CEOs’ strategic leadership role during crises: Shaping employee perceptions

Abstract

Of all stakeholders challenged by organisational crisis, employees are arguably the most affected. While scholars have extensively investigated external stakeholder influence on crisis, the internal stakeholder’s perspective is lacking. Employees as internal stakeholders, form perceptions about how they are led during crisis. Perceptions either support or disrupt CEO ability to effectively resolve crisis. Using qualitative methodology, 23 semi-structured interviews were conducted with line managers to CEOs to understand how employees perceived CEOs strategic leadership during two crisis events of the COVID-19 pandemic, and the political unrest, in Eswatini. An additional interest of the study was to explore how employee perceptions during crisis can be positively shaped by CEOs to effectively resolve crisis. The research findings first illustrate that CEOs play a critical role in shaping employee perceptions during crisis. Several factors: leader behaviour and trait, knowledge about CEOs (experience and biases) and the context and style of leadership, shape how employees perceive CEOs during a crisis. Second, the findings show that employee perceptions influence the support CEOs garner. Third, CEOs who apply leadership traits perceived positively by employees during crisis, manage and resolve crisis effectively. Fourth, leadership traits and behaviours which CEOs use to drive effective crisis outcomes include: care and empathy, communication, decisiveness, agility, positive attitude, a calm demeanour, vulnerability, honesty, use of incentives, listening, and the use of clear policy frameworks. The study contributes to the theories and frameworks of impression management, attribution theory and reintegration and employee trust repair during crisis. Importantly, it expands the strategic leadership role of CEOs during crisis, to embody crisis management through learned behaviours and understanding of what employees require from CEOs. By reviewing employee perceptions during crisis, the researcher suggests ways in which CEOs can strategically lead to shape impressions and perceptions of employees to drive positive and collective crisis resolution. This knowledge will assist leaders to manage their employees during crisis.