On April 27, Samsung, a multinational conglomerate, released a statement saying that the company had been donating money to and providing resources for several smaller businesses that were struggling economically due to the coronavirus pandemic. LG, one of the biggest companies of South Korea alongside Samsung, also decided to donate $45,125 this year to companies in need. One of such companies is NJ Company, a hand sanitizer manufacturer that almost went out of business due to the coronavirus crisis. In response to this predicament, Samsung supplied the company with a smart factory, which allowed NJ Company to meet its high demands and increase the total hand sanitizer production by 4000%. Soon after, NJ Company started donating to other companies in need as well.
“At the peak of the coronavirus, I was passing by the streets near Gangnam Station, and almost every store and local restaurant was empty,” said Sarah Yim (9), resident of the metropolitan area of Seoul. “It was then that I realized how serious the coronavirus situation was becoming. I think it is necessary that large companies donate to companies in need because helping each other is the only way that we can survive together through a globally terrifying situation like this.”
Due to the public spending less money during this pandemic, there is a significant decrease in the amount of products being sold. Sales and profit are decreasing while expenses remain constant, putting many companies at economic risk. Although large corporations have access to more funds, small businesses do not have this type of luxury. The cash flow of small businesses has been reduced because they have fewer funds to spare than large companies do, and as a result, some are even in danger of going out of business. In order to fend off their economic difficulties, such companies have to reduce their number of workers, rendering many employees at risk of losing their jobs. Conglomerates utilize products of smaller businesses to manufacture their own products, so the economic difficulties that smaller businesses face would also affect them, which is the reason they decided to donate to companies in need.
“A sizable part of the workforce is self-employed through small businesses,” said Morgan Miller, AP Economics teacher. “If this portion of the workforce all of a sudden did not have income, people wouldn’t have money to buy goods and services and that would have a ripple effect on the economy. Rich companies often have large amounts of money not being spent, but given to a business that doesn’t have as much money, they are more likely to spend it and boost aggregate demand. I think now is the time for people that have extra money to help people out that need to be helped, whether it is supporting a small business—if you like a particular coffee shop in your neighborhood, maybe buy something extra from there this week—or donating to a charity.”
Many businesses in need have been reinvigorated after receiving donations, and some even went on to help other businesses. NJ Company donated 10,000 hand sanitizers to KBIZ (the Korea Federation of SMEs), while OTOS, a protective eyewear company that Samsung aided, donated $40,733 along with 500 goggles to Daegu. Since the first case was identified five months ago, the pandemic has affected millions around the globe, causing many to go into lockdown and reduce their economic activity, putting small businesses at economic risk. If such companies go out of business, the factories of large companies will inevitably discontinue too, which will in turn put large companies at economic risk as well. As Samsung and LG have decided to help companies in need in the midst of this crisis, many other organizations have also taken on the path of supporting those in need, so that large and small companies alike can continue to coexist in the economy.
“When COVID-19 became a serious issue, I predicted that the majority of the businesses would have a hard time,” said Erin Ryu (9), avid viewer of the news. “I thought this was accurate when the stock market started crashing and the economy weakened. However, as the virus continues to influence us, I realized that I might have been incorrect. Although it would be wrong to say that businesses are not at all affected by this virus, I think that businesses including smaller companies are capable of withstanding the hardships. Recently, I have heard on the news that small corporations are receiving help from larger businesses. With this benevolence, larger companies are experiencing benefits as well. I believe every business has the potential to successfully overcome this global pandemic.”