Management leadrship in global economic recession Essay

Management leadrship in global economic recession


            It is indeed a real blow:  when everyone wakes up one day and the drastic changes in mortgage rates, interest rates, unemployment, rising energy costs, global trading imbalances, inflation all happen either one at a time, continuously; or, one after the other, simultaneously; or, all together, in synchrony.  Such economic picture of recession is a real test to leadership.

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            How can leaders “rise above the tempest” through contained and collective process that will redound to instilling, inspiring and insisting teamwork to continue the trajectory towards business success and growth despite harsh realities?

            A study of the congruent reaction of both subordinates and superiors during such difficult economic times will reveal if both sides of management are in sync in their perceptions, evaluation and convictions towards “living it out” together the tide of economic recession.


The purpose of this study is to investigate if a relationship exist between perceived supervisory use of transformational, transactional, and servant leadership styles in times of global economic recession;  employee’s moral and commitment to the organization prior to global economic recession;  and, employee’s moral and commitment to the organization during a global economic recession.

The quantitative descriptive correlation research study will use an adapted survey derived from an investigator-develop perceived leadership quality style questionnaire that measures motivation to assess the relationship between the perceived leadership quality style.

The variable criteria’s are economic recession and job in general. Predictable variables are analogous to independent variables and criteria variables are analogous to dependent variables (Creswell, 2003).  Criteria variables are characteristics or attributes in co-relational research whose values are predicted by the predictable variables.


Leadership refers to a person’s ability to affect another person’s or group’s behavior in order to achieve a certain purpose.  Leadership has always been an important aspect of teamwork. In politics, sports, corporate world and all aspects of life, leadership has an important role to play. However, organizational leadership needs to incorporate new and innovative methods to ensure that team members, groups and individuals are influenced by the decision of the team leader.

According to Tichy, N.M. and Devana, M.A. (1997) a successful leadership strategy include the incorporation of five basic elements; emotional intelligence, relationship, teamwork, performance and operations. This examination begins with managers and employees identifying leadership issues and adopting methodologies that allow their opinions to be taken into consideration. Therefore, to dismantle stereotypical notions of organizational leadership, they are required to use their own experience as individuals in leadership roles, at their own level of expertise.

In more challenging business and economic environments such as a recession or depression, management leadership evolves into a much different meaning and positioning.   Such conditions create a need for new leadership styles, to achieve organizational competence and speak the significance of leadership in human lives.

Economic times that are challenging must make leaders extol their capacities to “engage their constituencies” by gaining their complete attention.  They must inspire cooperation and commitment to mutually work with them in the revitalized management process of meeting such economic challenges.  Their subordinates must support and trust them – their leaders.  There must be a positive picture that must be painted.  Hope and courage must be instilled.

Therefore, it is a time that teamwork is the primary weapon for meeting the challenges of global economic recession.  Coalitions within the organization must be established:  for example, production and quality control departments must be united in product standards; finance and information technology must be united in accurate business trend information, etc.  And what highlights the creation of teamwork and reinforcement of common goals is establishing clear understanding of the business direction and the rewards that can be at hand when common success is achieved. Finally, “relationships with subordinates, peers and superior are the single most important leadership variable.”  (Kellerman, 1999)

A change in economic condition surrounding business, like a recession, should not totally discourage management leadership and see gloom and doom.  It is not a total “dead end”.  It could even be an opportunity to do profound evaluation of the entire business operation and awaken honesty towards weaknesses that should be resolved.  The ideal survival characteristics that management leadership could put into place could, for one, look into how business margins can be protected through cost efficiencies.

In addition, it is a time that astute leadership should apply efficient use of capital.  Business leadership during such times should also look into market segments where “distinctive competitive advantage” is more resilient and viable.  An economic recession unearths business creativity and inspires employee support.  (Thompson & Frank, 2005)

The totality of leadership process and qualities that must “double-up” during an economic crisis is truly called for.  Identifying the changes to be implemented and executing them requires stellar abilities.  To set up the primary stage of a vision on how to surpass the ordeal, is a primary and focal function of leadership in such times.  To achieve the same, superior quality decisions will have to be made.  Empowering becomes a clarion call.  Unity amongst every employee towards such vision; and process and decisions will be an equal challenge that leaders face during times of economic crisis.  (Lee, Shiba & Wood, 1999)


The research is a descriptive study of the employee’s and supervisor’s reaction and evaluation of the effect of economic recession towards their jobs and the company they work with.  They contributed very personal and subject opinion on how they feel within levels of continued fulfillment; satisfaction and confidence about their job; the people and the company they work with.

The target population of the study included the 350 employees of Coca Cola, branch located at Cidra, Puerto Rico. The study population was a convenient sample of 91employees from one of the 5 departments from the target population. The sample consisted of 10 supervisors and 81 employees.

The study population accomplished a survey questionnaire made up of ten questions.  The questionnaire used a Liker Scale of 1 to 5, identified as follows:

                                   GRADE RESPONSE                       EQUIVALENT LEVEL

                                                                                  OF EVALUATION

1                                                                                            Poor

2                                                                                            Fair

3                                                                                            Good

4                                                                                            Very Good

5                                                                                            Excellent

The data gathered were analyzed using weighted mean and ranking of response.  In the interpretation of responses using the weighted mean, the following ranges and verbal interpretation were used:

                                   MEAN RANGE                    EQUIVALENT LEVEL

                                                                                  OF EVALUATION

                                    1.0 – 1.49                                           Poor

                                    1.5 – 2.49                                           Fair

                                   2.5 – 3.49                                           Good

                                   3.5 – 4.49                                           Very Good

                                   4.5 – 5.0                                             Excellent


            The overall result of the survey showed an average good evaluation of the moral and perception of the employees and supervisors between them and with their company in times of global economic recession.  The general sentiment reflected in the study showed a good level of confidence towards their jobs.  This reflects on how leadership has carefully adopted process and procedures to keep the spirits and the vision of hope amongst every employee in the organization.

            The employees from the onset are already made well aware were informed as to how the company stands and what it continues to believe in and what it is confident of sustaining within the challenging economic environment.  In other words, the level of communication was immediate, constant and sustained.

            They were likewise informed of how the crisis management mitigation and planning strategies are and how they will work.  It was likewise explained and enjoined as to how changes in work style will be devised and implemented especially with regards to cost efficiencies.

            The respondents were all very honest and sincere in expressing their fears – which they cannot help.  But on the same token, they are likewise grateful that all of them in the company were inspired and motivated to unite towards holding on to each other to weather the storm.  They unanimously acknowledge that it is only through harder work; realistic work style and trust amongst each other and their company will lead them towards a better tomorrow.

            This therefore shows that the kind of leadership that has been implemented was satisfactory, if not ideal.  The singular attention towards communication that constantly permeates in the organization on anything and everything about the global economic crises creates a bond of hope and trust.  It is through this kind of transparent relationship through open and constant communication that business goals and success are achieved.


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