Leadership Research Summary:
• In March 2020, the COVID-19 virus turned into a pandemic that hit organizations globally. This pandemic qualifies as an exogenous shock. Based on the threat-rigidity hypothesis, the researchers hypothesized that this shock increased directive leadership behavior. The researchers also argue that this relationship depended on the magnitude of the crisis and the well-learned responses of managers.
• In the empirical analysis, researchers employed a differences-in-differences design with treatment intensity and focused on the period of the first lockdown, March until June 2020. Researchers founds support for the threat-rigidity hypothesis using a dataset covering monthly data for almost 27,000 managers across 48 countries and 32 sectors from January 2019 to December 2020.
• During the first lockdown, directive leadership increased significantly. The study also found that COVID-19 deaths per country moderated this relationship, the sectoral working from home potential, and the organizational management level. The findings proved how large exogenous shocks like COVID-19 can impact leadership behavior.
Leadership Research Findings:
• Researchers believe that the study and its main findings are relevant for leadership practitioners. Understanding how large exogenous shocks like COVID-19 might impact on leadership behavior is a necessary condition or first step for organizations and their managers to try to deal with such shocks.
• The results clearly show that the COVID-19 crisis especially led to an increase of directive leadership of lower level managers, and of managers who worked in sectors with low and mid levels of WFHP. However, whether such an increase in directive leadership in these contexts is effective is rather doubtful (see also Stoker et al., 2022), and such behavior might even be detrimental to performance or innovation (Somech, 2005). These results are especially relevant for HR-practitioners in organizations, who can monitor possible changes in leadership behaviors especially for these groups, and assist managers in becoming aware of the effect of a crisis on their behavior.
• Although the current COVID-19 crisis is an opportunity for researchers, but it is obviously a curse for leaders and their organizations in the real world. Doing rigorous and novel research on shocks and leadership is one way how academic research may inform and help leadership practitioners to deal with the consequences of the COVID-19 pandemic.