External Environmental Determinism: How The COVID19 Pandemic Impacted A Population Of Micro And Small Enterprises (MSEs)
Authors: Pereira Marcio Jasom , Castro Marcos De 
Published: November 2024

According to the Brazilian Institute of Geography and Statistics (IBGE), 99% of business organizations are
small enterprises, accounting for 30% of the Gross Domestic Product (GDP). Within this organizational range,
sectors like food and beverage are noteworthy. This article examines how the COVID-19 pandemic impacted
micro and small enterprises (MSEs) in the food and beverage sector —specifically, businesses like bars, snack
bars, and restaurants— using the Organizational Ecology Theory (OET). During the pandemic, public health
restrictions had a major impact on these businesses, and, as non-essential services, they faced numerous
restrictive measures that limited their activity. In a city in Paraná's central region, which includes the studied
organizational population, 57 out of 165 establishments closed between 2020 and 2022, resulting in a mortality
rate of 34.5%. This quantitative research used Likert scale questionnaires to evaluate how MSEs managed
demographic, ecological, and environmental processes. Among the organizations analyzed, bars were fewer in
number (24 out of 84 respondents) but were more significantly impacted by external environmental factors —
were more impacted by external environmental variations during the pandemic, particularly in relation to
factors influenced by governmental actions and political instability. Since these businesses predominantly
operate in enclosed spaces, movement restrictions amplified their challenges during the pandemic. Snack bars
and restaurants, however, demonstrated greater resource extraction capabilities within their niche, mitigating
the external impacts for those that survived. Despite adversities, the organizations that continued to operate
displayed evolutionary resilience, retaining those with desirable capabilities amid environmental fluctuations.
Context: The COVID-19 pandemic caused economic impacts across various sectors, including the food and
beverage industry. Government restrictions implemented to contain the virus heightened various barriers related
to organizational structures, competition, age of businesses, and more. According to the Association of Bars,
Snack Bars, and Restaurants(Abrasel), over one million establishments in these sectors faced closures, with more
than 300,000 establishments shutting down between 2020 and 2022 in Brazil. In the studied city, of the 165
organizations that made up the population before the initial restriction in March 2020, 57 had failed by the time
of the government’s relaxation of restrictions in March 2022. Using Organizational Ecology Theory (OET),
which examines how organizations retain resilience in the face of external impacts and evolve under such
pressures, this study investigates how bars, snack bars, and restaurants managed the difficulties imposed by the
pandemic. The objective is to examine how the external environment affected these business activities within the
population of similar businesses.
Materials and Methods: This article analyzes the impact of the COVID-19 pandemic on micro and small
enterprises (MSEs) in the food and beverage sector, using Organizational Ecology Theory (OET). During the
pandemic, sanitary restrictions significantly affected these companies. Centralized in a city in Paraná state’s
central region, 57 of 165 establishments closed between 2020 and 2022. The quantitative research employed
five-point Likert scale questionnairesto assess MSEs’ responses to demographic, ecological, and environmental
processes. Bars were the most affected, while snack bars showed greater adaptability. Despite the challenges, the
organizations that continued to operate demonstratedevolutionary resilience to external pressures.
Results: The different business segments within the population experienced external processes in distinct ways.
While similar, factors such as competition, age, structural size, and regulatory measures impacted each
segment differently. Findings indicated that bars were the most affected during the pandemic, with low
structural capacity and young organizational age as barriers to be overcome amidst high external fluctuations,
as outlined by OET-focused studies. While competition was not as severe, regulatory measures significantly
impacted the remaining businesses, especially given the frequent changes enacted by public authorities during
the studied period. Another finding of this research is that external forces demand the maintenance of resilient governmental actions and political instability—eliminating thosewithout sufficient capability to remain active—