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Crisis leadership in economic recession: A three-barrier approach to offset external constraints

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  • Lacerda, Teresa C.

Abstract

An economic recession is a type of crisis originated from external factors that may imperil an organization’s survival depending on the intensity and duration of the crisis. In peripheral European countries, such as Portugal, the recent financial crisis had devastating effects on various business activities. As a result, Portugal represents an important case study in examining how some corporate leaders have handled the economic recession successfully. I interviewed 20 corporate managers to capture their perceptions of the leadership traits and behaviors exhibited by their CEOs in guiding their companies through the recession. In economic recessions, negative constraints do not affect the most effective leaders, who instead erect barriers against the high-pressure conditions to create a supportive, positive work environment. In order to achieve maximum effectiveness, leaders must act as blocking agents against the negative social impacts of the economic crisis, including the fragility of trust in organizational life (i.e., a barrier against distrust), uncertainty of the future (i.e., a barrier against uncertainty), and toxic emotions (i.e., a barrier against toxic emotions).

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  • Lacerda, Teresa C., 2019. "Crisis leadership in economic recession: A three-barrier approach to offset external constraints," Business Horizons, Elsevier, vol. 62(2), pages 185-197.
  • Handle: RePEc:eee:bushor:v:62:y:2019:i:2:p:185-197
    DOI: 10.1016/j.bushor.2018.08.005
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    References listed on IDEAS

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    1. Bowers, Melissa R. & Hall, J. Reggie & Srinivasan, Mandyam M., 2017. "Organizational culture and leadership style: The missing combination for selecting the right leader for effective crisis management," Business Horizons, Elsevier, vol. 60(4), pages 551-563.
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    Cited by:

    1. Susanne Durst & Ann Svensson & Mariano Martin Genaro Palacios Acuache, 2021. "Peruvian Small and Medium-Sized Enterprises in Times of Crisis—Or What Is Happening over Time?," Sustainability, MDPI, vol. 13(24), pages 1-17, December.
    2. Bruning, Patrick F. & Hsin-Chen Lin, & Hsu, Ching-Yi, 2022. "Crafting solutions to leadership demands for well-being and effectiveness," Business Horizons, Elsevier, vol. 65(5), pages 603-615.

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