holding all other variables constant. P-value for Total deaths is no significant. Corresponding P-value for total deaths is 0.2247, which more than 0.05. Table 8.46 shows Causality Tests of Series. According to the Table 8.46 corresponding P-value for total cases is 0.0155 which is less than 0.05. Total cases does cause XU100 stock indices. P-value for total deaths is 0.1129 which is more than 0.05. Total deaths does not cause XU100 stock indices.

8.6 Conclusion COVID-19 affected not only world health but also it has indirect effects for financial markets. It has changed the way all people live and work. It is expected to affect this way in a long time. According to this study, the stock market indices of 19 countries were examined. Many results have been obtained based on countries. According to unit root tests, stock indices of 18 countries are stationary at 5% level of significance. Mostly total deaths and total cases are non-stationary at 5% level of significance. Regression coefficients of 7 countries are statistically significant. These countries are Brazil, United Kingdom, Indonesia, Russia, Japan, Saudi Arabia and Turkey. Total cases of Covid 19 does cause 16 countries of stock indices according to causality tests. These countries are China, Australia, India, Brasil, France, United

Prob.*

−4.192337

−3.520787

−3.191277

1% level

5% level

10% level

0.258335 0.9977

t-Statistic

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test statistic

Null hypothesis: Exogenous: Lag length:5 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Test critical values: 10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

Prob.*

−3.196411

−3.529758

−4.211868

1.238313 0.9999

t-Statistic

Null hypothesis: Exogenous: Lag length:8 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 9)

Table 8.41 Unit Root Tests of Total Cases, Total Deaths and TASI

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.185512

−3.510740

−4.170583

−6.556628 0.0000

Null Exogenous: Lag length: 0 hypothesis: constant, (automatic—based on TASI has a linear trend SIC, maxlag = 9) unit root t-Statistic Prob.*

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Table 8.42 The regression analysis of COVID-19 data and TASI Dependent variable: TASI

Sample: 1/21/2020 3/26/2020

Method: Least squares

Included observations: 48

Variable TOTAL_CASES TOTAL_DEATHS C

Coefficient

Std. error

t-Statistic

Prob.

−0.026100

0.006884

−3.791303

0.0004

0.440957

0.151773

2.905373

0.0057

8385.229

141.6114

59.21297

0.0000

R-squared

0.728712

Akaike info criterion

Adjusted R-squared

0.716654

Durbin-Watson stat

0.235577

Prob (F-statistic)

0.000000

F-statistic

60.43760

15.05284

Table 8.43 Causality tests of series total cases, total deaths and TASI Pairwise granger causality tests, sample: 1/21/2020 3/26/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTALCASES does not Granger Cause TASI

46

0.29939

0.7429

TASI does not Granger Cause TOTALCASES

0.94198

0.3981

TOTALDEATHS does not Granger 46 Cause TASI

0.92523

0.4046

TASI does not Granger Cause TOTALDEATHS

0.41983

0.6599

Kingdom, Italy, South Africa, Germany, Canada, Indonesia, South Korea, Russia, Japan, the United States and Turkey. The total number of deaths was not as effective as the total number of cases. Total deaths of Covid-19 does cause 6 countries of stock indices according to causality tests. These countries are the India, United Kingdom, Italy, Germany, Canada, Indonesia, South Korea, Russia and the United States. According to the study, Covid-19 mostly affects stock markets. More comprehensive results will be achieved in the long term.

−3.508508

−3.184230

5% level

10% level

10% level

5% level

1% level

Test critical values:

−4.165756

1% level

*MacKinnon (1996) one-sided p-values

Test critical values:

Augmented Dickey-Fuller test statistic

Augmented Dickey-Fuller test statistic

Prob.*

Prob.*

−3.183002

−3.506374

−4.161144

6.002521 1.0000

t-Statistic

Null hypothesis: Exogenous: Lag length:0 TOTAL_DEATHS constant, (automatic—based on has a unit root linear trend SIC, maxlag = 10)

−3.531543 0.0475

t-Statistic

Null hypothesis: Exogenous: Lag length:0 TOTAL_CASES constant, (automatic—based on has a unit root linear trend SIC, maxlag = 10)

Table 8.44 Unit root tests of total cases, total deaths and XU100

Test critical values:

10% level

5% level

1% level

Augmented Dickey-Fuller test statistic

−3.184230

−3.508508

−4.165756

−7.315284 0.0000

Null Exogenous: Lag length: 0 hypothesis: constant, (automatic—based on XU100 has linear trend SIC, maxlag = 9) a unit root t-Statistic Prob.*

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Table 8.45 The regression analysis of COVID-19 data and XU100 Dependent variable: XU100

Sample: 1/21/2020 3/27/2020

Method: Least squares

Included observations: 49

Variable TOTAL_CASES TTOTALDEATHS C

Coefficient

Std. error

t-Statistic

Prob.

−0.090007

0.009326

−9.650923

0.0000

3.317562

2.695560

1.230750

0.2247

118,778.2

1528.628

77.70247

0.0000

R-squared

0.670250

Akaike info criterion

Adjusted R-squared

0.655913

Durbin-Watson stat

0.168276

Prob (F-statistic)

0.000000

F-statistic

46.74973

20.85012

Table 8.46 Causality tests of total cases, total deaths and XU100 Pairwise granger causality tests, sample: 1/21/2020 3/27/2020, lags: 2 Null hypothesis:

Obs

F-Statistic

Prob.

TOTAL_CASES does not Granger Cause XU100

47

4.60727

0.0155

XU100 does not Granger Cause TOTAL_CASES

2.76029

0.0748

TOTALDEATHS does not Granger 47 Cause XU100

2.29811

0.1129

XU100 does not Granger Cause TOTALDEATHS

0.88901

0.4187

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Volkan Dayan is an Associate Professor in Department of Banking and Finance, Uzunkopru School of Applied Sciences at Trakya University, Edirne (Turkey). He worked formerly in Celal Bayar University, Mugla Sitki Kocman University, He received a Ph.D. in Finance at Celal Bayar University, Turkey. He is visiting scholar at Bilgi University, Istanbul and University of La Laguna, Spain. He has completed the postdoctoral training program “Social Sciences and Humanities in a Post-Crisis Period” in The European Scientific Institute and University of La Laguna, Spain. His research interests cover topics in the field of economy and finance, such as basel regulations, credit risk management, cryptocurrencies and sustainable finance. He took part into different international conferences. He performed research projects at the national and international level. He took part into different international conferences and in Erasmus mobility programme at Huelva University, Spain.

Part V

Recommended Management Styles during the Covid-19

Chapter 9

The Perception of Epidemic Situation Amongst Coaching and Mentoring Professionals: An Emotional Analysis Approach Sezer Bozkus Kahyaoglu

and Riza Kadilar

Abstract In this paper, the perception of COVID-19 situation amongst coaching, mentoring, and supervision practitioners is analyzed based on the survey conducted by European Mentoring Coaching Council (EMCC Global) with the participation of (476) people from various countries. Based on the data obtained, ‘word cluster analysis-emotional text mining’ and ‘correlation analysis’ are performed. The major empirical findings are summarized as follows: firstly, correlations are calculated among the most repetitive words in the statements of participants by using the Euclidian distance approach. In this respect, participants describe COVID-19 related feelings with the most frequent words they use as coaching, work, anxiety, clients, working, fear, time, business, home, and stress respectively. This indicates that COVID-19 epidemic related issues leads participants to think about their clients. They have the most common feelings of anxiety, stress, and fear at work, business and home. They are sensitive about the time as well. Secondly, cluster dendrogram is applied and this indicates that there are five major categories defined with strong correlation between them such that: coaching, work, anxiety, change, issues, crisis, will, managing, new, people, management, client, working, fear, uncertainty, future, time, stress, business, home. In conclusion, policy recommendations are made regarding the pandemic period all over the world in order to contribute relevant literature based on the empirical findings of EMCC Global’s survey. Keywords Coaching · Mentoring · Emotional text mining · Dendrogram · COVID-19 · EMCC global

S. B. Kahyaoglu (B) Accounting and Finance Department, Izmir Bakircay University, Izmir, Turkey e-mail: [email protected] R. Kadilar EMCC Global, Brussels, Belgium e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 K. T. Çalıyurt (ed.), Corporate Sustainability in Times of Virus Crises, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-19-9079-3_9

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9.1 Introduction It is a fact that the COVID-19 epidemic required mandatory isolation for everyone in all countries and hence, all professions and sectors are affected by this situation. In this context, EMCC Global conducted a global survey in order to reveal the current situation regarding coaches, mentors, and supervision practitioners as one of the most affected professions. These survey findings provide a wide-ranging study of global emotions and thoughts, and based on the common findings from this research, it is aimed to develop a strategy against COVID-19 epidemic on behalf of the coaching and mentoring profession. In this respect, the organization of the paper is as follows: Firstly, the basic definition of the coaching and mentoring profession is made and its differences and benefits are explained. These explanations are especially presented within the framework of the current literature, and the future expectations regarding the position of coaching and mentoring in the period after COVID-19 epidemic are also stated. Secondly, data is explained, and the profile and demographic information of participants are provided. In addition, the methodology and the dendrogram is presented based on emotional text mining analysis. Thirdly, the empirical findings are presented in detail. In conclusion, policy recommendations are made considering the perceptions of COVID-19 epidemic situation amongst coaching, mentoring, and supervision practitioners in order to contribute relevant literature.

9.2 Literature Review on Mentoring and Coaching The origin of mentoring and coaching profession goes back to ancient times specifically to the Odyssey epic about 2,700 years ago. Today, the mentoring and coaching professions are widely accepted in the world and they are among the professions that serve institutionally in a wide variety of forms and age groups. The use of mentoring in the business world in the modern sense began first in the USA in the 1980s. Mentoring and coaching relations before this period were generally practiced in an informal approach in various organizations (Clutterbuck et al. 2012). Mentoring simply focuses on “growing an individual” and this focus is dedicated to the mentee’s professional career and personal wellbeing. The characteristic of this relationship is based on expert and learner. Coaching is defined in a narrower scope than mentoring, and relates to certain domain of performance and occupational outcome of individuals. The European Mentoring Centre (EMC) (1999) makes a formal definition of mentoring as follows: “…off-line help by one person to another in making significant transitions in knowledge, work or thinking”. In addition, the definition of mentoring as suggested by the EMCC mentoring work group of experts as presented at EMCC 26th Yearly Conference on 2 June 2020: “Mentoring is a learning relationship, involving the sharing of skills, knowledge, and expertise between a mentor and client through developmental conversations, experience sharing, and role modelling. The relationship may cover a wide variety

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of contexts, and is an inclusive two-way partnership for mutual learning that values differences” (EMCC Global 2020). In the early periods, different approaches emerged on the definition of coaching and mentoring in the USA and Europe, specifically UK and expectations from this profession. In the USA, it can be stated that a stronger positioning of the mentors is generally made compared to Europe. This means that mentors have a strong impact on providing career opportunities for their mentees with their wide range of experience, influential networks, and deep knowledge. Hence, in the USA mentoring practice, it is assumed that the mentor has a strong and superior position against the mentee. On the other hand, in the case of Europe and especially England, the role of the mentor consists mostly of guidance, counseling and facilitation. It is assumed that the mentor is more experienced and knowledgeable about the area that the mentee needs. Clutterbuck (2001) argues that the mentor’s responsibility is not to do what the mentee is supposed to do. Rather, the mentor supports the mentee in the career development process and undertakes to reveal his/her level of awareness and personal development needs. According to this approach, the most important responsibility expected from mentors should be to contribute to finding the right solution by asking the right questions to the mentee. The important point here is to establish a “learning cooperation” between the mentor and the mentee (Withmore 2002; Kochan and Pascarelli 2012; Kadilar and Balkan 2016). In this learning process, mentors can help mentees to realize the changes caused by external and internal factors in accordance with their needs and expectations regarding the professional work environment and personal issues. Klasen and Clutterbuck (2002) define this learning process as establishing a “learning partnership” by making use of the ability. Throughout this process, the mentors and the mentees are expected to act responsibly as parties to this mentoring relationship. Thus, the mentor and mentee on both sides of the relationship will create the best environment for their own learning journey. In this way, they will be able to share their knowledge, skills and experiences openly and honestly. A mentor cannot solve the problems the mentee encounters. Instead, it can help the mentee to increase his competencies, achieve his goals, and overcome obstacles. Therefore, the mentee should take advantage of the information and experiences transferred to him during the personal development process, determine his goals and take advantage of it himself (Hattingh et al. 2005). There is a growing professionalism of mentoring as a service. This is due to the corporate users’ needs and expectations from this service. The benefits provided by mentoring have already been noticed in the business world of the twenty-first century and are widely implemented in corporate businesses all over the world. Businesses that use the mentoring mechanism well and effectively gain a significant competitive advantage (Allen and Poteet 1999; Burke et al. 1994). Especially in times of crisis, this advantage is even more evident (Baruch 1999, 2002; Gibb 1999; Finkelstein et al. 2003). In traditional approaches, there is an assumption that the mentor is older than the mentee will also have more in experience. Considering the potential capacity and strength of their own characters, both mentors and mentees can influence each other during execution of the learning relationships and this can be called “mutual learning

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and support relationship” as well. In this respect, young people are now offered more opportunities in learning relationships, which have recently been identified as “reverse mentorship” (Augustiniene and Ciuciulkiene 2013; Zauchner-Studnicka 2017). It is possible to involve in reverse mentoring when the experience of the young is appropriate for the old. The pandemic period has made the human factor, which is competent in the dynamic structure of the business world, even more important. In order to cope with the problems in such a disruptive transformation that arise during the pandemic period, it makes it necessary for people around the world to have more resilient and quick decision-making skills against increasing risks. The need for mentoring and coaching support is increasing even more to have problem solving skills and to make fast and consistent decisions (EMCC Global 2020). In this context, it was decided by EMCC Global to conduct a global survey in order to understand the status and perception of its members whom are located in various countries. In this respect, these survey data, methodology and empirical findings are presented in the below sections.

9.3 The Data and Methodology 9.3.1 The Profile and Demographic Information of Participants In this paper, the data is obtained from the survey of EMCC Global, which is conducted in April 2020.1 There are (476) participants from more than (25) countries, namely Belgium, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Spain, Switzerland, Turkey, Ukraine, United Kingdom, and the Asia Pacific Region. The major aim of this survey is to understand the perception of participants during pandemic period. The profiles and demographic information of participants are shown in detail at Appendix 9.1, and the key issues are summarized as follows: • Membership: The 65.6% of participants are EMCC Members and 29% of them are members of other coaching organisations. This is a valuable information regarding the fact that the Survey results reflect the views and the situation of mentoring and coaching community. • Gender Information: The 63.3% of participants are female and hence, female represents the significant majority of this community. • Age Information: The average age of respondents is between 45 and 54. 1

EMCC Global supports this academic work and gives permission to use the survey data. In this respect, the authors are grateful for EMCC Global for sharing this valuable multinational survey data to understand the perception of participants against epidemic.

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• Employment Status: 50.8% of participants are Self-employed professionals and 28.4% of them are the Business owners in a Partnership. • Work Experience: The average work experience of participants is quite high, i.e. 37% of them between 11 and 20 years and 15% of them more than 20 years. This is an important finding that the most experienced participants constitute the majority in this research. • Coaching, Mentoring and Supervision Activity: The main field of activity of • more than half of the participants is Coaching, Mentoring, and Supervision. • Trends in Business Activity: Compared to their business expectations in January 2020; the 29% of participants state that their business activity almost stopped; the 18.8% of participants state that their business activity is decreased by 51–75% and the 17.3% of participants state that their business activity is decreased by 26–50% due to COVID-19. • Preparedness of Participants for Support: The 64.3% of participants are ready to contribute by providing coaching support to all people working on the Frontline. The data is analyzed by using correlation analysis, emotional text mining (the word cluster analysis), and cluster dendrogram which is explained in the below section.

9.3.2 Correlation Analysis and Emotional Text Mining Correlation analysis is used to obtain preliminary information about the direction and extent of the relationship within the data. In this survey, the data is mainly the unstructured sentences of the participants and hence, the correlations are calculated among the most repetitive words in the statements of participants by using the Euclidian distance approach.2 This approach gives the distance, direction and allocation from each word in the raster to the nearest reference (Lee et al. 2010). It is a fact that the proper, coherent and fast processing of textual data is an important development in knowledge management in today’s business world. In this regard, considering the high speed of increasing amount of textual data, there is a need for new text processing techniques. Text processing techniques are mostly applied for finding the texts written in the same scope and organizing the recently come data with respect to the existing range. In order to make a mathematical model by using the texts, there is a need for processing the textual data via computer systems. In addition, it is necessary to apply data mining techniques on these texts. In this respect, a vector space model is used. A specific vector space model is established

2

The Euclidean distance is computed based on Euclidean algorithm. The brief explanation of this algorithm is as follows: Euclidean distance can be computed from the center of the source unit to the center of each of the surrounding units. In this way, the True Euclidean distance is achieved at the end. For instance, for each unit, the distance to each source unit is calculated by computing the hypotenuse with x_max and y_max as the other two legs of the triangle. This calculation is necessary to obtain the true Euclidean distance, rather than the unit distance.

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by considering the textual data as a term vector by weighting the terms consisting of the texts (Eroglu 2000; Balci et al. 2015). In the text mining techniques, the impact of a word in textual data, i.e. in a document is evaluated with word frequency (tf) and inverse document frequency (idf). This formula (tf-idf) is calculated to reflect the discriminative power of a word both within a textual data and over the whole documents. The level of similarity between two documents is determined by using cosine function. This function is based on Euclidian geometry, cosine Q = (v1v2)/(||v1|| ||v2||) (Salton 1989; Titov and McDonald 2008; Lee et al. 2010; Noel 2018; Akundi et al. 2018). Initial step for the text mining is to clean the text from the noise factors. The emotional text mining is a certain way of data mining. The major difference between these two mining techniques is related to the nature of data, i.e. data mining is based on structured data and text mining is based on unstructured data. The structured data usually comes from the corporate databases like ERP, CRM, and accounting applications. On the other hand, major source of the unstructured data is internet, social media and various type of documents. Today’s competitive business environment requires us to analyze not only the structured data but also the unstructured digital data by using advanced text mining techniques as an influential tool for utilizing the strength of this data. This is achieved by extracting valuable information in order to name the significant connections and correlations hidden in this data. Due to the growing value of artificial intelligence applications in every field of our lives via digital transformation, the usage of text processing, deep learning, machine learning and pattern recognition to textual information becomes key issues in the economy. In this respect, each and every sector and profession is looking for a suitable text mining solution for their business context to maintain their competitive advantage (Hearst 2005; Bholat et al. 2015; Irfan et al. 2015). Text mining is a very convenient tool to achieve the following benefits in the business world: (a) It is possible to support organizations regarding a better and faster decision-making process. The decision making process is improved via providing insights on the business strategies, enhancing customer satisfaction, monitoring and enhancing the product/service quality, and making reliable engagements with third parties. (b) Text mining enables to analyze the documents by creating more secure and clear filtering process for emails and various websites. (c) It is easy to monitor relationships between users. (d) Text mining provides a reliable tool for social media purpose. (e) It enables determining perceptions on particular topics or sentiments on specific events (Truyens and van Eecke 2014; Genztkow et al. 2017; Ferreira-Mello et al. 2019). On the other hand, there are some problems in the practical application of text mining especially to the big data cases. There are various languages spoken in the world and these languages have some complications, which have a potential to create problems during text refinement processes especially considering the identification of entity relationships. In addition, some words have the same spelling but they have diverse meanings. Hence, the grammatical rules remain an open issue in the text mining techniques (Gupta and Lehal 2009; Zhong et al. 2012; Sumathy and Chidambaram 2013; Talip et al. 2016).

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Typical text mining process is performed by applying the following steps in R “tm” package (2019): firstly, unstructured textual data from different sources are collected in different formats such as plain text, digital files, and web pages etc. Secondly, the pre-processing activities are executed in order to clean the data to detect and remove anomalies. This step is mandatory to capture the essence of text available. Data cleaning is performed to remove all stop words in English. Afterwards the data is indexed, the word clouding and the cluster dendrogram is established.

9.3.3 The Word Clouding The size of a word in the cloud indicates how often that word is used in the text. Hence the bigger the size, the most frequent is the word determined within the cloud. The most important advantage of the word cloud technique is that it is possible to capture the concepts that stand out in a text without having to count the words. In addition, word cloud provides immediate insights by summarizing the textual data in a page, which enables to make quick decisions accordingly (Heimerl et al. 2014). One of the obstacle of word cloud is that it provides a basic statistical outline of isolated words without taking linguistic knowledge about the words and their relation to account. For this reason, this approach provides only a limited interaction and knowledge about the textual data. Kuo et al. (2007) argue that word clouds are useful tools for providing a ‘big picture’ by broad visualization of an issue to communicate the context of the textual data.

9.3.4 The Cluster Dendrogram A dendrogram is a certain type of diagram, which is designed to reveal the hierarchical relationship between various items. It is usually used for analyzing the “hierarchical clustering” relationships. The major advantage of a dendrogram is that it provides the best direction to allocate items to the clusters. In this respect, a typical dendrogram shows a summary of the distance matrix between items and hence, similarity between these items can be assumed accordingly. It is important to note that the interpretation of dendrogram is different from other diagrams. When the whole text is divided into segments, each segment is called a “chunk” on a dendrogram. Each branch of dendrogram is called a “clade” and terminal end of each clade is known as a “leaf”. There may be only a single leaf belonging to a clade and it is called “simplicifolious”. On the other hand, there is no limit to the number of leaves on a clade. It could be bifolious (two leaves), tribifolious (three leaves) etc. (Simfit 2020). There are two major approaches to read a dendrogram: the first approach is based on interpreting the diagram in terms of large-scale groups, i.e. bottom up, and the second approach is based on explaining the text in terms of similarities within the segments, i.e. top to bottom. It should be noted that the height of each vertical line at a dendrogram

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shows the level of dissimilarity between segments. In other words, the taller the line, the bigger the difference (Drout and Smith 2012). The dendrogram indicates the emotional clusters and in this context, our survey results regarding the perception of epidemic among the coaching and mentoring professionals are explained in the next section.

9.4 The Cluster Dendrogram and Emotional Analysis Findings In this paper, the emotional text mining analysis is applied by using R “tm” package and the empirical findings are explained as follows: Before starting the text mining analysis, the textual data is cleaned to make it reliable and valid. Firstly, correlation analysis of clean textual data is obtained based on the Euclidean distance approach. The word frequency is given at Appendix 9.2. In addition, the top ten of most frequent words used by the participants are illustrated at Fig. 9.1 as bar chart, and at Fig. 9.2 as distance chart. In this regard, coaching is at the top of the most frequent words. Following the coaching as expected, the other most frequent words are as follows: work, anxiety, clients, working, fear, time, business, home and stress respectively. These words indicate the most common feelings of the participants against epidemic. Coaching and mentoring professionals are concerned about their business, specifically about their clients. The cluster dendrogram is presented at Fig. 9.3 and in our case; there are five major clades. The interpretation of the cluster dendrogram and emotional text analysis findings of the participants are given below. Clade A: In this clade, there is a single leaf, namely coaching. Coaching is the key responsibility of the participants and they are aware of their professional roles and responsibilities even in the epidemic period. The demographic information and the profile of participants explained above is also supporting this key finding.

Fig. 9.1 Most frequent words used by participants

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Fig. 9.2 Top ten frequent words by used by participants

Fig. 9.3 Cluster dendrogram

Clade B: In this clade, there are two leaves, namely work and anxiety. The participants are nervous about their work and their dominant feeling and perception about the work is based on anxiety. Because, their business activities slow down and nearly stopped during the epidemic period. Clade C: Compared to A and B, there is a chunk at C. In this chunk, there are two major clades and under these clades, there are eight leaves, namely (Clade 1: change, issues, crisis, will, managing), (Clade 2: people, new, management). Clade 1 indicates the feelings of participants about the issues which brings change and somehow depression in their lives. However, the participants have a will to manage the issues in order to cope with this crisis. Clade 2 indicates that there is something new in epidemic period related to people and participants have a feeling to find a solution to manage. Clade D: This clade indicates that the participants have a fear about working environment and they are sensitive and worried about their clients due to epidemic. Clade E: Similar to the Clade C, there is another chunk at E. There are two major clades and six leaves under these clades, namely (Clade 1: uncertainty, future), (Clade

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Fig. 9.4 Word cloud of participants

2: stress, home, time, business). Participants believe that the future is uncertain due to epidemic period. For this reason, they stay at home and consider about the time, they are stressful and worried about the business. The word cloud of the participants is shown at Fig. 9.4. This is another way of showing the perception of epidemic among the participants. The size of the words exhibits at a glance that coaching and mentoring professionals have a perception of epidemic, which is closely related to the words as work, anxiety, clients, time, fear, home, future, stress and uncertainty as explained in the above sections.

9.5 Concluding Remarks In this paper, the perception of epidemic among coaching, mentoring and supervisors professionals is analyzed based on the emotional text mining approach. The cluster dendrogram gives us valuable information about the emotions of participants in five major clades as follows: A. Coaching B. Work/Anxiety

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C. C.1 Change/Management C.2 People/Management D. Clients/Fear E. E.1 Uncertainty/Future E.2 Stress/Business. All clades other than the clade A (Coaching), refer to the main themes encountered during a typical coaching/mentoring relationship. First conclusion would be that the professionals are willing to cope with the ambiguity of the current period of COVID19 by serving the frontline as well as serving their clients though there is declining business on the field. Secondly, the professionals themselves are not immune to the topics in their realms of life, i.e. change management, fear, anxiety, coping with stress and anxiety regarding the future of business. A further study might be useful to explore how the professionals guide themselves on the themes emerged in the context of the survey and reflecting on the activities they have chosen to reconstruct their standing point with regard to the changes they observe and being challenged personally. Hence, the requirement on the engagement of practicing members in ongoing supervision with a suitably qualified supervisor or peer supervision group with a level of frequency is becoming of utmost importance. As told, the origin of mentoring and coaching profession goes back to almost years ago. twenty-first century comprises the roots and establishments of human experience in the storage of history and as a profession mostly needed in the digitalization age in the aftermath of COVID pandemic. Coaching/Mentoring professional conduct would be most influential processes as part of human legacy to cope with challenging times. Therefore, the continuing professional development increases its value, which is specified in the EMCC code of ethics as follows: “Members are expected to make a contribution to the professional community that is appropriate to their level of expertise. Forms which this may take include informal peer support to fellow practicing members.” Therefore, the encouragement of peer support groups, supervision, research might lead to ability to perform as competent coaches/mentors/supervisors and serving the clients on excellent practice as the outcome. Hence, the requirement on the engagement of practicing members in ongoing supervision with a suitably qualified supervisor or peer supervision group with a level of frequency is becoming of utmost importance. Based on this insight EMCC Global leadership has successfully organized a series of virtual meetings with more than 3,000 members registering over a period of ten weeks. At weekly events taking place on Friday morning, more than thousand members have actively engaged in to a dialogue in small groups about their ongoing experience keeping a focus on what is possible on the other side of the pandemic. The data obtained during these meetings will be separately analyzed to find prove about the positive impacts of staying connected during these trying times as next steps for achieving future works.

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Appendix 9.1: The Profile and Demographic Information of Participants

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Appendix 9.2: The List of Frequent Words Word Frequency List Word

Frequency

Coaching

99

Work

80

Anxiety

70

Clients

59

Working

55

Fear

53

Time

51

Business

50

Home

49

Stress

46

Uncertainty

43

Future

41

People

35

New

33

Management

32

Issues

27

Crisis

27

Change

27

Will

26

Managing

26

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Klasen N, Clutterbuck D (2002) Implementing mentoring schemes: a practical guide to successful programs. Butterworth-Heinemann, London Kochan F, Pascarelli, JT (2012) Perspectives on culture and mentoring in the global age. In: Fletcher S, Mullen CA (eds) SAGE handbook of mentoring and coaching in education, Sage, Thousand Oaks, CA, pp 184–198 Kuo BYL, Hentrich T, Good BM, Wilkinson MD (2007) Tag clouds for summarizing web search results. Proceedings of 16th international conference. On world wide web, WWW’07, ACM, pp 1203–1204 Lee S, Song J, Kim Y (2010) An empirical comparison of four text mining methods. J Comput Inf Syst 51(1):1–10. https://doi.org/10.1080/08874417.2010.11645444 Noel S (2018) Text mining for modeling cyberattacks. In: Venkat N, Gudivada CR (eds) Computational analysis and understanding of natural languages: principles, methods and applications; Elsevier, Amsterdam, pp 463–515. https://doi.org/10.1016/bs.host.2018.06.001 R Program (2019) “tm” text mining package. Version 0.7-7. https://cran.r-project.org/web/packages/ tm/tm.pdf. Accessed 5 Jul 2020 Salton G (1989) Automatic text processing: the transformation, analysis, and retrieval of information by computer. Addison-Wesley Longman Publishing, Boston, MA Simfit (2020) Cluster dendrogram analysis. https://www.simfit.org.uk/dendrograms.pdf. Accessed 5 Jul 2020 Sumathy K, Chidambaram M (2013) Text mining: concepts, applications, tools and issues-an overview. Int J Comput Appl 80(4):2013 Talip R, Hanif MK, Ayesha S, Fatima F (2016). Text mining: techniques, applications and issues. Int J Adv Comput Sci Appl, 7(11). https://doi.org/10.14569/IJACSA.2016.071153 The European Mentoring Centre (EMC) (1999) Definition of mentoring. https://www.trainingzone. co.uk/deliver/coaching/european-mentoring-centre Accessed 5 Jul 2020 Titov I, McDonald R (2008) A joint model of text and aspect ratings for sentiment summarization. Urbana 51:308–316 van Truyens M, Eecke P (2014) Legal aspects of text mining. Comput Law Security Rev 30:153–170. https://doi.org/10.1016/j.clsr.2014.01.009 Whitmore J (2002) Coaching for performance: growing people, purpose and performance, 3rd edn. Nicholas Brealey Publishing, Boston Zauchner-Studnicka SA (2017) A model for reverse-mentoring in education. Int Scholarly Sci Res Innovation 11(3):551–558 Zhong N, Li Y, Wu ST (2012) Effective pattern discovery for text mining. IEEE transactions on knowledge and data engineering. 24(1):30–44

Chapter 10

Changes in Working Conditions in the Light of a Primary Research During the Pandemic in Hungary Zsuzsanna Széles, József Csernák, and Aranka Baranyi

Abstract Working conditions around the world have been transformed by the pandemic. Businesses were able to determine whether an employee was able to work from home without hindrance, or whether the nature of the activity did not allow for working from home, based on the activities they carried out. A new aspect has been introduced to differentiate work, namely, whether or not it can be teleworked and, if so, under what arrangements and conditions. For the businesses which could allow for working from home after overcoming initial difficulties, there was no significant loss of turnover, but unfortunately, there were sectors worldwide which had to practically suspend their activities, e.g. tourism, catering, travel organisation, travel. Within the framework of primary research the objective of our analysis was to explore how employers have reacted to these changing circumstances and how they have or have not passed them on to their employees. Keywords Pandemic · Employer · Employee · Working conditions · Working from home

10.1 Introduction In Hungary, the first COVID-19 case was detected on 4 March 2020. Well-tailored, effective measures have been introduced promptly in the very early phase of the outbreak. Due to these measures, the virus could not spread significantly from closed communities (Röst et al. 2020). The aim of our research is to present the changed working conditions caused by the COVID-19 pandemic. With the declaration of a state of emergency in March 2020, working conditions in Hungary changed significantly. With the end of the emergency state, the course of things more or less went Z. Széles (B) Institute of Business Sciences, Budapest Metropolitan University, Budapest, Hungary e-mail: [email protected] J. Csernák · A. Baranyi Institute of Business Sciences, Eszterhazy Karoly University, Eger, Hungary © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 K. T. Çalıyurt (ed.), Corporate Sustainability in Times of Virus Crises, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-19-9079-3_10

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back to normal, but we all feel that our lives have been changed as a result of the epidemic. The experience of recent months shows that the “World” cannot be closed, the economy cannot withstand such pressure. Employers are looking for work solutions that allow businesses to continue operating without compromising income, profits, or owners’ dividends. In our research, we are looking for an answer to the question of what activities were hindered from work and whether educational attainment shows a significant correlation with the changed work conditions. In an article published on 9 July 2020, the Weekly World Economy (HVG) reports, citing Ipsos research, that telework still accounts for a significant proportion of employment patterns after an emergency. Prior to the pandemic, those working in the capital were in many cases allowed to work from home in rural areas. Of course, home office is not applicable in all sectors. A quarter of employees work partly or entirely from home, and teleworking is common to 51% of those with a tertiary education among those surveyed. Three-quarters of skilled workers continue to do their jobs. The whole Europe (and many countries around the World) is suffering from the effects of the corona crisis although there are differences in the extent of the economic downturn, but all experts agree that it will be very difficult to get economies back on track (Corona Krise, June 15, 2020). Forecasting the economic problems caused by the pandemic and their effects is another problem for economists. The methods of the well-used economic forecast cannot be applied due to the time lag, and forecasting methods must be developed that can track changes in the state of the economy such as the weekly activity index (WAI) used by the German Central Bank (Deutsche Bundesbank) (Göpfert 2020).

10.2 The European Union Bringing economic activity to a standstill has put many jobs at risk. The EU unemployment rate increased to 6.6% from 6.5% the previous month in March 2020 as reported by Eurostat. Eurofound (2020) survey recorded that in April, 5% of respondents that were part of the EU27 labour force reported losing their jobs permanently due to the pandemic, with 23% stating they had lost their contracts or jobs temporarily. Men under 35 seem to be a group affected somewhat more than the rest of the population. Job insecurity is highest in several eastern and southern Member States (Bulgaria, Greece). Services sectors have been heavily affected by the COVID-19 pandemic. Tourism, transport and distribution services have suffered as a result of mobility restrictions and social distancing measures. The increased use of online services during the pandemic has accentuated technology and connectivity disparities (WTO 2020). The economic and social shock presented by the COVID-19 pandemic is likely to reshape perceptions of individuals and organizations about work and occupations and results in both micro and macro changes in the world of work. The great “work from home experiment” may change occupational perspectives on working from home. Researchers may be able to better understand which occupational and individual characteristics

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are associated with work-from-home effectiveness and better designate occupational groups and individuals to working from home (Kramer and Kramer 2020). Apart from the devastating health consequences on people directly affected by the coronavirus, the COVID-19 pandemic has had major implications for the way people live and work, affecting their physical and mental well-being in a profound way. To capture the economic and social effects of this crisis, Eurofound (2020) launched a large-scale survey across the European Union and beyond. The aim of the survey is to investigate as follows: • the impact on well-being, • work and telework, and • the financial situation of people living in Europe. During April 2020, more than 85,000 people already took part in the e-survey. The first results show people are showing some decrease in their well-being. The survey findings also confirm an increase in teleworking and a feeling of insecurity regarding their jobs with a dramatic decrease in working time. The survey paints a stark picture of citizens across the EU Member States who have seen their economic situation worsening and are concerned about their future (Eurofound 2020).

10.2.1 Hungary In the three-month period between April and June, unemployment rate in Hungary was 4.6%, according to the Hungarian Central Statistical Office (VG 2020). The economic consequences of the coronavirus epidemic affected the entire study period. In June, the number of unemployed increased by about 25,000 compared to the previous month. Unemployment rate increased by 0.5 percentage points in one month and by 1.9 percentage points in one year. By the end of June, the number of registered jobseekers rose to 376,000, up 51.6% from a year earlier. The main measures during the epidemic in Hungary are the following (IMF 2020): • The government declared a state of emergency on March 11 and implemented various containment measures. • On March 27, mandatory shelter-in-place was imposed. • Since May 4, the economy has been gradually reopening. Stores, malls, museums, churches were allowed to reopen, outdoor seating is permitted in restaurants, students returned to schools. • On July 15, a colour-coding system was introduced with respect to travel from abroad, classifying countries based on the pandemic situation. Each country in the world has been assigned either red, yellow or green status according to its current level of COVID-19 infection. These colours dictate whether an entry ban or mandatory quarantine is imposed. Some of the emergency measures will remain in place and the government will be able to declare a health crisis for a period of up to six months without parliamentary authorisation.

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10.3 Material and Methods The primary study is based on a questionnaire carried out online using the Google Forms programme between June and the first half of July 2020. While planning the research, the statistical analysis of the data suggested by the literature was kept in mind (Babbie 2012). The research targeted higher education students who completed their internship at the time of the interview but could also be completed by graduated students already working. The questionnaire was also circulated on social media, and the number of prospective respondents was extended beyond the scope of students in higher education. Using the findings of the study will help make the process of planning the forthcoming internship practice smoother. The number of questionnaires completed and analysed was n = 250. The compiled database was analysed using the SPSS software package, which is very frequently used in social sciences (Marques de Sá 2007). First, we analysed the data using descriptive statistics, and then tested the correlation between the categorical variables using a Chi-square test and Cramer’s association coefficient. Factor and cluster analysis were also conducted in addition to univariate analyses. The questionnaire also included open-ended and closed-ended questions. The latter ones mainly contained variables measurable on a nominal and ordinal scale, but there were also data measurable on a metric scale that met the conditions of the different methods (Sz˝ucs 2004). Hypotheses H1 Employers may be well categorized according to their reactions to the pandemic. H2 A statistically significant correlation exists between the respondents’ age and their reaction to the altered working conditions. H3 Statistically significant correlation exists between the size of the employer and the response to the pandemic. H4 A higher proportion of men possess the technical conditions for working from home. H5 All employees were helped in the same way by their employer in this new life situation.

10.4 Results 10.4.1 Employment Characteristics In the present case, as well, more women than men completed the questionnaire, and in terms of reliable results, this equals to 30–70%. At the time of the study, nearly 60% of the respondents had a student status which was linked to 74% in the field of

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Fig. 10.1 The location of the place of work (in percentage) (Source Own research 2020, n = 250)

economics, 14% in the field of agriculture, 6–6% in the field of computer science and pedagogy, respectively. Sixty eight percent of students continue their studies in correspondence training. Almost the same proportion of students study in higher education vocational training and master’s degree programmes while 64% of the respondents are undergraduate bachelor students. Ninety six percent of the respondents worked at the time of the survey. Thirteen percent of the respondents completed their internship during the pandemic, and 82% have a full-time job. Figure 10.1 shows the location of the workplace. Forty nine percent of interns and employees work in a city, but the proportion of people working in the capital is also decisive, but not exclusive, so the results of the survey do not necessarily express only the conditions of employment in Budapest. Half of the respondents have a degree of tertiary education and less than 25% have a certificate of secondary education as the highest level of qualification.

10.4.2 Findings on Working Conditions Thirty five percent of the respondents work in the public sector e.g. at the municipality, 42% at the company, 8% at the sole proprietor. Seventy eight percent of the respondents were employees and nearly 10% were trainees. In the case of more than half of the respondents, the restrictions due to the coronavirus did not impact their work at all, in the case of 35% it was possible to work from home from the beginning of the restrictions. Most of the respondents worked in almost equal proportions in trade, education, finance and tourism. Employers were mostly very willing to design the working conditions of teleworking, but in the case of 25% replies reflected that they were no partners at all in designing the working conditions at home. Fortunately,

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employment was suspended in only a minimal number of cases, and there were also only a few cases in which fringe benefits were withdrawn, with 84% no change in benefits, despite the fact that managers also worked from home but their allowances remained, which is understandable as work had to be organized in the same way or in some cases even better, so only 9 people were deprived of the management allowance. Regarding the development of working conditions at home, the answers are illustrated in the Fig. 10.2. Graduality is most typical of employers’ responses to emergencies, while in the case of 13% rather difficult adaptation could be stated. Nonetheless, the provision of technical support went smoothly, and 35% of the respondents reported that they had had to make their own efforts to establish working conditions from home. More than 55% experienced the phenomenon of working more at home than they would otherwise at work, so it is not necessarily true that if we are at home our work ethic deteriorates or we are engaged in things that take time away from work. The employers did better if they allowed the employee to work from home who, in turn, completed more tasks, at least based on the respondents’ answers in the questionnaire. “Home Office proved to be much more effective than my boss had previously imagined.” We generally say we are social beings, which is also evident from the fact that 83% of the respondents lacked the atmosphere at work, the team and working together. Employers also tried to set up a control system for working from home, with 53% of respondents stating that their work was under constant control. Sixty four percent of employers complied with the regulatory requirements, only 3% indicated that the employer did not take the regulations seriously at all. Redundancies were not common among respondents, and alternatives had already included adjustments in working hours. Twenty percent of the respondents said they

Fig. 10.2 How did your employer respond to the emergency situation? [The work conditions, rules could easily be modified] (Source Own research 2020, n = 250)

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were working only partly instead of full-time. Unfortunately, our statement that the employer attempted to distribute the work at home in a proportionate manner was supported by only 28% of the respondents, which also reflects the negative view of the workplaces together with the fact that 41% of the respondents did not receive any assistance in working from home. Thirty two percent of the respondents had a problem with tasks that could not be done from home. From the part of employees, more than 60% had difficulty working, and 22% said that their children’s staying at home limited their work. In 32% of the cases, the technical conditions were provided on their own, and in 31% the employer helped with the development. Fortunately, less than 2% of respondents reported complete loss of income. Fig. 10.3 shows the answers to our question about restricting earning income. There was very interesting experience as the open-ended questions and comments were being formulated. The answers revealed that children’s stay at home is a significant problem in both studying and working. Such curricula and videos need to be compiled that can be downloaded and updated at any time of the day so that parents with children can adapt to their own chores at what pace they are going with the online curriculum. Once it came to determining what to do with an employee who was staying at home with a young child and was unable to work, the employer faced a real dilemma. The fact that the work was being performed by colleagues who were able to manage childcare created a conflict situation. State assistance should be provided to businesses who wish to keep an employee who is unable to work from home, because it is neither the child’s nor the parent’s fault, but this can still create unsolvable circumstances at the workplace. The biggest problem was faced by the hospitality sector, which further worsened the labour shortage in the industry,

Fig. 10.3 Restrictions to earning income during the pandemic (person) (Source Own research 2020, n = 250)

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resulting in labour emigration to other areas; because if a better salary was earned in another job under other circumstances, the employee did not return to the previous job.

10.4.3 Results of the Factor and Cluster Analysis We first looked at the employees’ responses to the question of how they interpret the employers’ steps taken during the pandemic using a rotated component matrix. The findings obtained with the aid of the statistical software program SPSS are summarized in Table 10.1. Three factors have emerged based on the examination; the characteristics of each factor are as follows. Factor 1 consists of the characteristics that are most typical of employers in terms of regulations, i.e. everything went smoothly according to the employees’ opinion, the employer adhered to the regulations, the emergency rules, and also paid attention to the fact that the job to be done by employees was equally allocated. Factor 2 consists of employer attributes which helped employees work effectively, rapidly and efficiently from home, even under altered circumstances. The employer did not only assist, but also controlled work, thus constantly seeing who needed what help, where to intervene and in what area. Factor 3 included the characteristics that actually provoked negative responses from employers, i.e. redundancies, reductions in working hours, withdrawal of additional benefits. It was possible to create and evaluate clusters after the clear appearance of the variables. Eleven clusters were created, of which four groups reached a share above 5%, Groups 1, 2, 4, and 5. Twenty seven percent of the sample was in cluster 1, 48% in cluster 2, 5% in cluster 3, and 12% in cluster 5. The category with the largest number of items is category number 2, which contained the opinion of 121 employers (Table 10.2).

10.4.4 Cluster Formation Figure 10.4 presents the size of the single clusters. In the following box plots the factors that prevail in each cluster and their size are illustrated. Different characteristics for each factor are revealed in each cluster. In the case of cluster 1, the regulatory position is important, i.e. according to their opinion, the employees belonging to this group encountered the processes during the pandemic in such a way that despite the turmoil the rules were known and well followed, the employer tried to make the rules widely public and make them clear. The focus of the employer was on central regulation rather than home inspection. In this group of respondents, redundancies and restrictions on additional payments were also less common. In the case of cluster 2, the emphasis was on assistance of employer behaviour, i.e. employees received help from employers to create new

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Table 10.1 Displaying the factors generated Rotated Component Matrixa Variables

Component 1 (Regulation factor)

2 (Leadership factor)

3 (Austerity factor)

q11.12. How did your employer react to the emergency situation? [The circumstances and rules of teleworking were formulated easily]

0.815

0.082

−0.174

q11.1. How did your employer react to the emergency situation? [All rules were adhered to]

0.795

0.120

0.079

q11.6. How did your employer react to the emergency situation? [Workload was distributed proportionately so that no position could be endangered]

0.599

0.192

0.047

−0.055

0.802

0.090

q11.7. How did your employer react to the emergency situation? [Helped a lot in teleworking]

0.399

0.777

0.001

q11.2. How did your employer react to the emergency situation? [Helped in creating new working conditions at home]

0.423

0.757

0.019

−0.193

0.155

0.729

0.175

−0.035

0.692

−0.074

0.233

0.664

q11.10. How did your employer react to the emergency situation? [Continuously controlled working from home]

q11.5. How did your employer react to the emergency situation? [Stopped additional benefits] q11.4. How did your employer react to the emergency situation? [Reduced working hours] q11.9. How did your employer react to the emergency situation? [Stopped management allowances]

(continued)

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Table 10.1 (continued) Rotated Component Matrixa Variables

Component

q11.3. How did your employer react to the emergency situation [Instant redundancy]

1 (Regulation factor)

2 (Leadership factor)

−0.138

−0.291

0.577

0.083

0.008

0.441

q11.11. How did your employer react to the emergency situation? [Redundancies and restrictions appeared even before the emergency situation at my workplace]

3 (Austerity factor)

Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization Source Own research 2020, n = 250 a Rotation converged in 5 iterations Table 10.2 Cluster formation Clusters Valid

Frequency

Cumulative percent

Cluster 1

67

26.8

29.0

29.0

121

48.4

52.4

81.4

Cluster 4

13

5.2

5.6

87.0 100.0

Cluster 5 Cluster 3

30

12.0

13.0

231

92.4

100.0

6

2.4

Cluster 6

1

0.4

Cluster 7

5

2.0

Cluster 8

3

1.2

Cluster 9

1

0.4

Cluster 10

2

0.8

Cluster 11

1

0.4

Total Total

Valid percent

Cluster 2

Total Missing

Percent

19

7.6

250

100.0

Source Own research 2020, n = 250

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Fig. 10.4 Displaying the size of groups formed in the cluster analysis (Source Own research 2020, n = 250)

working conditions, were able to adapt more easily to the altered circumstances, and this adaptation was helped by the development and presentation of rules, although this was not the most decisive factor in the life of the group. Fortunately, the participants of cluster 2, who made up the greatest number of items, experienced the least amount of employer austerity that was involved. The austerity steps were the most frequent in the case of cluster 3, marked 4. Unfortunately, in this case the workers did not reported about any assistance or explanation of the rules and their observance. In the case of cluster 4 marked with the number 5, none of the factors was really dominant, but if it has to be characterized, the intention to help, which was reported by the employees, can be highlighted the most, while the regulatory factor prevailed to the smallest extent (Fig. 10.5). Using variance analysis, we analysed the relationship between the respondents’ age and their responses and sought the answer whether a correlation can be found statistically, for instance, between age and solving the problems and tasks occurring during the pandemic. The answer is clearly no that is regardless of age, everybody tried to do their best. In the issue if everyone, regardless of age, had the technological requirements to work from home, we found a similar finding. We hypothesised that while younger people tend to have a smartphone and tablet, older people do not, but this has not been justified. We also examined, but did not prove, that there could be a connection between age and the lack of time spent at work, i.e. everyone, regardless of age, likes to work in a community, it was not typical that someone who has been working for decades would not miss his job or for young people, the love of the workplace goes without saying because they do not have much work experience yet.

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Fig. 10.5 Clusters and their characteristics (Source Own research 2020, n = 250)

However, with the help of the Chi square test, our hypothesis was proved according to which the workplaces of different sizes based on the number of employees have responded differently to the altered circumstances induced by the emergency situation, the correlation of which is shown in Fig. 10.6. Based on the examination, it can be concluded that the larger the enterprise, the more typical the employee’s regulation on working from home was. However, in the case of smaller companies, this was not so relevant, but we know from previous research findings that these companies were trying to give their employees all the support. However, it is important to note that smaller businesses can be praised for the pace and versatility of implementing new working conditions. In the case of larger organizations, the processes are slower, but once established, the flow of information follows stable, well-developed rules. It is important to mention that due to the foreign ownership dominance of large companies, employers had to adapt not only to national rules, but also to the regulations of the parent company (Fig. 10.7). Our examination also included testing the hypothesis according to which estate, municipal enterprises and workplaces respond differently in terms of employment during the pandemic than the private sector. This hypothesis was not justified, i.e. no correlation between the two factors was found as all employers acted similarly.

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Fig. 10.6 Crosstabulation ‘How did your employer react to the altered circumstances? [Continuously controlled work at home]’ and ‘Size of workplaces based on the number of employees’ (Source Own research 2020, n = 250)

An interesting result was generated when testing our hypothesis according to which a higher proportion of men possess the technical conditions for working from home than women. Figure 10.8 justifies our hypothesis. A similarly important finding was the one that in the case of economics students/workers employers were more likely to assist in the improvement of the technological requirements for working from home (Fig. 10.9).

10.5 Summary The key focus of our research was to investigate how employees perceived the working conditions that emerged during the pandemic, and what steps the employers took, despite the altered circumstances, through the glasses of the employees regarding the performance of the tasks. The survey predominantly included (former) students of economics. It can be concluded, based on the study, that the employees

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Fig. 10.7 Crosstabulation ‘How did your employer react to the emergency situation? [The circumstances and rules of teleworking were formulated easily]’ and ‘Size of workplaces based on the number of employees’ (Source Own research 2020, n = 250)

were able to adjust well to the conditions, to the changing demands, in some cases they worked even more at home than at the workplace. In the case of companies grouped according to the number of workers, a strong correlation as detected between the size of the company and the improvement of working conditions for the pandemic and its speed. Businesses in the SME sector responded more quickly to change and were able to implement their ideas more easily. In the case of multinational companies, regulation prevailed better, which took more time to set up, but they also provided great support to their employees, even in terms of creating working conditions. The summary of testing our hypotheses is as follows. H1 Employers may be well categorized according to their reactions to the pandemic. The hypothesis was proved, and four groups could be identified. H2 A statistically significant correlation exists between the respondents’ age and their reaction to the altered working conditions. This hypothesis was rejected as regardless of age, all employees tried to do their best.

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Fig. 10.8 Crosstabulation ‘How did you experience the period of restriction in connection with your work? [Technical conditions were not provided at the beginning but later I made up for the loss on my own]’ and ‘Gender’ (Source Own research 2020, n = 250)

H3 Statistically significant correlation exists between the size of the employer and the response to the pandemic. Our hypothesis was confirmed: companies in the smaller SME sector were initially able to respond more quickly to change, but later multinational firms followed rules while helping their employees in the altered circumstances. H4 A higher proportion of men possess the technical conditions for working from home. This hypothesis was also confirmed, as women were less prepared to work from home than men. H5 All employees were helped in the same way by their employer in this new life situation. This hypothesis could not statistically be proved but in the case of those studying in the field of economics or working with that qualification, the employer proved to be more willing to help than in other jobs.

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Fig. 10.9 Crosstabulation ‘How did you experience the period of restriction in connection with your work? [Technical conditions were not provided at the beginning but later my employer made up for the loss]’ and ‘What major do/did you study?’ (Source Own research 2020, n = 250)

References Angela Göpfert: Wirtschaft in der Corona-Krise Momentaufnahmen statt Prognosen, https://www. tagesschau.de/wirtschaft/boerse/coronakrise-wirtschaft-111.html, letöltve 2020.07.10 Babbie ER (2012) The practice of social research. Wadsworth Publishing, United Kingdom, p 584. ISBN: 978-1133049791 Die Konjunktur auf dem Weg ins tiefste Tal, https://www.dw.com/de/die-konjunktur-auf-dem-wegins-tiefste-tal/a-53447188, letöltve 2020. 06.15 Eurofound (2020) Living, working and COVID-19: first findings—April 2020, Dublin HVG—Weekly World Economy (2020) Átalakuló munkavégzés, HVG, 2020.07.09, p 45 International Monetary Found—IMF (2020) Policy responses to Covid-19. https://www.imf.org/ en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#H. Accessed 15 July 2020 Kramer A, Kramer KZ (2020) The potential impact of the Covid-19 pandemic on occupational status, work from home, and occupational mobility. J Vocat Behav 119:103442. Published online 2020 May 8. https://doi.org/10.1016/j.jvb.2020.103442 Marques de Sá J (2007) Applied statistics using SPSS, STATISTICA, MATLAB and R (Second Edition. kiad.). Springer-Verlag Berlin Heidelberg, Heidelberg

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Röst G et al (2020) Early phase of the COVID-19 outbreak in Hungary and post-lockdown scenarios. Viruses (1999–4915) 12(7):708 Sz˝ucs I (2004) Alkalmazott statisztika; Agroinform kiadó. Budapest, p 551 VG—World Economy (2020) Rugalmasabbá válhat a távmunka szabályozása. 30 July 2020. https://www.vg.hu/gazdasag/gazdasagi-hirek/rugalmasabba-valhat-a-tavmunka-szabalyozasa2461322/. Accessed 30 July 2020 World Trade Organization—WTO (2020) Trade in services in the context of COVID-19. Published 28 May 2020. https://www.wto.org/english/tratop_e/covid19_e/services_report_e. pdf. Accessed 15 July 2020

Prof. Dr. Zsuzsanna Széles Ph.D. is a Full Professor at the Alexandre Lámfalussy Faculty of Economics at the University of Sopron (SoE) and since 2021 the Dean of the Faculty. In 2006, she successfully defended her doctoral dissertation on corporate finance with a “summa cum laude” qualification, and in 2011, she was habilitated. Prior to SoE, she has served as Head of Institute of Economics at the Budapest Metropolitan University. From 2013 to 2017, she was Head of the Department of Financial Management and Control at Szent Istvan University. She lectured at several foreign higher education institutions in recent years. She also takes an active part in the work of several doctoral schools, 6 of her students have obtained Ph.D. degrees. She is a member of several domestic and international organizations, and since 2016, she is the Vice-President of the Hungarian Society of Value Analysts. She is a member of the Agricultural Economics Committee of the Hungarian Academy of Sciences since 2008. Her research interests cover topics in the field of economy and finance, such as corporate finance, value methodology and international accounting. She also takes an active role in professional life. József Csernák Ph.D. is an associate professor in the Institute of Economic and Finance, Óbuda University, Budapest (Hungary). He worked formerly at Hungarian University of Agriculture and Life Sciences University, Eszterházy Károly University, and Károly Róbert Collage. He received a Ph.D. in Management and Business Administration at the Szent István University Gödöll˝o, Hungary. His research interests cover topics in the field of economy and finance, such as financial literacy, attitudes of the population towards finance, financial awareness, corporate finance, business development, household savings, statistical analysis of finances. He took part in different international conferences. Aranka Baranyi obtained her Ph.D. title in 2004 and habilitated in 2020. An economist, associate professor at the Institute of Economics and International Relations of the University of Sopron and a lecturer at the Budapest Business School. She has been working in higher education since 1999. Her main research interests include sustainability finance, money and capital markets, corporate financing, corporate finance. Subjects taught are Banking, Corporate Finance, Corporate Financing and Money and Capital Markets. She has actively been involved in student talent management and participated in several Hungarian and international projects.

Chapter 11

AI Applications in Health Sector: Use of Artificial Intelligence in Covid-19 Crisis and Impacts of Medical Robots on Global Economy Özlem Arzu Azer

˙ and Ibrahim Bora Oran

Abstract Opinions stating that artificial intelligence (AI) and robotic technologies are digital technologies which would have important impacts on the development of humanity in the near future were actually recognized in the world, however, some basic problems about what can be done with such systems, what the systems are required to be perform by themselves and which risks they bear or how these system would be controlled, were being heavily discussed. These discussions generally contained some biases regarding that the era of human control would end with the use of such means. With the emergence of the Covid-19 pandemic in our present day, it was faced with the problem where the artificial intelligence and robotic technologies have become compulsory due to the fact that the utilization requirements particularly in logistic or health sector have increased. In conclusion, the attention was drawn to the importance of the solutions proposed by the artificial intelligence and robotic technologies pertaining to reduce the risks onto covering the human life and basic needs of people. The aim of this research is to determine the future predictions with findings obtained from the analyses based on the requirement increase for using the robotic Technologies experienced pre and post Covid-19 since an effective pandemic process enough to lead to the ignorance of the problems likely to occur due to the utilization of AI systems is experienced. A comparative historical method is utilization as research method in the study. The utilization of artificial intelligence and robotic technology means in the world between 2009 and 2019, their utilization pre and post Covid-19 and analyses created with estimations for their utilization in the future years are included. Depending on the findings, while the need for the utilization of such Technologies with the impact of Covid-19 is evaluated, it is aimed to determine the impacts in new normal process. According to the results we obtained, Ö. A. Azer (B) Istanbul Atlas University, Istanbul, Turkey e-mail: [email protected] ˙I. B. Oran Faculty of Business and Management Sciences, Logistics Management Department, Istanbul Esenyurt University, Istanbul, Turkey e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 K. T. Çalıyurt (ed.), Corporate Sustainability in Times of Virus Crises, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-19-9079-3_11

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it is attempted to determine the requirement of which models among the artificial intelligence and robotic technologies should be utilization in which areas. While societies many countries having different economic powers in the world have been primarily struggling for survival against a too severe epidemic due to Coronavirus epidemic which has started as from the early months of 2020 and spread to many countries, they are facing with slackening and globalizing economic crises due to restrictions. The epidemic was perceived as a problem only experienced in China in the early months since it was actually announced that it started in Wuhan City of China in the late months of 2019. For this reason, some solutions were initiated by other countries and companies for minimizing the risks to be cauterization by recession experienced in China depending on the fact that China is a highly effective country in the global markets. Once a few months later it was understood that a pandemic which affects many countries in the world is experienced, the Covid-19 pandemic has globalized in a very short time with the impact of the inadequacy problem created on health systems of the countries and lack of drug and vaccination to treat the disease. Within the scope of quarantine restrictions applied in the pandemic process, it was seen that the need felt for the utilization of artificial intelligence and robotic Technologies in the health sectors for covering the basic needs of people, notably health services or executing the economically necessary shopping, has increased. Thus, Covid-19 pandemic has facilitated the process of using robotic Technologies and Industrial Revolution 4.0 which has actually started long time ago. Today, it is observed that the artificial intelligence and digitalization have further entered into the life of people in any field ranging from health to education and they are found in the foundation of the process called as new normal. Researches related with this study validate that the utilization of medical robotic technology has significantly increased the safety and quality of health management systems in the Covid-19 process compared with manual systems due to the digitalization of health services. Also, the utilization of robotic technologies provides important conveniences in the health sector. In the first part of this study, introductory information are given about artificial intelligence and robotic Technologies in a descriptive method. In the second part, analyses are performed for the change in utilization levels of robotic Technologies with the impact of Covid-19 by including indicators related with the subject. After the findings obtained from the research and illustrations in the literature are explained, finally the impacts of Covid-19 pandemic are determined. In the digitalization process facilitated with the globalization of pandemic, it is attempted to obtain the most correct provisions and predictions for the future depending on the importance of the utilization of artificial intelligence and robotic technology. According to these classifications, the utilization field ad functions of the medical robots are as follows (Momont 2020). Surgical robots provide surgical service with precision and accuracy compared with human surgeons. Many tele-operators have been designed for remote operations (Grespan et al. 2019). Radiologist robots are utilization in radiology, angio and 3D imaging due to high radiation level and safety problems for human operators (Twin 2020). Rehabilitation robots support the relieving of nerves by alleviating the muscular disorders in treatment of elderly people, disabled and patients under disturbing conditions and in rehabilitation of patients who underwent

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accident or stroke (Zhao et al. 2020). Tele-medicine robots are helpful in epidemics in distant regions where a remote medical doctor is provided by all information and diagnoses diseases, healthcare personnel is not available (Koceska et al. 2019). Receptionist robots are utilization in hospital reception for guiding the patients. Ambulance robots are helpful in providing urgent treatment to any remote patient as soon as possible. Nurse robots are intended for assistance to medical doctors just as human nurses and commonly utilization particularly in Japanese hospitals. Hospital service robots are utilization in duties such as displacement of heavy materials in hospitals or for distributing foods to patients (Mettler et al. 2017). Cleaning robots are utilization in hospital cleaning Works such as mopping or disinfecting in the hospitals (Prassler et al. 2000). Disinfection robots are utilization for drugs whose contact with human is dangerous in spraying of antiseptic mixtures to wide outdoor areas or wide settlement centers. Food robots are robot chief utilization in hospital kitchen for offering high-quality foods by the hygienic standards (Iqbal et al. 2017). Delivery robots are robots and drones utilization in transport of drugs and blood samples, operating on the ground or air and saving life by making urgent deliveries. Findings; • The importance of opportunities provided by the artificial intelligence is increasing depending on the increase of online shopping preferences under the quarantine conditions in Covid-19 process. • While demand for these technologies has existed since the previous years since some heavy works for human were performed by robots in the logistic sector all over the world, the increases of these utilizations were accepted as natural due to the necessity of using within the scope of contact-free trade in the Covid-19 process. • As a result of robots are able to fulfill the necessary duties such as lifting heavy and providing consistency while providing cognitive skills of a capable individual, people and robots work on the same duty together. • While the utilization of robots was started in the previous years in the healthcare sector, Covid-19 has accelerated this process. An increase trend was initiated in the utilization of artificial intelligence and robotic technologies used in diagnosis and treatment stages of Coronavirus contamination. • During the outbreak, telemedicine even helped provide mental health support. The vision of rolling out systematic, accessible, and comprehensive mental health support for healthcare workers and general public was made possible by many popular online platforms. The 2020s may turn out to be the decade when digital technology reshapes the health system. COVID-19 has certainly driven many developments in the first three months of 2020, as the digital health community continues to navigate how best to bolster classic public health measures (WHO 2021). • Telemedicine is being adopted for triage and treatment of outpatient, enabling protection for patients and medical practitioners to reduce exposure risk from unnecessary exposure. Telemedicine and virtual care can be integrated into the healthcare system as an approach to maximize the efficiency of healthcare delivery.

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It promotes social distancing measure and help medical centers in managing prolonged waiting times and risk of disease progression. By minimizing in-person visits and reducing face-to-face contact among physicians and patients, the use of virtual care solutions can help lessen the transmission of the virus and protect medical practitioners from infection (Bokolo 2020). Last of all; In this study, it is attempted to determine the changing utilization preferences due to Covid-19 pandemic about the impacts of the artificial intelligence and robotic technologies. For this purpose, the artificial intelligence and robotic technologies were defined and short historical development, types, classifications and utilization areas were described. Then, the analyses of the developments intended for transition of only industrial robots and medical robots into the daily life were performed since types of smart and moving robots but different from people, that is, these devices designed for living and cooperating with people are numerous. At this point, it was targeted to determine the risk or challenges to be created by their utilization in the process of Covid-19 pandemic prevailing effectively in our present day. After all, robots are being used in any field that comes to our mind, for example, they take inventory in businesses or clean floors in stores. They rack up the goods to be sold or bring for being sent to warehouses. They cut vegetables, fruits and even they pick fruits. On the other hand, they assist in the care of autistic children or help paralyzed people to re-use their limb. They serve as patrol at national boundaries or attack to targets they see as enemies in case of war. On one hand, they organize flowers or support people in their personal services. In short, their utilization has started in any field of life with their features of helping from different point of views, however, the issue asking that which fields they can be more helpful in such a fatal pandemic process exercising control over the whole world, has really gained great importance. The meaning of the artificial intelligence and robot support has altered in such an environment where boundaries among all countries in the world were closed, people have to maintain their daily life under quarantine conditions, there is no therapeutic drug apart from mask, disinfectant and mask solutions, it is fighting against Coronavirus diseases for which there is no vaccination. For this purpose, indicators where utilization and sales of industrial robots in the pre-Covid-19 process were examined or utilization of logistic robots and medical robots in the pre and post Covid-19 process was examined, are included. A comparison between the impacts of Covid-19 and utilization of artificial intelligence and robotic technology was performed, findings obtained were explained and also, opinions obtained from the analyses performed in the related literature were included. As a result of analyses based on definitions made by descriptive method, their utilizations by years and impacts of Covid-19; it is understood that “The utilization of artificial intelligence and robotic technologies has been already preferred, but, this preference demand has showed increase compulsorily with the impact of Covid-19”. Since any work is acknowledged as dangerous for people, the demand for mechanical changes has quickly increased. In conclusion, this pandemic has been useful mostly for workers; industrial and medical robots. However, a problem stating that medical robots will substitute the healthcare professions or healthcare professional army will be required

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to be diminished in professional sense, is never observed. On contrary, it is clearly understood that the utilization of artificial intelligence and robotic technologies will be the most important support factor in terms of both those working in health profession and those being under the risk of contamination in such an important subject for the human life like pandemic. Keywords Health sector · Artificial intelligence · Covid-19 · The global economy

11.1 Introduction Opinions stating that Artificial Intelligence (AI) and robotic technologies are digital technologies which would have important impacts on the development of humanity in the near future were actually recognized in the world, however, some basic problems about what can be done with such systems, what the systems are required to be perform by themselves and which risks they bear or how these system would be controlled, were being heavily discussed. These discussions generally contained some biases regarding that the era of human control would end with the use of such means. With the emergence of the Covid-19 pandemic in our present day, it was faced with the problem where the artificial intelligence and robotic technologies have became compulsory due to the fact that the utilization requirements particularly in logistic or health sector have increased. In conclusion, the attention was drawn to the importance of the solutions proposed by the artificial intelligence and robotic technologies pertaining to reduce the risks onto covering the human life and basic needs of people. The aim of this research is to determine the future predictions with findings obtained from the analyses based on the requirement increase for using the robotic technologies experienced pre and post Covid-19 since an effective pandemic process enough to lead to the ignorance of the problems likely to occur due to the utilization of AI systems is experienced. A comparative historical method is utilization as research method in the study. The utilization of artificial intelligence and robotic technology means in the world between 2009 and 2019, their utilization pre and post Covid-19 and analyses related with estimations for their utilization in the future years are included. Depending on the findings, while the need for the utilization of such Technologies with the impact of Covid-19 is evaluated, it is aimed to determine the impacts in new normal process. According to the results we obtained, it is attempted to determine the requirement of which models among the artificial intelligence and robotic technologies should be utilization in which areas. While societies many countries having different economic powers in the world have been primarily struggling for survival against a too severe epidemic due to Coronavirus epidemic which has started as from the early months of 2020 and spread to many countries, they are facing with slackening and globalizing economic crises due to restrictions. The epidemic was perceived as a problem only experienced in China in the early months since it was actually announced that it started in Wuhan

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City of China in the late months of 2019. For this reason, some solutions were initiated by other countries and companies for minimizing the risks to be cautilizationd by recession experienced in China depending on the fact that China is a highly effective country in the global markets. Once a few months later it was understood that a pandemic which affects many countries in the world is experienced, the Covid19 pandemic has globalized in a very short time with the impact of the inadequacy problem created on health systems of the countries and lack of drug and vaccination to treat the disease. Within the scope of quarantine restrictions applied in the pandemic process, it was seen that the need felt for the utilization of artificial intelligence and robotic Technologies in the health and logistic sectors for covering the basic needs of people, notably health services or executing the economically necessary shopping, has increased. Thus, Covid-19 pandemic has facilitated the process of using robotic technologies and Industry 4.0 which has actually started long time ago. Today, it is observed that the artificial intelligence and digitalization have further entered into the life of people in any field ranging from health to education and they are found in the foundation of the process called as new normal. Researches related with this study validate that the utilization of medical robotic technology has significantly increased the safety and quality of health management systems in the Covid-19 process compared with manual systems due to the digitalization of health services. Also, the utilization of robotic technologies provides important conveniences in the logistic sector. In the first part of this study, introductory information are given about artificial intelligence and robotic Technologies in a descriptive method. In the second part, analyses are performed for the change in utilization levels of robotic Technologies with the impact of Covid-19 by including indicators related with the subject. After the findings obtained from the research and illustrations in the literature are explained, finally the impacts of Covid-19 pandemic are determined. In the digitalization process facilitated with the globalization of pandemic, it is attempted to obtain the most correct provisions and predictions for the future depending on the importance of the utilization of artificial intelligence and robotic technology.

11.2 Artificial Intelligence and Robotic Technology It is seen that numerous similar definitions related with the artificial intelligence are made, however, it is defined in the briefest manner as technologies which can mimic the human intelligence and show characteristics being close to it. The artificial intelligence enables the machinery to learn and fulfill the human-like duties. For instance, computers using the artificial intelligence Technologies are developed for processing plenty of data and fulfilling certain duties by recognizing the data (Nocks 2007). To shortly look at the history of the artificial intelligence, it is seen that the first artificial intelligence researches have properties such as short problem-solving support and some symbolic methods rather in 1950s. It was started to develop computers utilization in the defense industry and basically mimicking the human logic in 1960s.

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Fig. 11.1 Artificial intelligence’s characteristics and importance (Pollock 2018)

With these studies, the way was paved for the properties seen in computers such as supporting systems and smart calling systems designed for completing and increasing the human abilities. Thus, it was started to create artificial intelligence examples in health, retail and many more fields by developing in such way which will provide specific advantages in different sectors. Hence, it was continued to create the techniques of embedding artificial intelligence technologies into solutions in different fields (Asimov 1996) (Fig. 11.1). Since the artificial intelligence is to design smart machinery having thinking ability, the studies related with the importance of the artificial intelligence are increasing by accelerating. In our today’s world where computers completely dominate, it is clearly seen that the works performed artefactually has significantly decreased and computers have become a dependence for people and its importance cannot be ignored. The artificial intelligence is a technology having impacts in many areas and its place in our life is gradually increasing. It is seen that the biggest advantages it provides is speed and convenience created in the Works. Artificial Intelligence’s areas of utilization (Pollock 2018) (Fig. 11.2). Artificial intelligence practices (Pollock 2018); • It increases the speed and efficiency of human works, • It enables the personal drug and X-ray reading, • It provides virtual shopping ability determining the purchasing options with consumer, • It can develop stock management technologies, • It can perform manufacturing IoT analysis by using the repeating networks, • It determines credit scoring in a fast and accurate way in financial institutions, • It automatizes the data management that is too difficult for man power,

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Fig. 11.2 Artificial intelligence’s areas of utilization

• It is an appropriate field for including the robots into work flow. The artificial intelligence is utilization in filling the gaps in meeting the needs under the severe quarantine conditions implemented due to Coronavirus in order to support the fight against virus epidemic which has affected the whole world as from the early 2020. The artificial intelligence provides important supports in sharing of information about pandemic, reaching of health personnel to data in any place of the world, detection and monitoring of those who are infected with Covid-19, providing a safe delivery with drones equipped with artificial intelligence and sterilization of risky areas. Robotic technology is to design the Project of machinery which will substitute the man or is able to perform those which men are able to do. Its aim is to design smart machinery which will assist people in their daily life, facilitate and accelerate their works and also, provide them to be safe in risky environments. Robots which can substitute people and bear the ability to perform the Works which people do are being utilization in many fields. While the foundation of the robotic science dates back to ancient times, the fully autonomous robots have emerged as late as the second half of the twentieth century. The first robots operated and programmed digitally were installed for stacking and taking the hot metal components from die cast machinery in 60s. Today, they are

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Fig. 11.3 Classification of robots used for social distance in health

utilization in dangerous or heavy works that are not suitable for people and for performing the works in easier, cheaper and more reliable way compared with people (SAS 2020). Robots are used in all fields for social distance in health for the purpose of Covid-19 restrictions. Robots are classified by their areas of utilization, works they are able to perform, how they are controlled and transferred, structural characteristics that are similar to the joints of people and methods of operating as follows (Zeghloul et al. 2015) (Fig. 11.3). Generally, robots have a mechanical structure designed for performing a certain duty, however, they need an electrical power which operates the machinery. Also, they have certain programming patterns such as remote control, artificial intelligence and hybrid. The robots utilizing artificial intelligence can interact by themselves without any control source and determine reaction to problems by using their programs. Hybrid contains both artificial intelligence and remote control functions (Rosheim 1994, p. 18). While the expansion of areas of utilization for robots has existed as from the previous years, the utilization requirement has further increased for the solution of health problems in necessary fields with the impact of Covid-19 pandemic (Singh and Nandi 2016). In conclusion, a great variety of robots are developed for serving in various roles in health sector.

11.3 Impacts on Robotic Technology in Covid-19 Process With the ever-increasing preference of the utilization of robots in different fields in the world, the changing requirements are increasing the need felt for some robots

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in the Covid-19 process. Due to a wide variety of robots, only impacts encountered onto the industrial robots and medical robots in the pandemic process are investigated within the scope of this study. It is aimed to determine the most correct predictions with the findings obtained by comparising the impacts seen in the pre- and post-Covid 19 depending on the increase in the importance of such robots in areas where people are under more risk in the pandemic process experienced in our present day. Industrial robots are automatic and programmable robots which can move around multiple axis. Industrial robots are utilization in fields such as aviation, automotive, beverage, computers, consumer goods, painting, assembly, storage in logistics, packaging, labeling, palletizing, etrade, electronics, food, grocery, hardware, health service, fabrication and distribution. There is an increase trend in the sales and utilization of the industrial robots between the years of 2009 and 2019 after the elevation in smart production and automation in the world, as will be seen in Chart 11.1. It is seen that 1.01 millions of robots working in the plants all over the world as from 2009 increased to 2.7 millions in 2019, that is, it experienced 2, fivefold increase over 10 years. In the first 7 months of 2020, 553 thousand increase was experienced and it is estimated that this number will exceed 4 millions until the end of the year (IFR 2020). If it is contemplated that the outcomes of the Coronavirus epidemic on the global economy could not be fully evaluated and the remaining months of 2020 will shape by adopting to the “new normal”, it is expected that the robot suppliers will adopt to the demand of new solutions. While big orders are not expected in 2020 since other economies excluding China are experiencing a milestone, it is estimated that with the impact of Covid-19, automation projects will increase and robot demand will initiate a recovery process in 2021 and reaching to the expected level will continue until 2022 or 2023. As a reason for showing China as an exception in this regard, 1.021 2009

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Chart 11.1 Sales and utilizations of industrial robots in the world (IFR 2020)

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it is explained that China will primarily increase the utilization of industrial robots compared with other economies becautilization the coronavirus epidemic was firstly detected in Wuhan City of China in December 2019 and the country already started to recover in the second quarter (Guerry 2020). It is seen that fast spreading of Covid-19 epidemic cautilizationd many sectors in different economies and geographical regions to accept the industrial automation technologies. Particularly, the utilization of collaborative industrial robots has facilitated in Covid-19 process since they feature minimum error margin and they are able to exhibit performance with similarity to best-trained human ability in millimetric extent. It becomes clear that the impact of Covid-19 resulted in a long-lasting health and economic crisis of countries and communities has paved the way for the robotic technology in some sectors. It is estimated that the industrial robot market will earn more in the future years. However, people are trying to understand how they will prevent such a restriction created by Covid-19 in the future and how much investment made to robotic technologies will cost to them, if required. Fortunately, robots have been actually designed for extremities; extreme hot and cold temperatures, great loads, toxic chemicals or global epidemic. It is foreseen that complexity, robotic and automation are the best remedy for future production, regardless of problem.

11.4 Use of Medical Robots One of the most basic factors for the growth of global medical robotic market in the past years passed to the pandemic is the increase for the demand to utilization robot particularly in neurological, orthopedic and laparoscopic procedures or minimal operations such as treatment of eye diseases. Consequently, it was started to develop a wide variety of robots for serving in various roles in the medical environment and there are surgical robots and rehabilitation robots among the robots specialized in the human treatment today. The field of assistant and therapeutic robotic devices is also expanding quickly. The existing technologies are being utilization in the new forms for increasing and regulating the efficiency of healthcare operations in Covid19 process. In this process, the new medical robotic Technologies are utilization. The medical robots are classified by their different applications related with their utilization mainly in health and associated fields (Momont 2020, p. 35) (Fig. 11.4). According to these classifications, the utilization fields ad functions of the medical robots are as follows (Momont 2020, p. 37); • Surgical robots provide surgical service with precision and accuracy compared with human surgeons. Many tele-operators have been designed for remote operations (Grespan et al. 2019). • Radiologist robots are utilization in radiology, angio and 3D imaging due to high radiation level and safety problems for human operators (Twin 2020). • Rehabilitation robots support the relieving of nerves by alleviating the muscular disorders in treatment of elderly people, disabled and patients under disturbing

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Fig. 11.4 Classification of medical robots

• • • • • •

conditions and in rehabilitation of patients who underwent accident or stroke (Zhao et al. 2020). Tele-medicine robots are helpful in epidemics in distant regions where a remote medical doctor is provided by all information and diagnoses diseases, healthcare personnel is not available (Koceska et al. 2019). Receptionits robots are utilization in hospital receotion for guiding the patients. Ambulance robots are helpful in providing urgent treatment to any remote patient as soon as possible. Nurse robots are intended for assistance to medical doctors just as human nurses and commonly utilization particularly in Japanese hospitals. Hospital service robots are utilization in duties such as displacement of heavy materials in hospitals or for distributing foods to patients (Mettler et al. 2017). Cleaning robots are utilization in hospital cleaing Works such as mopping or disinfecting in the hospitals (Prassler et al. 2000).

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• Disinfection robots are utilization for drugs whose contact with human is dangerous in spraying of antiseptic mixtures to wide outdoor areas or wide settlement centers. • Food robots are robot chiefs utilization in hospital kitchen for offering high-quality foods by the hygienic standards (Iqbal et al. 2017). • Delivery robots are robots and drones utilization in transport of drugs and blood samples, operating on the ground or air and saving life by making urgent deliveries.

5.3 4.1

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Medical Robots (billion $) 2018

2019

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Field Robots (billion $) 2023

Chart 11.2 Robots in professional utilization (World Robotics 2020)

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Also, it is contemplated that it will a highly strong potential also in the hospitals conducting the logistics by means of professional service robots. As shown in Chart 11.2, the production and sales of medical robots utilization in a very important field affecting the human life like healthcare sector among the professional service robots broke an important record with 5.3 billion $ with an increase of 28% in 2019 in comparison with 2018. It was determined that about 50% of total turnover of the professional service robots is constituted by medical robots in 2019 and large part of this is cautilizationd by the surgical robots having the highest cost. Accordingly, it is estimated that sales of medical robot will reach to 11.3 billion $ until 2022 or they have a potential of providing an increase more than two-times by reaching to 12.6 billion $ in 2023 (World Robotics 2020). It is seen that robots which exhibited the maximum elevation in increase in utilization of robotic systems in the world are medical robots. The highest increase ratio in utilization among the types of robots shown in Chart 11.2 in 2020 in comparison with 2019 is logistic robots (136%). Medical robots follows it with a ratio of 124%. Amongst others, the utilization ratio of domestic works, entertainment and field robots is 116%. In such case, it is considered that the biggest factor is Covid-19 pandemic and it is expected that an increase trend will be experienced in preference

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of utilization of robots in healthcare sector and then logistic sector due to increase in digitalization at high ratios in the future years. Once the robotic market of the world is examined regionally, it is seen that Asia– Pacific has the biggest share and North America follows it in the second rank and the same situation is expected in the future-oriented estimations (Mordor Intelligence 2020); • Since the industrial robots are significantly adopted in Asia Pacific Region, it recorded a high growth ratio throughout Covid-19 period. Particularly, China already has the highest regional utilization ratio due to great currency in electronic and automotive production sectors, however, its utilization ratio has started to increase depending on the increase in utilization preference in the pandemic process. • Since Asia–Pacific countries like Japan and China have both high population and increase in their elderly population, the utilization of medical robots in healthcare organizations is too high. It is considered that the job types to be affected from the increase in the utilization of industrial robots and medical robots which has already started in the world and whose requirement has accelerated with the impact of Coronavirus, will vary by the development levels of countries. However, although millions of people will become unemployed, those who lost their job due to the fact that robots deprived of their jobs are required to acquire new abilities quickly. The increasing importance of the subject to utilization the medical robotic technologies as a solution for Covid-19 management is shown with a comparison in the following. Differences of current measures and robotic solutions (Khan 2020) (Table 11.1). As is seen from the data presented, nurse and tele-medicine robots are preferred for patients in most of severe cases. Furthermore, it is considered that robots will be helpful for keeping the environment clean, disinfecting and sterilizing the hospital buildings and settlement areas.

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Table 11.1 Matching of Covid-19 management steps by using robotic solutions COVID-19 Electronic Data Capture (EDC) suggestions

Category

Measures

Emergency Diagnosis

First emergency care

N95 face mask, gloves, Doctor robots, nurse goggles, sterilization robots, ambulance robots

Hand Hygiene

Personal hygiene

Sterilization

Disinfectant dispensing robots

Surface Hygiene

Environmental hygiene

Use of alcohol-based disinfectants—for example ethanol

Spray robots for indoor or outdoor disinfection

Carrying Patients

Ambulance transfer Surgical mask for driver, PPE for healthcare worker

Driverless car to transport the sick

Hospital

Management Measures

Surgical mask for driver, KKD for healthcare worker

Receptionist robots

Patient management

N95 face mask, goggles, gloves, etc.

Telemedicine robot and lifting robot to relocate patients

Pharmacy

N95 face mask, goggles, gloves, etc.

Drug delivery robots and drone robots

Catering

N95 face mask, goggles, gloves, etc.

Robot chef—food delivery robots

Patient care at home

N95 face mask, goggles, gloves, etc.

Autonomous service robots

Robotic solutions

Waste management N95 face mask, goggles, gloves, etc.

Cleaning and disinfection robots

Lab-test—Medical Film

Blood testing and x-ray

N95 face mask, goggles, gloves, etc.

Sampling robots, biopsy robots, 3Dx-ray robots

Death Management

Management measures

N95 face mask, goggles, gloves, etc.

Nurse robots for lifting and transport robots to the cemetery

Long-term Sick or Needy Elderly Care Facilities

Palliative care

N95 face mask, goggles, gloves, etc.

Rehabilitation robots, telemedicine robots, entertainment robots and auxiliary robots

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11.5 Literature and Finding About Artificial Intelligence and Robotic Technologies Analysis/synthesis method is used in the research. Analyzing the developments observed with the synthesis of artificial intelligence applications in the health sector. Impacts in different fields are described in the literature created about the impacts of the utilization of artificial intelligence and robotic technologies in Covid-19 process (Table 11.2).

11.5.1 Criteria Used in the Research • • • • • • • • •

Artificial intelligence’s characteristics and importance Artificial intelligence’s areas of utilization Classification of robots used for social distance in health Sales and utilizations of industrial robots in the world Classification of medical robots Robots in professional utilization Global medical robot market, by geography: 2019–2027 Matching of covid-19 management steps by using robotic solutions Literature.

Sources of data used; IFR (International Federation of Robotics) reports, SAS (Symbiotic Autonomous Systems) reports, WR (World Robotics) reports, RW (Robot Works) reports, MRR (Market Research Reports) reports and field studies literature by other scientists.

11.6 Findings • The importance of opportunities provided by the artificial intelligence is increasing depending on the increase of online shopping preferences under the quarantine conditions in Covid-19 process. • While demand for these technologies has existed since the previous years since some heavy works for human were performed by robots in the logistic sector all over the world, the increases of these utilizations were accepted as natural due to the necessity of using within the scope of contact-free trade in the Covid-19 process. • As a result of robots are able to fulfill the necessary duties such as lifting heavy and providing consistency while providing cognitive skills of a capable individual, people and robots work on the same duty together.

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Table 11.2 Literature about Covid-19 impact on Artificial Intelligence Scientific author

Scientific publication

The result of the study

M. Tavakoli, J. Carriere, A. Torabi

Robotics, Smart Wearable Technologies and Autonomous Intelligent Systems for Healthcare During the Covid-19 Pandemic: An Analysis of the State of the Art and Future Vision

Robotics is a cutting-edge technology promising in tele-medicine having potential applications in monitoring of patients under remote conditions as well as transformation of physical examination and clinic care

G. Yang, H. Zhang, L. Yang, Keep Healthcare Workers Safe: Robotics may be used for J. Deng Application of Teleoperated minimizing more exposure in Robot in Isolation Ward for infectious epidemics Covid-19 prevention and Control M. Tavakoli, J. Carriere, A. Torabi

Robotics, Smart Wearable Technolohgies and Autonomous Intelligent Systems for Healthcare During the Covid-19 Pandemic: An Analysis of the State of the Art and Future Vision

Exposure to Covid-19 may promote more robotic research for addressing the risk of contagious disease

N. E. Samalavicius, R. Sisulya, V. Janusonis, A. Dulskas

Use of 4 Robotics Arms Performing Senhance Robotic Surgery may Reduce the Risk of Coronavirus Infection to Medical Professionals During Covid-19

It has the potential of minimizing the risk of Covid-19 exposure for robot-assisted surgeons

J. E. Hollander, B. G. Carr

Virtually Perfect? Telemedicine Tele-medicine has paved the for Covid-19 continuity way for a critical patient at times of interruption in the healthcare service during Covid-19

J. Ye

The Role of Health Technology and Informatics in a Global Public Health Emergency Practices and Implications from the covid-19 Pandemic

Artificial intelligence (AI) and robotic technologies can play an important role for being used in Coronavirus disease (Covid-19) and post-pandemic world and in tele-medicine distribution

E. M. Luo, S. Newman, M. Amat, M. Charpignon

MIT Covid-19 Datation: Data Without Boundaries

International efforts are continuing for estimation, prevention and treatment of Covid-19 by using data-focused means and pooled data sets as from the Covid-19 epidemic (continued)

Ö. A. Azer and ˙I. B. Oran

220 Table 11.2 (continued) Scientific author

Scientific publication

The result of the study

S. Sinha, L. M. Kern, L. F. Gingras, E. Resthetnyak, J. Tung, F. Pelzman

Implementation of VideoVisits During Covid-19 Lessons Learned from a Primary Care Practice in New York City

Covid-19 has caused a sharp increase in the demand for tele-medicine services

Frost & Sullivan

Telehealth—A Technology—Based Weapon in the War Against the Coronavirus. Social Distancing Needs will Present Both Growth Opportunities and Challenges

According to some estimations, Covid-19 has an impact on providers of tele-medicine that is a sector which faces with an unprecedented demand growing 150% or above

R. Vaishya, M. javaid, I. H. Khan, E. Haleem

Artificial Intelligence (AI) Applications for Covid-19 Pandemic. Diabetes and Metabolic Syndrome: Clinical Research and Reviews

The role of artificial intelligence applications was searched in terms of Covid-19 (Coronavirus) and other pandemics. The artificial intelligence technologies may be utilized in scanning, analysis, estimation and follow-up of existing patients and probable patients in future

• While the utilization of robots was started in the previous years in the healthcare sector, Covid-19 has accelerated this process. An increase trend was initiated in the utilization of artificial intelligence and robotic technologies used in diagnosis and treatment stages of Coronavirus contamination. • It was understood that the increase in the demand will be inevitable since the utilization of the artificial intelligence ad robotic technologies particularly in logistis and healthcare sectors increased and they provided assistance for protecting the health of people and covering their basic needs, in comparison with the utilization of many other robot types accustomed in daily life such as domestic work robots, entertainment robots, field robots. • During the outbreak, telemedicine even helped provide mental health support. The vision of rolling out systematic, accessible, and comprehensive mental health support for healthcare workers and general public was made possible by many popular online platforms. The 2020s may turn out to be the decade when digital technology reshapes the health system. COVID-19 has certainly driven many developments in the first three months of 2020, as the digital health community continues to navigate how best to bolster classic public health measures (WHO 2021). • Telemedicine is being adopted for triage and treatment of outpatient, enabling protection for patients and medical practitioners to reduce exposure risk from unnecessary exposure. Telemedicine and virtual care can be integrated into the healthcare system as an approach to maximize the efficiency of healthcare delivery.

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It promotes social distancing measure and help medical centers in managing prolonged waiting times and risk of disease progression. By minimizing in-person visits and reducing face-to-face contact among physicians and patients, the use of virtual care solutions can help lessen the transmission of the virus and protect medical practitioners from infection (Bokolo 2020).

11.7 Conclusion In this study, it is attempted to determine the changing utilization preferences due to Covid-19 pandemic about the impacts of the artificial intelligence and robotic technologies. For this purpose, the artificial intelligence and robotic technologies were defined and short historical development, types, classifications and utilization areas were described. Then, the analyses of the developments intended for transition of only industrial robots and medical robots into the daily life were performed since types of smart and moving robots but different from people, that is, these devices designed for living and cooperating with people are numerous. At this point, it was targeted to determine the risk or challenges to be created by their utilization in the process of Covid-19 pandemic prevailing effectively in our present day. After all, robots are being used in any field that comes to our mind, for example, they take inventory in businesses or clean floors in stores. They rack up the goods to be sold or bring for being sent to warehouses. They cut vegetables, fruits and even they pick fruits. On the other hand, they assist in the care of autistic children or help paralyzed people to re-use their limb. They serve as patrol at national boundaries or attack to targets they see as enemies in case of war. On one hand, they organize flowers or support people in their personal services. In short, their utilization has started in any field of life with their features of helping from different point of views, however, the issue asking that which fields they can be more helpful in such a fatal pandemic process exercising control over the whole world, has really gained great importance. The meaning of the artificial intelligence and robot support has altered in such an environment where boundaries among all countries in the world were closed, people have to maintain their daily life under quarantine conditions, there is no therapeutic drug apart from mask, disinfectant and mask solutions, it is figthed against Coronavirus diseases for which there is no vaccination. For this purpose, indicators where utilization and sales of industrial robots in the pre-Covid-19 process were examined or utilization of logistic robots and medical robots in the pre and post Covid-19 process was examined, are included. A comparison between the impacts of Covid-19 and utilization of artificial intelligence and robotic technology was performed, findings obtained were explained and also, opinions obtained from the analyses performed in the related literature were included. As a result of analyses based on definitions made by descriptive method, their utilizations by years and impacts of Covid-19; it is understood that “the utilization of artificial intelligence and robotic technologies has been already preferred, but, this preference demand has showed increase compulsorily with the impact of Covid-19”. Since any work is acknowledged as

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dangerous for people, the demand for mechanical changes has quickly increased. In conclusion, this pandemic has been useful mostly for workers; industrial and medical robots. However, a problem stating that medical robots will substitute the healthcare professions or healthcare professional army will be required to be diminished in professional sense, is never observed. On contrary, it is clearly understood that the utilization of artificial intelligence and robotic technologies will be the most important support factor in terms of both those working in health profession and those being under the risk of contamination in such an important subject for the human life like pandemic.

References Asimov I (1996) The robot chronicles. Gold. Voyager, London, pp 224–225 Bokolo A (2020) Use of telemedicine and virtual care for remote treatment in response to COVID-19 pandemic. J Med Syst 44(Article number: 132) Bowles T, Pauletto S (2010) Emotions in the voice: humanizing a robotic voice. In: Proceedings of the 7th sound and music computing conference, Barcelona, Spain Corner S (2017) AI-driven robot makes ‘perfect’ flatbread. iothub.com.au Crawford M (2020) Top 6 robotic applications in medicine. ASME.org Frey CB, Osborne MA (2017) The future of employment: how susceptible are jobs to computerisation? Technol Forecast Soc Chang 114:254–280 Frost & Sullivan (2020) Telehealth: a technology-based weapon in the war against the coronavirus. Social Distancing Needs Will Present Both Growth Opportunities and Challenges Grespan L, Fiorini P, Colucci G (2019) The route to patient safety in robotic surgery. In: Springer proceedings in advanced robotics. Springer International Publishing, Basel, Switzerland, pp 25–35 Guerry (2020) Record 2.7 million robots work in factories around the globe. https://ifr.org/ifr-pressreleases/news/record-2.7-million-robots-work-in-factories-around-the-globe Hollander JE, Carr BG (2020) Virtually perfect? Telemedicine for covid-19. N Engl J Med 382(18):1679–1681 Hunt D (1985) Smart robots—a handbook of intelligent robotic systems. Chapman and Hall. 141. Library of Congress Cataloguing in Publication Data. ISBN 978-1-4613-2533-8 IFR (2020) Service robots record sales worldwide. https://ifr.org/ifr-press Iqbal J, Khan Z, Khalid A (2017) Prospects of robotics in food industry. Food Sci Technol 37:159– 165 Kagan E, Ben-Gal I (2015) Search and foraging: individual motion and swarm dynamics. Chapman and Hall/CRC Karlı H, Tanya¸s M (2020) Lojistik Yönetiminin Dijital Dönü¸sümü: Akıllı Lojistik Üzerine Sistematik Literatür Haritalaması. Optimum Ekonomi Bilimleri ve Yönetimi dergisi 7(2):613–632 Khan ZH, Siddique A, Won Lee C (2020) Robotics utilization for healthcare digitization in global COVID-19 management. Int J Environ Res Public Health 17(11) Koceska N, Koceski S, Zobel PB, Trajkovik V, Garcia NM (2019) A telemedicine robot system for assisted and independent living. Sensors 19:834 Kolodny L (2017) Robots are coming to a burger joint near you. CNBC. Retrieved Luo EM, Newman S, Amat M, Charpignon M (2020) MIT Covid-19 datathon: data without boundaries. BMJ Innovation Market Research Report (2020) https://www.marketresearchreports.com/ Mettler T, Sprenger M, Winter R (2017) Service robots in hospitals: new perspectives on niche evolution and technology affordances. Eur J Inf Syst 26:451–468

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Momont A (2020) Ambulance drone. Available online: https://www.tudelft.nl/ Mordor Intelligence Report (2020) https://www.mordorintelligence.com/ Nocks L (2007) The robot: the life story of a technology. Greenwood Publishing Group, Westport, CT Ozkil AG, Fan Z, Dawids S, Aanes H, Kristensen JK, Christensen KH (2009) Service robots for hospitals: a case study of transportation tasks in a hospital. In: Proceedings of the 2009 IEEE International Conference on Automation and Logistics, Shenyang, China, 5–7 August 2009, pp 289–294 Pollock E (7 June 2018a) Construction robotics industry set to double by 2023. engineering.com. Retrieved 3 December 2018 Prassler E, Ritter A, Schaeffer C, Fiorini PA (2000) Short history of cleaning robots. Auton Robot 9:211–226 Robot Works (2020) https://www.robots.com/ Rosheim ME (1994) Robot evolution: the development of anthrobotics. Wiley-IEEE, pp 9–10. ISBN 978-0-471-02622-8 Samalavicius NE, Sisulya R, Janusonis V, Dulskas A (2020) Use of 4 robotics arms performing Senhance robotic surgery may reduce the risk of coronavirus infection to medical professionals during covid-19 Samani H, Zhu R (2016) Robotic automated external defibrillator ambulance for emergency medical service in smart cities. IEEE Access 4:268–283 SAS (2020) History of industrial robots. Archived from the original (PDF) on 24 December 2012. Retrieved 27 October 2012. https://www.sas.com/ Scudellari M (2020) Drone beats ambulance in race to deliver first aid to patients. IEEE Spectrum. Available online https://spectrum.ieee.org/the-human-os/biomedical/devices/drone Singh AK, Nandi GC (2016) NAO humanoid robot: analysis of calibration techniques for robot sketch drawing. Rob Auton Syst c. 79:ss. 108–121 Sinha S, Kern LM, Gingras LF, Resthetnyak E, Tung J, Pelzman F (2020) Implementation of video visits during covid-19 lessons learned from a primary care practice in New York City. Public Health Tavakoli M, Carriere J, Torabi A (2020) Robotics, smart wearable Technologies and autonomous intelligent systems for healthcare during the Covid-19 pandemic: an analysis of the state of the art and future vision. Adv ˙Intel Syst Thomas J (1 November 2017) How corporate giants are automating the farm. New Internationalist. Retrieved 3 December 2018 Toy T (29 June 2011). Outlook for robotics and automation for 2011 and beyond are excellent says expert. PBT Consulting. Retrieved 27 January 2012 Tsui KM, Yanco HA (2007) Assistive, rehabilitation, and surgical robots from the perspective of medical and healthcare professionals. In AAAI 2007 workshop on human implications of human-robot interaction, technical report WS-07-07 papers from the AAAI 2007 workshop on human implications of HRI; Springer: Gold Coast, Australia Twin Robotic X-Ray. Siemens. (2020) Available online: https://www.siemens-healthineers.com/ Vaishya R, Javaid M, Khan IH, Haleem E (2020) Artificial Intelligence (AI) applications for covid-19 pandemic. Clin Res Rev World Robotics (2020) http://www.world-robotics.com Yang G, Zhang H, Yang L, Deng J (2020) Keep healthcare workers safe: application of teleoperated robot in isolation ward for covid-19 prevention and control Ye J (2020) The role of health technology and informatics in a global public health emergency practices and implications from the covid-19 Pandemic. JMIR, Med Inform Zeghloul S, Med A, Gazeau JP (2015) Robotics and mechatronics. In: Proceedings of the 4th IFToMM international symposium on robotics and mechatronics. Springer Zhao P, Zi B, Purwar A, An N (2020) Editorial: Special issue on rehabilitation robots, devices and methodologies. J Eng Sci Med Diagn Ther

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Özlem Arzu Azer is a Professor of International Political Economy. She earned her B.S. in Economics from Marmara University, her Master of International Banking at Marmara University, and her Doctorate in Economics at Istanbul University. Her doctorate thesis was on the subject of globalization, titled “The Transformation of Capital from Multinational to Supra-national between 1994–2005.” She won her title of “Associate Professor of Political Economy on 28th February 2014. She has been working as a professor since April 2019. She is working as “Head of the Business Administration Department” at Istanbul Atlas University. She worked for various universities including Kadir Has University. She worked as a vice Rector’. Besides her academic identity, she is also an ex-banker and worked at different banks in Turkey and Netherlands for total of 14 years. During her academic career, she participated in many international conferences. She joined the project titled “Perspectives of Conflict Transformation from the Middle East and Europe (CTMEE)” funded by Marie Sklodowska-Currie Actions and went to the West Bank in Palestine between 12–26 December 2012. She coordinated the project related to Syrian Migrants in the district of Esenyurt, ˙Istanbul in 2020. ˙ Ibrahim Bora Oran after completing his undergraduate education in Economics at Istanbul Marmara University completed his master’s degree in International Economics and his Ph.D. in Economic Theory at the Institute of Social Sciences of the same university. In the first years of his working life, he worked in various independent audit companies and in the field of international auditing. He worked as an accounting manager at Besler A:S¸ belonging to the Ulker Group and as a general manager at Turkmenistan Imperial Hospital. In his academic life, he gave economics courses at foundation universities such as Istanbul Okan University and Istanbul Gelisim University. Finally, he works at Istanbul Esenyurt University. He held administrative positions such as deputy dean and department head at the Faculty of Business and Management Sciences at Esenyurt University. Scientific publication studies on economics and international economic issues are continuously published in congresses (9 units), book chapters (9 units), and various national and international journals (41 units). There are (5 articles) or accepted for publication (8 SCI and SSCI articles) that have been published in journals scanned in important indexes and especially in Web of Science indexed journals.

Chapter 12

Evaluation of Vaccine Supply Chain Performance Activities of Health Systems in the COVID 19 Pandemic Period with DEA: European Countries Özlem Alada˘g Bayrak

and Kadir Kaan Göncü

Abstract In this paper, the linkage of two different concepts; sustainable competitive advantage (SCA) and Supply Management (SM) are analyzed. SCA has been gaining attention in last decades. Companies have been trying to obtain SCA in order to be successful and keep their position in the future. As competition intensifies among enterprises, each enterprise seeks to research how to reduce costs and/or achieve excellence compared to competitors in the market. One of the areas that the enterprise can exploit to achieve a sustainable competitive advantage is the supply chain. Supply chain management (SCM) philosophy is based on collaboration of suppliers, manufacturers and distributers. SM is a vital part of SCM and SM has been gaining importance in the last decades according to several factors. Sustainable SM activities may provide supply chain SCA from many aspects. It is argued that Supply Management (SM) is linked with performance and effects on SCA directly or indirectly. In this chapter, the health systems vaccine supply chain performance activities were evaluated with DEA during the COVID 19 pandemic period, using the health indicators of European countries for January 2022 in Trading Economics and WHO databases. Keywords Supply chain performance · Covid-19 · DEA · European countries

12.1 Introduction Health is one of the most important issues in human life. Investments made for people (education, health, etc.) are among the development and development indicators of societies. However, in the development processes of countries, the human capital Ö. A. Bayrak · K. K. Göncü (B) Trakya University, Edirne, Türkiye e-mail: [email protected] Ö. A. Bayrak e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 K. T. Çalıyurt (ed.), Corporate Sustainability in Times of Virus Crises, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-19-9079-3_12

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factor is an important factor in increasing the level of production by making structural changes in the economy and reaching the level of developed economies (Sen ¸ 2003). For this reason, it is important for countries to value human health and provide health services in the most effective and efficient way in order to maintain their existence and being in a sustainable development. Today, health expenditures represent an important use of national resources and are growing rapidly. The financial burden of the increasing demand for health services in the world for various reasons made the countries to search for effective and efficient services, and it has become one of the main preoccupations of health policy makers and managers. In recent years, health care became one of the most critical public policy issues. Especially, what happened during the COVID-19 epidemic in the world has drawn attention to this issue (Tarantola et al. 2020). The impact of the previous investment policies and developments of the countries on the health system were seen more clearly in the COVID 19 pandemic period. The COVID-19 epidemic, which emerged in the world at the end of December 2019 and spread rapidly to other countries in Asia, Europe and North America and was declared a pandemic by the World Health Organization (WHO), resulted in countries closing their borders and imposing restrictions (Remuzzi and Remuzzi 2020). In this period, the production and supply process all over the world was heavily affected. However, the effect of the epidemic was mostly experienced in the health sector, and irreversible results were encountered. Countries have tried to take measures by making various initiatives in order to minimize the effects experienced. The problems in the production and supply process in health have focused on the acquisition of primary medical consumables used in the diagnosis and treatment processes of the epidemic. In the beginning of COVID 19 epidemic period, there were difficulties in accessing and supplying protective equipment (mask, etc.) and diagnostic kits (PCR test, etc.) in the countries. In the later stages of the pandemic, the supply chain management efficiency of drugs used for preventive vaccines and treatment have been measured by the successes of countries in their health care management performances. In this chapter, the health systems vaccine supply chain performance activities were evaluated with DEA during the COVID 19 pandemic period, using the health indicators of European countries for January 2022 in Trading Economics and WHO databases. In the study, 15 countries (Finland, France, Germany, Iceland, Ireland, Italy, Latvia, Lithuania, Luxenburg, Netherland, Poland, Slovak Republic, Slovenia, Spain and Turkey) that can regularly access vaccine supply chain performance data of their healthcare systems during the COVID 19 pandemic period were included in the study. In the study, the number of doctors per 1,000 people in the country population, the number of nurses per 1,000 people and the number of hospitals per 1000,000 people were used as input variables and COVID-19 vaccination rate per 100 people, total number of vaccines per 100 people, and Total/COVID 19 death rate were used as output variables. Using the data of the first quarter of 2022 published by WHO, DEA Analysis (DEA-CCR and DEA-BCC) was applied according to Fixed Return for Output Oriented Scale and Variable Return Model for Output Oriented Scale. Fixed income to scale approach constitutes the basis of DEA (Gökgöz 2009,

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p. 17). In this model, it is assumed that an increase in inputs is equal to an increase in output. According to Lee et al., DEA models are based on the principle of maximizing outputs or minimizing inputs according to the purpose of use (Lee et al. 2009, pp. 848– 855). The Variable Returns to Scale (BCC) Model, on the other hand, is based on the assumption of the Banker, Charnes and Cooper (BCC) model of variable returns to scale. In this model, the increase in the amount of output causes an increase at a higher or lower rate than the increase in the input (Lee et al. 2009, p. 848). A literature analysis of the studies conducted by using the DEA Method, a nonparametric linear programming type, which has a general use to measure the relative efficiency and effectiveness analysis, and the COVID 19 data published by WHO, was carried out. The literature study was carried out using the Systematic Literature Review method. Systematic Literature Review ensures that the quality of the studies is synthesized in an unbiased and objective way by including all the studies done so far on the researched subject and research question in both a scientific and transparent manner (Tranfield et al. 2003, p. 209; Lamé 2019, p. 1635). With the applied method, all the resources suitable for the search constraints, determined in all of the databases whose names are mentioned below were reached and a systematic review was carried out on the ones directly related to the subject. The literature review covers the years 2001–2022 and was conducted using the Arts & Humanities Citation Index, British Library EThOS, Emerald Insight, Google Scholar, IEEE Xplore Digital Library, ScienceDirect, Scopus, Social Sciences Citation Index, Springer Nature eBooks databases. While scanning, the keywords such as efficiency, productivity, COVID 19, vaccine, supply chain, efficiency, WHO, European Countries, supply chain, tzy, scm, vza, dea, were used, and in this way, a large-scale search was carried out without prejudice. The determined keywords were searched in the Title/Title, Keywords/Keywords and Abstract/Abstract and sections of the articles and the following results were obtained. As a result of the in-depth analysis in the literature, it has been seen that studies have been carried out in many different fields (health sector, tourism sector, banking and insurance, educational institutions and businesses, etc.) using the DEA Method. 15 literature reviews that are closely related to the Vaccine Supply Chain Performance Activities and DEA efficiency and effectiveness analysis of the health sector during the COVID 19 process are summarized below: (“dea” OR “vza” OR “data envelopment analysis” OR “data envelopment analysis”) AND (“health services” OR “health services”) 168 studies (“dea” OR “vza” OR “data envelopment analysis” OR “data envelopment analysis”) AND (“supply chain” OR “supply chain” OR “tzy” OR “scm”) 329 studies (“health services” OR “health services”) AND (“supply chain” OR “supply chain” OR “tzy” OR “scm”) 124 studies (“vaccine” OR “vaccination”) AND (“supply chain” OR “supply chain” OR “tzy” OR “scm”) 149 studies

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(“Vaccine Logistics” OR “Vaccine Supply Chain”) AND (“Coronavirus” OR “Cold Chain”) 6 pcs (“COVID-19” OR “Data Envelopment Analysis”) AND (“Contagion Control Efficiency” OR “Medical Treatment Efficiency”) 19 studies (“dea” OR “vza” OR “data envelopment analysis” OR “data envelopment analysis”) AND (“health services” OR “healthcare”) AND (“supply chain” OR “supply chain” OR “tzy” OR “scm”) 2 studies (“vaccine” OR “vaccination”) AND (“dea” OR “vza”) 9 studies (“covid” AND (“vaccine” OR “vaccination”) AND (“supply chain” OR “supply chain” OR “tzy” OR “scm”) 4 studies (“vaccine” OR “vaccination”) AND (“supply chain” OR “supply chain” OR “tzy” OR “scm”) AND (European countries” OR “European countries”) 0 study (“vza” OR “dea”) AND “covid” AND (“vaccine” OR “vaccination”) AND (“supply chain” OR “supply chain” OR “tzy” OR “scm”) 0 study In the study conducted by Fahrni et al. (2022), which includes the management scoping review of the cold chain logistics of COVID-19 vaccines, the PRISMA–ScR 2018 checklist was used to conduct and report the scoping review. In the study, publications in PubMed (LitCovid), Scopus and ScienceDirect from April 2020 to January 2022 were reviewed. All review phases were pilot-tested to calibrate 2 reviewers, and articles on cold chain logistics and management were included, while only publications describing COVID vaccines, vaccine development, and clinical aspects were excluded. The results were analyzed thematically. Evaluating 6984 potentially relevant citations, the study found that COVID-19 vaccines require specific end-to-end supply cold chain requirements, from production and shipping to warehouses and healthcare facilities. And the study revealed that a durable vaccine supply chain is essential for to be efficient and effective, supported by temperature monitoring technologies for sustain production to minimize waste and ensure vaccines reach target audiences. De Boeck et al. (2022) in “Vaccine Supply Chains in Resource-Limited Settings: Reducing Rainy Season Interruptions” examined the role of supply chain disruptions on vaccination coverage and inequalities, and developed a modeling approach combining spatial modeling and simulation. This approach evaluated the impact of the rainy season on vaccine coverage and inequalities in the context of the Madagascar vaccine supply chain. Based on this assessment, various mitigation strategies were explored and found significant operational challenges remain in resource-constrained environments, frequent stock depletion, inadequate immunization coverage, and inequity in vaccine access. In the study of Burgos et al. (2021) titled “COVID-19 vaccine race: opportunities and challenges in development and distribution”; Comprehensive plans for equitable vaccine education, distribution, management and post-marketing surveillance highlight the need to successfully implement vaccine hesitancy to overcome supply chain barriers and healthcare provider shortfalls in an already overloaded healthcare system.

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In the study of Kim et al. (2022) on the balancing role of delivery rate against varying levels of efficacy of COVID-19 vaccines under variants, the SIR-D model (referred to as the master model) was developed, by performing a comprehensive sensitivity analysis on the master model and further detailing the disease dynamics. An extended SIR-D model (described in Supplementary Materials) was used to capture. When their simulations were run in the absence of vaccines, they resulted in an estimated IAR of approximately 88.93% and a mortality rate of 1.3% (ie the percentage of the population that died from the disease over the time horizon). Despite massive efforts to vaccinate worldwide, vaccine distribution has been identified as an ongoing challenge due to production shortages, economic constraints, and the lack of advanced supply chain infrastructure that is critical to the effective distribution of highly effective vaccines. The study showed that a vaccine with a relatively low efficacy can achieve at least as good health outcomes as its higher efficacy counterparts, as long as it can be distributed more quickly. Chandra and Kumar (2018) performed a fuzzy MICMAC analysis to improve supply chain performance of essential vaccines in developing countries. Twenty-five key issues as various factors of the vaccine supply chain are presented in this research. Fuzzy MICMAC analysis was performed to classify the factors according to their driving and dependency forces and to develop a hierarchy-based model. In addition, the findings were discussed with field experts to identify critical factors. Three factors: better demand forecasting, communication between supply chain members, and proper planning and scheduling have been identified as critical factors of the vaccine supply chain. It is among the results of the study that special attention should be paid to these factors in order to improve the performance of the vaccine supply chain. In their study titled “A fair and accessible vaccine supply chain network in the COVID-19 epidemic outbreak under uncertainty” by Shiri and Ahmadizar (2022), it was revealed that uncertainty is an important factor affecting the design of the supply chain network. The demand for each type of vaccine for high-risk and low-risk groups in terms of high volatility during the COVID-19 outbreak has been considered an uncertain parameter. The study using the MSSP method involves decision making in all periods and is therefore a suitable method for the proposed model. This study designs a vaccine supply chain to achieve a fair and accessible network. With the MSSP approach, it models the uncertainty in demand due to the dynamic nature of the COVID-19 outbreak. In the study conducted by Dizbay and Öztürko˘glu (2021), the problems encountered in the vaccine supply chain stages and various methods used and recommended to be used within the scope of Industry 4.0 to solve these problems were evaluated. The aim of the study is to compile the methods suggested in the literature and to reveal the benefits of using these methods. Thus, the problems experienced in the vaccine supply chain process can be minimized and the negative consequences of these problems can be prevented. In the study, the general structure of the vaccine supply chain in the world was examined, but the structure and layers of the vaccine supply chain may vary according to countries and regions. In the study, it was observed that one of the biggest problems causing vaccine losses at the stages of the vaccine supply chain

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was the lack of equipment necessary for the storage and transportation of vaccines in the areas to be vaccinated. In a two-stage study by Kumar et al. (2021): Stage I, a quantitative cross-sectional survey design was applied to understand stakeholder adoption intent (ADI) for the blockchain-enabled vaccine supply chain through the extended technology adoption model using partial least square structural equation modelling. The findings have determined that the necessity of stakeholder trust and perceived ease of use for the blockchain-enabled vaccine supply chain directly affect the perceived usefulness (PUS) and individual subjective norm. PUS has emerged to significantly influence the ADI of stakeholders in the vaccine supply chain towards the blockchain. Phase II proposes an integrated vaccine supply chain architecture with IoT devices to bring transparency and flexibility to the vaccine supply chain. It has been determined that medical health centers where the architecture will benefit the beneficiary to approve or disapprove vaccines through self-generated report, can see the efficacy of vaccines before they are clinically delivered to patients. In the first phase of the three-phase study by Alam et al. (2021), 12 experts from the healthcare industry and VSC were interviewed to add and filter the list of challenges found through literature review. In the second stage, a questionnaire consisting of collected questions was given to the experts who responded on a linguistic scale. In the third and final stage, the data were analyzed using IF-DEMATEL. According to the results, the COVID-19 pandemic has demonstrated several challenges that supply chains face with significant disruptions, and vaccine supply chains are no exception. Therefore, identifying and prioritizing the challenges to the COVID-19 vaccine supply chain (VSC) is essential to paving the way out of this pandemic. This study combines the decision-making trial and evaluation laboratory (DEMATEL) method with heuristic fuzzy sets (IFS) to explore the key challenges of COVID-19 VSC. In the study by Jahani et al. (2022), entitled Interventions to increase the distribution of vaccines in Sub-Saharan Africa: A scoping review, crisis-driven vaccine supply chain management recently highlighted the importance of responding promptly to a crisis (for example, the COVID-19 pandemic). This study develops a queuing model for a crisis-driven vaccine supply chain to enable efficient coordination and distribution of different COVID-19 vaccine strains to people with varying levels of vulnerability. A multi-period queuing model has been proposed that takes into account congestion in the vaccination process to minimize two conflicting goals: (i) the expected average waiting time of vaccines; and (ii) the total investment in holding and ordering vaccines. To develop the bi-objective nonlinear programming model, goal attainment algorithm for small to large problems and non-dominant sequencing genetic algorithm (NSGA-II) are used. According to Georgiadis and Georgiadis (2021) Optimal planning of the COVID19 vaccine supply chain, it provides a new framework to simultaneously address the optimal planning of COVID-19 vaccine supply chains and the optimal planning of daily vaccines at existing vaccine centers. A new mixed integer linear programming (MILP) model has been developed to generate optimal decisions regarding quantities transferred between locations, inventory profiles of central and vaccination centers,

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and daily vaccination plans in vaccination centers of the supply chain network. Certain COVID-19 features have been appropriately modeled, such as specialized cold storage technologies, limited shelf life of mRNA vaccines in cold conditions, and challenging vaccination targets under extreme time pressure. The goal of the model is to minimize overall costs, including storage and transportation costs, costs associated with fleet and personnel requirements, as well as indirect costs associated with wasted doses. A two-stage decomposition strategy based on the divide-conquer and integrate approach has been proposed for the solution of large-scale problems. As a result, mass vaccination campaigns against COVID-19 are assisted by increasing the efficiency of the distribution network. According to Çevik et al. (2021) Vaccine Supply Chain Processes: Encountered Problems and Digital Solutions, in order to prevent diseases or epidemics, the cold chain should not be disrupted at any of the supply chain stages of vaccines and processes should be carried out under appropriate conditions. If suitable conditions are not provided in the vaccine supply chains, immunity rates decrease, vaccine waste, environmental wastes and immunization costs increase. In this study, vaccine supply chain stages were analyzed. With the literature review, the decisions to be made for the effective management of the supply chain stages and the technological developments that can be used within the scope of Industry 4.0 have been examined. In the study of ˙Ipekçi and Tanya¸s (2021), cold chain logistics and its application areas are discussed in a conceptual framework. The aim of the study is to examine the current cold chain applications around the world and to reveal the general situation of the sector and applications in Turkey. In the study, SWOT analysis method was used to understand the general situation of cold chain logistics in Turkey. As a result of the analysis, it was observed that the practices in Turkey were harmonized with international standards. Selamzade and Özdemir (2020) analyze the efficiency level of 36 OECD countries in the fight against Covid-19 on April 24, 2020, using Data Envelopment Analysis. In the study, the number of doctors, nurses and hospital beds per ten thousand people and the ratio of health expenditures in Gross Domestic Product (GDP) are used as inputs, the number of tests per million people, the number of cases and the number of deaths are used as output. According to the analysis made with the CCR method, 8 countries are fighting the pandemic effectively according to the BCC method. While Slovakia and Iceland are the most active countries; Italy, Spain, USA, Great Britain, the United Kingdom of Northern Ireland and France are listed as countries that cannot compete effectively. When the Studies on Efficiency Analysis with DEA Technique during the Covid19 Pandemic Period are examined; In the study conducted by Bayram and Yurtsever (2021), the performance of 27 European countries on the spread and deaths caused by the COVID-19 epidemic was evaluated and compared using the input-driven data envelopment analysis (DEA) method. The model here was implemented in two stages. In the first stage, the effectiveness of contagion control was analyzed, while in the second stage, the effectiveness of medical treatment was evaluated. In addition, four regions were classified using the countries area chart. Some recommendations are given for countries in each region.

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When the literature is examined, it has been determined that most studies in terms of the health sector are conducted by investigating the ‘logistics management challenges encountered in the vaccine cold chain’ and examining the performances of countries severely affected by COVID-19 with Data Envelopment Analysis. There have not been many studies on the evaluation of vaccine supply chain performance activities of health systems with DEA during the COVID 19 pandemic process. With our study, it is aimed to eliminate this deficiency in the literature.

12.2 Efficiency and Efficiency Analysis Methods In the globalizing world, measuring the performance of production units and identifying their inefficient resources in increasingly competitive markets are the prerequisites for improving the performance of any production unit (Vincova 2005, p. 24). Efficiency and productivity measurements are made in two ways, for input and output. The maximum amount of output that can be produced using a given amount of input determines the best performance. In input-oriented productivity measurements, it comes to the fore how much the amount of input can be reduced without any change in the amount of output. In output-oriented productivity measurements, it is aimed how much the output amount can be increased without any change in the current input amounts (Coelli et al. 2005, pp. 11, 12). The difference between output-oriented productivity measures and input-oriented ones can be summarized as minimizing the ratio of weighted input to weighted output. In other words, it is investigated how much output combination can be obtained with a certain input combination (Yolalan 1993). DEA, which is one of the most used methods in efficiency measurement, is a mathematical programming-based method used to measure the relative efficiency of organizational units with multiple inputs and outputs that perform similar operations. DEA has been accepted as an effective approach especially when more than one input or output cannot be converted into a weighted input or output set (Ulucan 2000). The DEA method compares the production units, which are assumed to be homogeneous, among themselves. After accepting the best observation as the efficiency limit, the other observations are evaluated according to this effective observation. Therefore, the activity limit is an observation that occurs, not a default state. Since the efficiency limit is determined in this way, random error is not used in this method (Seyrek and Ata 2010). DEA method is examined in two groups as CCR and BCC models. CCR is a productivity ratio definition that measures the efficiency of decision-making units that have more than one input and output (Shang and Mao 2009, p. 43). The BCC Model, on the other hand, is implemented as a Variable Return to Scale (VRS) application to the original DEA model to solve the Fixed Returns to Scale problem (Banker et al. 1984, pp. 1078–1079; Kuah et al. 2010, pp. 168–169).

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12.3 The Concept of Health and Health Services Until today, the concepts of “Health” and “Disease” have been defined in many different ways depending on the changes in medical paradigms and perspectives. In general, the concept of health is evaluated as the level of adaptation to the changes in the environment, as well as focusing on the physical, social and spiritual well-being of the individual. The word of “disease” is expressed as a deviation from the normal state of being healthy. The World Health Organization (WHO) defined the concept of health not only as the absence of disease and infirmity, but also as a state of complete physical, mental and social well-being (Pender et al. 1990). In addition to many different definitions of the concept of health, the concepts of health and health care have taken place in the literature as separate phenomena. While the concept of health refers to a situation in which there is no disease in the narrow sense, the concept of health service is defined as the operations performed on a person or services used to diagnose or treat a disease (Segen 2002). While the concept of health is defined in different ways, it is seen that similar definitions are made for the concept of health service, whose main purpose is the protection of health. In their study, Mutlu and I¸sık (2012) defined health care as “the services that must be provided in order for individuals to continue their lives in a physically, spiritually and socially balanced way” (Mutlu and I¸sık 2012, p. 14). In addition, according to the 2nd article of the Law on Socialization of Health Services dated 05.01.1961 and numbered 224, health services; It is defined as “activities to destroy various factors that harm human health and protect them from the effects of these factors, to treat patients, and to accustom those with reduced physical and spiritual abilities and faculties to work” (Official Gazette Number: 10705 1961). According to the definitions, health service in general; health service is the provision of services in accordance with the needs and demands of the society, organized at the country level, on the condition of making use of health personnel from different branches in health institutions. Health services are expressed as a continuous and permanent system that covers all kinds of preventive and curative practices for the health care needs of individuals and society. The main areas of health services are “Prevention”, “Treatment” and “Rehabilitation”. Preventive health services offered to healthy people are briefly defined as health services to prevent people from getting sick. Treating health services covers the health services provided to restore health of individuals who are sick or injured in any way, or who have lost their physical or mental health. Rehabilitation services, on the other hand, are treatments for the mentally handicapped, mental illnesses, and some organs to restore their former functions, which cover very long periods and provide the most difficult results (Sargutan 2005, pp. 67, 68). In order to create a productive society, it is necessary to prevent diseases and eliminate negative situations in society. In this respect, it is important to produce and maintain health services (Altay 2007, p. 34). Health problems due to a disease or inadequate health conditions in any part of the world have global consequences. For example; The COVID19 epidemic process, which is one of the most challenging

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processes of the last century, has affected the production and consumption areas all over the world economically and psychologically, causing a change in the supply– demand balance in the world. It has been observed that the COVID-19 epidemic has affected the international trade of goods and services with both supply shock and demand shock characteristics (Baldwin and Tomiura 2020). However, the COVID 19 outbreak has affected the healthcare industry much more deeply. During the pandemic process, the delays and fluctuations in the supply chain in the health sector have affected the health of healthy individuals and patients, resulting in irreversible results. For this reason, supply chain management in the health sector is an important issue that should be seriously considered (Akbal 2020). In order to minimize the effects of the epidemic during the pandemic process, all countries in the world have taken preventive measures in almost every sector. However, despite these regulations, problems have occurred in many supply chain processes and even the process has been disrupted from time to time. For this reason, it is extremely important to establish a well-executed supply chain structure, especially in the health sector, during epidemics and natural disasters in the world.

12.4 Healthcare Industry and Supply Chain Management The main goal of organizations in the health sector is to provide high quality service for patients. In line with this goal, factors such as the supply cost of the products used in the health sector and the intense competition in the health sector forced the health institutions to develop new methods in order to provide service at the standard patient care level but at low costs (Callender 2007). Health institutions are struggling with difficult conditions such as the complex nature of business processes, efficient use of resources, and increasing the quality of services. Because of all these factors, it is important to apply the supply chain management principles, which ensure the management of institutions with a holistic perspective, in the health sector (Vries et al. 1999). The level of health services provided in human life, in raising and protecting the quality of life, is considered as an indicator that determines the development level of countries. Therefore, health services are multidimensional and comprehensive services with their supply, financing, procurement processes and stakeholders that need to be analyzed separately (Asunakutlu 2005, p. 3). In the health service sector, the final product in the supply chain is the “basic service provided”, while the last users of the supplied materials are doctors, nurses and other health workers who are the “internal customers” of the system. This point shows that supply chain management in healthcare has a unique feature (Schneller and Smeltzer 2006). Within the scope of health services, the existence of many different diseases that require different treatment has necessitated the presence of many different medical supplies and equipment, and people working with different fields of expertise and functions in the provision of health services. The diversity of services offered in health services requires the establishment of strong cooperation networks in matrix-structured health

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institutions, and the level of these cooperation networks also affects the quality of health services provided. In this direction, the main objectives of the healthcare supply chain are listed as follows: • To ensure the supply of medical products and materials in healthy conditions, at the appropriate time, at the appropriate place, in the appropriate amount and at the lowest cost, • To try to reduce it without compromising the quality and lead time of the medical product or material, • Maximizing the space required for patient care while minimizing storage space, • To increase the quality of service in patient care processes, • To ensure the continuation of profitability and to increase competitiveness by minimizing stock costs (Acar and Bozaykut 2017). For this reason, supply chain and supply chain management, which is defined as a network of producers and distributors who supply raw materials, convert raw materials into intermediate goods and final products, and distribute the final products to customers, has a more important place especially in the health sector (Lee and Billington 1992, p. 66). In summary, in terms of the health sector supply chain management is expressed as a system that manages the product and information flow in order to ensure that the business processes consisting of service providers, distributors, retailers, manufacturers and patients are in harmony, from the production of the material to the last consumer (patient) (Tengilimo˘glu and Yi˘git 2013, p. 25). In healthcare delivery, the healthcare provider has the responsibility to administer the treatment and ensure the quality of service. In this process, there is an obligation to provide a quality service for the person requesting health care, while reducing the costs of providing health care services. However, increasing the service quality also leads to higher costs. For this reason, increasing the service quality by reducing costs requires a supply chain process created by correct planning. Supply Chain provides information to health institutions on issues such as stock management and material management. A properly planned supply chain will contribute significantly to the service delivery process (Biçer and Ömürgönül¸sen 2019, p. 613). From this point of view, a successful supply chain management in the health sector provides an effective and high-quality health service for health care consumers, and it is also a very important element in fulfilling the purpose and activities of health care supply.

12.5 Supply Chain Management in Healthcare Services in Crisis Periods The concept of crisis can also be expressed as a difficult period, depression, encountered in the life cycle of an organization or a person (Turkish Language Association 1994, p. 479). A supply chain crisis occurs when the activities of one or more supply chain members are interrupted, resulting in a massive disruption of the normal flow

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of goods or services. The magnitude of the impact of the crisis depends on many factors and varies from case to case (Natarajarathinam et al. 2009). While the crisis in the supply chain is unpredictable, it may not be unexpected (Coombs 1999). Supply chain management has been recognized as the most important and critical issue for every business worldwide (Koberg and Longoni 2019; Yazdani et al. 2021). However, in the broader context of the healthcare industry, it includes not only clinics and hospitals, but also wholesale distributors, pharmaceutical manufacturers, medical equipment businesses, pharmacies, government regulators, private health insurance companies, technology providers, and information technology vendors. This is true and important for the entire industry, where logistics, procurement and supply chain management are interconnected and interdependent (Bialas and Manthou 2014). In times of crisis, the interruption of the health service supply causes a great chaos in the whole community life with a domino effect. In these circumstances, it is foreseen that the key to success can be achieved with optimal management of supply chains.

12.6 COVID-19 and Healthcare Supply Chain With the rise of COVID-19 in China in late December 2019, the epidemic gained a universal character. It has affected every aspect of life, from the economy to social relations, from the health sector to production systems. However, the epidemic caused disruptions in the supply chain operations, which flowed to all areas the most. Due to the unique structure of the health service sector, it requires special care as it should not disrupt the service supply in any extraordinary situation. Healthcare supply chains have faced serious problems, risks and challenges due to the spike in demand for medical products as a cause of the increase in cases infected with COVID-19 (Queiroz et al. 2020). In this process, it has been observed that hospitals and medical centres have experienced a significant shortage of standard products such as special waste bags, medical face masks, face shields and gloves (Pamucar et al. 2022). Accordingly, in order to meet demand more effectively during a crisis, longer-term significant changes in the function and performance of healthcare supply chains are required (Francis 2020). As a result, it has become clear that rapid response practices are more important than ever as the events during the COVID 19 pandemic are faced with sudden, unexpected and simultaneous shocks on both the demand and supply side (Saarinen et al. 2020). Businesses that had a flexible and sensitive supply chain structure during the pandemic period were minimally affected by the negative effects of the process (Milosevic et al. 2021; Petrovic et al. 2019). Since the health sector is directly related to the human, any disruption in the supply of primary products such as medical consumables in the health sector will cause irreversible and high costs. In this perspective the main purpose of this paper is to examine the vaccine supply chain performance activities of the health systems of the European countries during the COVID 19 pandemic process by using the DEA method and to offer solutions to the countries that have efficiency problems. For this purpose, efficiency analysis

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was performed using the DEA method with the data of Medical Doctors, Nurses, Hospitals, COVID-19 Vaccination Rate, COVID-19 Vaccination and Total/COVID 19 Death Rate from 15 European countries. As a sample of research, 15 countries, within European countries (Finland, France, Germany, Iceland, Ireland, Italy, Latvia, Lithuania, Luxenburg, Netherland, Poland, Slovak Republic, Slovenia, Spain and Turkey) that can regularly access vaccine supply chain performance data of health systems during the COVID 19 pandemic process were included in the sample.. In the study, 15 European countries that were considered homogeneous before DEA were chosen as Decision Making Units. The reason why these selected countries were included in the study is that it is possible to have full access to regular data on their health systems. Countries that were not included in the analysis due to the inaccessibility of all their data can be cited among the limitations of this study. In the analysis, the data of the health systems of 15 European countries, whose data can be fully accessed, during the COVID 19 pandemic process were used. Medical Doctors, Nurses and Hospitals were used as the input variables of these countries, which are called decision-making units and the criteria for as output variables; COVID-19 Vaccination Rate, COVID-19 Vaccination and Total/COVID 19 Death Rate were preferred and also Databases provided by “Trading Economics” and “WHO” were used in the research. The data were compiled from the data of January 2022.In the paper, belonging to European countries; An efficacy analysis was performed using data from Medical Doctors, Nurses, Hospitals, COVID-19 Vaccination Rate, COVID-19 Vaccination, and Total/COVID 19 Death Rate. In the analysis, three criteria described as Medical Doctors, Nurses, Hospitals were accepted as inputs, while the other three criteria described as COVID-19 Vaccination Rate, COVID-19 Vaccination and Total/COVID 19 Death Rate were accepted as output variables. Using the data of the first quarter of 2022 published by WHO, DEA Analysis (DEA-CCR and DEA-BCC) was applied according to Fixed Return for Output Oriented Scale and Variable Return Model for Output Oriented Scale. According to findings of the research, in the efficiency-productivity relationship analysis of the countries used as decision-making units; the number of doctors per 1,000 people in the country’s population, the number of nurses per 1,000 people and the number of hospitals per 1000,000 people were used as input variables. In the analysis, as output variables; COVID-19 Vaccination Rate per 100 people, the total number of vaccinations per 100 people and Total/COVID 19 Death Rate were used. While determining the Total/COVID 19 Death Rate, the relationship between the population of the country, which is the decision-making unit, and COVID 19 was calculated and in order to maximize this number, which is the output variable, the operation is performed by taking the inverse of this value. 15 European countries were chosen as the decision-making units for efficiency and productivity analysis. For the performance evaluation of the decision-making units to be analyzed, the “Fixed Return Model According to Output Oriented Scale” was used and evaluation criteria were resolved through the DEA method and the EMS Package program. During the application, the sequence of the following steps will be followed.

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1. Selection of input–output variables with decision-making units and obtaining data, 2. Determination of the program in which the DEA method will be applied, selection of the model to be applied and efficiency analysis, 3. Evaluation of the relative effectiveness of decision units and comparison of ineffective decision units with reference decision units. In Stage 1; Table 12.1 was created by taking the data of European countries determined as decision-making units from Trading Economics and WHO database as input variables of decision making units; Medical Doctors, Nurses, and Hospitals were used and COVID-19 Vaccination Rate, COVID-19 Vaccination and Total/COVID 19 Death Rate criteria were preferred as output variables. In Stage 2; For the measurement of efficiency, Fixed Return for Output Oriented Scale and Variable Return Model for Output Oriented Scale were preferred and EMS Package Program, which is widely preferred in the literature, was used to make the calculation. In Tables 12.2a and 12.2b, the efficiency scores resulting from the data entered into the EMS program are shown. While the decision-making units highlighted in bold in the aforementioned tables were determined as effective countries as a result of LPI scores, the countries outside the painted area were evaluated as ineffective decision-making units. As seen in Table 12.2a, Finland, France, Germany, Latvia, Lithuania, Netherland, Poland, Slovakia and Slovenia emerged as ineffective decision-making units in the results of Output Oriented CCR analysis. As seen in Table 12.2b, the results of the Output Oriented BCC analysis revealed Finland, France, Germany, Latvia, Lithuania, Netherland, Poland and Slovakia as ineffective decision-making units. In Stage 3; In order to determine whether there is a difference between the analysis results of the two models between the decision-making units, the CCR Model and the BCC Model were compared to each other and the ‘scale efficiency’ was determined in this way. In Table 12.3, the scale efficiency was found by calculating CCR / BCC. It is seen that some of the scores in Table 12.3 are not the same in CCR and BCC analyzes. This is mainly because the BCC Model measures technical efficiency. Iceland, Ireland, Italy, Luxenburg, Spain and Turkey were found to have full scale Table 12.1 Variables of decision-making units Finland Franc e Germany Ic eland Ireland Italy Latvia Lithuania Lux enb Netherl Poland Slovak ia Slovenia Spain Turk ey

Medical Doctors {I} Nurses {I} Hospitals {I} COVID-19 Vaccination Total {O} COVID-19 Vaccination Rate {O} 43,28 3,33 15,84 204, 00 75,98 44,73 205, 00 3,36 11,07 77,17 4,90 200, 00 74,44 17,10 36,42 216, 00 80,45 15,73 21,97 3,89 210, 00 3,30 12,88 17,43 78,85 4,32 6,68 17,68 218, 00 77,25 65,22 3,31 4,40 31,87 151, 00 67,46 4,83 7,70 33,64 165, 00 3,31 15,90 11,98 196, 00 72,11 12,23 196, 00 3,31 32,75 70,86 2,58 5,14 32,56 139, 00 57,70 3,57 5,74 23,65 127, 00 49,50 13,84 57,90 3,32 141, 00 10,44 75,48 195, 00 6,10 16,48 4,73 1,95 2,40 169, 00 62,99 18,62

1/COVID 19 Death Rate {O} 2466,55 507,44 690,40 6206,90 776,21 393,19 378,89 340,24 643,51 813,02 348,62 300,91 316,17 488,41 917,61

12 Evaluation of Vaccine Supply Chain Performance Activities of Health … Table 12.2a Output oriented analysis results (CCR-OUTPUT BY EMS)

Table 12.2b Output oriented analysis results (BCC-OUTPUT BY EMS)

Table 12.3 Scale activity

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efficiency, while Finland, France, Germany, Latvia, Lithuania, Netherland, Poland, Slovakia and Slovenia were found to be ineffective. While Slovenia showed full efficacy in BCC analysis, it could not show full efficacy in CCR analysis. This shows that the decision-making unit provides ‘technically efficient’ in BCC analysis, but cannot provide ‘scale efficiency’, and therefore it is not effective in CCR analysis that shows total efficiency. In Stage 4; Table 12.4 was created by using the Benchmarks (Reference) values seen in Table 12.2a of ineffective decision-making units. In the tables, the target output values that the relevant countries must achieve in order to be effective and the necessary improvement rates for this are calculated. At this stage, when a sample calculation of a decision-making unit is made, the following procedure is followed. Benchmarks values for Finland, which is the DVB No. 1, are 0.33 for Iceland, the country no. 4, and 1.05 for Turkey, which is the country no. 15. The reference value of 0.33 belonging to Iceland was multiplied by the number 1 output value of this country, the number 216 seen in Table 12.1. The same process was done in Turkey, which is the other reference country, and the reference value of 1.05 was multiplied by the number 1 output value of Turkey, which is 169. Afterwards, these values were added together and the number of efficiency value Finland should reach was found. In finding the improvement rate; the difference of the current value of this country was taken from the number found as the efficiency value of Finland, and this number was divided by the current value to reach the required improvement rate.

12.7 Conclusion In this chapter, belonging to European countries; An efficacy analysis was performed using data from Medical Doctors, Nurses, Hospitals, COVID-19 Vaccination Rate, COVID-19 Vaccination, and Total/COVID 19 Death Rate. In the analysis, three criteria described as Medical Doctors, Nurses, Hospitals were accepted as inputs, while the other three criteria described as COVID-19 Vaccination Rate, COVID19 Vaccination and Total/COVID 19 Death Rate were accepted as output variables. Using the data of the first quarter of 2022 published by WHO, DEA Analysis (DEACCR and DEA-BCC) was applied according to Fixed Return for Output Oriented Scale and Variable Return Model for Output Oriented Scale. As a result of the data obtained as a result of the analysis; Iceland, Ireland, Italy, Luxenburg, Spain and Turkey were found to be active countries. When the results of Finland, which is one of the inactive countries, are compared with the reference values, it is considered sufficient to make an improvement of 22% for the output criteria to be effective. To be effective, France needs to make an improvement of 42% in output number one, 40% in output number two and 211% in output number three. To be effective, Germany needs to make an improvement of 85% in output number one, 86% in output number two, and 152% in output number three. To be effective, Latvia needs to make an improvement of 90% on output number one, 64% on output number two, and 312% on output number three. In order for Lithuania

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Table 12.4 Target values and improvement rates

to be effective, it needs to make an improvement of 101% in output number one, 84% in output number two and 351% in output number three. For Netherland to be effective, it needs to make an improvement of 47% in output number one, 51% in output number two, and 92% in output number three. In order for Poland to be effective, it needs to make an improvement of 60% in output number one, 44% in output number two and 247% in output number three. In order for the Slovak Republic to be effective, it needs to make an improvement of 85% in output number one, 79% in output number two and 252% in output number three. To be effective, Slovenia needs to make an improvement of 19% in output number one, 9% in output number two and 58% in output number three. As a result of the analyzes made with the Output Oriented CCR and BCC Models, it has been observed that there are differences in some countries. As a result of the analysis made with the CCR Model, it was seen that six countries were fully efficient, while the remaining nine countries were ineffective. As a result of the analysis made

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with the BCC Model, it was seen that while seven countries were effective, the other eight countries were not efficient. According to the findings, while Slovenia showed full effectiveness in the BCC analysis, which measures technical efficiency, it could not show full effectiveness in the CCR analysis, which measures total efficiency. The ineffectiveness of the decision-making unit in the CCR analysis shows that it provides technical efficiency but not scale efficiency. As a limitations of the study can be said that, 15 European countries that were homogeneous before DEA were chosen as Decision Making Units. These countries were included in the study because of full access to regular data on their health systems. Countries that were not included in the analysis due to the lack of regular data for all Continental European countries can be considered among the limitations of this study. For the further research, it can be said that; the negative effects of the COVID 19 global epidemic, which is among the difficult conditions that countries have not faced for a long time and no country in the world is fully prepared, has affected every stage of human life without exception. At this scale, the importance of SCM, which has attracted the attention of decision makers after a major disaster and has been talked about a lot, has been better understood and a lot of academic work has been carried out in this field. It will be more effective to see how the paradigms of the countries related to SCM have changed of this research on vaccine supply, which is one of the most problematic areas during the pandemic period, if it is repeated in the following years. As a result, knowing the criteria and improvement rates that will enable reaching the effective level in the countries included in the study will guide the decision makers. The use of these outputs can be considered as the contribution of the study to the field of application. In the pandemic process, the importance of another dimension as important as the number of health workers and patients in the countries has been understood. Procuring the vaccine, ensuring its distribution and establishing appropriate storage conditions have been crucial in the disease control process. It has been seen that supply chain management in the field of interest is much more important than in other branches in terms of continuing the services in the field of health without interruption.

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Sen ¸ A (2003) ˙Insan Sermayesi Ve Sosyo-Ekonomik Geli¸sme A¸samalarına Göre ˙Insan Sermayesinin Rolü. ISGUC J Ind Relat Hum Res 5(2):0–0 Seyrek ˙IH, Ata HA (2010) Veri Zarflama Analizi ve Veri Madencili˘gi ile Mevduat Bankalarında Etkinlik Ölçümü. BDDK Bankacılık ve Finansal Piyasalar Dergisi 4(2):67–84. Retrieved from https://dergipark.org.tr/tr/pub/bddkdergisi/issue/57360/812695 Shang S, Mao X (2009) Data envelopment analysis on efficiency evaluation of irrigationfertilization schemes for winter wheat in North China. In: Li, D, Chunjiang, Z (ed) IFIP international federation for information processing, vol 293, Computer and Computing Technologies in Agriculture II, vol 1 Shiri M, Ahmadizar F (2022) An equitable and accessible vaccine supply chain network in the epidemic outbreak of COVID-19 under uncertainty. J Ambient Intell Humaniz Comput:1–25. https://doi.org/10.1007/s12652-022-03865-2. Epub ahead of print. PMID: 35692508; PMCID: PMC9171116 Tarantola D, Parmet WE, Costanza MC, Yu S (2020) COVID-19 exposes need for progressive criminal justice reform. Am J Public Health 110(7):967–968 TDK (1994) Türk Dil Kurumu Okul Sözlü˘gü. Türk Tarih Kurumu Basım Evi, Ankara Tengilimo˘glu D, Yi˘git V (2013) Sa˘glık ˙I¸sletmelerinde Tedarik Zinciri veMalzeme Yönetimi. Nobel Yayın Da˘gıtım, Ankara Tranfield D, Denyer D, Smart P (2003) Towards a methodology for developing evidence: informed management knowledge by means of systematic review. Br J Manag 14:207–222. https://doi. org/10.1111/1467-8551.00375 Ulucan A (2000) Sirket ¸ Performanslarının Ölçülmesinde Veri Zarflama Analizi Yakla¸sımı: Genel ve Sektörel Bazda De˘gerlendirmeler. Hacettepe Üniversitesi ˙Iktisadi Ve ˙Idari Bilimler Fakültesi Dergisi 18:405–418 Vincova K (2005) Using DEA models to measure efficiency. BIATEC, vol XIII, pp 8, 24–28 Vries Gde, Bertrand JWM, Vissers JMH (1999) Design requirements for health care production control systems. Prod Plan Control 10(6):559–569. Eri¸sim: 16 Haziran 2015, Taylor & Francis Online Yazdani HO, Kaltenmeier C, Morder K, Moon J, Traczek M, Loughran P, Zamora R, Vodovotz Y, Li F, Wang JH, Geller DA, Simmons RL, Tohme S (2021) Exercise training decreases hepatic injury and metastases through changes in immune response to liver Ischemia/Reperfusion in Mice. Hepatol June 73(6):2494–2509. https://doi.org/10.1002/hep.31552. Epub 2021 Mar 16. PMID: 32924145; PMCID: PMC7956053 Yolalan R (1993) ˙I¸slemeler arası Göreli Etkinlik Ölçümü. Milli Prodüktivite Merkezi, Ankara

˘ BAYRAK graduated Özlem Alada˘g Bayrak was born in Edirne in 1975, Özlem ALADAG from Edirne Anatolian Teacher High School and completed her undergraduate education in Gazi University, Gazi Education Faculty, English Language Teaching Program (Ankara 1997). She got her master degree at Trakya University, Institute of Social Sciences, Department of Educational Administration Inspection, Planning and Economics (Edirne 2012). In 2019, she completed Anadolu University Faculty of Economics and Administrative Sciences, Department of Labor Economics and Industrial Relations as her second undergraduate education. In 2021, she got her PhD degree at Trakya University, Institute of Health Sciences, Health Management Doctorate Program. She has articles published in various national and international scientific journals, book chapters, scientific studies presented in conferences and seminars under the titles of Health Tourism and Health Management. She currently works at T.U in the Department of Foreign Languages of the Rectorate, as Dr. Lecturer. She is married and has two children. Kadir Kaan Göncü was born in Adıyaman in 1977. He completed his high school education at Birecik High School. In 1994, he started his undergraduate education at Trakya University, Faculty of Arts and Sciences, Department of Physics. After completing his undergraduate education in Anadolu University, Department of Business Administration, which he started in 2002, he got his

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master’s degree in business administration at Trakya University Social Sciences Institute in 2008. He established his company, Göncü Computer Industry and Trade Limited in 2001 and maintained his partnership until 2012. He started to work as a lecturer at Trakya University Edirne Vocational School of Social Sciences in 2013 and continues to work. He has an associate degree in the Department of Justice and has a Class A Occupational Safety specialization certificate. He completed his Ph.D. education, which he started in 2017 at Trakya University, Department of Business Administration, in 2022. Multi-criteria decision-making methods, production systems, efficiency, supply chain management and logistics are his special areas of interest.

Part VI

Sustainability in Education during the Covid-19

Chapter 13

Sustainable Teaching: Teacher Readiness for Online Teaching Working from Home Christo Joseph

Abstract The COVID-19 pandemic has prompted a shift to online education, and work from home is becoming the new normal for teachers. Key areas of interest in this context are teacher readiness, online teaching, and working from home. Through a rigorous literature survey, this paper identifies gaps, looks for possibilities, and identifies factors affecting teacher readiness, online teaching, and working from home for online teachers. Five main areas for intervention are identified: keeping online audience attention, technology and preliminary infrastructure, social and emotional factors of online teachers, learner readiness, and effective management. The future course of research is also discussed. Keywords Teacher readiness · Online teaching · Work from home · E-learning · Online teachers · Online students

Abbreviations CoP ELS e-ROT ICT LMS OLT ROT WFH

Community of practice E-learning system e-Readiness of teachers Information and communications technology Learning management system Online teaching Readiness of teachers Work from home

C. Joseph (B) Garden City University, Bangalore, India e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 K. T. Çalıyurt (ed.), Corporate Sustainability in Times of Virus Crises, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-19-9079-3_13

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13.1 Introduction The COVID-19 health crisis and the rapid spread of the coronavirus have caused educational institutes around the world to close and education to be delivered electronically instead of onsite (Li and Lalani 2020). Online learning has been found more efficacious than traditional methods; it increases information retention, consumes less time, and can be undertaken remotely (Keramati et al. 2011). With over 1.5 billion students affected by closures (UNESCO 2020), the potential impact of the pandemic has increasingly fallen on the pathway of e-learning (Xu et al. 2020). Some wonder if online learning will continue post-pandemic and how such a transition would impact the global education market (Li and Lalani 2020). With the spread of the coronavirus and frequent lockdowns, universities have moved to online platforms and educators initially trained to provide onsite education only are training for online instructing. There are still many areas to be addressed, including quality of education provided (Osman 2020). University settings are at high risk for spreading infection due to many people confined to small spaces; preventive measures, such as providing learning materials electronically and delivering lectures through online LMSs are being taken. For example, Sultan Qaboos University, the Sultanate of Oman’s only public university, accommodates over 17,500 students and over 6,000 staff members with 9 colleges, 13 research centers, 4 deanships, and a teaching hospital. It has a well-established e-learning infrastructure and offers free campus-wide internet access to teachers and students. Within a week of implementation, online courses increased from 41 to 200%, demonstrating good teacher and student readiness for e-learning (Osman 2020). WFH allows workers to work when and where they choose and has become increasingly popular (Reshma et al. 2015). Teachers practicing WFH virtual teaching are facilitated by telecommunications technology including video calling tools such as Zoom, Google Meets, and Microsoft Teams (International Labour Organization 2020). In 2010, some 10% of the workforce worked from home at least one day a week. By the end of 2021, some 25–30% of the global workforce will be working remotely (Global Workplace Analytics 2021). WFH now encompass a wide range of occupations (Dockery and Bawa 2014) and, because it is spreading widely, rigorous research should be done on it. We must find out whether teachers are ready to successfully deliver education via online methods while working from home. Although there have been many assumptions and stipulations in this context, few studies on the topic have been conducted. To fill this gap, this paper identifies factors affecting ROT, OLT, and WFH and examines their applicability for online teachers. Finally, an interconnection of all three concepts is investigated. The introduction overviews e-learning and ROT for OLT, as this is essential for gaining insight into these concepts, before analyzing the available literature.

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13.2 Overview of E-learning Although e-learning has evolved over years, and researchers have evaluated its different aspects, the intervening role of readiness factors in e-learning outcomes has not been assessed sufficiently (Richard and Haya 2009). Before examining such factors, different definitions and perspectives on e-learning are investigated, as shown in Table 13.1. There does not appear to be a common definition or definitive perspective on the term “e-learning,” and existing definitions reflect researchers’ specialization and interest (Dublin 2003). E-learning covers a wide range of areas, including electronic methods in learning, structured learning methods, and knowledge delivering processes (Rossi 2009). It is thus difficult to find a universally accepted definition of it (Dublin 2003; Oblinger and Hawkings 2005). Table 13.1 Definitions and perspectives on e-learning E-learning has made research work more available to both teachers and students (Richard and Haya 2009) Teaching learners how to regulate courses in an organization; materials are produced by internet and other important technologies and are components of e-learning (Fry 2001) E-learning provides learners in universities with individual support and allows them more suitable learning schedules than in-person learning. Researchers also noted increased collaboration between teachers and peers over traditional learning environments (Tao et al. 2006) Conceptually, e-learning covers a range of applications, learning methods and processes (Bernard et al. 2004) E-learning is teaching and learning conducted via computer (Goodyear et al. 2001) E-learning is a method of distance education where at least 80% of the content is delivered online (Shelton and Saltsman 2005; Allen and Seaman 2008; Kentnor 2015) E-learning is a concept featuring the use of technology to provide distance education (Roffe 2004; Kentnor 2015) During e-learning, knowledge is gained via a group of computers in a network (Shedletsky and Aitken 2001) E-learning makes learning possible anywhere and anytime (Alonso et al. 2005) E-learning requires strategies differ from traditional methods of teaching and learning (Barber and King 2016) Embracing online pedagogy and learning styles and faculty buy-in are critical for successful of online education and e-learning (Bernard et al. 2004; Marcus 2004; Kentnor 2015) Web based education (e-learning) and design and implementation of web-based education systems have grown rapidly in recent years (Hugo 2010) Virtual worlds play an important role in online teaching and learning (Franceschi et al. 2009) E-learning has been implemented as a new method of learning (Vaughan and MacVicar 2004)

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13.3 Readiness for OLT Literature on readiness for OLT includes diverse elements, as shown below in Table 13.2. This new trend in education shows an increasing shift from teacher-centered to learner-centered approaches (Abbas et al. 2011). E-learning can drastically reduce costs, time, and space, increasing its popularity (Abbas et al. 2011). Although we only assess ROT in this paper, we note that the quality of education provided through online platforms also depends on the quality of e-learning sources (Abbas et al. 2011). To extract maximum benefit from e-learning, factors that affect readiness should be assessed. Regarding student readiness, online learning methods have received favorable responses from students, who may be able to spend more time learning concepts because online coursework is more self-guided (Kirtman 2009). Online learning has made life easier by reducing time spent on travel-related problems, allowing more time for learning, and facilitating flexible schedules that allow more time for leisure activities (Abbas et al. 2011). However, e-learning puts high demands on the quality, accessibility, and reliability of technological infrastructure for delivering online activities efficiently. Further, for successful e-learning, student communities should develop a positive attitude towards online learning; they should be self-driven, responsible, and motivated to harvest knowledge (Keramati et al. 2011).

Table 13.2 Selected studies on readiness for OLT Outcomes An elective model for processing e-learning was proposed (Darab and Montazer 2011) This study, conducted in Iran, identified organizational features, information communication technology infrastructures, information and communication technology availability, and security as critical issues for e-readiness assessment (Fathian et al. 2008) Readiness factors such as technology and design were investigated (Piccoli et al. 2001; Sun et al. 2008) This study found progress among academic staff and a high level of readiness for implementing e-learning (Machado 2007) This study proposed a conceptual model to determine the roles of readiness factors in the relationship between E-learning factors and E-learning outcomes (Keramati et al. 2011) A sample of tutors and learners from diploma, undergraduate and post-graduate levels were found reasonably well equipped for e-leaning (Kaur and Abas 2004b)

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13.4 Methodology A systematic review is a study design that intends to answer a particular wellstructured research question formed to cover important areas (Cook 1997; Garrison et al. 2009). Comprehensive inclusion and exclusion criteria, a systematic approach to collecting secondary data, critical appraisal of research studies, and quantitative or qualitative analysis of outcome should be adapted to summarize existing literature in a methodical, comprehensive, transparent, and replicable manner (Garrison et al. 2009). Systematic reviews enable researchers to appreciate differences and similarities of studies conducted on the same topic. Quality of systematic reviews and metaanalyses depends on the quality of the studies that are included in them (Garrison et al. 2009). The quality of a study depends on the methodology, transparency, and inclusion and exclusion criteria used. Therefore, it is of utmost importance to decide which studies to include in a systematic review. By reviewing methodology, we can decide on whether bias has been introduced; one should always include studies without bias to prevent undue influence on outcome (Davies 2010). Systematic reviews are most widely used in medicine. Some features have been adopted into social sciences as well (Cubillo et al. 2006; Vrontis et al. 2007). Individual studies may have less credibility and generalizability due to insufficient sample sizes (Davies 2010); a systematic review allows insight into particular areas through multiple studies. The three circles in the Venn diagram shown in Fig. 13.1 represent the distribution of ROT, OLT, and WFH literature. A few articles cover all three elements; most cover only one or two of the three concepts. There is an overlap between ROT and OLT and between WFH and OLT. In such a scenario, a comprehensive systematic review is the best way to obtain a more generalized idea. The review identifies gaps in the published research. OLT, ROT, and WFH are not new, but prevailing data is not arranged systematically, and literature is scattered and haphazard. The literature must be arranged systematically for more insight into the following areas: 1. ROT for OLT 2. Factors that influence OLT 3. The concept of WFH and implementing it in OLT. According to Cook et al. (1997a, b), in a systematic review a replicable, scientific, and transparent process should be followed; ours is described below.

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Fig. 13.1 Venn diagram representing the interplay of online teaching, readiness of teachers, and work from home (Source Author)

13.5 Search Strategy Search keywords and phrases reflected “factors contributing to teacher readiness for online teaching working from home” in peer-reviewed publications. As noted above, efforts were made to integrate literature on different aspects of ROT, OLT, and WFH, but only a few articles covered all three aspects. This study aims to fill this gap and enhance understanding of the OLT–WFH space. A SCOPUS search using 26 keywords and phrases was conducted (see Annexure 13.1).

13.5.1 Inclusion and Exclusion Criteria 13.5.1.1

Inclusion Criteria

This paper is based on peer-reviewed journal articles on teachers readiness, OLT, and WFH from 2000 to 2020 from 18 regions. The year 2000 was selected to begin the literature collection period because it is an important marker of when technology for distance and online learning began seeing wide use (Casey 2008). The search

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Table 13.3 Sample Excel spreadsheet Title

Country Methodology

Evolution of USA distance education

Study audience

Remarks

Literature review Universities/colleges Chronicled the that have attempted evolution of distance distance education education into OLT from its beginnings to its present form as a formal mean of online education

yielded results in technology, infrastructure, outcome, knowledge, motivation, and OLT in social science subjects. Together, the search keywords provided results on OLT. However, “online teaching work from home” did not return a single response. An Excel database of the examined literature was created (Table 13.3 is a sample) to facilitate convenient revisiting. Each paper was reviewed, title, theme, country of origin, methodology, and study audience type were extracted, and comments on each paper were recorded.

13.5.1.2

Exclusion Criteria

A total of 78 references were initially gathered; 26 were excluded as follows: • • • • • • • •

Books, publications by international agencies Reports and similar material with little relevance to OLT Papers of low credibility due to limited evidence and literature surveys Non-peer reviewed papers Papers with broad titles lacking specific focus on e-learning Irrelevant papers over 20 years old Conference papers Papers that could not be accessed in full or with abstracts that did not reflect the paper’s content in depth.

Fifty-two papers remained after the exclusion process.

13.5.2 Literature Distribution This section summarizes the distribution of literature by area of interest, geographical location, total publications per year, methodology, and participants: Faculty experience was obviously the focal point, followed by articles on readiness for OLT. Articles on motivating factors for OLT, evolution of OLT, critiques of elearning, factors that affect productivity, factors that negatively affect efficacy of OLT, identity of online teachers, time spent by instructors, phenomenological studies,

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e-learning, asynchronous learning, role changes of online teachers, experience in transition, and systematic reviews received little coverage. The years 2002 (13.2% of total articles) and 2007 (1.8% of total articles) saw the most articles, and 2010, 2012, 2015 and 2017 saw the least (1.8% each). In the context of methodology, researchers adopted survey approaches (online, web- or paper–pencil-based) (40%), interviews (17%), literature reviews (15%), content analyses (7%), and case studies (6%). Comparative studies (3%), PAR, longitudinal qualitative research, standard data entry forms, descriptive studies, theoretical model developments, and reviews of intervention contributed 2% each. Educators, academics, and experts collectively contributed 55%, students 27%, and administrators, volunteers, and staff 6%.

13.6 Results and Discussion This section critically analyses aspects of “teacher readiness for online teaching working from home” through the lens of the three main concepts identified through the literature survey. The first section identifies factors that directly contribute to ROT, the second is dedicated to factors that influence OLT, the concept of WFH, and the implications of WFH on OLT. The third section is devoted to a combination of all three.

13.6.1 Factors that Affect Teacher Readiness for OLT Technology, organizational and institutional policy perspectives, attitudes towards elearning methods, infrastructure, skills, online teacher characteristics, online learner characteristics, time management and motivation, and other people-centered factors all affect OLT.

13.6.1.1

Technology

Kaur and Abas (2004a) highlighted technological readiness as a key driver of OLT. Hashim and Tasir (2014) interpreted e-readiness as competency for adjustment to new learning environments including the “electronic learning system” (p. 267) and its technological tools. Darab and Montazer (2011) and van Zyl et al. (2013) believed that e-ready online instructors should efficiently and effectively apply technology as needed for OLT when using an ELS (Darab and Montazer 2011; Gay 2016; Hashim and Tasir 2014; Hung et al. 2014). E-ROT includes their familiarization with using information and communication technology (Gay 2016; Hung et al. 2014). Thus, a holistic approach to e-learning readiness calls for addressing the technological, social, and organizational preparedness of users for ELS (Hashim and Tasir 2014).

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In their new roles, teachers must use various teaching methods, establish social relationships with students, take on administrative and organizational tasks, and provide technical support (Coppola et al. 2002). Technological readiness requires desire and willingness to embrace change and use new technologies to accomplish goals. Users’ state of mind can permit or deny adoption of technology and can be driven by correct attitudes or sense of insecurity, respectively (Parasuraman 2000; Summaka et al. 2010).

13.6.1.2

Organizational and Institutional Policy Perspectives

From an organizational perspective, e-readiness is an institution’s level of holistic readiness, including its ecosystem of conducive policies, technology infrastructure, institutional commitment reflected in training, incentives, recognition, support systems, and motivation and practices that encourage e-learning (Hashim and Tasir 2014; Watkins et al. 2004). The role of policymakers and regulators as key players in creating ecosystems conducive to adopting e-learning is a contributing factor of readiness not to be undervalued (Kaur and Abas 2004a).

13.6.1.3

Attitudes

Teacher readiness encompasses carrying the appropriate attitudes required for transition to OLT. The OLT paradigm has been found “dissonant with the existing assumptions, beliefs, and views that are central to [teachers’] pedagogical or teaching identity” (Buchanan 2015. pp. 700–719). Lack of willingness to adopt technology and negative attitudes towards the same are key barriers to e-learning readiness (Christensen 2002; Jacobsen et al. 2002; Hew and Brush 2006; Yildirim 2007).

13.6.1.4

Infrastructure

ICT is important in sectors worldwide for innovation and improvement of efficacy. It is crucial to learning in and out of classroom settings (Basri et al. 2018). Organizational features and ICT infrastructure, availability, and security were found to be essential factors for e-readiness assessment in the context of Iran (Fathian et al. 2008).

13.6.1.5

Acquired Skills

Essential skills for self-directed learners include ability to work alone, persistence in learning, reading ability, computer competence, word-processing skills, and ability to

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develop work completion plans (Piskurich 2003; Kaur and Abas 2004a). For online teachers, the importance of technology training is highlighted (Hashim and Tasir 2014; Keramati et al. 2011). Similar to the skills required for ROT for OLT, online learners should be capable of acclimating to new learning environments by adapting to technology (Hashim and Tasir 2014).

13.6.1.6

Characteristics of Online Teachers and Learners

Another crucial element affecting ROT for OLT is the online teachers themselves, as their levels of motivation, attitude, training, and teaching style have enormous impact on outcomes (Keramati et al. 2011).

13.6.1.7

Characteristics of Online Learners

The role of online learners is not to be neglected; readiness cannot be reduced to a single independent element, with the teacher being the sole actor. Online teachers can only perform their roles in the context of the readiness and expectations of online learners. E-learning readiness encompasses two key actors: teachers and students. Since online learning is largely self-directed and self-enabled by students with teachers acting as guides, teachers can experience shifts in their online teacher identity (Buchanan 2015). This identity shift is perceived as unhelpful and can repel teachers from OLT.

13.6.1.8

Time Management and Motivation

Due to the self-directed nature of OLT, time management skills and acquiring motivation through personal teaching styles and experiences promote ROT for OLT (Pillay et al. 2007; Smith et al. 2003; Smith 2005). Furthermore, Muilenburg and Berge (2005) identified lack of learner motivation and lack of time and support for studies as among major barriers to OLT.

13.6.1.9

People-Centered Factors

People-centered factors that negatively affect e-learning include demands of effort and time from teachers, resistance to change, inadequate administrative support, low levels of computer literacy, inadequate incentives, poor training, and a lack of vision to integrate technology into learning processes. Overcoming negative attitudes, negative beliefs, and unwillingness to use technology empowers online teachers and is critical for successful e-learning (Pelgrum 2001; Summaka et al. 2010). Particularly, in developing countries, human resource readiness is an important element for successful e-learning (Aydin and Tasci 2005).

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Darab and Montazer (2011) proposed an eclectic model for assessing e-learning readiness and found that factors affecting it are contextual and include culture, stage of development, and prior exposure. Some researchers consider readiness factors independent variables driving e-learning outcomes (Piccoli et al. 2001; Sun et al. 2008). Keramati et al. (2011) found that technology and design are independent variables that affect e-learning outcomes irrespective of other contextual factors. Most studies identified and addressed single factors influencing e-readiness; few took a holistic approach or offered plans of action (Menchaca and Bekele 2008). On a holistic level, there are six personal or dispositional barriers to e-learning: learning style, instructional barriers, situational barriers, organizational barriers, content suitability, and technological barriers. Based on understandings gained through literature regarding e-readiness and its multi-disciplinary character, it is clear that multiple interpersonal elements must work in collaboration for optimal outcome.

13.6.2 Factors Influencing OLT This section covers factors that directly influence online teaching. As shown in the Venn diagram (Fig. 13.1), factors affecting ROT and OLT overlap. Some factors favor traditional teaching, while others support OLT. Discussed here are effective communication, online teacher roles, content structure, training online teachers, teaching methods and interactions, and social interactions and performance.

13.6.2.1

Effective Communication

Online education refers to receiving knowledge through digital content using online modes of communication (Laflen and Smith 2016). This is in contrast to face-toface modes of education that utilize both nonverbal and verbal forms of formal and informal interaction, including body language and facial expressions that serve as effective communication and feedback tools. The informal element of verbal and non-verbal communication is missing in OLT, which is considered lacking in human non-verbal cue-based feedback. OLT demands more writing (typing) by students and teachers as a primary mode of communication (Maggio et al. 2018). Lack of effective communication in OLT is considered a weakness. OLT demands that teachers alter their face-to-face teaching practices and adopt new practices to fit the online ecosystem. To overcome the harmful effects of lack of communication, online feedback is essential. Online feedback is clear and can be stored and retrieved for later use, enabling possible records-based continuous assessment. Thus, OLT is qualitatively different from traditional learning in terms of shortcomings and expectation mismatches (Laflen and Smith 2016). Expectation mismatch is a barrier to traditional teachers’ embrace of OLT, and their willingness or unwillingness to accept OLT links ROT to OLT (Piskurich 2003; Kaur and Abas 2004a).

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Online Teachers’ Roles

Online teachers play multiple roles as researchers, content facilitators, technologists, assessors, designers, advisor/counsellors, process facilitators and manager/administrators. While process facilitators handle online activities to support student learning, adviser/counsellors works with individual learners to help them get the most out of their courses (Goodyear et al. 2001) and are concerned with grades, feedback and validating learners’ work. Researchers produce new knowledge and fill in gaps in areas being taught. Content facilitators enable learners’ understanding of course content, while technologists are responsible for making technological choices to facilitate better learning environments. Designers design online learning tasks, and manager/administrators handle learner registration, security, record keeping, and the like (Goodyear et al. 2001).

13.6.2.3

Structure of Content

Content should be organized beforehand for maximum outcome. Online feedback systems assess students’ understanding of lesson, and student feedback can be used to improve online learning methods (Sun et al. 2008). However, OLT is perceived as robbing teachers of their freedom of spontaneity (autonomy), content enrichment (empowerment), and flexibility. This expectation mismatch regarding structure of content may destabilize online teachers’ deeply held teacher identities (Maggio et al. 2018), and online teachers need attitudinal shifts to embrace new expectations. This attitude adjustment is another influencing factor for ROT, as noted earlier.

13.6.2.4

Training Online Teachers

Transition to OLT settings requires training in technology, technical support, and individual effort and teamwork (Goodyear et al. 2001). Online teachers may expect compensation for their increased efforts through monetary rewards, flexible schedules, decreased workloads, increased time off, and the like (Florence et al. 2019; Wingo et al. 2017). However, increased workloads seem common in OLT (Samarawickrema and Stacey 2007). There are contrasting perspectives on this, and some sources claim that time spent teaching in OLT is comparable or marginally lower (Hislop and Ellis 2004). The perceived gap is expected to be breached as more online teachers voluntarily embrace the new paradigm and are out of the initial learning phase and when online venues become mainstream.

13.6.2.5

Teaching Methods and Interactions

Online teachers and virtual professors face new, multi-dimensional pedagogical roles as well as social, managerial and technical ones (Coppola et al. 2002). Teachers’

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personal characteristics, teaching competence, subject matter expertise, and relationships with students determine student interest in e-learning. Teachers are expected to be flexible, enthusiastic (Borg 2006), charismatic, compassionate, egalitarian, humorous, creative, honest, responsible (Green and Kelso 2006), good-tempered, optimistic, approachable, supportive, committed, and encouraging (Murphy et al. 2011; Xiao 2012).

13.6.2.6

Social Interactions

Techniques such as building protocols and guidelines for social interaction can minimize feelings of loneliness that affect many students and teachers. Social interaction between teachers is important to enhance their teaching practices by sharing their experiences. Creating an online sense of “self” can alleviate feelings of isolation and create an online community that assists learning processes (McInnerney and Roberts 2004). The success of e-learning as an alternative or supplement to classroom instruction requires adapting to a new mindset on education and training (Kaufman et al. 2002; Watkins et al. 2004). It is important that both teachers and students actively communicate and participate in synchronous and asynchronous discussion to succeed in new online learning environments (Watkins et al. 2004).

13.6.2.7

Performance

Online teachers are concerned about their performance criteria and measures for performance assessment; clarity on measures of effectiveness of online courses affects assessment and evaluation of teachers’ performance (Florence et al. 2019). Online teachers experience fear of the unknown due to inability to connect with students, their potential replacement by computers, cold or distant OLT environment, disconnects between content and its online delivery, and low interaction endemic to faculty–student engagement (Xu et al. 2020). OLT is more than mere content delivery. Online teachers are expected to holistically understand and recognize the needs of the new paradigm, including functional, aesthetic, people-oriented, and emotional contexts. They must seamlessly transition to virtual ecosystems for students to learn collectively and collaboratively rather than only facilitating content delivery (Arbaugh 2000). Despite barriers, progressive online teachers may see this as an opportunity to shift gears and ready themselves for the future. Such teachers expect intrinsic rewards from the transition, including opportunities to provide innovative instruction and apply new techniques. They expect satisfaction from fulfilling desires to teach, recognition of their work, and recognition by peers. Major perceived obstacles are time requirements and mandates to develop effective technology skills and meet students’ assistance and support needs (Rockwell et al. 1999). OLT context is complex, and online learners face distraction and failure to selfregulate (Zimmerman 2002). There are no guarantees of active learning and achieving

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expected outcomes (Bond et al. 2020). Thus, researchers are investigating OLT’s effectiveness and methods to enhance learning achievements, such as improving support for online teachers (Dwivedi et al. 2019; Kahu 2013; van Leeuwen et al. 2013; Xu et al. 2020).

13.6.3 The Concept of WFH and Its Implications for OLT–WFH There are few-peer reviewed studies on WFH. However, WFH is not a new concept, and its practice has received attention in many other aspects of productive engagement. In the context of e-learning, WFH is considered part of an evolution towards a new paradigm. However, educators working at home are handicapped by not belonging to CoPs, collectives of people in similar professions bound by common characteristics who act as informal support systems for members. Other handicaps include unsupportive home ecosystem, disconnect and expectation mismatches among WFH workers and housemates, high multi-tasking demands of unpredictable nature, compulsions to deliver in non-conducive environments, low bargaining power, and low recognition for efforts. Benefits accrue in the form of flexibility, additional earning opportunity, more freedom to handle multiple responsibilities (domestic and economic), and opportunities to serve multiple clients (Zimmerman 2002). The unique expectations of working from home are reflected in the next section; they call for cohesive workable models that can deliver expectations and extract potential (Baldwin et al. 2017).

13.6.4 Associations Between ROT, OLT and WFH The primary functional prerequisites for OLT or e-learning are access to technology and availability of skills to make use of that technology. Collateral requirements are content in a form and structure compatible with online transmission and assimilation and availability of e-learning software to facilitate the process. E-learning outcomes are driven by e-readiness, which depends on technology-related functional factors as well as human, behavioral, and organizational factors. The third factor in play in the WFH paradigm is WFH readiness—a new dimension of e-readiness. Readiness forms the ecosystem for OLT, while WFH is a superset (union of the three sets: ROT, WFH, and OLT). Common elements of ROT and OLT–WFH are readiness factors of OLT and desired attributes of online teachers, such as attitudes, skills, motivation, and online etiquette. In the OLT–WFH paradigm, these factors should be supplemented by the ability to manage home dynamics to create congenial ecosystems, entrepreneurial qualities to manage technology, and personal attributes such as determination and motivation

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to multi-task and overcome non-supportive environmental characteristics, including connectivity issues and lack of dedicated WFH area. The OLT–WFH space must meet the requirements of readiness for OLT, ROT, and WFH; the absence of any one readiness measure could adversely affect outcomes. It is the space where home dynamics and home ecosystems are congenial for e-ready online teachers to successfully conduct online sessions, a space where housemates are sensitive to teachers’ needs and do not distract them. It is the space where teachers satisfy OLT readiness criteria and possess technical skills, are progressive, willing to embrace OLT, sensitive to online etiquette in the OLT space, and conduct themselves in a manner meeting the requirements of teaching, as well as maintaining cognitive and social presence, among other ROT factors.

13.7 Conclusions After a thorough literature survey, the paper addressed factors affecting readiness of online teachers, factors affecting online learning, and the concept of WFH. The first section of the paper was dedicated to factors that affect ROT, elaborated upon in subsections. Next, factors that directly affect OLT were discussed, followed by discussion of associations between ROT, OLT, and WFH. Teaching and learning communities should be open to change and embrace the opportunity that OLT brings. OLT facilitates teachers to deliver education from anywhere rather than compelling them to deliver it from or in an institutional setting. Successful management, organized systems, and motivation enable this transition. The WFH model of OLT is accompanied by unique determinants of e-learning. WFH online teachers play multiple roles with diverse expectations under limited support to deliver outcomes; they resemble entrepreneurs who perform under demanding situations. The student learner community should also have the correct mindset, mature attitudes, be self-driven, responsible, and motivated to benefit from the opportunity. Downsides of e-learning are student disconnects from society and deterioration of their social wellbeing. Moreover, e-learning may not provide the satisfaction of real-time experience and interaction provided by traditional methods. Further, it lacks opportunities for interacting with other students in physical settings. To avoid these problems, online teachers must use imaginative teaching methods and communication strategies and should successfully address learners’ concerns. OLT provides great opportunity for anyone with motivation and eagerness. However, this opportunity demands readiness, which calls for overcoming barriers created by the paradigm shift to OLT, particularly in a WFH context. After reviewing the literature and discussing various aspects, five main areas for intervention were identified: 1. Gaining the attention of online audience: To achieve this, content should be preorganized, though carefully to avoid over-structuring. When developing content,

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qualities that make learning more interactive and interesting must be retained. Content delivery should include spontaneity and reflect instructors’ teaching styles, keeping in mind the shift from single to multiple teacher roles. Technology and preliminary infrastructure requirements: Basic skills and computer literacy should be acquired for successful e-learning. Working conditions for both online learners and online teachers should be devoid of distractions and optimized for online education. Moreover, adequate funding to maintain quality of basic infrastructure should be provided. Social and emotional factors affecting online teachers: Change of teacher identity and roles, issues in home settings, disconnect with students, loss of autonomy, lack of motivation, and lack of recognition are key factors affecting teachers’ emotional and social wellbeing. Factors affecting learner readiness: Learners’ attitudes regarding OLT have a huge impact on its success. Positive attitudes encourage online learning methods, and negative attitudes work against successful implementation. Lack of student motivation and computer literacy are other major obstacles. Management: This component covers miscellaneous areas where everything comes into play and is interconnected. To harvest maximum benefits from online education, online learners and online teachers should put forth maximum effort. Moreover, both parties should contribute to situation and time management. Positive attitudes towards e-learning are essential to successfully experiencing it.

13.8 Scope for Further Research Only peer-reviewed content was included in this extensive literature survey. Excluded content might address matters from additional perspective and fill some gaps in the literature. This study found that adequate research has been conducted on e-learning and the e-readiness of online teachers. However, although OLT–WFH is blooming into a popular model of education and some understanding of the dynamics of WFH is available, OLT WFH is not fully understood. Therefore, future research should be directed towards filling gaps on how to make WFH rewarding and more productive for online learners and online teaching CoPs. This paper can be used as guidance towards future research on these areas. The first step to filling the gaps should be studying associations between home environment and delivery of education through online sources and the impact of WFH on other family members. Additional studies must be done to understand coping mechanisms utilized by WFH online teachers to handle the home setting conveniently; this would help teachers create the best environments for delivering OLT, acquire reliable technical support, and form CoPs. Finally, formal recognition of OLT–WFH spaces with recognized standards of practice would accelerate the growth of CoPs and reward online teachers with higher self-confidence and quality of life.

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As the COVID-19 pandemic has led to accelerated transition to online methods, it is vital for institutions and teachers to prepare for a more digitally driven education system.

Annexure 13.1: Key Word Search Results

Sl Keyword searched No. 1

Online AND teaching AND fear

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Online AND teaching AND work AND from AND home

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Online AND teaching AND outcome

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Online AND teaching AND technical AND support

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Online AND teaching AND infrastructure

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Online AND teaching AND knowledge AND skill AND motivation

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Online AND teaching AND knowledge

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Online teaching-subject areas—sociology, business, arts, psychology

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Synchronous AND online AND teaching

0 36 49 5,439 0 958 00 0

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Online AND teaching AND work AND from AND home AND technology (only one document—on continuing education—was returned)

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Christo Joseph is the Director—Strategy and Planning at Garden City University, India. He is a Research Scholar in the Education Department at Lancaster University, UK and holds a Master’s Degree in Education Management from King’s College London (KCL). His final work at KCL explored the impacts of market-driven education models and how private higher educational institutions can contribute to the growth of countries. Mr. Christo Joseph is a Fellow of the prestigious Royal Society of Arts & Commerce (FRSA), and is a member of British-South India Chambers of Commerce, helping UK businesses to expand into the Indian market. His academic interests are in institutional social responsibility , best pedagogical practices and neo-liberal education models . He is a regular speaker in international conferences and his mission in life is to serve in the higher education space in India and to build quality educational institutions that can compete on a world stage.

Index

A Accountability, 91, 93, 108, 110–113, 116, 117 Accountancy, 109 Accountant, 92, 94, 95, 103, 104, 109–111, 116, 117 Accounting, 67, 78, 88, 89, 91, 92, 94–97, 99–102, 104, 108–118, 174 Al applications, 174, 218, 220 Al technologies, 207–209, 218–222 Artificial intelligence (AI), 8, 174, 207–211, 218–222 Artificial intelligence’s importance, 208, 209, 218

B Banker, Charnes and Cooper (BCC), 226, 227, 231, 232, 237–242 Banking sector, 34, 35, 40, 45 Banks’ customers, 35–37 Bank’s procedures, 34, 35, 39, 41, 44, 45 Bank switching, 35, 37, 44, 45 Book keeping, 109, 117 Business, 3, 4, 6, 8, 18–21, 23, 25–27, 29, 30, 33, 54, 57, 59, 67, 74, 78, 81, 88–94, 96, 97, 101–104, 107–112, 116, 117, 170, 171, 173, 174, 176–179, 182, 186, 191, 196, 198, 221, 227, 234–236, 265

C Causality analysis, 123, 124 CCR, 226, 231, 232, 237–242

CEO compensation, 60, 61 Change management, 179 Clade, 175–179 Cluster dendrogram, 173, 175, 176, 178 Coaching, 170–173, 176, 178, 179, 182 Coercive isomorphism, 22, 23, 25, 29 Companies, 4–7, 9, 10, 18–27, 29, 30, 36, 54–62, 66, 69, 73, 92–94, 103, 104, 108–112, 114, 116, 117, 189, 196, 198, 199, 208, 236 Compensation in Scandinavia, 55, 61 Content analysis, 20, 21, 23, 29, 96 Coronavirus, 18, 27, 37, 54, 108–110, 114, 115, 122, 123, 125, 187, 189, 207, 210, 212, 213, 216, 219–221, 228, 250 Corporate governance, 54, 57, 60, 81 Covid-19, 3, 4, 6–10, 17–20, 22, 24–30, 34–37, 45, 54–62, 67, 68, 77–80, 88, 89, 92–97, 99, 101–104, 107–111, 116, 117, 121, 122, 125, 126, 128, 130, 132, 134, 136, 138, 140, 142, 144, 146, 148, 150, 152, 154, 156, 158, 160, 162, 164, 170, 173, 179, 185–187, 207, 208, 210–213, 216, 218–221, 226, 228–232, 234, 236–238, 240, 250 COVID-19 crisis, 54, 59, 93, 94, 107, 108, 116, 117 Covid-19 pandemic, 3, 7, 9, 10, 18–20, 25, 26, 30, 56–58, 67, 78, 80, 88, 103, 104, 107–109, 112, 122, 185–187, 208, 216, 219–221, 230, 231, 265 Crisis, 7, 9, 18, 27, 34, 37–39, 54, 60, 67, 68, 72, 75, 77, 79, 93, 94, 107, 108,

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 K. T. Çalıyurt (ed.), Corporate Sustainability in Times of Virus Crises, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-19-9079-3

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272

Index

110–114, 116, 117, 171, 177, 182, 186, 187, 213, 230, 235, 236, 250 CSR activation, 20, 22–30 Customer perception, 35, 36

Health sector, 207, 211, 218, 226, 227, 232, 234–236 Health systems, 208, 226, 232, 236, 237, 242

D Data envelopment analysis (DEA), 226, 227, 231, 232, 236–238, 240, 242 Dendrogram, 170, 173, 175–178 Derivatives products, 66–73, 76–78, 81 Digital technologies, 207, 220 Disclosure, 21–23, 62, 67, 93

I Impact of robots, 212, 213, 216 Index, 55, 71, 74, 122, 126 Institutional theory, 22, 23

E Efficiency, 91, 103, 209, 213, 220, 226, 227, 231, 232, 236–238, 240, 242 EMCC Global, 170–172, 179 Emergency changes in accounting profession, 88, 89, 91, 94, 96, 97 Emergency period, 88, 91 Emerging markets, 67–72, 76–78 Emotional text mining, 170, 173, 174, 176, 178 Employees’ performance, 35, 41, 44, 45 European countries, 226–228, 231, 236–238, 240, 242 Executive compensation, 55–57

F Financial institutions, 66, 68, 72, 73, 75, 78, 81, 210 Financial markets misconducts, 67 Financial risk management, 66, 67, 73 Future of business, 179 Futures contracts, 74

G G20, 78–80 G20 Countries, 121, 125 Global economy, 4, 17, 107, 121, 122, 212 Global financial crisis, 66, 67, 69, 70, 73, 78 Governance practices and regulations, 67 Government policy, 30

H Healthcare industry, 230, 234, 236 Healthcare services, 219, 235 Healthcare supply chain, 235, 236

J Job performance, 34–36, 39, 45

L Least Squares Regression Method, 123 Lebanese banks, 34, 35, 37–40, 45 Legitimacy, 20, 22, 23, 27–29 Lockdowns, 7, 8, 19, 20, 37, 109, 117, 250 Loss of output, 104, 229 Loss of revenue, 104, 191

M Manager, 45, 67, 74, 75, 91, 92, 95, 103, 190, 226, 260 Medical robots, 212, 213, 215, 216, 218, 221, 222 Mentoring, 170–172, 176, 178, 179 Mobile banking, 45 Movement Control Order (MCO), 19, 20, 23, 25, 29, 30

N Nordic Governance

O October 17th revolution, 45 Online news, 20, 22–25, 28–30 Online platforms, 24, 220, 250, 252 Options contracts, 66, 70, 71, 74–77 Over-the-counter (OTC) markets, 66, 69, 78

P Pandemic, 3–10, 17–20, 22, 25–27, 29, 30, 54, 56–58, 67, 78, 80, 88, 94, 96, 97, 101–104, 107–112, 114, 116–118, 122, 172, 179, 185–189, 191, 192, 195–199, 207, 208, 210, 212, 213,

Index 216, 220–222, 226, 230–232, 234, 236, 237, 242, 250, 265 Pandemic crises, 7, 27 Pay difficulties, 103 Perceptions, 22, 34–36, 39–42, 44, 45, 69, 170, 172, 174, 176–178, 186 Prevention, 219, 233 Professional accountants, 92, 103, 109, 110, 117 Professional conduct, 179 Protection, 38, 41, 104, 220, 233 Public support, 18, 22, 196, 198, 220, 221

R Recovery, 10, 80, 94, 108–112, 116–118, 213 Reduction in working hours, 192, 193 Regulations, 20, 67, 70, 71, 73, 78, 81, 97, 101, 102, 109, 110, 117, 190, 192, 196, 234 Remuneration, 57, 60, 61 Risk, 4–6, 9, 34, 54, 60, 66–74, 76–79, 81, 92, 94, 95, 104, 110, 112, 115, 122, 172, 186, 207, 208, 212, 219–222, 236 Robotic technologies, 207, 208, 213, 216, 218–222

S SARS-CoV-2, 122 Satisfaction, 10, 34, 36, 37, 81, 174, 261, 263 Savings, 8, 9, 103, 215 Sentiment analysis, 9, 10 Social contract, 22, 27 Social media, 24, 33, 34, 44, 174, 188 Stock indices, 122, 123, 125, 126, 128, 130, 132, 134, 136, 138, 140, 142, 144, 146, 148, 150, 152, 154, 156, 158, 160, 162 Stock markets, 58, 122, 162 stockpiling Stress, 78, 94, 95, 104, 176, 178, 179, 182

273 Supervision, 67, 71, 75, 170, 179 Supply chain disruption, 228 Supply chain management (SCM), 226, 234–236, 242 Sustainability, 6, 7, 22, 23, 27, 28, 54, 55, 60, 88–97, 101, 102, 104, 107–113, 116, 117 Sustainability accounting, 88, 89, 108–112, 114–118 Swap contracts, 66

T Technology, 8, 18, 26, 28, 29, 33, 34, 54, 66, 69, 91, 111, 112, 114, 122, 186, 207–210, 213, 216, 218–221, 228, 230, 231, 236, 250–252, 254, 256–264, 266 Teleworking, 186, 187, 189, 193, 198 Text mining, 170, 173–176, 178 Total cases, 37, 125–163 Total deaths, 125, 127–164 Turkey, 97, 100, 121, 125, 126, 158, 160, 162, 172, 226, 231, 237, 238, 240

U Unit root tests, 122, 123, 125, 128, 130, 132, 134, 136, 138, 140, 142, 144, 146, 150, 152, 156, 158, 160

V Vaccination, 208, 221, 226–228, 230, 231, 237, 238, 240 Vaccine supply chain, 226–232, 236, 237 Virus crises, 4, 5, 8, 116, 117

W Wage Compensation, 56, 58, 60, 61 Word cloud, 175, 178 World Health Organization (WHO), 18, 37, 125, 220, 226, 227, 233, 237, 238, 240