Abstract
The COVID-19 pandemic has put enormous pressure on firms to respond to the economic downturn, while also providing opportunities to contribute to the health-care challenges. We investigate firms within the Sharing in Growth (SiG) programme, a government-funded transformation programme in the UK aerospace sector. We evaluate the firms that responded to the UK Ventilator Challenge, to provide equipment to the UK National Health Service (NHS) in order to tackle the pandemic, compared to the firms that did not respond. The study shows that intangible capital in terms of organizational capital is a key capability in responding to opportunities provided by the UK Ventilator Challenge. In particular, we show that the role of leadership in fostering a culture of engagement and empowerment via continuous experimentation and learning is a key capability for firms in responding to sudden and unexpected changes in the environment. Moreover, the study shows that the building and subsequent effectiveness of these forms of organizational capital among the SMEs would not have been possible without the benefits accruing from the SiG programme. We discuss the managerial and policy implications of our findings.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
The SiG is a programme that selects firms to join the programme. The 46 firms were the ones that were actively involved with the improvement programme during this research study.
- 2.
This was as of April 2020.
- 3.
These are critical performance indicators of the SiG programme to improve the performance of the beneficiary SMEs. It is intended that investment in organizational capital would enhance the performance of the beneficiary firms and hence contribute to the overall growth in productivity and jobs in the economy.
- 4.
We calculated the financial measures from the reported numbers in the annual reports between 2011 and 2018 by accessing the Company Watch database.
- 5.
Since the SiG programme started at different times across these firms, we calculated the measures for the maximum number of years for which financial data is available following the start of the SiG programme.
- 6.
The DiD is calculated by comparing the difference in the average financial performance (e.g., sales per head) of the firms involved in the SiG programme with that of comparative firms not involved in the SIG programme, after the SIG programme with the same calculation before the SiG programme. Positive differences indicate that the firms involved in the SiG programme have benefited more than the firms that have not been involved in the SiG programme, and vice versa.
- 7.
The DiD is calculated by comparing the difference in the average financial performance (e.g., sales per head) of the firms involved in the UK Ventilator Challenge with that of firms not involved in the UK Ventilator Challenge after the SIG programme with the same calculation before the SiG programme. Positive differences indicate that the firms involved in the UK Ventilator Challenge have benefited more than the firms that have not been involved in the UK Ventilator Challenge, and vice versa.
References
ADS. (2020, June 19). Facts & figures 2020. https://www.adsgroup.org.uk/facts/facts-figures-2020/
Amabile, T. M. (1997). Motivating creativity in organizations: On doing what you love and loving what you do. California Management Review, 40(1), 39–58.
Avolio, B. J., Zhu, W., Koh, W., & Bhatia, P. (2004). Transformational leadership and organizational commitment: Mediating role of psychological empowerment and moderating role of structural distance. Journal of Organizational Behavior, 25, 951–968.
Birasnav, M., & Bienstock, J. (2019). Supply chain integration, advanced manufacturing technology, and strategic leadership: An empirical study. Computers and Industrial Engineering, 130, 142–157.
Cankurtaran, P., & Beverland, M. B. (2020). Using design thinking to respond to crises: B2B lessons from the 2020 COVID-19 pandemic. Industrial Marketing Management, 88, 255–260.
Day, G. S. (2011). Closing the marketing capabilities gap. Journal of Marketing, 75(4), 183–195. https://doi.org/10.1509/jmkg.75.4.183
Dodd, D. (2020, April 14). IMF warns of deepest economic plunge since 1930s. Financial Times.
Dong, X., & (Dani), Zhang, Z., Hinsch, C. A., & Zou, S. (2016). Reconceptualizing the elements of market orientation: A process-based view. Industrial Marketing Management, 56, 130–142.
Doraiswamy, I. R. (2012). Servant or leader? Who will stand up please? International Journal of Business and Social Science, 3(9), 178–183.
Gabrielli, G., Russo, V., & Ciceri, A. (2019). Understanding organizational aspects for managing crisis situations: A comparison between military and civil organizations: Part I. Journal of Organizational Change Management, 33(1), 29–49.
Haskel, J., & Westlake, S. (2018). Capitalism without capital: The rise of the intangible economy. Princeton University Press.
Ittner, C. D. (2008). Does measuring intangibles for management purposes improve performance? A review of the evidence. Accounting and Business Research, 38(3), 261–272.
Kaplan, R. S., & Norton, D. P. (2004). Measuring the strategic readiness of intangible assets. Harvard Business Review, 82(2), 52–63.
Men, L. R., Yue, C. A., & Liu, Y. (2020). “Vision, passion, and care:” The impact of charismatic executive leadership communication on employee trust and support for organizational change. Public Relations Review, 46(3), 101927
Mora Cortez, R., & Johnston, W. J. (2020). The Coronavirus crisis in B2B settings: Crisis uniqueness and managerial implications based on social exchange theory. Industrial Marketing Management, 88, 125–135.
Pedersen, C. L. (2019). Empowering employees: A how-to-guide for assisting autonomy. Copenhagen Business School.
Ritter, T., & Pedersen, C. L. (2020). Analyzing the impact of the Coronavirus crisis on business models. Industrial Marketing Management, 88, 214–224.
Schoemaker, P. J. H., Heaton, S., & Teece, D. (2018). Innovation, dynamic capabilities, and leadership. California Management Review, 61(1), 15–42.
Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319–1350.
Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2–3), 172–194.
Teece, D. J. (2018). Business models and dynamic capabilities. Long Range Planning, 51(1), 40–49.
Thompson, J. D. (1967). Organizations in action: Social science bases of administrative theory. McGraw-Hill.
Velu, C. (2016). Evolutionary or revolutionary business model innovation through competition? The role of dominance in network markets. Industrial Marketing Management, 53, 124–135.
von Hippel, E. (2001). Perspective: User toolkits for innovation. The Journal of Product Innovation Management, 18, 247–257.
Wilden, R., Gudergan, S., & Lings, I. (2019). The interplay and growth implications of dynamic capabilities and market orientation. Industrial Marketing Management, 83, 21–30.
Zott, C., & Amit, R. (2008). The fit between product market strategy and business model: Implications for firm performance. Strategic Management Journal, 29(1), 1–26.
Acknowledgements
We would like to thank Sriya Iyer for the helpful discussions, Leanne Wilson for the helpful research assistance, Amanda George for her helpful support and Neil Craythorne for his contributions. We would also like to thank Simon Pattinson, Tom Ridgman, Richard Foster, Charles Boulton and members of the Cambridge Business Model Innovation Research Group for helpful comments on previous versions of this article. We would also like to thank the three executives from Firms A, B and C for the valuable time spent on the interviews during the pandemic. Chander Velu would like to acknowledge funding from the Engineering and Physical Sciences Research Council (EP/R024367/1 and EP/T024429/1) and Economic and Social Research Council—The Productivity Institute (ES/V002740/1).
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2022 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this chapter
Cite this chapter
Said, F., Page, A., Salter, L., Velu, C. (2022). Intangible Capital and Reorientation of Manufacturing During a Pandemic. In: Gallitto, E., Massi, M., Harrison, P. (eds) Consumption, Production, and Entrepreneurship in the Time of Coronavirus. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-93169-8_7
Download citation
DOI: https://doi.org/10.1007/978-3-030-93169-8_7
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-030-93168-1
Online ISBN: 978-3-030-93169-8
eBook Packages: Business and ManagementBusiness and Management (R0)