AD HOC approach of cost management during the time of COVIDization of the economy

Abstract

This article aims to present the ad hoc approach of cost management taken by the companies under the conditions formed due to the COVIDIzation of the economy. Considering the uniqueness of the situation caused by COVID-19, the term COVIDization of the economy is interpreted. In general, it means complex changes in the PESTEL environment, conditioned by the global health crisis. For the majority of companies, these changes had an adverse effect. For others, it was neutral or favorable. The onset of the first wave of COVID-19 found most companies unprepared, with planned revenue, cost, and profit levels. In the face of a sharp change in revenue levels, firms had to respond ad hoc to meet these challenges. The publication brings out the ad hoc approach of cost management as a theoretical statement. It presents the effects on the revenues of the first wave of COVIDization and the companies’ ad hoc actions about their costs. Two studies conducted by the SRC Innovation and Competitiveness (U2B) were used in the current publication. They were conducted during the locked-down in 2020 and April-May 2021.