Developing Customer Relationship Management Operations During The Covid-19 Pandemic. A Digitalization Perspective

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Strategica.

Shaping the Future of Business and Economy

Developing Customer Relationship Management


Operations during the Covid-19 Pandemic. A
Digitalization Perspective
Valentin STOICA
National University of Political Studies and Public Administration
30A Expoziției Blvd., District 1, 010324 Bucharest, Romania
Valentin.stoica@facultateademanagement.ro

Abstract
The COVID-19 pandemic has impacted the firm’s ability to manage customer relationships as it was
done before, with lockdowns and restrictions making physical face-to-face interactions impossible.
As a response, organizations had gone through an accelerated process of digital transformation
and the use of social networks or communication tools proved to be more than useful when coming
to quickly adapt to the new reality. Based on an original qualitative analysis on 11 Romanian
managers carried out during June 2021, this paper aims to explore the digitalization perspective of
developing customer relationship management operations during the COVID-19 pandemic by doing
a semi-structured literature review, then analyzing the responses in an in-depth interview and
providing key-findings.

Keywords
COVID-19; digital transformation; customer relationships; digital technologies.

Introduction

Starting as an epidemic in mainland China in February 2020, the Coronavirus Disease


2019 (COVID-19) was declared a pandemic by the World Health Organization on
March 11, 2020, and sooner than we would ever imagine it changed the world as we
knew (World Health Organization, 2020). Our lives were paused, businesses were shut
and economies were put at risk by an invisible enemy. Currently, the world is
struggling, with public health strategies, fiscal and monetary support, the speed of
vaccine rollout, and the importance of hard-hit sectors making the difference between
countries, but the prospects for the world economy have brightened (OECD, 2021). It is
expected that the global output will rise by 6% in 2021, after a 3.5% contraction in
2020, but this won’t be enough to match the pre-pandemic growth path, with many
OECD countries having the living standards below the level expected before the
pandemic. However, due to swift policy actions, after sixteen months into the
pandemic, almost 2 billion vaccine doses were administered, paving the way for health
and economic recovery. With the world economy slowly returning to pre-pandemic
activity levels, the Global GDP is projected to rise by 5.75% in 2021 and close to 4.5%
in 2022 (OECD, 2021).

Although, as of today, countries across the globe began to gradually ease the
restrictions, with relaxation measures expected to continue during the summer, we are
still relying on digital technologies to keep our activity close to pre-pandemic levels.
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And although the general perception may be that employees are eager to return to the
office, almost one in two workers in the UK is willing to take a pay cut to continue
working from home in the long term (OWL Labs, 2020).

Organic versus accelerated digital transformation in the context of the COVID-19


Pandemic

In 2020, due to the COVID-19 pandemic, digital technologies have been adopted by
companies as a response to the need for social distancing and as an alternative to the
new normal, even if they were available on a large scale in the pre-pandemic period.
For instance, traditional education organizations all over the world had to adopt
electronic learning as it was the only possible way of continuing their activities during
the lockdown, but this technology was available a long time before it was adopted. The
term used to describe the development of favorable conditions for a historically
unprecedented phenomenon is “disruption”, or revolutionary transformation.
(Ganichev & Koshovets, 2021, p. 19). This process is happening with the forced
“manual” transfer of daily activities of individuals and organizations to a new digital
society. This is also important as humankind has to develop the ability to prepare
solutions for the inevitable shocks and disruptions that confront the economy and
society. One has a lot of recent examples to understand how important this process is,
the 2008 global financial crisis and the recent COVID-19 pandemic being only the tip of
the iceberg (Ra, Shanti, & Maclean, 2021, p. 44). And although a lot of effort was put
since the start of the new millennium into the process of going towards a more digital
economy with all its implications, it was not until recently that the entire world faced
the need for this change more than ever, with the COVID-19 outburst resulting in
massive disruptions to businesses from nearly every industry sector and impacting
day-to-day activities of entire populations across the globe. The solution was found in
technology, as the digitalization of business processes, online meetings, and remote
working were the most natural choice when lockdown measures were taken. And
although the larger impact of these changes is far from being completely measured and
analyzed, first evidence shows that the accelerated process of digitalization actually
increased productivity, reduced asset ratios, and produced an increase in the demand
for training, as new technologies had to be learned by employees (Ra, Shanti, &
Maclean, 2021, p. 237). However, there are also studies showing that the accelerated
process of digital transformation has its downs. According to the software intelligence
company Dynatrace, who conducted a global survey involving 700 Chief Information
Officers, many IT managers have doubts about their ability to keep up with digital
transformation as they don’t find proper integration between all teams in the company
(CE Noticias Financieras, 2021, p. 1). This problem has multiple causes. First of all, due
to the accelerated characteristic of this transformation, a lot of tools were used
meaning that a lot of time is wasted to manually combine data, gather information, and
align strategies rather than driving innovation. Another cause of this problem is the
external factors affecting employees, with psychological problems and worries about
work-life balance becoming a priority for organizations to keep employees as healthy
and as productive as possible under new circumstances. But as the COVID-19
pandemic was gradually becoming normality, there were three categories of
organizations: first there are those who “retreat to run” to conserve resources and
keep business as normal as possible. Other organizations “strive to maintain” to get

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Strategica. Shaping the Future of Business and Economy

back to strategies they developed before the pandemic. Last but not least, some
organizations saw this period as a chance to reinvent their approach towards
traditional business and provide a catalyst to their digital roadmap (Heller, 2020, p. 2).

Impact of digital transformation phenomenon on customer relationship management


operations during and after the COVID-19 Pandemic – literature review

To impact the impact of the digital transformation phenomenon on customer


relationship management operations during and after the COVID-19 Pandemic the
author focused on realizing a semi-structured narrative literature review. During
crises like the COVID-19 pandemic when everything is happening faster than usual and
we are surrounded by an avalanche of information with research publications already
expanding, literature reviews serve a crucial function. ProQuest Central, Scopus,
Springer, Wiley, Google Scholar, McKinsey, Cap Gemini, Deloitte Ernst & Young, KPMG,
and PricewaterhouseCoopers, the most used databases and sources were used to
search for keywords “customer relationship management” and “digital transformation
during COVID-19 pandemic”. Only studies that guide the impact of the COVID-19
pandemic on customer relationship management in terms of digital transformation or
digitalization in organizations were included, written in English. Due to the specific of
the COVID-19 pandemic the publication date was limited to 2020-2021, but we also
included studies from the past that analyzed the process of digitally transforming
customer relationship operations. Researching the titles existing in ProQuest online
library using keywords „customer relationship management”, “digital transformation”
and “covid-19” generated 53 results. After screening the titles and reading the
abstracts, a total of 16 studies were identified. Scopus generated 62 results after
researching the titles that included „customers”, „digitalization” and „COVID-19
impact”. A total of 26 results were identified after screening the titles and reading the
abstracts. Researching the titles existing in Springer using keywords “customer
relationship management”, “digital transformation” and “COVID-19” generated 81
results. After screening the titles and reading the abstracts, a total of 39 results
relevant articles were identified. Wiley Online Library returned 39 results after
researching the titles using keywords “impact of digitalization in customer relationship
management during COVID-19 pandemic” and “digital transformation”. After screening
the titles and reading the abstracts, a total of 12 studies were identified. In total, all
sources combined, we identified 93 studies and 6 reports as being directly linked to
the research topic – the impact of digitalization in organizations during the COVID-19
pandemic.

In the end, after reading the full-text of each one, a total of 78 articles were removed
for reviewing only a specific topic that was not directly linked to management, for
having a small number of citations (below 10), for being a duplicate of an article from
another database, for missing a qualitative approach of the interviews or for not being
relevant due to the small number of respondents. For each article, we picked 3 to 6
main findings in a tabular form to ease the review process and to have a clear image
for each one (Table 1).

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Table 1. Semi-structured narrative literature review - tabular form


Topic Main Findings
The role of The emergence of a global crisis, COVID-19, has significantly changed
digital tools in consumer behavior in the market, shopping motives and consumer sentiment.
customer The understanding of the needs and wishes of the customers is one of the
relationship most important marketing goals. The customer-oriented attitude has a direct
management effect on the customer’s satisfaction. A complex understanding of these users’
during and characteristics will allow researchers to better understand customer behavior
after the in online shopping in the initial transaction, which presents the biggest
COVID-19 challenge for the service providers. Understanding the user’s characteristics
pandemic will help the providers of goods and services to design the web pages better to
achieve a competitive advantage. Due to these changes, which happened at an
extreme pace, a new customer segment was created (Majercakova &
Rostasova, 2021, p. 5). Digital transformation is therefore a technology
catalyst and an opportunity for traditionally non-digital businesses to gain
new customers, extend market shares, and enter uncharted territory. 58% of
the businesses indicated that the adoption of new technologies is meant to
help their business to improve customer service. In addition, 43% use social
networks to advertise and push sales by attracting new customers, with
Facebook (33%) as the most preferred platform, followed by Instagram
(19%), Twitter (10%), and LinkedIn (8%). The rapid evolution of social media
and information and communication technologies, such as mobile
technologies, have changed the traditional relationships between businesses
and customers. Brands take advantage of technology, social media, and
constant connectivity to foster organic consumer engagement and
interactions towards co-creating personalized customer service. Realtime
service offers dynamic engagement with connected consumers (Fusté-Forné
& Filimon, 2021, p. 5). Digital marketing has enabled companies from various
industries to obtain real-time customer
insights and create and communicate value to customers more effectively
(Low, Ullah, Shirowzhan, Sepasgozar, & Lee, 2020, p. 21). In summary, greater
digitalization will allow innovative firms to grow and connect with new
customers (Fredrich & Bouncken, 2021, p. 13)
Customers The customer’s behavior has changed during the lockdown and massive use of
response the web and social media have become the channels to manage the product
towards information gathering and purchasing activities (Bettiol, Capestro, Di Maria, &
changes that Micelli, 2021, p. 2). One negative aspect noted was that many customers were
involved not ready to make decisions concerning larger investments remotely. Hence,
digital tools customers were satisfied when banks proactively contacted them to learn
during the about their situation and needs and advised them on using remote services
COVID-19 (Haapio, Mero, Karjaluoto, & Shaikh, 2021, p. 8). As customers are
pandemic continuously connected using mobile technologies, firms need to respond
with connected strategies to improve their customers' experience
(Kokshagina & Schneider, 2021, p. 6). The demand for online services sets
providers major challenges in maintaining customers' satisfaction in terms of
shopping experiences. Customers view online purchasing as a convenient and
efficient shopping method, but they perceive it as risky because of the
uncertainty about the reliability of the product and service (Ozuem, Ranfagni,
Willis, Rovai, & Howell, 2021, p. 4).
Challenges of Digitalization is costly and will cause short-term profitability losses that, in
the turn, also negatively affect sales growth (Fredrich & Bouncken, 2021, p. 13).
digitalization Organizations are unwilling to spend because the initial investment of

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process in installation and reengineering is very high, and the outcome is not 100%
customer assessable. Anyone can track personal data that belongs to an individual
relationship through the Internet. A lack of awareness about emerging technology and
management skepticism keeps businesses from pursuing digital strategies. Inadequate
in the context technology increases concerns about data protection (Bagale, Ramana
of the COVID- Vandadi, Singh, Kumar Sharma, & Garlapati, 2021, p. 13). The digitalization
19 pandemic process has been strongly associated with increasing inequality and job loss.
On the topic of cyber-security, there are security risks and concerns regarding
the increased reliance on digital technologies that can be hacked. The
accustoming to digital technologies has also been linked with changes in
social interactions, the loss of empathic ability, the growth of internet
addiction, and the desocialization of individuals (Van Veldhoven &
Vanthienen, 2021, p. 12). SMEs are known for experiencing significant
challenges when adopting ICTs as they often struggle to attract and retain the
required skills and expertise, and are usually less aware of available ICTs and
their benefits. Moreover, they often cannot afford expensive, customized ICT
solutions as they generally have limited financial resources (Wendt, Adam,
Benlian, & Kraus, 2021, p. 2).
Opportunities Digital transformation initiates a paradigm shift characterized by hyper-
of the connectivity and involvement of end-customers along the value chain,
digitalization including new opportunities for value co-creation via gamification or
process in crowdsourcing. Particularly young customers share a greater expectation for
customer digital servitization and building a digital identity (Fredrich & Bouncken,
relationship 2021, p. 11). The rapid evolution of social media and information and
management communication technologies, such as mobile technologies, have changed the
in the context traditional relationships between businesses and customers. Brands take
of the COVID- advantage of technology, social media, and constant connectivity to foster
19 pandemic organic consumer engagement and interactions towards co-creating
personalized customer service. Realtime service offers dynamic engagement
with connected consumers (Fusté-Forné & Filimon, 2021, p. 5). More
personalized features for the customer and more versatility, openness, and
globalization for the supply chain are obtained through digitalization.
Consequently, it must be possible to react quickly and efficiently to customer
needs and generate the latest version at smaller batch sizes. Using digital
resources, you can recognize areas that need professional development and
workforce gaps. It is now simpler to monitor employee performance, train
them, and educate them. By implementing digital tools, clients can enhance
the business’s metric analysis. Metrics such as internet traffic, operation
metrics such as sales and acquisitions, information metrics such as customer
insights, and people metrics such as employee job satisfaction can all be used
to enhance various facets of the organization quickly (Bagale, Ramana
Vandadi, Singh, Kumar Sharma, & Garlapati, 2021, p. 11).
Future of The implementation of a digitalization strategy will take time to break even
customer (Fredrich & Bouncken, 2021, p. 13). A new customer segment was created -
relationship digital-only. They may not even realize it, but when they return to the
management previous state nothing will be like previously. The people will not behave in
the store in the same way as previously (Majercakova & Rostasova, 2021, p.
5).
Author's elaboration

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Methodology

To explore how firms responded to the COVID-19 challenges with the main attention
on the use of digital technologies in customer relationship management, this article
draws on in-depth interviews carried out on Romanian employees from various
sectors. The responses were collected during the COVID-19 pandemic (June and July
2021). Managers of the firms were interviewed through a set of open-ended questions
that followed an interview guideline to keep the conversation structured and on point
(Table 2). Specifically, the questions aimed to assess more in-depth:
• The level of digitalization in organizations before the COVID-19 pandemic;
• The impact of COVID-19 pandemic on customer relationship management
with a focus on digital tools and their use in the process;
• Future of business after the COVID-19 pandemic ends.

Table 2. Firms and roles interviewed


Firm Industry Market Interviewee position
Firm 1 Media and Head of Digital Media
Telecommunications B2B/B2C Digital Sales Manager
CMO
Firm 2 Office supplies and B2B Marketing Specialist
stationery
Firm 3 Banking B2B/B2C Branch Manager
Firm 4 Software Development B2B IT Project Manager
Firm 5 Banking B2B/B2C Data Analyst
Firm 6 Internet Cloud computing. B2B Strategic Partner Manager
Advertising
Firm 7 Beverages B2B Supply Planning Coordinator
Firm 8 Cosmetics, skincare, B2C/B2B Finance Director
fragrance, and personal People Lead
care company
Author's elaboration

To reach the research purpose, a word cloud analysis was implemented to extract the
main words that emerged from the interviews. Starting from the transcription of the
interviews collected, the following criteria were applied: the same word present both
in singular and plural was counted as a single word; synonyms were considered as a
single word in the final count. After the cleaning process, from the total number of
words that emerged, only those with a minimum frequency of 10 were included in the
word cloud. From a total of 1.941 unique words, 23 words, whose frequency ranges
from 10 to 106 formed the cloud. Regarding the visualization of the words, frequency
(words that appear more frequently are larger) and scale (rare words are shown
differently than common words) were chosen as visualization modes after research.
The word order is random. The tool used for cleaning the text and counting the words
was wordcounter.net. For the visual representation of the word cloud, wordclouds.com
was used.

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Results. Developing customer relationship management operations


during the COVID-19 pandemic. A digitalization perspective – word cloud
analysis

A word cloud is a visual representation of word frequency that provides a first look for
formative purposes (DePaolo & Wilkinson, 2014). The main conclusion of this analysis
is the importance of the digital and online tools in customer relationship management
during the COVID-19 pandemic and that almost all strategies were people-oriented
(Figure 1).

Figure 1. Keywords mentioned in the interviews


(Author's elaboration)

“The first measures taken by the organization were meant to limit the necessity of
physically going to the office through work from home, meaning a transfer of day-to-
day activities (including customer meetings) to an online environment. Where this
wasn’t possible due to technical limitations or other constraints, we organized two-
week shifts to avoid as many risks as possible.”

Besides the importance of digital tools in customer relationship management, the


world cloud also reveals other key terms, from which results that the main focus in
organizations was to find new solutions to adapt as quick as possible, keeping
employees experience as close to normal as possible so they can implement the
adapted strategies and offer the customers a smooth transition towards online
interaction. These preliminary results offer an overview of the accelerated digital
transformation organizations had to deal with.

After developing the word-map, a step-by-step strategy of adapting to the new reality
was extracted by analyzing the content provided in the interviews, taking into
consideration the level of digitalization before the COVID-19 pandemic, the moment
they realized that an accelerated digital transformation process is needed and
organizations’ preferences regarding the digital tools used.

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Table 3 First steps taken by organizations at the beginning of the COVID-19 pandemic
Solution Frequency Percentage (%)
Develop internal infrastructure for employees 7 100%
More frequent calls 5 71.4%
Electronic signature 2 28.5%
Video tutorials for customers 2 28.5%
Online meetings 2 28.5%
Use of social networks 1 14.2%
Author’s elaboration

The first step taken by organizations was to develop the internal infrastructure and to
offer their employees a smooth transition towards work from home so they can offer
the customers an experience as close as possible to normality by using digital tools
(Table 4). Ease of the sign-up process, online payments, and electronic invoice
activation were also main concerns where normal interaction was happening
physically at the branches.

“At the beginning of the pandemic, in late February 2020, the following steps were
taken: business trips in other countries/ continents were canceled, as well as strategic
customer events in the country and we were advised to continue the customer
relationship management using only online tools.”

When it comes to the main purpose of the digital tools used when the first restrictions
were imposed, video communication apps were the most used. Where these tools were
already common, due to the specific of the business (an international organization or
virtual teams), the transition was smoother and other tasks were prioritized.
Important resources were also allocated towards keeping those applications
functional, upgrading them, and adding new features by gathering an increased
amount of feedback from new users. In terms of the existing levels of digitalization,
many organizations were already taking baby steps towards a more digitalized
approach. But due to the specific of this crisis, an important change was in terms of
communication inside or outside the organization, where there were no reasons to
find new solutions before the pandemic, thus facing even digitalized organizations
with new challenges and work from home becoming the new reality and normality
even though before this was a “nice to have” mention in the job description. A low level
of digitalization before the COVID-19 meant also that the efforts put into adapting the
offline solutions were not centralized and it resulted in a high number of independent
digital tools or apps: „If before the pandemic our digitalization level was around 2 on a
scale from 1 to 5, I think that now we are between 4 and 5. In 2019 we had 6 apps
available for employees and customers, at the end of 2020 we had 18 in total.”

Table 4. Percent of solutions that had a digital component


Percent of solutions that had a digital Frequency Percentage (%)
component
>90 7 100%
75%-90% 1 14.2%
50%-75% 1 14.2%
Author's elaboration
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Strategica. Shaping the Future of Business and Economy

All managers admit that many of the solutions found had at least one small digital
component (Table 4). There are still some parts of the business that couldn’t be
digitalized, this being different from industry to industry.

„Even simple initiatives like sending a Christmas gift required a small digital
component as we had to ask people to fill out a short form to confirm the address
where we could find them for delivery.”

The need for an accelerated digital transformation hit everyone right at the beginning
of the COVID-19 pandemic and even some of the managers acknowledged this trend
long before it was so much needed, it still affected them. Having the example of China,
where collective actions restricting the physical interaction started at the end of 2019,
it was clear enough that a lot of effort will be focused on transitioning towards an
almost exclusive online relationship between the organizations and the customers.

Table 5. Challenges of transitioning towards a predominantly digital relationship with the


employees and the customers
Transitioning towards a predominantly digital
relationship with the employees and the customers – Frequency Percentage (%)
challenges
Internal challenges 4 100%
Reluctant customers 4 100%
Time spent in front of the computer by employees 3 75%
Capture the customer’s attention 1 25%
Replace the social interaction 1 25%
Author's elaboration

The main challenges of transitioning towards a more digital relationship with the
employees and the customers were internal – adapting and succeeding in working
together as before as a team, teaching them new tools, and setting some rules for
efficient and productive work (Table 5). In the Banking industry, it was hard to
convince the customers that the processes are safe enough to be kept online to avoid
physical contact, thus making it harder for the managers to keep the customers'
satisfaction level close to normal. This was done by providing video examples, training,
and additional information so that the whole process was clear enough. When it comes
to accelerated digital transformation versus an organic environment, most managers
admit that the pandemic produced faster and more efficient changes, but for sure it
would have been a lot easier to implement these changes in an organic environment.
An important mention is that the reduced level of digitalization in public
administration meant that an important part of the customers had little to no
experience with digital tools because they were not needed before the pandemic.

“You can't give up something that helps you improve your business and help you to
evolve.”

This belief is shared by most of the interviewed managers, with solutions implemented
during the COVID-19 pandemic still in place and constantly improving using the
provided feedback so it’s more suited for the customers. One big step was made
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towards accepting work from home as a normality, but first studies show that a hybrid
approach is more likely to be preferred by the employees.

Discussion and conclusions

The main purpose of this analysis was to investigate the role played by digital tools
and the digital transformation process on customer relationship management during
and after the COVID-19 pandemic. A word cloud analysis provided initial keywords
that were used by the interviewed managers and showed their focus during the
process of adapting to the new reality. Adoption of digital tools was the main focus in
most of the organizations with significant attention towards first keeping the
employees happy by assuring the proper infrastructure and providing enough video
examples and tutorials for them to use new digital tools efficiently. Communication
was also an important aspect, both inside and outside of the organization, online
meetings becoming the new normal, employees having an increased number of weekly
calls with the customers or the partners so that all the details that would usually be
discussed face to face are clear enough. When analyzing the digital component of the
changes implemented at the beginning and during the COVID-19 pandemic, almost all
interviewed managers admit that even the small processes had a digital component.

With the pandemic still affecting the whole world and gradually increasing the level of
uncertainty that companies had to deal with and forcing customers to avoid as much as
possible physical contact, the need of communicating with customers from the
distance with the use of digital tools has become a top priority. More than that, the
whole customer experience had to be adapted and a “digital alternative” had to be
developed, from choosing a service to electronically signing the contract that will later
be delivered more safely, the whole process can now be done with only a few clicks on
the personal device. The quality of service and the capability of the firm in interacting
with customers are more important than ever, with the pandemic creating new
challenges but also offering new opportunities. One thing is sure, that many of the
changes implemented at the beginning and during the COVID-19 pandemic are here to
stay and improve so that they become even more suited for the customers.

Limitations and future research

The author acknowledges that the study has some limitations. Even if through in-depth
interviews, still a small number of managers were analyzed, coming from one city that
could influence the gathered results. A research opportunity is represented by
quantitative research on customers so that the impact of the changes proposed by the
organizations should be compared with the customers’ perception.

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