All Businesses to Involve Health Diagnostics in Post COVID-19 World? A Theoretical Framework.

AuthorBhattacharyya, Som Sekhar


The world of business received the shock of, metaphorically speaking, a once in a hundred-year flood in the year 2020. By the second week of May 2020, worldwide the number of COVID-19 cases crossed four million and resulted in about three hundred thousand deaths (Wong et al., 2020). The spread of the virus had prompted many governments to closedown public spaces, community premises and businesses with high footfall (Aljazeera, 2020; Choudury, 2020). Major world economies halted, and most businesses slowed down and stocks values plummeted (Jones et al., 2020). Business like shopping malls, airlines, hotels, restaurants, educational institutions, sports business, and many others registered abrupt drop-in activity and sales subsequently (Ghosh, 2020; Horwitz, 2020). The primary question that became pertinent was how to bring these businesses back to action given the high risk of spreading the contagion given its high infection level. The secondary question was regarding avoiding a repetition of similar situation in the future. Industries and businesses that survived on receiving high number of individuals (customers, employees, and others) in its premises had to rethink the very way of doing business. The authors argued that these businesses would have to incorporate an integrated fashion health diagnostics mechanism in its operations. This could be done either by acquisition or partnership with a Health Diagnostic Business (HDB). HDB in this context, according to the authors, would entail firms that would carry out scanning temperature of individuals, rapid blood test for infection detection (bacterial and viral), blood sugar level check, serum tests (if required), blood pressure test and such others. Individuals referred here would vary for different types of business. It would consist of customers, clients, visitors, employees, shoppers, students, and such others.

Towards this end, it would become, firstly, important to ascertain what would be the nature of partnership or acquisition. Secondly, the valuation of HDB would become a prime need for businesses in this context. Both the type of engagement with HDB (partnership/ acquisition) as well as the valuation of it would be contingent upon a number of factors. These factors could be both internal to the organization as well as external business environment factors. Generally, the interaction of the factors affecting value of a firm HDB engagement would be unique and dependent upon the organization and the industry. Identifying accurately the mix of this in terplay of factors for an HDB would be challenging for managers. In this article, the authors attempt to address this aspect by developing a framework.

Theoretical Argumentation

One can, in general, argue that one firm collaborated with another firm when it did not possess the required resources and capabilities to address a market need (Tutel & Urban, 2001). Dyer et al. (2004) recommended that a company pursuing merger or acquisition should identify the 'purpose' of the same. Managers must vet if the purpose required an acquisition, an equity share or just a non-equity alliance would be sufficient. They classify all the considerations between choice of an alliance (equity/ non-equity) versus merger and acquisition (M&A) into dimensions of synergy, resources, and market condition. Damodaran (2005) analyzed ways through which value enhancement could be achieved by a firm. Martin (2016) posited that an acquisition had higher chances of success if the aquirer had the ability to contribute to the value enhancement of target post acquistion by one or more of the four ways. These entailed being a smarter provider of growth capital, by providing better managerial oversight, tranferrence of valuable skills and by sharing of valuable capabilities (Martin, 2016). Lee, Kim & Park (2014) suggested that the studies of human aspects of merger and acquisitions could be classified into 'value conflict' and 'identity conflict'. In the former, cultural differences were considered as an independent variable which was stud ied with dependent variables like performance, knowledge transfer and others. In the 'employee identity conflict', differences were suggested to be arising if the employees of the acquired firm stuck to their older identities of the target firm and did not adopt the new identity of the acquirer firm. Lee et al. (2014) had also suggested that both the factors of cultural difference and identity conflicts play a role in the human factor of merger and acquisitions. They recommended that the natural cultural differences played a role post acquisition, but it could be leveraged for improving the synergies if the differences were perceived as something useful. Further, whether acquired employees perceived their newly created self-image to be more attractive was more important than intensity or speed of post-merger integration.

It would be important to understand what costs would be associated with an HDB in this context. According to the authors these costs would be incurred due to various tests like scanning temperature of individuals, rapid blood test for infection detection (bacterial and viral), blood sugar level check, serum tests (if required), blood...

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