An Analysis of the Organizational Resilience of Gubat Agritech Industries Company (GAICO) in Gubat, Sorsogon

Date

6-2022

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Melodee Marciana E. De Castro

Committee Member

Dinah Pura T. Depositario

Abstract

One of the coco coir processor in the Philippines is the Gubat Agritech Industries Company (GAICO). GAICO is an agribusiness company that is in partnership with the Securities and Exchange Commission based in Barangay Payawin, Gubat, Sorsogon in the Bicol Region. It is one of the four coco coir processors in the province of Sorsogon that was established due to the abundance of coconut husks within the area and its nearby municipalities. However, during the second quarter of 2020, this coco coir industry was also affected due to the existence of the COVID-19 pandemic. Aside from this, the prevalence of typhoons, which happened on an annual basis with an average of 20 tropical cyclones entering the Philippine Area of Responsibility, was another major shock consistently experienced by GAICO. These two major shocks require the company to acquire certain capabilities and respond with resilience in facing several threats thrown at them. Their portfolio of capabilities helped them to get through and withstand threats and bounce back or move forward from these said events.

The purpose of this study is to analyze the organizational resilience of the coco coir processing of Gubat Agritech Industries Company (GAICO) in Gubat, Sorsogon. Specifically, it aimed to: (a) present the profile of the Gubat Agritech Industries Company; (b) identify the threats of major shocks that affected the industry; (c) evaluate the company's portfolio of resilience capabilities; (d) analyze the resilience of the company through its actions and responses; and (e) formulate recommendations on improving the resilience capabilities.

Through the conceptual framework, this study tackled the different threat dimensions of major shocks, in times of the COVID-19 pandemic and the prevalence of typhoons, in which both shocks have affected the industry. The five dimensions that recognize the trajectory of the threats are severity (refers to what extent its threats affected the firm), complexity (pertains to the threats which implicate several sections of the organization), catalysis (a threat that triggers a ripple effect), frequency (a dimension that helps in weakening its threat effect), and familiarity (a threat which stimulates routine responses). It also shows the portfolio of resilience capabilities, specifically anticipation, cultural and behavioral, relational, and technological. This enables the researcher to assess how the organization responds when faced with major shocks and continuously progressing through its strategic actions and responses.

The study uses a descriptive qualitative case research type of research design. A key informant interview with the manager was conducted using interview guides. Analysis of the general management and the four areas of business functions were used. This includes Marketing Mix, Marketing Analysis, Sales Analysis, and Financial Statement Analysis such as Horizontal Analysis, Vertical Analysis and Ratio Analysis to assess the financial performance of the company. Also, the Thematic Analysis was used to identify, analyze, and report recurring themes during the interview, and gather information about the threats, capabilities, and responses of the company when faced with the two major shocks. This analysis also helped in recommending further improvements to the company also helped in recommending further improvements to the company.

Based on the analysis of the general management and the different areas of business functions, it can be observed that the company had dramatic changes in its management and normal processes. In its general management, the company's organizational structure has been modified where its working positions were lessened and became simpler. Machines used in the plant were further improved increasing the efficiency of the operations. This made the production capacity of the company's coco coir products further increased and made its edge of producing bulk orders maintained even when faced with major increase in their sales during the pandemic. In terms of marketing, its product lines expanded since the company started selling new product offerings related to garden uses, like coco twines and coco poles. Its prices increased in year 2019 but retained its prices having a markup of 20 percent. Present markets vary before, during and after the pandemic, but the company had loyal customers. For its human resources, the company never stops training and motivating its employees by providing them incentives and giveaways. It can be reflected through the financial analysis that the performance of the company was good and healthy, but the company's debt obligations showed an increase in current liabilities due to the loans incurred in the years 2020 and 2021. Thankfully, GAICO had an excellent liquidity ratio which has a more significant margin of safety in terms of paying debt obligations as they become due.

The five trajectories of threats showed that in terms of severity, the company experienced a declining volume of inputs, modifications in working arrangement, like bubbles, and problems in the distribution of products to both major shocks. Its complexity in typhoons, includes damaged power lines and repairs for machinery, while the emergence of the COVID-19 pandemic highlighted delays in delivery, oversupply, and strict compliance to health protocols. These complexities both lead the company to experience stop production; maximum of three days for typhoons and almost two months for the COVID-19 pandemic adjustment season. It catalysis made the short terms goals of the company change by focusing first on the major shock adjustments. Its familiarity and frequency revealed that experiencing typhoons seems normal to the company as it happens most of the time while COVID-19 pandemic shock was a new and unexpected occurrence to the company.

Different portfolios of resilience capabilities were displayed, and all of these were demonstrated through the actions and responses of the company when faced with major shocks. For typhoons, the company's anticipation capability was shown in their preparedness in securing machinery and safety of equipment, investment in advance in solar panels, future-proofing actions of elevating land to avoid flooding, and the additional budget for repairs and maintenance. Accessing digital technologies to communicate and relay updates with customers' status of orders and having a plant manager who is expertly equipped with the machinery checks and improvements were some of their technological capabilities. For relational, they had good relationships with their customers, suppliers, and other organizations which they can easily tap for the exchange of resources. The company had strong value on employee relationships by always opening communication with company changes.

On the other hand, for the resilience capabilities in times of the COVID-19 pandemic, one of the major edges of the company was its anticipation capability of having a work-from-home working arrangement even before the COVID-19 pandemic. Hiring workers who lived in the same community also helped the entire operations of the company to easily adjust to the mandated government protocols and work in bubbles ensuring a lesser risk of exposure. The company also foresees shifts in customer preferences and market demand which easily help them to adapt by offering new product offerings and accepting new emerging markets. Its technological capability was emphasized in how the company maximizes the potential of social media by having online order processing through google forms and online transaction payments through GCASH and bank transfers. They also used zoom for online meetings with partners. The company received financial assistance and programs which offered zero-interest loans which reflected their strong relationship with government agencies. As they valued employee relationships, they invested in their healthcare adding budgets for purchases of masks and safety equipment. Their cultural and behavioral capability was demonstrated in how the company built a family-kind of commitment in the workplace making communication faster and willingness of employees to easily adapt to changes implemented.

Results showed that the two major shocks, such as typhoons and the COVID-19 pandemic, both tested the resilience of the coco coir processing of Gubat Agritech Industries Company (GAICO). It can be concluded that the company developed its needed organizational resilience when faced with these major shocks. GAICO survived and responded with resilience despite the threats brought by typhoons and the COVID-19 pandemic. through a successful resilience building of the portfolio of resilience capabilities, the company thrived from these adversities.

It was recommended to improve its resilience capabilities by addressing the five gaps in company resilience identified in the cross-analysis of the different variables involved in the study such as threat dimensions, resilience capabilities, and responses. It was found out that there are gaps and lacking resilience capabilities of the company that needs to be improved. Theses gaps and insufficiencies open rooms for GAICO to learn and develop new strategies in facing these two mentioned major shocks in the study. The five company gaps of resilience that can be improved include: (a) Lack of personal delivery trucks; (b) No established contracts with the suppliers of raw materials; (c) No competitive pricing implemented; (d) Product development and innovation can be broadened; and (e) Online exposure is very minimal. These gaps can be addressed by implementing new strategies and enhancing resilience capabilities acquired by the company.

Language

English

LC Subject

Coconut industry, Organizational resilience--Research

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2022 M17 A23

Notes

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Document Type

Thesis

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