ASSESSMENT OF OPERATIONAL CHALLENGES POSED BY COVID-19 PANDEMIC ON SMALL AND MEDIUM SIZED ENTERPRISES OPERATING IN ADDIS ABABA

Abstract

The outbreak of coronavirus disease (COVID-19) has severely affected the global and Ethiopian economy. Major victims of the COVID-19 outbreak are micro, small, and medium-sized enterprises (SMEs). This thesis aims to assess the impact of COVID-19 outbreak on these businesses and provide policy recommendations to help MSMEs in reducing business losses and survive through the crisis. I adopted descriptive methodology with comprehensively reviewing the available literature, including policy documents, research papers, and reports in the relevant field. Further, to add empirical evidence, we collected data from 390 small and medium-sized enterprises operating in Addis Ababa by administering questionnaire. There are involved more than ten SME (like:- food and beverage, construction, agro proceeding, and others) business category. Employing a stratified random sampling, 390 respondents were selected using Taro Yamane (1967) sample size determination formula. The data were analyzed through descriptive statistics. The results indicate that most of the participating enterprises have been severely affected and they are facing several issues such as financial, supply chain disruption, decrease in demand, reduction in sales and profit, among others. The study confirms 15.7% of respondents said they had currently fully trading , 29.9 % of the respondent responded paused trading and does not intended to restart in few months. 11.5 % of the respondents had responded that they had permanently ceased the trading. In short, we find that micro and small businesses experienced a larger decline in businesses activity compared to medium and large firms. There is a finding since most of micro and small businesses in Addis Ababa halted operations due to their disruption in demand and supply (28%) , lack of transport goods (18.1% ), reduced demand for product and services (17% ), time taken raw material delivery (9.3 %) changes in transport cost (28% ) agriculture and manufacturing firms compared to service sector firms. In this research, an attempt was made to study the impact of HRM challenges on COVID-19 HRM practices