How does transformational leadership work on COVID-19?

An empirical evidence from China

Mu Han, Ma1 and Qi Sheng, Yang2

1Beijing Normal University

2 City University of Macau

Abstract

Purpose -- The COVID-19 epidemic has exposed many enterprises’ problem of insufficient

crisis leadership ability. A general lack of research on the combination of enterprise crisis management

and leadership theory. This paper verifies the relationship between transformational leadership and crisis

management performance under different levels of crisis perception.

Method -- Based on the data of 283 structured questionnaires of enterprise employees in

Guangdong Province, an empirical study applied the transformational leadership, epidemic crisis

perception and crisis management performance scale.

Findings -- It revealed that (1) transformational leadership had a significant positive correlation

with crisis management performance under different epidemic crisis perception degrees. (2) moral

modeling and charisma had a significant positive correlation with crisis management performance under

low epidemic crisis perception. (3) Under the high epidemic crisis perception, visionary vision and

charisma have a significant positive correlation with crisis management performance, but moral modeling

loses its correlation.

Keywords: transformational leadership, crisis management, crisis perception, crisis management

performance

Questions raised

The COVID-19 epidemic outbreak at the end of 2019 has evolved into a global crisis, with major

economies including China falling into recession in the first quarter of 2020. Under the continuous impact

of the crisis, enterprises will face a more turbulent external business environment and more complex

internal management issues than before. Most research of enterprise crisis management focuses on the

organizational, such as (Runyan, 2006), (Herbane, 2010), (Smallbone, Deakins, Battisti, & Kitching,

2012), (Doern, 2016) and other scholars focused on exploring how companies take positive actions to

reduce the impact of the crisis; (Martinelli, Tagliazucchi, Marchi, & Research, 2018) and other scholars

from the perspective of organizational flexibility discussion: Corporate response strategies before and

after the crisis. Compared with organizational level research, academic research on leadership is still quite

scarce under crisis scenarios. So far, research results related to crisis scenarios have mainly focused on

two perspectives of "leadership behavior" and "indirect influence". According to (Mulder, de Jong,

Koppelaar, & Verhage, 1986), autocratic leadership can effectively deal with the crisis. As the impact of

the crisis increases, employees will expect leaders to focus on authority and take decisive action.

(Gladstein & Reilly, 1985); (Isenberg, 1981); (Hannah, Uhl-Bien, Avolio, & Cavarretta, 2009) and other

scholars further pointed out that leaders do not need to share and discuss the decision-making process

with employees in the crisis period, because open consultation is not conducive to coping with the crisis.

Besides, a study by (Van Wart & Kapucu, 2011) explored leadership behavior during a catastrophic crisis.

In the context of a catastrophic crisis, the ability to negotiate and change with leaders becomes

unimportant. Organizational members tend to be strong and decisive leaders, which are characterized by

confidence, decisiveness, analytical ability, willingness to take responsibility, and authorization ability.

For example, (Bernard M. Bass & Avolio, 1990), (Podsakoff, MacKenzie, & Bommer, 1996) and other

scholars have proved that transformational leadership has a significant impact on the following four

aspects: organizational commitment, employee satisfaction with leadership, work motivation, and

leadership effectiveness. Research by (Zhe, Ming, & Gu, 2012) pointed out that the impact of

transformational leadership on the execution of team orders in a crisis. These results suggest that

transformational leadership can help enterprises through the crisis by improving organizational

performance and enhancing team cohesion. Based on the research results of the above scholars, we find

that there is a lack of relevant research on mature leadership theory (such as transformational leadership)

combined with the crisis. Now facing the specific crisis of the new crown epidemic, we must re-examine

the leadership theory. This paper studies the effectiveness of leadership theory from the perspective of

contingency in a specific crisis.

Theory and hypothesis

crisis and transformational leadership

(Pearson & Clair, 1998) defined crisis scenario as " a low probability, high impact situation that is

perceived by critical stakeholders to threaten the viability of the organization and is characterized by

ambiguity of cause, effect, and means of resolution". Some scholars point out that effective leadership to

manage crises can successfully lead the organization out of crisis. (Bolman & Deal, 2017); (Burnett,

2002); (James & Wooten, 2005). However, there is no agreement on what kind of leadership theory can

effectively control the crisis. Some studies have shown that authoritarian styles are most effective during

crises (Gladstein & Reilly, 1985); (Mulder et al., 1986); (Mulder, Ritsema van Eck, & De Jong, 1971);

van wart and (Van Wart & Kapucu, 2011). However, other scholars believe that both transformational

leadership and transactional leadership may play a role in crisis (Bernard M Bass & Bass, 2009); (Boehm,

Enoshm, & Michal, 2010), and others point out that transformational leadership may be more effective

(Waldman, Ramirez, House, & Puranam, 2001). All these arguments show that the study of leadership

theory in crisis is not enough. We will try to explore the effectiveness of transformational leadership in

crises.

"The transformational leadership theory consists of four dimensions: idealized influence,

inspirational motivation, intellectual stimulation and individual consideration". It can improve

organizational performance by maximizing the work passion and potential of employees (B. Bass &

Avolio, 1995). Since Burns put forward the transformational leadership theory, it has occupied the core

position of leadership theory research. (Hoch, Bommer, Dulebohn, & Wu, 2018) (Bernard M Bass &

Bass Bernard, 1985) actively developed this theory and introduced it into the study of organizational

behavior. Many scholars, including (Bernard M. Bass & Avolio, 1990) and so on, demonstrated the

relationship between transformational leadership and organizational commitment, job satisfaction,

motivation, and performance. In recent studies, scholars tend to discuss transformational leadership in a

variety of specific situations and use a contingency perspective to verify the role of the theory in various

cultural and organizational environments (Triana, Richard, & Yücel, 2017); (Geier, 2016); (Jyoti & Dev,

2016). (Chaoping & Kan, 2005) based on the analysis of China's situation, divided the transformational

leadership into four sub-dimensions: vision incentive, leadership charm, moral model and personalized

care, and developed the transformational leadership scale suitable for China's situation. As the

transformational leadership theory has a positive impact on organizational commitment, employee

satisfaction with leadership, work motivation and other indicators of organizational performance

improvement, this study reasonably speculates that this type of leadership can promote employees to

evaluate the effectiveness of leadership or sacrifice their interests for the benefit of the organization, to

play a positive role in the crisis of the organization. Based on this, the following assumptions are

proposed:

H1: transformational leadership is significantly positively correlated with crisis management

performance

High crisis perception and low crisis perception

Under the epidemic crisis, enterprises in different regions and different industries are affected

differently, and the employees' perception of the epidemic crisis will also be different. Is transformational

leadership effective at any crisis perception level? This problem needs to be addressed to the crisis

contingency analysis of the relationship between the scenario and crisis management performance. On

one hand, it is necessary to classify the scenario based on the epidemic awareness, on the other hand, it is

necessary to explore the influence mechanism of the transformational leadership structure from the

subdimension of transformational leadership. In the context of the actual operation of the organization,

there are differences in the personal quality, personality characteristics and workability of leaders;

moreover, in different situations and times, the sub-dimensions of transformational leadership also have

different influences, so we also need to use the sub-dimensions of transformational leadership variably.

For example, (Ryan, M.,2011) classified crisis management into two situations: task management in

crisis and personnel management in a crisis. And it also discusses the effectiveness of different gender

roles in crisis management. (Chaoping, Bao, & Kan, 2006) verified that transformational leadership has a

significant impact on employees ’work attitudes. According to this conclusion, (Chaoping et al., 2006)

found that visionary vision and moral modeling have a significant impact on organizational commitment

and employee satisfaction; charisma and individualized consideration only have a significant impact on

employee satisfaction; visionary vision and moral modeling have the significance of the work affects

employee satisfaction and organizational commitment. It is inferred that to improve employee evaluation

of transformational leadership regarding crisis leadership, transformational leadership must also explore

how to choose and apply different scenarios under different levels of crisis perception the effective sub-

dimensional factor of transformational leadership. In short: how to combine transformational leadership

sub-latitude factors to achieve the best performance in different crisis scenarios?

The following assumptions are further proposed:

H2a: In a low-crisis perception, transformational leadership has a significant positive correlated

with crisis management performance

H2b: In a high-crisis scenario, transformational leadership has a significant positive correlation

with crisis management performance

H3a: In the low-crisis perception, moral modeling (H3a1), visionary vision (H3a2),

individualized consideration (H3a3), and charisma (H3a4) in each sub-dimension of transformational

leadership have a significant positive correlation with crisis management performance.

H3b: In the high-crisis perception, moral modeling (H3b1), visionary vision (H3b2),

individualized consideration (H3b3), and charisma (H3b4) are significantly positively correlated with

crisis management performance in each sub-dimension of transformational leadership.

In summary, we have established a conceptual model in which transformational leadership and its

sub-dimensional factors affect crisis management performance at different levels of crisis perception, as

shown in Figure 1.

Figure 1

Method

Data collection

The Pearl River Delta region of Guangdong Province is a relatively comprehensive industry

category in China. In this study, a total of 400 formal questionnaires were issued to this region,

excluding invalid questionnaires, 283 valid questionnaires were obtained, and the effective questionnaire

recovery rate was 70.75%. Demographic statistics involved in the study academic variables include

gender, age, length of service, job level, industry, etc. Through analysis, it is found that gender, age,

length of service, industry to which the company belongs do not affect the results, while job level may

affect the results to ensure the simplicity of this study, the above variables are not considered in the

empirical study of this article.

To study the relationship between transformational leadership and crisis management

performance in different crisis scenarios, we took the overall sample's median epidemic crisis perception

score as 9 as the limit, and divided the epidemic crisis perception degree into: low crisis perception

degree and high crisis perception degree. Research subjects with low crisis perception level (c≤9) are

combined into one group, labeled G1, N = 134. Research subjects with high crisis level (c> 9) are

combined into one group, labeled G2, N = 148. Each is an independent sample group.

Variable measurement and reliability and validity test

The main variables in the study were measured by Likert 5-point scale. 1 means "very

inconsistent", 5 means "very consistent". Among them:

Classified variable

epidemic crisis perception in this study, the degree of crisis perception refers to the subjective

evaluation of employees based on the epidemic situation. For the measurement of epidemic crisis

perception, we refer to the public risk perception scale for public health emergencies prepared by (Yajun,

Yanhua, & Qunhong, 2020) and re-prepare this scale. The scale includes three items: life impact, work

impact and enterprise impact. After the validity of the questionnaire was tested by an expert evaluation

method, three experts agreed that the questionnaire can better reflect the crisis perception level of

employees during the epidemic. The Cronbach's α value of the scale in this paper is 0.862, with a high

level of reliability. KMO value is 0.712, which is between 0.7-0.8. The validity of the research data is

good.

Independent variable-transformational leadership and its sub-dimensions

Considering the cultural background of the sample, we used the Chinese transformational

leadership scale compiled by (Chaoping & Kan, 2005) to measure transformational leadership. The

questionnaire includes visionary vision, charisma, moral modeling and individualized consideration.

There are 20 sub-dimensions, a total of 20 Item. The scale is a mature scale measured by transformational

leadership in the Chinese scenario. In this study, Cronbach's α value was 0.972, and the reliability level

was high. The validity was verified using KMO and Bartlett tests, and the KMO value was 0.965 and

greater than 0.8, indicating that the research data validity is very good.

Dependent variable-crisis management performance

The crisis management performance in this study refers to the comprehensive evaluation of

corporate employees on their leaders’ crisis management ability. The crisis management performance

evaluation questionnaire contains two dimensions of objective evaluation and subjective trust. Objective

evaluation is used to evaluate the extent to which leaders respectively play a role in enterprises / teams /

individuals, and the level of which employees trust their leaders' ability to manage crises. In the process

of preparing the questionnaire, three organizational behavior experts and five corporate leaders discussed

the various items of the questionnaire to ensure that the evaluation dimension is complete and the content

is credible. The Cronbach's α value of this questionnaire in this article is 0.918, and the reliability level is

high. The validity verification using the KMO and Bartlett test results in a KMO value of 0.853, and a

KMO value greater than 0.8, indicating that the research data is very valid.

Empirical analysis

The impact of transformational leadership on crisis management performance

Perform linear regression analysis using transformational leadership as the independent variable

and crisis management performance as the dependent variable to obtain the statistical results as shown in

Table 1:

Table 1

hypothetical H1 test results

H1 B SE Beta t p VIF R² F

（N=283

） H1 0.195 0.009 0.802 22.506 0.000*** 1.000 0.643

F (1,281)=506.498,

p=0.000

* p<0.05 ** p<0.01 *** p<0.001

From the above table, the square value of the model R is 0.643, which means that

transformational leadership can explain the 64.4% change reason of crisis management performance. The

model passes the F test (F = 506.498, p = 0.000 <0.05), the result shows that transformational leadership

will definitely produce crisis management performance Affect the relationship; and the regression

coefficient value of transformational leadership is 0.195 (t = 22.506, p = 0.000 <0.01) .The results show

that: transformational leadership will have a significant positive relationship with crisis management

performance.

Suppose H1 is supported by data.

The impact of transformational leadership on crisis management performance at different levels of

crisis perception

The data is divided into two groups: low crisis perception (G1) and high crisis perception (G2).

Transformational leadership (X) is used as an independent variable and crisis management performance

(Y) is used as a dependent variable for linear regression analysis. The statistical results shown in Table 2:

Table 1

hypothetical H2 test results

H2 B SE eta t p VIF R² F

G1（N=135） H2a 0.201 0.012 0.820 16.552 0.000*** 1.000 0.673 F (1,133) =273.961,

p=0.000

G2（N=148） H2b 0.190 0.012 0.786 15.357 0.000*** 1.000 0.618 F (1,146) =235.830,

p=0.000

* p<0.05 ** p<0.01 *** p<0.001

It can be seen from the above table:

In the context of low crisis perception, the R-square value of the model is 0.673, that is,

transformational leadership can explain 67.3% of the change of crisis management performance. The

results of F-test (F = 273.961, P = 0.000 < 0.05) show that transformational leadership must have an

impact on the performance of crisis management, the model formula is: Y = 4.291 + 0.201 * X.

In the context of high crisis perception, the R-square value of the model is 0.618, that is,

transformational leadership can explain 61.8% of the change of crisis management performance. The

results of F-test (F = 235.830, P = 0.000 < 0.05) showed that transformational leadership must have an

impact on the performance of crisis management, the model formula is: Y = 5.034 + 0.190 * X.

The summary analysis shows that transformational leadership will have a significant positive

relationship with crisis management performance regardless of the low-crisis perception scenario or the

high-crisis perception scenario.

Suppose H2a and H2b are supported by data.

The impact of transformational leadership sub-dimensions on crisis management performance at

different levels of crisis perception

Divide the data into two groups: low crisis perception (G1) and high crisis perception (G2). Take

each sub-dimensional factor, including moral modeling, visionary vision, individualized consideration,

charisma as independent variables. The performance of crisis management is taken as the dependent

variable for stepwise regression analysis. The statistical results are shown in Table 3:

Table 2

hypothetical H3 test results

H3 B SE Beta t p VIF R ² F

G1（N=135

）

H3a1 0.276 0.066 0.317 4.172 0.000*** 2.379 0.679 F (2,132)=139.391,p=0.

000 H3a4 0.516 0.071 0.556 7.306 0.000*** 2.379

G2（N=148

）

H3b2 0.525 0.094 0.547 5.592 0.000*** 3.618 0.616

F (2,145)=116.480,p=0.000

H3a4 0.233 0.086 0.265 2.710 0.008** 3.618

* p<0.05 ** p<0.01 *** p<0.001

According to the analysis in Table 3 and excluding the insignificant items, the results under the

low-crisis perception scenario show two items which are the final remaining charisma and moral

modeling. The R-square value in the model is 0.679, which means the above two sub-dimensions could

explain 67.90% of the change of crisis management performance. The model was validated by F test (F

= 139.391, P = 0.000 < 0.05). The model formula is: Y = 4.263 + 0.276 * X4 + 0.516 * X1.

According to the analysis in Table 3 and excluding the insignificant items, the results under the

high-crisis perception scenarios show two items which are the final remaining visionary vision and

charisma. The R-square value in the model is 0.616, which means the above two sub-dimensions could

explain 61.6% of the change of crisis management performance. The model was validated by F test (F =

116.480, p = 0.000 <0.05). The model formula is: Y = 4.911 + 0.525 * X2 + 0.233 * X4.

In addition, according to the multiple collinearity test of the model, it is found that all the VIF

values in the model are less than 5, which means there is no collinearity problem; and the D-W value is

near the number 2, which means that the model does not have autocorrelation, there is no correlation

between the sample data, and the model is better.

The summary analysis shows that in the low-crisis perception scenario, the effects of moral

modeling and charisma among the four sub-dimensional factors of transformational leadership on crisis

management performance are statistically significant (P <0.05), and the regression coefficients (β) of the

above two sub-dimensional factors both are greater than 0. Therefore, the leader's crisis management

performance is significantly positively correlated with the above two sub-dimensional factors.

In high-crisis perception scenarios, the effects of visionary vision and charisma on crisis

management performance among the four sub-dimensional factors of transformational leadership are

statistically significant (P <0.05), and the regression coefficients (β) of the above two sub-dimensional

factors are greater than 0. Therefore, the leader's crisis management performance is significantly

positively correlated with the above three sub-dimensional factors.

Suppose H3a1 and H3a4 are supported by data, while H3b2 and H3b4 are supported by data.

Discussion

Research conclusion

In this study, from the perspective of epidemic crisis scenarios, based on the transformational

leadership theory, it has been demonstrated that under different epidemic crisis perceptions,

transformational leadership has a significant positive correlation with crisis management performance.

At the same time, under low epidemic crisis perceptions, moral modeling and charisma have a

significant positive correlation with crisis management performance. Under the epidemic crisis

perception, Visionary vision and charisma have a significant positive correlation with crisis management

performance, but moral modeling has lost its correlation.

For the high and low epidemic crisis perception scenarios, the correlation between the sub-

dimensional factors in transformational leadership and crisis management performance is obviously

different. The possible reasons are:

Low-crisis perception

Under the perception of a low epidemic crisis, the main work difficulties faced by employees only

exist at the level of specific task resolution, such as: the decline in efficiency caused by the remote office, the

decline in performance caused by difficulties in customer contact, etc. At this time, the specific actions such

as "Dare to grasp and manage, to deal with difficult problems" and "Very committed to work and always

maintain a high level of enthusiasm" can effectively help employees overcome their work difficulties. At the

same time, in the moral modeling dimension, "hard work comes first, and enjoyment comes afterwards"

behaviors such as "corruption and honesty, not selfishness" can serve as a role model and gain subordinates'

recognition, respect, and trust (Jung & Avolio, 2000), which produces a good crisis management performance

evaluation of leaders.

High-crisis perception

Under the perception of a high epidemic crisis, employees not only need to overcome specific

difficulties at work but also worry about the company's prospects and personal futures. In this scenario, the

high moral modeling dimension will cause greater environmental pressure on employees, such as "For the

benefit of the department/enterprise, sacrifice personal interests" and "Do not care about personal gains and

losses, work hard" and other specific behaviors; and the Visionary vision dimension "describes the desirable

future to employees", "indicates the struggle goals and progress to employees "Direction", which can more

stimulate employees' self-confidence (Harland, Harrison, Jones, & Reiter-Palmon, 2005) and ease the

psychological pressure of employees facing future uncertainties (Chen, Jia, Li, Song, & Zhang, 2006),

thereby generating a better crisis management performance evaluation for leaders.

Both high and low crisis perception

This study also found that in both high and low crisis perception, the individualized

consideration dimension did not show a positive correlation with crisis management performance. The

reason may be that the leader's concern about employees' life outside of work and family conditions is

not effectively solved the problems of employees, especially the problems encountered at the level of

specific tasks and future development. For some employees, family life is outside the scope of work, so

some employees may also have a negative attitude towards excessive individualized consideration.

Research significance

First, this study enriches the theory of crisis management and transformational leadership at the

theoretical level and reveals the relationship between transformational leadership and crisis management.

The study also verifies that the choice of leadership sub-dimensional factors should have contingent

visual skills and specific scenario matching.

Secondly, the research reveals that under different scenarios, the specific effective factors of the

same effective leadership type may have significant differences. Different crisis scenarios have different

requirements for leaders ’leadership styles. The combination of specific scenarios can only contribute to

the prediction of leadership performance.

Finally, the study provides a strategic reference and theoretical basis for crisis management on

the practical level of the epidemic crisis, especially in the choice of leadership methods and the

leadership of corporate leaders. In terms of selection, as a leader, it is necessary to timely understand the

level of the epidemic crisis in the environment and the degree of employees affected by the crisis, to

choose crisis leadership behaviors that are suitable for the current situation and effectively improve the

crisis management performance.

Limitations and recommendations for future research

Based on the specific situation of the COVID-19 epidemic crisis, this study takes the degree of

epidemic crisis perception as the classification variable, and distinguishes high crisis perception and low

crisis perception. In the future, the research direction can be based on the existing theory of crisis

scenario in the academic community, and accurately define and classify the scenario, to

comprehensively investigate the relationship between different types, scales and sources of crisis

scenario and leadership theory.

In the aspect of variable control, this study preliminarily verified the influence of common

demographic variables on the results, among which position level may have an impact on the results.

This finding can be further studied.

This study proved that transformational leadership had a significant positive impact on crisis

management performance in different epidemic crisis levels, but did not explore the specific mechanism.

Whether there are mediating effects of psychological empowerment, organizational commitment and

other variables in this mechanism can be further explored in future research.

In the situation of the epidemic crisis, it is difficult to obtain more extensive data. This study

only obtains effective survey data on the Pearl River Delta in Guangdong Province. The author believes

that in the future, we can expand the scope of sample collection and the total number of samples in order

to study the transformational leadership performance in a crisis.

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