Cash flow bullwhip control mechanisms in a major crisis situation: a case study from the COVID-19 crisis

Abstract

Purpose To understand the specificities of Cash-flow bullwhip in the context of major crises similar to that of COVID-19, to identify its financial impacts on the Moroccan FMCG companies, to establish the profile of the companies most affected by this CFB and finally to propose internal control mechanisms that should be put in place to mitigate the effects of Cash flow Bullwhip in such a context. Design/methodology/approach The authors chose to conduct descriptive research on companies operating in the fast-moving consumer goods sector in Morocco. For this purpose, a survey was conducted on a target population during the period from December 2020 to March 2021. To answer the different research questions, a multiple correspondence analysis (MCA) has been conducted on the 21 variables obtained from the survey questions. Findings Small and medium-sized companies are those that have been the most financially impacted. Indeed, the instability of the cash flow conversion cycle increased their working capital requirements and limited their self-financing capacity. To face this situation, those companies used alternative means to finance their operational activity by using their equities or bank loans. Originality/value Due to the originality of the COVID 19 context, this study gives a different angle of view to analyze the cash flow bullwhip and its implications on the financial health of companies.