Individual Report: Impact of COVID-19 Pandemic on LTR Organizations

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Added on  2022/12/06

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This individual report examines the impact of the COVID-19 pandemic on Luton Town Residences (LTR). It begins with an executive summary and introduction, followed by an analysis of the pandemic's economic disruptions and organizational design implications on UK businesses. The report discusses key issues present at LTR, including financial impacts due to the drop in commercial income and the council's budget. It explores changes in work arrangements, such as remote work and task specialization, and the potential for modularization. The report also covers government support packages and the challenges faced by Luton Borough Council. Finally, the report offers recommendations for addressing the key issues. The report uses figures and tables to illustrate the impact of COVID-19 on UK businesses and LTR.
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Individual Report: Impact of COVID-19 Pandemic LTR
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Impact of COVID-19 Pandemic on organizations

A Study on Luton Town Residences
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Individual Report: Impact of COVID-19 Pandemic LTR
1. Executive Summary

This individual report is based on impact of COVID-19 on LTR. Britain's

coronavirus-ravaged economy shrank 9.9% in 2020, the biggest annual fall in output since

modern records began, but avoided heading back towards recession in the final quarter of the

year, official figures showed on Friday. Britain's gross domestic product (GDP) grew 1.0%

between October and December versus the previous quarter, the Office for National Statistics

said, compared with forecasts in a Reuters poll of economists for growth of 0.5%. This makes

it unlikely that Britain will see two straight quarters of contraction - the standard definition of

recession in Europe - even though the economy is set to shrink sharply in early 2021 due to

the effects of a third COVID lockdown. Further arguments associated with the issue are as

follows.

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Individual Report: Impact of COVID-19 Pandemic LTR
Table of Content

1. Executive Summary
...............................................................................................................2
2. Introduction
............................................................................................................................ 4
3. Main Body
..............................................................................................................................4
3.1 Impact of the Covid-19 Pandemic on organisations:
.......................................................4
3.2 Key Issues present at LTR:
..............................................................................................4
3.3 Recommendations:
........................................................................................................... 4
4. Conclusion
..............................................................................................................................4
List of Figures

Figure 1: Impact of COVID-19 on UK businesses
....................................................................5
Figure 2: UK COVID-19: Expert support for Risk Management, Insurance and Employee

Benefits
....................................................................................................................................... 6
Figure 3: COVID19 and LTR
.................................................................................................... 9
Figure 4: UK Average LTR activity Percentile for 2020
.........................................................10
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Individual Report: Impact of COVID-19 Pandemic LTR
2. Introduction

This report marinates around economic disruptions caused by COVID-19 pandemic in

UK environment. The further focus will be laid upon Impact of the Covid-19 Pandemic on

UK organisations along with Key Issues present at LTR. A combination of different

arguments will be accumulated together to give recommendations for Key Issues present at

LTR for the sole purpose of overcoming threats regarding the aforementioned scenario.

3. Main Body

3.1 Impact of the Covid-19 Pandemic on organisations:

The economic disruption induced by the Covid‐19 was caused by governments

reacting to the health threat by locking down parts of the economy, as well as by individuals

reacting cautiously to the threat by, for example, cutting back on services from restaurants,

bars, cinemas, and the like.

This had a number of immediate organizational design implications, caused by

physical distance becoming an important contingency. First, much on‐site work (particularly

in the supporting ‘techno‐structure’; Mintzberg, 2020) was transformed to work mediated by

tools like Zoom and in general electronic platforms substituted for direct coordination under

conditions of co‐presence in the coordination of work efforts. Second, this seems to have

been accompanied by a higher level of real delegation as companies were compelled to

transfer decision competence to local managers (e.g., Carlsberg transferred more competence

to country managers; see also Dill, 2020).

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Individual Report: Impact of COVID-19 Pandemic LTR
Figure
1: Impact of COVID-19 on UK businesses
(Source: VoxEU)

Economics‐based organization design theory indicates that these changes are

accompanied by changes in reward systems towards more performance‐dependent salaries,

more reliance on output rather than input measures of efforts, and a higher degree of

formalization as organizations seeks to maintain control under conditions of distance, virtual

work and reduce the moral hazard problems from a higher level of informational asymmetry

(see Jensen and Meckling, 2016). In fact, the latter challenges may lead firms to substitute

independent contractors (e.g., freelancers) for employees. Alternatively, firms may invest

more in building employee relations, possibly backed up by giving them more incentives in

the form of ownership stakes in the enterprise. Clearly, the implications for rewards and

ownership arrangements are different here, and which predictions are confirmed by the data

remains to be seen.

Concerning the longer‐run consequences of the pandemic, one possibility is that the

pandemic will turn out to have been just a temporary disturbance. Thus, the economy,

including the organization of transactions across the economy (which of course would also

include the world economy) will return to its pre‐pandemic configuration, as supply chains

are restored, international mobility patterns revert back, resources flow back into the

experience economy, and so on. This could happen with the quick development of a

successful vaccine, and/or the widespread use of effective testing and tracing routines. If on

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Individual Report: Impact of COVID-19 Pandemic LTR
the other hand no vaccine is found and the virus doesn’t mutate towards less harmful variants,

constant precautions in the form of continuing social distancing, reduced international labour

mobility and business travel, and semi‐closed borders will be permanent features of the

business landscape
(Beech and Anseel, 2020). However, this will not be identical to the
situation at the onset of the pandemic as innovations and changed work routines will emerge

to compensate. For example, virtual meetings are likely to improve in quality.

However, even if the situation relatively quickly returns to ‘normal’, the pandemic is

likely to leave a permanent mark on organization design. The reason is that major disruptions

imply major changes to the so‐called ‘economic fundamentals’, namely technology,

scarcities and preferences, which do not revert back to pre‐disruption levels. For example,

Watanabe (2016, p. 209) shows that ‘technology improvements in the recovery were so rapid

that, over the whole Great Depression period, technology growth was highest among pre‐

WWII decades’. It also well known that major disturbances are associated with changes in

preferences as these pertain to labour‐leisure trade‐offs and politics (Ohanian, 2010). It is

likely, however, that the Covid‐19 pandemic will imply the following permanent changes to

firms’ organizational designs under any scenario.

Figure
2: UK COVID-19: Expert support for Risk Management, Insurance and Employee Benefits
(Source: Aon)

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Individual Report: Impact of COVID-19 Pandemic LTR
The pandemic is likely to leave permanent traces on the organization of tasks in terms

of specialization, bundling of tasks and sequencing of tasks. Organizational theory suggests

that interdependencies may be thought of as pooled, sequential and reciprocal (Thompson,

2017). While this is often linked to the underlying technology, to some extent

interdependencies are choice variables; for instance, some tasks that naturally involve

reciprocal interdependencies can be made more sequential, given sufficient advance planning.

Moreover, firms can decide on the intensity with which they use certain technology‐

interdependence pairs. Because the pandemic makes reciprocal interdependencies more

difficult to organize (as these often involve, direct and potentially lengthy face‐to‐face

interaction), task interdependencies will tend to migrate more towards the pooled or

sequential category, and firms will invest more in pre‐planning task execution as there may

be less scope for real time coordination
(He and Harris, 2020). This will also tend to support
modularization of tasks and task sequences so that highly interdependent tasks will tend to

become more concentrated in technological and organizational modules (small rather than

large work teams), which will necessitate a careful rethinking of the interfaces between work

activities. The increased use of automation brought about by the pandemic may reinforce

these tendencies (Lee, 2020).

Thus, research may address whether the Covid‐19 has in fact resulted in more

technological and organizational modularization, for example, using regression discontinuity

designs. The problem with such research is that panel datasets with relevant organization

design information are basically non‐existing. However, it may be possible to exploit public

register data (such as those in the Scandinavian countries) that have plant‐level employee

data. For instance, it may be that the pandemic has driven a trend toward more plants and

towards plants with fewer employees.

Such changes may sacrifice some advantages stemming from specialization and the

exploitation of complementarities. On the other hand, efficiencies may be realized as firms

have to rely less on potentially wasteful face‐to‐face coordination and more on automation,

pre‐planning and the design of standard operating procedures (see Bartik et al., 2020, for

survey data with a bearing on the efficiencies and inefficiencies of remote work).

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Individual Report: Impact of COVID-19 Pandemic LTR
The proportion between on‐site and remote work will likely not bounce back to

former proportions because of preference changes (many employees have discovered the

possibility of remote work and have come to like it), technological change (tools that

facilitates remote work will rapidly improve, including the use of hologram‐assisted

communication and sophisticated means of monitoring employee productivity at a distance),

and politics (remote work better supports a green transformation agenda). The increased use

of remote work may imply a decreasing use of teamwork (which is easier to manage on‐

site), smaller teams (that are easier to coordinate remotely), and an increasing use of

management by individual objectives and rewards.

3.2 Key Issues present at LTR:

The Petition of residents of Luton, declares that the COVID-19 crisis has radically

impacted upon the operation of London Luton Airport, resulting in a significant drop in

commercial income, which in turn has impacted upon Luton Borough Council’s provision of

vital services
(Cowling, Brown and Rocha, 2020); notes that in 2018-19 London Luton
Airport Ltd paid £20.2 million in dividends to Luton Borough Council to support its funding

of vital services; further notes that Luton is facing a £49 million impact on its 2020-21 budget

due to the reduction in revenue from its airport, a drop in council tax and business rates, and

other costs due to the crisis; further notes that Luton Borough Council has been forced to

produce an emergency budget to find savings of £22 million this financial year; and further

notes that a related Change.org petition calling for additional funding to Luton for essential

services has over ten thousand signatures.

The petitioners therefore request that the House of Commons urge the Government to

review the level of support provided to Luton Borough Council to ensure there is no

reduction in vital services. The Government recognise the additional costs and pressures

finances councils are facing as a result of the current covid-19 crisis. Luton Town Residences

have made available a £4.3 billion package of support for expenditure pressures, including

£3.7 billion of un-ringfenced grants and the £600 million infection control fund
(Panzone,
Larcom and She, 2021)
. Of this £3.7 billion, Luton Borough Council has received £13.4
million, on top of a £9 million increase in core spending power this financial year even before

emergency funding.

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Individual Report: Impact of COVID-19 Pandemic LTR
As part of the Secretary of State’s recent announcement, Luton Town Residences also

confirmed that Luton Town Residences will extend the period over which councils must

manage shortfalls in local tax income relating to 2020-21, from one to three years, and Luton

Town Residences will announce further details of how Luton Town Residences will support

local authorities to manage tax losses at the comprehensive spending review later in the year.

The Government also announced that a further component of its comprehensive

approach to support councils in addressing their income losses will be a co-payment scheme

to cover irrecoverable sales, fees and charges income in 2020/21. The scheme compensates

for irrecoverable income losses experienced by local authorities above the level they could

have been expected to plan for. The scheme applies to income which is defined as a sale, fee

or a charge and is attached to local service delivery, for example, car parking income or

receipts from owned cultural assets. The scheme will not compensate for lost commercial

investment income
(Nicola and et. al., 2020). This is because commercial income losses are
more complicated in nature, and Government recognise that there are a complex set of

variables relating to commercial income sources including recoverability. Luton Town

Residences recognise that some council with strategic investments, such as airports, are put in

an exceptional position by this crisis. Luton Town Residences will continue to work closely

with Luton Borough Council to help them navigate through what is undoubtedly a difficult

situation, as they support their communities through this national emergency.

Figure
3: COVID19 and LTR
(Source: VoxEU)

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Individual Report: Impact of COVID-19 Pandemic LTR
English Championship football club Luton Town has announced that it intends to

submit detailed plans for its new stadium in six months time. The news was disclosed as

Luton and its partner in the Power Court project, 2020 Developments, provided an update on

the scheme, which also includes the Newlands Park mixed-use development. In January

2020, Luton was allowed to press ahead with the plans after being informed by the local

council that no fresh appeal had been made against the project
(Parnell and et. al., 2021). In
March 2019, Luton Borough Council’s development control committee ruled that plans for

the Newlands Park project should be approved after the club was granted permission to build

a new stadium on the Power Court site in January of that year.

However, work has been unable to start on either site since then, with COVID-19

having a major impact on the delays. In its latest update, Luton and 2020 Developments said

structural changes in the way the UK consumer shops, works and plays has required a

revision to scheme plans originally conceived in 2015-16 prior to submission of original

planning applications. The two parties said: “The Coronavirus pandemic has generally served

to accelerate these structural changes. Our challenge has been to ensure our vision for both

sites remains viable and deliverable. Several changes were already being considered by the

development team ahead of any impact from COVID-19. This is standard for any

development between early stages of the process.”

Figure
4: UK Average LTR activity Percentile for 2020
(Source: About Facebook)

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Individual Report: Impact of COVID-19 Pandemic LTR
The intended capacity for the Power Court stadium remains set at 23,000, with

potentially an initial cap at 17,500 for transport assessment reasons, and a target opening date

in 2024. In late 2020, a Planning Performance Agreement (PPA) was agreed with Luton

Borough Council in respect of revised planning applications for both Power Court and

Newlands Park. The aim of the PPA is to meet all statutory requirements with a target date

for determination of April/May 2021
(Bas and Sivaprasad, 2020). For Power Court, the new
application focuses on changes to the West and East ends of the site. The statement read:

“Here the vision is that, from Guildford Street/Church Street, the site will be entered at

ground level so that the walk from the town centre will be easy and seamless. By dropping

the original vision of steps up to a podium Luton Town Residences can now make use of the

River Lea that is currently converted through the centre of the site in its natural route.

3.3 Recommendations:

“The new plans see the river brought back to life and made into a feature that will add

character and a cultural identity to the piazza space at the heart of Power Court. St Mary’s

Church remains a key feature in our design thinking. With the removal of the podium at the

West End of the site Luton Town Residences reduce the mass of the buildings by a

considerable margin. Luton Town Residences are also now able to open-up the site to allow

greater access from St Mary’s Road.” The original plans for Power Court proposed relocating

the River Lea to run down St Mary’s Road
(Buchheim and et. al., 2020). The statement
continued: “With further work investigations Luton Town Residences feel this is unviable

and simply does not work as, in practice, the river would sit many metres below the ground

and so would look and feel more like a moat or a trench and act as a barrier to access the

stadium from St Mary’s Church, the University and the rest of the town centre. “Instead,

Luton Town Residences want to work with the Council and our neighbours to reduce traffic

on St Mary’s Road and introduce green space and a high-quality public realm. In revising our

plans for Power Court, Luton Town Residences have been able to increase the number of

residential units to approximately 1,200 without materially increasing overall building

heights. Luton Town Residences have also increased our commitment to working with LBC

and helping local housing need by volunteering a policy compliant 20% affordable provision

on-site.”

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Individual Report: Impact of COVID-19 Pandemic LTR
The two parties said the Newlands Park project has shifted away from a retail and

leisure led scheme to one with a broader mix of uses to include business space, research and

development, distribution and office uses. Retail space will still be incorporated, but at a

much lower scale. The statement said: “Ultimately our position remains the same in that a

stadium at Power Court will not come forward without Newlands Park.” It added: “In terms

of our stadium plans Luton Town Residences are working within the original planning

permission to bring forward a final and detailed design for our club’s new home
(Trivedy,
Mills and Dhanoya, 2020)
. In addition to the stadium itself the central area of the site will
include a mix of food and beverage, retail, business, and community space such that it will be

a hive of activity on non-match days. Luton Town Residences believe this is critical to

making Power Court a genuinely thriving new quarter for the town centre.” Luton and 2020

Developments said they will shortly announce partnerships with sector specialists in

residential and commercial development. Detailed plans for the new stadium are expected to

be revealed in the summer, with a view to commencing initial work at Power Court by the

end of the year.

4. Conclusion

Based on above-mentioned discussions it can be concluded that organizations all over

the United Kingdom are severely affected due to covid-19 pandemic situation. The focal

point of this individual report is the impacts at Luton Town Residences. It can be concluded

that remote working, motivation and use of technology are the final delivered affects of

scenario.

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Individual Report: Impact of COVID-19 Pandemic LTR
5. References

Books and Journals

Beech, N. and Anseel, F., 2020. COVID‐19 and its impact on management research and

education: Threats, opportunities and a manifesto.
British Journal of
Management
. 31(3). pp.447.
Available through: <
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7361241/>
He, H. and Harris, L., 2020. The impact of Covid-19 pandemic on corporate social

responsibility and marketing philosophy.
Journal of Business Research. 116.
pp.176-182.

Available through: <

https://www.sciencedirect.com/science/article/abs/pii/S0148296320303295>

Cowling, M., Brown, R. and Rocha, A., 2020. <? covid19?> Did you save some cash for a

rainy COVID-19 day? The crisis and SMEs.
International Small Business
Journal
. 38(7). pp.593-604.
Available through: <
https://journals.sagepub.com/doi/abs/10.1177/0266242620945102>
Panzone, L.A., Larcom, S. and She, P.W., 2021. Estimating the impact of the COVID-19

shock on UK food retailers and the restaurant sector.

Available through: <

https://www.sciencedirect.com/science/article/pii/S2211912421000055>

Nicola, M., and et. al., 2020. The socio-economic implications of the coronavirus and

COVID-19 pandemic: a review.
International journal of surgery.
Available through: <

https://www.sciencedirect.com/science/article/abs/pii/S1743919120303162>

Bas, T. and Sivaprasad, S., 2020. The impact of the COVID-19 pandemic crisis on the travel

and tourism sector: UK evidence.

Available through: <
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3623404>
Buchheim, L., and et. al., 2020. Firm-level Expectations and Behavior in Response to the

COVID-19 Crisis.

Available through: <
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3603773>
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Individual Report: Impact of COVID-19 Pandemic LTR
Trivedy, C., Mills, I. and Dhanoya, O., 2020. The impact of the risk of COVID-19 on Black,

Asian and Minority Ethnic (BAME) members of the UK dental profession.
British
dental journal
. 228(12). pp.919-922.
Available through: <
https://www.nature.com/articles/s41415-020-1781-6>
Parnell, D., and et. al., 2021. Football Worlds: Business and networks during COVID-

19.
Soccer & Society. 22(1-2). pp.19-26.
Available through: <

https://www.tandfonline.com/doi/full/10.1080/14660970.2020.1782719>

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