The Interplay Between Leadership and Adverse Context: The Paradox Explained

Since the beginning of the economic crisis in Europe, Portugal has been one of the EU economies most affected. As a result, Portugal represents an important case study to examine how corporate leaders have handled the economic crisis. Using a qualitative approach, we interviewed 20 corporate managers to capture their perceptions of leadership traits and behaviours exhibited by their CEOs during the recession of the Portuguese economy. Our results contribute to improve our understanding of specific traits and behaviours displayed by effective leaders during the economic recession, and to the extension of leadership theory in adverse contexts. Specifically, we found that in economic recession, the most effective leaders are not affected by the negative constraints and tend to work to create a barrier against the high-pressure conditions to enable a supportive and positive working environment. Paradoxically, we found that to be effective, leaders must act as blocking-agents against the negative social impacts of the economic crisis, examples being the fragility of trust in organisational 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). However, the restriction of the sample to a single geographical area limits the generalisability of the study to larger groups. Therefore, we encourage the academic community to expand the research to other countries affected by the economic recession.