I do not typically present two consecutive posts on the same topic, but I will make an exception this week. Earlier this week, I reviewed research on the pandemic's impact on corporate managers. Today I highlight a new paper (still in draft form) from John W. Barry (Duke), Murillo Campello (Cornell), John R. Graham (Duke), and Yueran Ma (Chicago) that presents an analysis of the pandemic’s impact from the perspective of corporate Chief Financial Officers (CFOs). Read together, the papers provide two views of the same phenomenon: one from frontline managers and the other from senior-most financial executives whose decisions helped shape the world ever since the crisis began.

A key conceptual element of this second study is the authors' decision to base their analysis on flexibility and the role that it played in decision-making. In finance, flexibility refers to the ability of a firm to respond quickly (and in value-maximizing ways) to unexpected changes in the firm's cash flows or investment opportunities. The authors expand the concept of flexibility for this paper along three specific dimensions:

1) Financial flexibility: the degree to which a firm has access to internal and external capital during a crisis

2) Workplace flexibility: the degree to which a firm can shift the physical location of its work

3) Investment flexibility: the degree to which a firm can accelerate or delay capital investment decisions

The researchers' goal in this particular study is to show how each of these kinds of flexibility plays a role in shaping corporate planning in the COVID-19 crisis and how they interact.