Responsible Leadership in Organizational Crises: An Analysis of the Effects of Public Perceptions of Selected SA Business Organizations' Reputations

D.A.L. Coldwell, T. Joosub, E. Papageorgiou

Research output: Contribution to journalArticle

21 Citations (Scopus)

Abstract

'The loss of a stable state' (Schon 1973) in organizational transformation can both be regarded as lamentable and inevitable. Transformation causes disruption and invasions of comfort zones to those affected by it, but it is nevertheless inevitable. The article maintains that while the loss of a stable state is inevitable in the stream of change confronting organizations today, points of stability and methods of dealing with instability are attainable through responsible management. The article postulates that steps taken by responsible leadership in response to specific business crises will reduce the effects of instabilities brought about by such transformational situations and reassert a stable state more rapidly. Utilizing Weber's 'ideal type' model format (Morrison 2006) with a specific example of international best practice of remedial steps taken by management in reaction to a specific crisis experienced by an organization, the article uses a qualitative historical case study analysis and quantitative time series research design to investigate South African firms which had recently faced crises impinging on their current corporate reputations. Findings suggest that both the number of remedial steps taken by companies and the speed in which they are implemented in conformance with the model are negatively associated with the size of the share price falls immediately post crises. The findings also suggest that larger share price appreciations over 6-month post-crises are associated with greater perceived corporate reputations and brand strengths. Tentative conclusions and possibilities for further research are briefly discussed.

Original languageEnglish
Pages (from-to)133-144
Number of pages12
JournalJournal of Business Ethics
Volume109
Issue number2
Early online date27 Nov 2011
DOIs
Publication statusPublished - Aug 2012
Externally publishedYes

Keywords

  • Ideal type
  • Organizational crisis
  • Remedial steps
  • Reputation capital
  • Responsible leadership

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics
  • Business, Management and Accounting(all)
  • Law
  • Arts and Humanities (miscellaneous)

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