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Business and Responsible Leadership in Times of Crises


A leader’s ability to leverage others’ efforts toward accomplishing challenging tasks, act quickly and decisively when necessary, and exceed the competition often characterizes leadership. It demonstrates a leader’s ability to motivate others to provide their best effort. Initially, leadership was predicated on the born leader, who has natural leadership qualities. A hierarchical control and command system underpinned management and, by extension, leadership (Chuadhry Zafar et al., 2021). The leaders tended to exercise the power that came with their role. Even coercive tactics were used occasionally. As times evolved, so did the leader and follower interaction. Technological advancement and global diversity, among other factors, have been responsible for fast-tracking these changes.

Before the 2008 financial crisis and recession, the prominent leadership style was transactional leadership. A manager who can maintain the operations’ balance and is process-oriented, who prioritizes accountability and control, who supports safety, and who is successful in circumstances in which predetermined standards are applicable are necessary for transactional leadership (Chuadhry Zafar et al., 2021). In contrast, transformational leadership emphasizes impact, steering in a specific direction, charting a plan of action, and driving opinion. This leadership style is indicative of a strong figure who possesses the capacity to develop and express an inspiring vision and whose actions and behaviours nurture the perception that their objective is exceptional. Thus, this paper will look at these and other leadership styles that were preferred before the financial crisis of 2008. It will further give alternative leadership models that focus on individual employees and promote a fair and more inclusive work environment.

Traditional leadership models pre-financial crisis

Transactional Leadership

Leaders with a transactional style place a premium on getting the job done rather than on the processes involved. Transactional leaders are content if the day-to-day functions are without hiccups and everything gets accomplished (Ma & Jiang, 2018). They come out as overbearing managers that constantly issue directives without checking in to see how their staff is faring. The transactional leader is effective because they put in place systems that make it evident to employees what is expected of them and what they will get from complying. This connection may be considered quite sure. The transactional leader is responsible for making all expectations crystal apparent via establishing measurable benchmarks (Jensen et al., 2017). What must be done and how it will be done must be clear.

There is limited space for creativity, invention, or alternate techniques of goal completion. Hence transactional leadership is most successful in these situations. To make a product, for instance, an efficient factory needs a well-planned procedure. There can be no room for error in the definition of this procedure. Thus, a transactional approach to leadership is most suitable and efficient in making this product. Possible benefits of transactional leadership include a defined chain of command from leadership to subordinate. The transactional leader ensures that subordinates are working toward targets and goals that align with the company’s (Ma & Jiang, 2018). There is no disagreement about who is in control and often little argument about the objectives and goals.

The problem with the transactional leadership style is that it can only generate superficial levels of motivation. In the most complex stages of human evolution and cognition, reward and punishment are ineffective motivators. Consequently, the transactional leadership style is most effective when the activities and procedures being carried out by the team’s members are well-designed and consistently provide positive outcomes (Jensen et al., 2017). The style is not suitable if sophisticated reasoning is required. The transactional leadership style restricts originality since targets and purposes are not easily articulated by following a formula. More importantly, those who imitate a leader with a transactional approach will be hindered in their efforts to advance professionally. These sorts of followers are driven independently in distinct ways. At this point, transactional leadership fails to inspire its followers (Ma & Jiang, 2018). When motivating someone of this calibre, rewards and punishments are too simplistic.

Short-term steadiness and efficient functioning come at the expense of long-term planning and preparation. It may be challenging for a company to adjust to the frequent changes in the current business climate. Although not exclusive to transactional leadership, a failure to anticipate and react to change has been linked to the demise of some significant, market-leading businesses (Jensen et al., 2017). For an institution to endure, its leaders should clearly understand its future goals and ideal position. Employees who are less invested in the company and its success might be motivated by clearly defined objectives and attainable incentives. In contrast, those more committed to the organization’s mission may feel constrained by its hierarchical structure. Such workers will probably find the prospective incentives woefully inadequate to their aspirations. Nevertheless, monetary incentives, mainly if seen as dominating, may overshadow innate drive, and the effect of contingent rewards and punishments can be demotivating (Ma & Jiang, 2018).

Directive Leadership

In this model, leaders make choices on behalf of their subordinates and then demand that they carry them out. An effective leader in a directive style is skilled at delegating tasks, communicating goals, and establishing deadlines and objectives. It is, however, feasible for these leaders to exhibit both directive and supporting conduct depending on the circumstances (Li et al., 2018). This approach is a kind of autocracy that places a premium on productivity at the expense of interpersonal harmony. A leader establishes the parameters of the group’s work and communicates those parameters to the group’s members for each assignment. The leader speaks to the group but does not listen to what they have to say. When there is a leader in place, followers are given clear instructions. Through this method, the leader spends less time engaging in reassuring activities and more time focusing on his team’s success (Lonati, 2020). A leader’s job actions indicate how much he cares about the work and whether or not his followers do it. This kind of leadership involves the leader directly supervising their employees while they carry out the directives they have been given.

Activities accompanying the directive model include delegating tasks, organizing work and communication styles for adherents, inspiring and imparting expertise, and monitoring and checking up on assignments. Following the group’s needs, transformational leaders might take on dictatorial or democratic styles. Directive leadership shines by improving the stable and predictable foundations of a company. Guidelines for the duties are often laid out in advance by leaders (Lonati, 2020). Workers are expected to fill leadership responsibilities with little guidance from upper management. According to proponents of the path-goal theory, directive leaders boost team output by keeping tabs on everyone’s progress and swiftly refocusing their efforts if someone falls behind. Leaders who take a command-and-control directive are at their most potent when they utilize their expertise to impose order on the lives of those around them. This type of leadership may be effective when a group is unfamiliar with the tasks involved in a project. The leader will assign everyone specific responsibilities that must be carried out exactly (Li et al., 2018). The leader’s knowledge may be shared with the team, improving the chances of success.

Leadership that is more directive has difficulty adapting to jobs that need innovation. These heads of state need a standardized procedure by which all tasks may be completed. The leader then provides tight supervision to guarantee that the task meets all expectations. Workers in jobs requiring creativity will find their initiative curtailed by such strict management (Li et al., 2018). Therefore, this kind of leadership is ineffectual when a creative task has to be done. Leaders that use a directive and control approach ignore the advantages of teamwork because they are confident in their expertise. They are not interested in helping others out or being helpful. When urgent tasks are to be performed, encouraging employee development and insight takes a back seat (Lonati, 2020). The leader then tells everyone what they are responsible for; if they do not do it, they will face the consequences.

Leaders in the financial sector were egotistical and greed-driven; they prioritized quick gains and easy profits; conflicting interests compromised many, and they lacked a firm grasp of the many subtleties of the credit derivatives they dealt with. Everything added to them taking unnecessary risks, which triggered the economic meltdown of 2008 and had far-reaching repercussions for the whole world (Chuadhry Zafar et al., 2021). There was a frightening management crisis on top of the economic meltdown since trust in leadership had been severely damaged, including leadership in financial firms and the state. Leaders stopped caring about their customers, their clients’ assets, and their customers’ long-term financial stability, which is where their concentration should have been. Although the executives made much money in the near run, the companies went bankrupt, and they personally, their staff and customers all suffered as a result.

New Leadership Approaches

Transformational leadership

Transformational leadership may also play a role in a management setting. One’s capacity to drive people from the inside out may be improved by developing transformational leadership, which is the leader’s capability to obtain employee performance above standards (Khan et al., 2020). Leaders who make a transformational difference in their organizations know their strengths and stand firmly for their beliefs. As a result of believing in themselves, they can maintain their motivation and form a personal connection with the company. They are very self-motivated, enabling them to establish a clear vision for the business, influence their supporters, and move the company forward (Ma & Jiang, 2018).

The results of implementing transformational leadership are positive. Transformation leadership improves the impact at the uppermost managerial level. Because of their status as examples, followers of these leaders tend to follow their example and appreciate how they interact with others in the workplace. The result is a productive work environment characterized by high trust levels and open communication lines between management and staff. Employees listen to the leadership, which results in rapid concept execution and a pleasant, flat organizational structure. This is so because there is a greater focus on personal growth rather than petty bureaucratic bickering. Instead of spending much time attempting to bring together different factions within a company, leaders should focus on directing their teams toward the goal (Ma & Jiang, 2018). When everyone on staff is on the same page and committed to the mission, progress can be made quickly.

In a company run by a transformational leader, employees are constantly faced with the test of maintaining their high motivation levels. As a result, people are more likely to take their obligations seriously and strive to do a good job. Employees are more likely to develop unique and innovative solutions to problems after being inspired by a transformational leader. When workers are motivated to think beyond the box, they can realize their full potential while the problem of self-development is also addressed. Employees who feel valued and appreciated at work are more likely to give their all and develop innovative solutions to problems, boosting productivity across the company (Khan et al., 2020).

Reflective Leadership

Action and individual experience are essential to the reflective process. The thoughtful practitioner thinks about the impact of their actions while taking them. An individual’s thoughts are put into a discussion with themselves and others after they have been through the reflective process, which is both an individual and group activity because it includes ambiguity and expertise and defining questions and essential aspects of activity (Göker & Bozkus, 2017). Individuals evaluate insights gained in light of other viewpoints, beliefs, attitudes, opinions, and the more excellent framework in which the queries are posed. By pausing to think things through, we get the clarity we need to decide how to proceed.

A fundamental goal of developing reflective cooperative learning is to foster an environment where all employees are encouraged to use the many learning options open to them. Effective professional growth may also be facilitated via networking with like professionals who can encourage constructive criticism, fresh perspectives, and sources of inspiration for the revitalization process. When given a chance to think things through, all administrators want to provide learning opportunities that are both more effective and widely distributed (Egleston et al., 2017). However, their skills depend on how they understand the current and potential linkages between education and leadership in their local settings.

Reflective leaders balance telling with listening, rely heavily on the accumulated knowledge of their colleagues, and understand that education is an ongoing process throughout one’s life. These leaders make substantial choices based on their judgment rather than sitting in judgment (Göker & Bozkus, 2017). They are the kind of people who often remove themselves from their usual and comfortable environments to do their best thinking, exploring, and learning. Leaders today are more likely than ever to adopt a partiality for activity in response to the corporate environment’s increased complexity, volatility, and rapid pace (Egleston et al., 2017). However, the most influential leaders always take the time to consider their previous events and seek out new and novel perspectives before making any significant decisions.

Servant Leadership

The motivation to lead comes second to the desire to serve in servant leadership. According to this conception of leadership, serving others comes before assuming that role. This depicts a servant leader as someone who does not hoard information but instead makes an effort to share it with those who need to know it to ensure that everyone affected by a decision is heard and considered. One of servant leadership’s critical traits is the figureheads’ capacity to pay attention to their supporters. As opposed to talking, servant leaders value listening. They pay special attention to what their believers suggest. Leaders who take the time to listen to their teams build stronger bonds with their employees (Eva et al., 2019). After hearing employees’ concerns, servant leaders try to put themselves in their stead. This helps them get a clear picture of their staff’s problems and the existing solutions.

Self-awareness is a hallmark of servant leaders; they know exactly what they bring to the table regarding skills, abilities, perspectives, and values. Due to this insight, they can provide their followers with excellent service. Leaders can play to their strong points to gain followers’ support for decisions. They are aware of their flaws and capable of working on them so that their leadership does not harm their followers. Leaders who put their subordinates’ needs before their own have persuasive communication skills. Leaders have great sway because of their persuasive and emotive powers. In order to successfully bring about change in an organization, the capacity to influence others is essential (Pawar et al., 2020). The leaders have enough sway to persuade their followers to embrace the change that the firm can make with little pushback from the workforce.

Leaders have the power to invigorate and concentrate the efforts of their teams so that positive outcomes can be achieved. Those who work under a servant leader are more likely to take the initiative and effect positive change within their institutions (Eva et al., 2019). Leaders with a servant mentality are masters at forging and maintaining a strong sense of team spirit within their organizations. Cohesive company culture exists when all employees share the same core values. Cohesive organizational cultures are not dependent on the specifics of organizational processes but rather on the dedication of every employee to the shared ideals and values that define the group. The formation of cooperative teams directly results from servant leadership (Pawar et al., 2020). Management leadership, created when managers adopt a servant leadership style, is extremely uncommon but highly effective. Organizations with managers who can act as leaders are much more likely to succeed in their missions.


Although there is still a long way to go, things are improving. The emphasis is shifting from the institution’s profit at any cost to its constituents’ wants and issues. In general, people are more conscious of their surroundings and how sustainable they are. Any catastrophe is a chance for businesses to reorganize, and in this regard, the financial crisis of 2008 and the pandemic of 2020 presented opportunities for transformation. Crises use the brittleness and resiliency of society and its institutions and are turbulent and unpredictable, encouraging a change in the status quo. Any emergency management strategy must prioritize openness and communication, which highlights the significance of effective leadership under these circumstances. The post-crisis leadership should behave like a mentor, sit with rather than above their staff, have exceptional compassion and active listening, and acknowledge their team members’ concerns, thoughts, and aspirations (Chuadhry Zafar et al., 2021). Everyone desires to work in a great environment where information flows freely across the whole company, where individuals feel a part of the culture, and where senior staff and managerial members trust one another and govern with values.

The capacity of the leader to have a goal, to get the backing of the team, and to adapt his leadership style so that it aligns with the perception to steer the whole group in an intended way are all critical components of an organization’s success. This is taken into account by transformational leadership, which involves the leader clearly understanding the path he desires to take the company, persuading the staff to help them see how crucial the shift is, and then working with them to implement it. Rather than leading others, servant leadership is driven by a desire to serve. Therefore, servant leaders prioritize serving others above anything else. Whenever they work, they are dedicated to creating groups of individuals and are empathic, charismatic, and practical (Pawar et al., 2020). Additionally, they can successfully listen to others. Servant leadership creates a link between leadership and management by aiding the development of management leadership, which is crucial for achieving the objectives and goals of the company.


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