See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/374343848

Leadership and Crisis Management for Businesses Globally: The Role of

Leadership in Business Sustainability in a Crisis Environment

Chapter · October 2023

DOI: 10.1007/978-981-19-8388-7_203

CITATIONS READS

0 85

3 authors, including:

Stanley Bruce Thomson Darcia Roache

MacEwan University University of Saskatchewan
52 PUBLICATIONS 1,886 CITATIONS 9 PUBLICATIONS 108 CITATIONS

SEE PROFILE SEE PROFILE

All content following this page was uploaded by Stanley Bruce Thomson on 11 October 2023.

The user has requested enhancement of the downloaded file.

© Springer Nature Singapore Pte Ltd. 2022
Amita Singh
International Handbook of Disaster Research
10.1007/978-981-16-8800-3_203-1

Leadership and Crisis Management for

Businesses Globally: The Role of Leadership in
Business Sustainability in a Crisis Environment
Stanley Bruce Thomson1 , Darcia Roache2 and Richard Muschette3

(1)University of MacEwan, Edmonton, AB, Canada

(2)University of Saskatchewan, Saskatoon, SK, Canada
(3)Coventry University, Coventry, UK

Stanley Bruce Thomson (Corresponding author)

Email: thomsons2@macewan.ca

Darcia Roache

Richard Muschette

Abstract
The reach of businesses is expanding, customers’ needs and wants are increasing, and natural and
man-made disasters permeate the business environment causing tremendous financial implications
on business productivity. Given these crises, there is the need for business leaders to develop
leadership skills or adapt different leadership approaches to mitigate the negative effects of crisis and
disaster in order to maintain business effectiveness. Considerable literature on disaster management
seeks to aid business leaders on how to address/manage disasters in business. This conceptual
chapter explores leadership approaches that leaders can implement in times of crisis. We suggest that
a leadership function in a crisis environment intensifies the impact of management functions. The
chapter concludes by examining the implications of leadership approaches. This then leads us to a
discussion of business sustainability and the impact of decision-making on leadership. Although the
literature states that transformation is the best in times of crisis, we opine that situational leadership
is more appropriate in the dynamic environment of a crisis.

KeywordsLeadership -Situational leadership -Crisis management -Financial resources -Business

sustainability -Functions of management

Introduction
There is no doubt the COVID-19 pandemic affected business negatively across the globe. The
impact of COVID-19 on the global economy was increased because of the geographic spread of the
virus. A survey conducted by Bartik et al. (2020) between 28 March and 4 April 2020, to explore
“expectations of business owners at a critical point in time when both the progression of COVID-19
and the government’s response were quite uncertain” (p. 1) revealed that of more than “5800 small
businesses that are members of Alignable, a network of 4.6 million small businesses” (p. 1) were
impacted negatively.
…43% of businesses had temporarily closed, and nearly all of these closures were due to
COVID-19. On average, the businesses reported having reduced their active employment by
39% since January, where 54% of firms were closed and employment was down by 47%.
Impacts also varied across industries with retail, arts and entertainment, personal services,
food services, and hospitality businesses all reporting employment declines exceeding 50%;
in contrast, finance, professional services, and real estate-related businesses experienced less
disruption, as these industries were better able to move to remote production (p. 2).
A survey conducted by Dun and Bradstreet (provider of commercial data, analytics, and business
insights) stated that 82% of small businesses experienced a negative impact and 70% believed that
the recovery demand will be approximately 1 year (Dun & Bradstreet, 2020). The COVID-19
pandemic saw a financial fragility of business’ operation that caused massive layoffs. According to
Donthu & Gustafss (2020), the disruption was unprecedented and caused challenges in business
entities, cash flow, marketing and sales, supply chain, customer demand for product and service,
health and safety, and education. However, it also exposed a call for businesses to be resilience in
their operations. The negative impact on business called for a change in business processes, adaption
to technology, and change leadership/change management.
The development of business strategies to mitigate the negative effects of disaster for business
continuity include preparedness and resilience, recovery, and solutions to achieve business financial
viability. Business leaders in crisis situations should ensure that in the event of a disaster or crisis
occurring, the impact is minimal. This then raises the need in leaders for personnel efficiency,
effectiveness, knowledge, and flexibility to be adhered to obtain the best solution (Teutsch, 2010).
The negative impact of COVID-19 on business saw the closure of many businesses through the lack
of mission and vision for the business, and the failure of leadership to have scanned the political,
economic, social, technological, environmental, and legal (PESTEL) framework to improve their
business processes. Strategic management principles call for a continuous monitoring of a business’s
ongoing processes, internal and external events, and timely change. Adapting to change in business
organization forces an organization to assess internal capabilities and resources (human, financial,
and material resources). Businesses that were able to adapt were positively impacted. For many this
meant focusing more on their online presence in the global marketplace. For many they have seen
massive growth in areas of online communication, entertainment, and shopping (Donthu &
Gustafsson, 2020). The adaptation to change in business stability during the pandemic forced
business managers to effectively formulate, implement, monitor, and evaluate their strategies to
achieve continued economic and financial growth. Thus, business strategies to mitigate the negative
impact of a disaster/crisis to maintain business effectiveness becomes an important determinant of
success.
Change management theories addressed the need for change alignment to business paradigm and
success. Lewin’s model emphases the need for change in business organizations to unfreeze, change,
and refreeze (Lewin, 1947). Unfreeze in organizations calls for a change in the existing processes
and procedures that were counterproductive to business operations; the pandemic ushered the prime
factor of several businesses. Business entitles have to change their prospective, perceptions, and
processes to include an online space or presence for continued capitalization on their market share
and growth rate to include training of their staff complement or workforce. Refreeze sees business
entities change their business culture and norm based on lessons from the pandemic.
Business managers’ inclusion in their strategic plan or business plan of their organization/business
the need for change management for business survival. This will hold managers accountable for the
endowment, contingency implications, and confirmation of the profitability of the business.
Chinoperekweyi (2020) supported that “there is need to make change management part and parcel of
the business plan, and not an add-on that is managed independently; and ensuring managers are
accountable for making sure change happens and certain behaviors are rewarded or punished” (p. 6).
The pandemic forced business organizations into a contingency approach for continued viability in
the marketplace of goods and services offerings. Organizational practices should be consistent with
the demand of the organization (McLoughlin & Clark, 1988). Business managers are the nucleus of
organizational change. They need to act upon the responsibilities for the direct functions of the
organization in a manner that will boast profitability and yield a return on investment, which
includes people and other resources.
The frequency of disaster occurring globally affects people’s lifestyle, business operations, and
strategic planning of business/organizations. The need for the tools, resources, and best practices to
effectively provide the technology to develop business strategies to mitigate the crises of disaster to
maintain business effectiveness is vitally important. Successful business strategies need integrate
organizational change to sustain and shield business from disaster. People are the most effective and
profitable means of production in organization. For organizations to be sustainable to manage
change in 2020 and beyond, the need for “agility, embracing digital, customer centrism, and
innovation” (Chinoperekweyi, p. 6) should be intertwined with the philosophies of change
management and the technical perspective. The key for creating that agility and intertwining change
management lies within the leadership of the organization. Therefore, leadership is the key
component to successfully navigate through a crisis environment. Thus, this chapter will focus on
leadership and explore the functions, sustainability, and leadership approaches in a crisis
environment.

Functions of Leadership in Business in Times of Crises

The management of any business operations calls for effective planning, organizing, controlling,
staffing, and leading to manage disasters. The functions of management are relevant prior, during,
and after any pandemic. Maintaining the functions of management was not easy during the
pandemic. For example, Middaugh (2020) found that the fundamental functions of management are
often forgotten before and during a disaster and stressed its application and revision before and
during such times. Leaders/managers with technical, critical thinking, and conceptual skills should
lead the organization. Leadership is grounded in technical, human, and conceptual skills (Northouse,
2015). The technical relates to proficiency in the product, service, and regulations (Katz, 1974; Yukl,
2006). Human relates to how the manager’s interpersonal initiative influence and motivate team
members to accomplish the goal of the business (Katz, 1974; Yukl, 2006). Conceptual skills refer to
the problem solving and critical thinking skills of the manager (Northouse, 2015). The functions of
management for any organization liaise with how effective the manager can use this technical,
human, and conceptual skills to turn around the organization and to shield it from negative impact,
especially in times of crises.
Leadership and Sustainability
Before a discussion on leadership, it is necessary to frame our discussion of sustainability within this
chapter around the definition of sustainable business practices. In the literature, business
sustainability is commonly aligned with the definition of sustainability, which refers to the concerns
surrounding the impact of business decision-making on environmental, social, and economic factors
through resource depletion (both physical and natural) (Benkert, 2021; Mollenkamp, 2021). Haanaes
(2016) states
…sustainability is a business approach to creating long-term value by taking into
consideration how a given organization operates in the ecological, social and economic
environment. Sustainability is built on the assumption that developing such strategies foster
company longevity (p. 1)
However, Mollenkamp points out that sustainability, at its root level “refers to the ability to maintain
or support a process continuously over time” (Mollenkamp, 2021, p. 1). The two definitions
illustrate the need to clearly state a definition of sustainability. For this chapter we define business
sustainability as “a long-term approach in decision-making to maintain/support business activity that
ensures organizational longevity.”
For us the key to the definition is “decision-making.” Within any business organization, key
business decisions and/or strategic business decisions are made by organizational leaders. Decisions
made in times of crisis are often made under less than ideal situations. Decision makers often have
little or no data to base decisions on. To add to the difficulty, time is often of essence. Under normal
conditions, research has shown that the leadership approach impacts decision-making (Northouse,
2015; Uzonwanne, 2015). Thus, it is only logical that when exposed to a crisis such as natural
disasters (e.g., the pandemic or earthquakes), leadership will significantly impact the outcome. This
then leads us to our investigation of leadership approaches in times of crisis and in particular during
the COVID pandemic.

Leadership in Times of Crisis

Crisis management has been defined as a term that “broadly captures organizational leaders’ actions
and communication that attempt to reduce the likelihood of a crisis, work to minimize harm from a
crisis, and endeavor to re-establish order following a crisis” (Bundy et al., 2017, p. 1663). As can be
seen in the definition and supported by numerous authors, leadership is a key aspect of crisis
management (Bundy et al., 2017; Kalra et al., 2021; Kielkowski, 2013). This then leads us to the
question of whether or not one particular leadership style leads to business sustainability in the face
of a crisis?
The research on leadership styles during the COVID-19 pandemic delves into democratic leadership
(Agusta & Nurdin, 2021; El Gharib & Elnahas, 2021; Sanusi et al., 2020), integrative leadership
(democratic and transformational) (Agusta & Nurdin, 2021), transactional/authoritarian (Azizah et
al., 2020; El Gharib & Elnahas, 2021; Frangieh & Rusu, 2021; Purnomo et al., 2021; Sanusi et al.,
2020), and transformational leadership (Azizah et al., 2020; Bojadjiev & Vaneva, 2021; Brown &
Nwagbara, 2021; El Gharib & Elnahas, 2021; Noureen et al., 2020; Purnomo et al., 2021; Sanusi et
al., 2020). The common finding was that a transformational style was best suited for a crisis
situation. This is due to its focus on change and encouraging and developing an attitude of the
acceptance of change. Also, another common finding was the importance of open and transparent
communication during a crisis. And here again, it was pointed out that open and transparent
communication is a characteristic of transformational leadership (Bojadjiev & Vaneva, 2021). So, it
would appear that transformational leadership is best suited for times of uncertainty – a crisis.
However, studies comparing leadership styles, such as Sanusi and co-authors (Sanusi et al., 2020),
El Gharib & Elnahas (2021), Frangieh & Rusu (2021), and Purnomo and co-authors (2021), found
that a transactional leadership style was also effective. In fact, Sanusi and co-authors (2020), El
Gharib & Elnahas (2021), and Purnomo and co-authors (2021) found that multiple leadership styles
had a positive impact on organizational performance. The research indicated that there was a strong
need for leadership that had a clear vision of the future and the steps required to realize that vision.
This meant that at times a different leadership approach may be applicable and more effective. This
brings forth the concept of situational leadership.
In the context of situational leadership, the leadership style is contingent on the situation (Blanchard
& Hersey, 1996). Therefore, the leader adapts to the environment and the interactions of the players
in that environment. This means that at one point a transactional approach may be more effective to
achieve the desired results of that moment. This then starts to explain the seemingly contradictory
results of the research in leadership and crisis management.
Although it may be fair to say that no one style is more appropriate than another, it does appear that
a transformational leadership style would be more effective. However, research also indicates that
those that prepare for a crisis and have plans in place fair better and are more resilient (Bundy et al.,
2017; Kielkowski, 2013). Therefore, business sustainability relies on strong leadership not only
during a crisis but in pre-crisis preparation and post-crisis recovery.

Conclusion
Literature on the effects on sustaining, minimizing, shielding, and preventing business from the
negative impact of disaster explores systems change, formulation of institutional and operational
policies to overcome the losses of production, while improving consumption pattern to boost
countries economic (Kumar et al., 2020) is minimal. The literature fails to provide strategies and
procedures to fully address aspects of how to sustain, minimize, shield, and prevent business from
the negative impact of disaster through the lens of leadership. Leadership needs to implement and
mitigate loss through the implementation of strategies designed to shield and preserve organization
vitality – business sustainability. However, business leaders can and need to engage in crisis
management to reduce the risk and outcome of a crisis to create business sustainability effectively
and efficiently.
According to the World Economic Forum’s Global Risks Report (2020), there are critical risks
manifesting the global economy and cited examples of stagnation, climate change, and cyberspace
threats. Other risks for companies that the report highlighted were prolonged recession of the global
economy, surge in bankruptcies of big firms and SMEs, waver of industry consolidation, weakening
of fiscal positions in major economies, and increase in inflation globally. Leadership and business
sustainability work hand-in-hand to prevent, implement, and resolve issues rising from crises. Crisis
management needs strong leadership utilizing transformational leadership but with the realization of
the need to adapt leadership approaches to the situation. Building sustainability in business during
the COVID-19 pandemic calls for support and collaboration to sustain, minimize, shield, and
prevent business from the negative impacts of disaster. Business sustainability is therefore urgently
needed to rebuild, adapt, and solve the business and economic challenges resulting from the
COVID-19 pandemic.

References
Agusta, S. A., & Nurdin, L. (2021). Integrative leadership style of libraries at Islamic Universities in
Indonesia. Library Philosophy & Practice, 1–18.

Azizah, Y. N., Rijal, M. K., Rumainur, Rohmah, U. N., Pranajaya, S. A., Ngiu, Z., Mufid, A.,
Purwanto, A., & Ma’u, D. H. (2020). Transformational or transactional leadership style: Which
affects work satisfaction and performance of Islamic University Lecturers during COVID-19
pandemic? Systematic Reviews in Pharmacy, 11(7), 577–588.

Bartik, A. W., Bertrand, M., Cullen, Z., Glaeser, E. L., Luca, M., & Stanton, C. (2020). The impact
of COVID-19 on small business outcomes and expectations. Proceedings of the National Academic
of Science, 117(30), 17656–17666. https://doi.org/10.1073/pnas.2006991117
CrossRef

Benkert, J. (2021). Reframing business sustainability decision-making with value-focussed thinking.

Journal of Business Ethics, 174(2), 441–456.
CrossRef

Blanchard, K. H., & Hersey, P. (1996). Great ideas revisited. Training & Development, 50(1), 42.

Bojadjiev, M. I., & Vaneva, M. (2021). The impact of Covid-19 crisis on a company’s internal
communication. Interdisciplinary Description of Complex Systems, 19(2), 239–256.
https://doi.org/10.7906/indecs.19.2.5
CrossRef

Brown, C., & Nwagbara, U. (2021). Leading change with the heart: Exploring the relationship
between emotional intelligence and transformational leadership in the era of Covid-19 pandemic
challenges. Economic Insights - Trends & Challenges, 3, 1–12.
CrossRef
Bundy, J., Pfarrer, M. D., Short, C. E., & Coombs, W. T. (2017). Crises and crisis management:
Integration, interpretation, and research development. Journal of Management, 43(6), 1661–1692.
CrossRef

Chinoperekweyi, F. (2020). Exploring philosophical proclivity of change management articles:

Technical-rational perspective versus other change philosophies. Organizational Development
Journal, 38(2), 1–18.

Donthu, N., & Gustafsson, A. (2020). Effects of COVID-19 and research. Journal of Business
Research, 117, 284–289. https://doi.org/10.1016/j.jbusres.2020.06.008
CrossRef

Dun & Bradstreet. (2020). Business impact of the coronavirus: Business and supply chain analysis
due to the Coronavirus outbreak. Retrieved from
https://www.dnb.com/content/dam/english/economic-and-industry-
insight/DNB_Business_Impact_of_the_Coronavirus_US.pdf

El Gharib, A., & Elnahas, E. (2021). Evaluate the role of leadership in crisis management: A field
study in psychiatric hospitals in Egypt. Global Business & Management Research, 13(3), 113–123.

Frangieh, M., & Rusu, D. (2021). The effect of the carrot and stick transactional leadership style in
motivating employees in SMEs. Review of International Comparative Management/Revista de
Management Comparat International, 22(2), 242–252. https://doi.org/10.24818/RMCI.2021.2.242
CrossRef

Haanaes, K. (2016). Why all businesses should embrace sustainability. Institute for Management
Development. https://www.imd.org/research-knowledge/articles/why-all-businesses-should-
embrace-
sustainability/#:~:text=Simply%20put%2C%20sustainability%20is%20a,such%20strategies%20fost
er%20company%20longevity

Kalra, S., Arora, N., & Talalnusair. (2021). Leadership in the pandemic times (Covid-19) –
Pandemic style leadership: Proposed practices to be embodied by the leaders. Webology, 18(2), 687–
692. https://doi.org/10.14704/WEB/V18I2/WEB18347
CrossRef

Katz, R. L. (1974). Skills of an effective administer. Harvard Business Review, 52(2), 90–102.
Kielkowski, R. (2013). Leadership during crisis. Journal of Leadership Studies, 7(3), 62–65.
https://doi.org/10.1002/jls.21300
CrossRef

Kumar, A., Luthra, S., Mangla, S. K., & Kazancoglu, Y. (2020). COVID-19 impact on sustainable
production and operations management. Sustainable Operations and Computers, 1(2020), 1–7.
https://doi.org/10.1016/j.susoc.2020.06.001
CrossRef

Lewin, K. (1947). Frontiers in group dynamics: Concept, method, and reality in social science:
Equilibrium and social change. Human Relations, 1(1), 5–41.
CrossRef

McLoughlin, I. P., & Clark, J. (1988). Technological change at work (1st ed.). Open University
Press.

Middaugh, D. (2020). Maintaining management during disaster: The COVID-19 edition.

MEDSURG Nursing., 29(3), 211–212.

Mollenkamp, D. T. (2021, November 15th). Sustainability. Investopedia.

https://www.investopedia.com/terms/s/sustainability.asp

Northouse, P. G. (2015). Leadership: Theory and practice (7th ed.). Sage.

Noureen, G., Noshaba, A., & Akhter, Z. (2020). Exploring the relationship between transformational
leadership style, job satisfaction, emotional exhaustion and burnout: A case from universities of
Lahore. Journal of Educational Research (1027–9776), 23(2), 161–173.

Purnomo, E. N., Supriyanto, A., Mustiningsih, M., & Dami, Z. A. (2021). The effectiveness of
principal leadership styles in crisis management. Pedagogy Studies/Pedagogika, 141(1), 5–25.
https://doi.org/10.15823/p.2021.141.1
CrossRef

Sanusi, S. E., Arum, M., Wandi, D., Rahmat, A., Kurnianingsih, A., Haerani, A., Dasmaran, V.,
Taryanto, Adha, S., & Purwanto, A. (2020). Develop leadership style model for Indonesian SMEs
leaders during Covid-19 pandemic. Systematic Reviews in Pharmacy, 11(8), 576–586.
 Teutsch, K. (2010). Effective disaster management strategies in the 21st century: Developing the
tools, processes, and best practices to meet the demands of the increasing number of disasters.
Retrieved from https://www.govtech.com/em/disaster/effective-disaster-management-strategies.html

Uzonwanne, F. (2015). Leadership styles and decision-making models among corporate leaders in
non-profit organizations in North America. Journal of Public Affairs, 15(3), 287–299.
https://doi.org/10.1002/pa.1530
CrossRef

World Economic Forum’s Global Risks Report. (2020). Retrieved from

https://www.weforum.org/reports/the-global-risks-report-2020

Yukl, G. (2006). Leadership in organizations (6th ed.). Pearson-Prentice Hall.

View publication stats