THE IMPACT OF LEADERSHIP STYLE ON FIRM PERFORMANCE DURING THE COVID-19 CRISIS

Abstract

The emergence of the covid-19 pandemic had diverse impacts on various sectors and companies across the world. However, the success or failure of organisations during the covid-19 crisis was heavily influenced by the leadership style and approach adopted by the management. This study mainly aimed at assessing the impact of leadership styles (transactional and transformational) on organisational performance. The study used a quantitative research method with an online survey to collect data. The study used 50 participants (including workers in contractual, permanent and probationary terms and internees) from different firms, including businesses, universities, and hospitals in Saudi Arabia. The results indicated that leadership style is an important determinant for Saudi organisations' success or failure (performance). However, the findings indicated leaders, executives and managers differ with lower-level employees on the meaning of leadership. The findings suggested leader must adopt the most effective leadership style that will engage and motivate employees to work as teams to achieve overall business goals. In this case, the study recommended that a leader must actively engage the workers, consider their wellbeing, be empathetic especially during the pandemic, encourage them and ensure they are all committed to their responsibilities to drive organisational goals. Moreover, the findings noted that the transformational leadership style is most preferred in managing organisations during a crisis such as the covid-19 pandemic. However, some Saudi organisations still are using the transactional leadership style, because it enabled the companies to achieve their short-term goals. Therefore, the study recommended that Saudi organisations should adopt a transformational leadership style to overcome the challenges posed by covid-19 and focus on achieving long-term goals. The study also suggests that future explorers should explore and determine if transactional and transformational leadership can be adopted together to improve overall organisational performance.