The impact of COVID-19 on business resilience in Malaysia: Insights from Kelantan

Abstract

This chapter aims to explore the financial management practices and core competencies of small and medium enterprises (SMEs) in Kelantan that are economically affected by the coronavirus pandemic (COVID-19). A qualitative approach using an online open-ended survey has been employed to explore the financial management practices of 11 SMEs in Kelantan and to identify the relevant core competencies possessed by SME owners that would develop business resilience in facing COVID-19 impact. The results of the survey revealed some of the financial management practices applied by SMEs in Kelantan during the first movement control orders (MCO) period (March to May 2020) are working capital management, including inventories management, efficient debt management, cash flow management, keep proper bookkeeping for all transactions and cost saving. Besides, the findings also provide evidence that SMEs in Kelantan have been facing difficulties in managing the business during the early stage of MCO in 2020. However, the efficient and swift action taken by business owners has portrayed an efficient transformational leadership such as switching the business strategies from offline to online mode have shaped the business resilience during this challenging period. Next, in the aspect of entrepreneurial competence, 10 of them have utilised social media platforms to do marketing and business activities in order to generate sales. The findings also revealed that 7 out of 11 business owners agreed that technical competence possessed by them plays a vital role in managing the businesses during MCO. Therefore, this chapter contributes to the resilience strategies of the business for the sustainability of SMEs in Kelantan.