Evolution of Strategies and Dynamic Capabilities in the Auxiliary Private Education Sector During the Coronavirus Pandemic

Abstract

Coronavirus pandemic has caught the world unprepared and businesses throughout the globe were left to scramble for solutions as they witnessed customer behaviour becoming significantly more conservative. This rapid transformation posed many opportunities to study multiple theories and frameworks presented in business literature and observe how they are manifested in real-life situations during the period of the health crisis. Therefore, the subject of understanding how Small and Medium Enterprises (SMEs) have developed their strategies and gained learning as well as transformational capabilities was deemed highly relevant and worth investigating. To reflect how SMEs have dealt with the challenges brought by the pandemic it was decided to center this master’s thesis around introspective and retrospective analysis of qualitative data collected during in-depth semi-structured interviews as well as various types of secondary research. Based on initially collected and analysed information the final research question of this master’s thesis was set: How small and medium enterprises in the auxiliary private education sector have evolved their strategies and Dynamic Capabilities throughout the Coronavirus pandemic and what can be learnt from it? To understand multiple perspectives and put together a more detailed outlook on how businesses have transformed during the pandemic it was chosen to conduct comparative multiple case study with main focus on discovering how SMEs in the auxiliary private education sector have developed their Dynamic Capabilities, formed strategies under uncertainty and demonstrated capabilities of foresight as well as risks and crisis management. As the research was mostly focused on understanding each case by conducting in-depth interviews and analyzing them rather than developing a theory - content analysis was chosen as the primary approach on data analysis. While analyzing collected data it was focused on noticing patterns within multiple businesses as well as understanding how real-life strategies reflect theoretical frameworks about Dynamic Capabilities and operating under uncertainty. To pursue answering this question three semi-structured interviews were conducted with auxiliary private education enterprises based in Lithuania. To keep consistency of data collection, analysis and comparison, a set of prerequisites was established. By doing so it was assured that the cases were exposed to similar dilemmas and market conditions in order to observe and analyse most pronounced processes of customer behavior transformation and business alignment to it. Gained information during conducted interviews was condensed into cases in order to provide a clear overview and present what were each business’ performed actions and executed strategies. After primary analysis of each case was done, these cases were compared and analyzed within a broader scope of the whole sector. To make parallels of similarities and differences that these enterprises demonstrated it was aimed to provide equal amount of time and significance for each analysed enterprise. Following these analyses, the Discussion section was put together to use previously made findings and interpret them in a broader context. This way it was sought to utilize data gathered not only to provide analysis based on chosen theories and frameworks, but also to present broader insights about the sector of auxiliary private education and its development. For this purpose three main topics were covered: 1) External factors’ influence on SMEs in auxiliary private education and their response to these circumstances, 2) Links of produced cases with covered theory and how well it applies in the context of global health crisis, and 3) What trends in the auxiliary private education sector could be expected in the near future? Based on all collected information and analysis performed it was concluded that interviewed businesses in the auxiliary private education sector changed their strategies by shifting their approach of providing educational services from direct (physical) to remote (digital). This required enterprises to further develop their Dynamic Capabilities and adapt to existing conditions by proactively gauging rapidly shifting customer needs. It was learnt that businesses enjoying well developed competitive advantage can be challenged greatly and even possessing attributes of Dynamic Capabilities cannot provide complete immunity in the environment where customers’ behavior is shifting rapidly and unpredictably. Finally, strategic parts of Risk and Crisis Management were mostly approached in an Ad Hoc manner and bears the question if proper Foresight activities could have prepared these businesses for the health crisis and softened its impact or did the Coronavirus crisis was the unforeseen factor that unpredictably reshaped the sector enabling digital transformation which has formed a new path of how auxiliary private education will evolve in the future.

A master thesis from Aalborg University

Evolution of Strategies and Dynamic Capabilities in the Auxiliary Private Education Sector During the Coronavirus Pandemic