Post-covid Reality in Case of Wirkkala Company

Subject: Case Studies
Pages: 14
Words: 3924
Reading time:
15 min
Study level: Master

Introduction

In the 21st century, the business landscape remains closely connected to the external environment. Today’s world has become highly globalized, which, in turn, instills complexity and interrelatedness on an unprecedented level. The environment remains in a state of constant evolution, as shifts in certain areas lead to further transformations. In order to remain relevant and sustain growth, companies are to be in line with external development. This idea comprises the necessity of adjustments, thus posing serious requirements for organizational flexibility. It is vital not only to recognize the threats and opportunities within the external environment but also to react accordingly, making a substantial effort to withstand the competition and counteract the shift in the business paradigm. Another critical component of the process is related to the rapid technological progress observed today. Digital communication, as well as new means of data collection and analysis, have entered the array of available instruments within the business environment. These tools appear to extend beyond the limit of mere convenience, becoming indispensable for efficient entrepreneurial activities.

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Under these circumstances, additional attention is devoted to the concepts of digitalization and digital transformation. According to Bloomberg (2018), these two notions are barely synonymous as they represent different levels of change. In the case of digitalization, the emphasis is laid on the incorporation of new technology into an existing business model. More specifically, most scholars and experts acknowledge digital communication as the key driving force of digitalization. Companies rely on them to maintain uninterrupted communication with the stakeholders, thus attaining an unprecedented level of engagement (Fraccastoro et al., 2021). At the same time, digital transformation exists in a broader context and implies changes on a larger scale. Bloomberg (2018) recognizes this concept as a profound reorganization of the entire business model that pushes toward a new, digital-centric framework. In this case, the new technology does not enhance the existing avenues. Instead, it prompts the organization to seek completely new opportunities based on state-of-the-art advancements. This way, changes encompass not only the internal structure or the immediate environment but the entire operational context in general.

Therefore, the 21st century is the era of transformation for the business landscape. The unique nexus of globalization and technology increases the competition while providing stakeholders with new instruments of influence. This tendency creates a highly competitive environment in which organizations have little or no room for hesitation or mistakes. Thus, the current business landscape becomes the ultimate test of leadership capabilities. In fact, organizational leadership is gradually becoming a well-established discipline with its own rules and paradigms. Moreover, today’s best practices have substantially enhanced the arsenal of prominent leadership models that, however, vary in effectiveness and applicability across industries. Under these circumstances, managers are to select the correct approach for each particular situation through the rigorous analysis of their organization’s environment, challenges, and opportunities. A similar situation is encountered by Wirkkala, as the company faces new challenges in the post-COVID reality. This report argues that the key to the further development of the company, both domestically and internationally, lies in the area of digital transformation, namely in data processing and analysis.

Wirkkala is a relatively young company in the marketplace of the United Kingdom, specializing in healthy beverages for well-being. The initial stages of the organization’s development were fuelled by the enthusiasm of expertise of the four founding directors: Alison Smith, Kristine Kochanski, Diane Ugbede, and Anne Aalto. Their combined efforts quickly made Wirkkala an attractive, promising start-up. The young spirit of the company found a positive response from both workers and stakeholders. As a result, the sales levels met the initial expectations of the founders. At the same time, most employees of the company have demonstrated exceptional loyalty to the enterprise. In a way, such an outcome has been attained through the sense of belonging and participation instilled by the directors. Wirkkala is a commercial enterprise that, however, reflects today’s increasing focus on social value promotion within the business environment. Pricing policy became another critical component of the start-up’s success, balancing such key areas as company profit, employee wages, and prices for the end consumers. The spirit of youth persists across Wirkkala’s operations, as most workers’ perspectives remain in line.

However, the initial success of the operations eventually faced an unpredictable barrier in the form of the novel coronavirus pandemic. COVID-19 introduced a new reality, shaking most marketplaces across the globe. In the case of Wirkkala, the pandemic’s primary detrimental impact is represented in the economic domain. COVID-19 has disrupted most market processes by damaging the normal functioning of supply chains. In addition, lockdowns and economic aftershocks prompted Wirkkala’s customers to reconsider their priorities, opting for other types of products under the circumstances of purchasing power depletion.

Along with the increasing scale of operations, Wirkkala has faced new challenges in the form of growing competition. Simultaneously, the company’s Board has grown to acknowledge the vital role of information in its business. The models of data collection, analysis, and distribution have not been in a line across the various departments. In a way, Wirkkala has sacrificed the unity and functioning of business processes in favor of maintaining the pace and spirit of an ambitious start-up. The recent COVID-19 crisis became a major disruption for the fragile system of the company, and the directors now seek new avenues of recovery and further development. The overall chaos of the pandemic found its reflection in both internal operation and external representation of Wirkkala in the marketplace. Ultimately, efficient data handling, as well as uniform companywide policies, are becoming the key priorities of the organization moving forward.

COVID-19 and the Business Landscape

The novel coronavirus (COVID-19) pandemic has become a major turning point for most organisations across the globe. However, as Wirkkala is a relatively new player in the marketplace, the impact of the pandemic has been particularly strong in its case. The outbreak of the virus began early in the year 2020, quickly spreading across national borders (Meyer et al., 2021). Shortly after, most authorities responded to the threat by closing their countries and provinces in an attempt to contain the virus and prevent it form spreading further. In addition, the government of the United Kingdom introduced serious lockdown protocols (Miles et al., 2020). Residents were to remain within the limits of their households and most work processes had to be executed in a remote format. The primary objective of such measures was to maintain social distancing, preventing the transmission of COVID-19 through limiting direct personal contacts within the population (Pieh et al., 2021). While the safety protocols are completely justified in the context of the threat’s seriousness and scale, they still had an adverse impact across industries.

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Most businesses that are deemed non-essential were subject to temporary closure unless remote work could be organised. In other cases, workplace procedures had to be reorganised to a considerable degree, disrupting normal processes. Employees are to maintain social distancing in the workplace, which often compromised the efficiency of their performance (Kim, 2020). For example, the time of arrival and departure from the location had to be extended, forcing workers to leave their homes earlier and return later. In the case of Wirkkala, the emergency changes were handled chaotically, to an extent, resulting in workers’ dismay and complaints. Such a situation may have been caused by the general lack of managerial expertise within the company. In other words, the leadership was unable to organise safety protocols in response to the pandemic in a uniform manner, meaning that the measures were often sporadic. This resulted in uneven policies across the company’s departments, creating a sense of unfairness.

At the same time, the pandemic’s effect encompassed the primary stakeholders of the marketplace, as well. In this regard, the economic impact on the population has been particularly strong (Bitler et al., 2020). Following the closure of multiple businesses and rearrangement of others, the revenue levels have inevitably become lower (Estrada, 2020). Accordingly, many people saw a personal income decrease or even lost their jobs (Coates et al, 2020). This situation compromised the purchasing power of the population, thus instigating a global economic crisis.

Amid the decrease in available funds and concerns of personal health and well-being, consumers’ purchasing behaviour underwent serious transformations, as well. Residents of the country had to reconsider their priorities even at the expense of the preferred quality of life. Wirkkala’s products are beneficial for health, but they still can be attributed to the non-essential category. Many customers may have opted for the basic sustenance, leaving healthy beverage for a better time (Chen et al., 2020). In addition, most of Wirkkala’s products are on display in the leading retail chains that no longer provided a similar level of visibility amid lockdowns and social distancing. The combination of these factors put the company’s business model at risk, highlighting the organisational flaws.

Leadership in Business

The contemporary business environment introduces an array of new challenges that are to be addressed by managers. Wirkkala’s case is an excellent example of the degree to which the external environment affects the organisational performance and development. According to Munro and Belanger (2017), today’s business strategies can no longer be considered separate from the broader context surrounding companies. In the previous eras, most organisations relied on the internal vision as the primary benchmark of subsequent development. However, within the current business landscape, the external context becomes an integral component of efficient practices and sustained growth. The environment has become globalized and more complex, affecting businesses through the interrelatedness of all components. The nexus of diverse components nurtures new challenges that put leadership capabilities to an ultimate test. Wirkkala experienced a similar situation, in which major shifts in the operational environment contributed to the indeterminacy in regard to the company’s future. In this context, the selection of the leadership style will be a crucial component of sustained success or lack thereof. Thus, the prominent leadership models based on the best contemporary practices deserve additional exploration.

The Role of Leadership

In a way, leadership is the cornerstone of organisational success in the modern marketplace. According to Cortellazzo et al. (2019), its role has been particularly crucial in the digitalized world of the 21st century. The emergency of new technology has transformed the world in most respects to a substantial degree. From the perspective of the general public, it has been viewed positively because of the perceived benefits and improvements in terms of the quality of life. However, for modern leaders, the continuous digitalization results in new challenges conditioned by the shift of the business paradigms. First of all, the development of global transportation and communication prompts various markets and industries to merge, forming a global competitive environment. In this situation, the level of competition grows, as well. New local players emerge more frequently whereas industry giants are able to exercise more influence over international markets.

Second, the development of digital technology enables uninterrupted communication with the primary stakeholders. This tendency may lead to better levels of customer engagement, but there is a downside to it, as well. More specifically, modern companies remain in the centre of the public attention, becoming subject to additional scrutiny. Leaders’ decisions, strategies, and even personalities are observed and evaluated by both workers and stakeholders through the facilitated exchange of information. As the possibility of comparison emerges, the current environment becomes more demanding in terms of leadership integrity and expertise. In other words, today’s managers have little or no room for mistake, as their actions will inevitably be compared to others. In this regard, it is vital to select the most optimal mode of conducting business through the implementation of a strategy that will correspond to the public’s expectations and organisational goals.

Transactional and Transformational Leadership

One of the most discussed paradigms of management in the contemporary business environment is transactional leadership. This theory originates from the 1980s and focuses on the short-term planning (Purwanto et al., 2020). The key instrument of this style utilizes personal motivation through an emphasis on a clear chain of command. Transactional leadership is found to be effective in addressing the immediate objectives of an organisation through hands-on management and guidance across most tasks, even the smallest ones. The adepts of this method remain engaged in the company’s day-to-day operation which allows them to observe progress in person. In other words, transactional leadership in highly outcome-oriented, as it emphasises the integrity of the organisational structure. Within this paradigm, the followers are required to comply with the company’s goals and objectives, and the extended supervision serves to implement the strategic vision.

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According to the available information in regard to Wirkkala’s operations prior to this point, the management of the company actively utilizes this approach. The organisation is rather compact, which creates a favourable environment for hands-on management exercised by the founding directors. Moreover, Wirkkala’s initial success appears to be conditioned by the alignment of values and priorities that are shared among employees and managers. When people concentrated on the common goal, their combined efforts are capable of yielding exceptional results.

However, as it is the case with many start-ups, the prevalence of transactional leadership has shifted the focus of attention toward the short-term perspective. In other words, Wirkkala concentrated on the immediate success at the expense of prolonged planning and vision of a more distant future. In the current changeable business environment, the accomplishment of the short-term goals does not necessarily guarantee that a similar pace will be maintained beyond a certain point. Furthermore, such an outcome appears highly unlike, and the decrease in the growth rate may become a source of demotivation for employees. Therefore, Wirkkala can no longer rely exclusively on hands on, transactional model of leadership, as highlighted by the COVID-19 pandemic.

Another critical component of the most prominent leadership dichotomy of today is represented by the transformational style. This approach takes a different avenue to the goal completion through employee motivation and engagement. In this scenario, leaders represent the role models that set the strategic vision and inspire their followers (Buil et al., 2019). Spoken differently, transformational leadership paves the path to a better future through shared values and ideas. Such managers do not exercise day-to-day control of the company’s operations, remaining distant, development-oriented figures. Within this framework, the employer-employee relations extend beyond balancing rewards and punishments. On the contrary, this approach is more individualized, as each worker is expected to appraise the values through the prism of their own reasoning. In the transformational paradigm, followers do not pursue rewards or avoid penalties. Instead, they eventually grow to identify with their leaders, which leads to better engagement and dedication.

Therefore, transformational and transactional models are inherently different in nature. The former is proactive, as it has the potential to prevent the emergence of serious organisational issues through long-term planning and preparedness. In turn, transactional leadership tends to react to problems as they arise due to the short-term focus on the model. In addition, as implied by the title, transformational leadership is not limited by the existing organisational structure, as it aims to change – or transform – the business adapting it to projected challenges. Another point of comparison is represented by the personal versus common good dichotomy. The first aspect is prevalent in transactional leadership that balances rewards and punishments. As per the transformational principles, followers comply with shared organisational values. Moreover, they do so not because the management wants them to but because they grow to accept a similar vision. Finally, within the opposition between management and leadership, transactional models align with the former whereas transformational ones correspond with the latter. Overall, both paradigms may be effective for specific purposes, but they reveal their advantages only when implemented correctly.

Trait Leadership

As the general theory of management and leadership evolved, the field has seen several broad developments. First of all, the 1950s are characterised by the increasing role of trait-spotting. According to this principle, a leader possesses a set of specific traits that define his or her ability to lead, motivate, and inspire the followers. Therefore, it is claimed to be possible to identify natural-born leaders through the analysis of their personalities. Once such a person is found within an organisation, the trait-spotting recommends their promotion to a management position. However, the critics of such an approach argue that it is discriminatory to a degree. The presence of a specific trait list implies that leaders are born and not made.

However, securing leadership positions for people with allegedly correct innate qualities may be unfair and even detrimental for a company. Moreover, each context possesses different variables that may render certain “established” leadership qualities insignificant and even damaging. This idea is particularly important in the current changeable environment. Nevertheless, even though the fundamental concepts of the trait leadership theory were mostly rejected, certain generalizations have persisted across decades. More specifically, such qualities as sociability and motivation remain the cornerstone of successful leadership, but they are no longer fixed to a birth right.

Style-Counselling

Along with the development of the trait-spotting principles, another approach was developed in the mid-20th century. The focus of the style-counselling model is on the behaviour of leaders. The adepts of this model studied the action patterns of successful leaders in an attempt to devise a training framework that would develop similar behaviours among projected managers. Unlike trait-spotting, this theory disregards the personal qualities behind the actions. Furthermore, its design differs from the key postulate of the trait theory, claiming that leaders’ attributes are innate. On the contrary, the emphasis of the style-counselling is on the training and development of specific behavioural patterns. Nevertheless, the applicability of this approach in the contemporary environment appears limited, as well. The design is reminiscent of a blind imitation of prominent role models. In addition, such imitations are often detached from the general context that defined the course of action. As a result, style-counselling concentrates on what good leaders do instead of explaining the why aspect of the situation.

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Contingency Leadership

The evolution of the business landscape and leadership theories has introduced another major development within the field of research. The contingency theory of leadership recognises the variabilities across different contexts that require a certain degree of managerial flexibility. Each organisation operates in a particular environment with its own features, both internal and external. Accordingly, the exact style of leadership cannot be deemed universal, as each case requires a degree of adaptation. The emphasis of the contingency theory is on critical thinking, implying that a leader should be able to analyse the situation with all its variables. In other words, universally applicable rules of leadership do not exist. The contingency theory refutes the ideas of set attributes or action patterns of leaders, encouraging them to develop their expertise through rigorous analysis and thinking. Such an approach appears favourable for Wirkkala, as the firm’s management has already faced the changeable reality of the 21st-century business. Under these circumstances, adaptation is the key to success, allowing leaders to counteract negative developments within the complex external environment.

Wirkkala’s Leadership Challenges

The new, post-COVID reality introduces major dilemmas for Wirkkala’s directors who need to find suitable development avenues in the short-to-mid term. The company has been mostly unprepared for a crisis of this magnitude that put its sustained growth at risk. Evidently, such a situation could hardly have been predicted, as the impact of COVID-19 has been global and universal. However, at this point, it is essential to draw substantial conclusions in order to increase the company’s resilience in the face of potential crises.

Short-Term

In the short-term perspective, the key to recovering from the COVID-19 crisis is to re-establish the rapport between the management and the employees. As discussed above, the prevailing leadership paradigm within the company has been transactional. The directors remained in control of most operations, exercising hands on management in most cases. At the same time, the first stages of Wirkkala’s development have been characterised by the alignment of values within the personnel. However, one may argue that this alignment was largely coincidental as its deliberate nurturing contradicts the organisation’s leadership style.

Most Wirkkala’s employees are within the same generation, which includes the company’s founders. Accordingly, the age similarities became the primary factor of value sharing. Once the company faced serious impediments amid the pandemic, trust and rapport were undermined, as disagreements in regard to the work process ensued. In the shortest term possible, it is essential to establish a mutual dialogue between leadership and followers. The primary objective of this task is to ensure that all workers understand the direction of the company’s development post-COVID. This dialogue will be the first, and the most important, step toward the implementation of transformational leadership that is required for the sustained growth of Wirkkala.

Mid-Term

As can be inferred from the lessons of the recent past, the emphasis on the short term may be detrimental for the company’s development. Wirkkala is currently, passing the threshold between a start-up and a mature enterprise, instigated by the COVID-19 pandemic challenges. Thus, the time has come for the management to consider more distant prospects of their organisation. In the mid-term, the key objective will be to rearrange the data handling architecture within the company, making it more efficient. As of now, Wirkkala relates on the data processing techniques that are surprisingly disorganised for a young-spirit company. More specifically, its departments utilise different databases that are not interconnected. In the current environment, an exchange of key information is crucial, as it helps all units work in a synchronised manner. The available technology allows for an approach, as new solutions pursue efficiency of communication and data exchange. Moreover, improved data handling will help Wirkkala implement better analysis techniques to acquire a better understanding of consumer decision-making patterns in the post-COVID era.

Recommendations and Conclusions

The future of Wirkkala is tightly related to the use of business information systems. First of all, it is essential to synchronise the company’s data storage systems. The use of different supplier and customer databases impedes the development of strong and mutually beneficial relations with the primary stakeholder. In order to amend for this flaw, it is recommended to implement a cloud computing technology that will enable a synchronised access to the system from the Head Office, warehouses, and factories. However, this method of data storage may be subject to cyberattacks and leaks, as certain competitors may resort to such dishonest practices. Therefore, Wirkkala’s directors are to consult renowned specialists in the field of cybersecurity to ensure a sufficient data security infrastructure.

In addition, the research of consumer purchasing behaviour remains an essential objective. Furthermore, this task has only gained additional importance in the fallout of the pandemic. COVID-19 has had a global impact, affecting the lifestyle and decision-making paradigms of most people. Under these circumstances, Wirkkala is to determine and analyse the key changes in the purchasing behaviour of its audiences in order to remain relevant. The implementation of synchronised data storage will be the first step to completing this task, as it will provide the responsible departments with up-to-date, relevant information. Nevertheless, as the company continues to grow, the amount of data is projected to increase accordingly. Therefore, the use of big data analysis appears relevant in the context of Wirkkala’s situation. The company is advised to allocated available resources to the training programs that will help the personnel become acquainted with the principles of big data computing. Thus, data analysis will be the key to the further growth of the organisation, identifying changes in consumer decision-making and enabling timely responses.

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