


































Global Research in Higher Education 
ISSN 2576-196X (Print) ISSN 2576-1951 (Online) 

Vol. 3, No. 3, 2020 

www.scholink.org/ojs/index.php/grhe 

22 
 

Original Paper 

Leading Change and Crisis: How Transformational Changes 

Can Be Successful Nowadays? 

Evangelia Fragouli
1*

 & Theodora Tourlaki
2
 

1
 School of Business, University of Dundee, Dundee, UK  

2
 Hellenic Open University, Patras, Greece 

*
 Evangelia Fragouli, E-mail: e.fragouli@dundee.ac.uk 

 

Received: July 14, 2020        Accepted: July 24, 2020      Online Published: September 2, 2020 

doi:10.22158/grhe.v3n3p22               URL: http://dx.doi.org/10.22158/grhe.v3n3p22 

 

Abstract 

Nowadays, the world scene is changing at a fast pace. The increase of competition, technological 

developments, financial downturns, market expansion, legal and political instabilities are forcing the 

international business environment to transformational changes. Researchers agree that most 

transformation efforts produce only middle level results. Changes can be stimulating in an 

organization, but are often met with negative emotions such as stress and fear which result in 

resistance and in organizational crisis. Literature review reveals that crisis will always accompany 

changes. The aims of this study are to bridge leadership effectiveness and leader’s competencies in the 

context of leading change and crisis under the optimal profile of transformational leadership. The 

study is based on a critical literature review following a qualitative research approach of reviewing 

secondary data and sources. The main conclusion of this study is that transformational changes can be 

successful with the proper guidance and support of the leaders. Transformational leadership is 

considered critical during times of change because of the importance leaders to encourage and 

implement changes but also to encourage, engage and motivate their followers to accept changes. 

Keywords 

transformational change, crisis, crisis management, leadership, transformational leader 

 

 

 

 

 

 



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1. Introduction 

The increasingly turbulent environment, the effect of globalization, the new technological 

developments, new markets, new legislation, economic crises, mergers and acquisitions, are some of 

the macro-environmental factors affecting and forcing the world and organizations to change fast (Van 

Tonder, 2004). Micro-environmental factors like the renewal of technological systems, management 

practices and corporate culture also create the need for change to organizations. These factors compel 

the organizations, which aim to remain competitive and satisfy their customers, to adapt the demanded 

changes, and only these who will manage it will survive (Burnes, 2009). There are three categories of 

change (Anderson, D. & Anderson, L., 2001; Scheele, 2013): a) specific change initiatives that have to 

be executed within specific deadlines, b) continuous improvement changes as part of business; and c) 

transformational changes (Ashkenas, 2015). The large-scale organizational change or transformational 

change is very complex and challenging. Organizational change is a highly complicated psychosocial 

process (Bandura, 1997; Goleman, Boyatzis, & Mckee, 2002) which affects individuals’ emotions. The 

change process provokes negative emotions to the individuals like stress, fear, denial, anxiety, cynicism 

(Barnett, 1999; Curtis & White, 2002). This results in increase of employees’ resistance towards the 

requested changes which very often leads them to failure causing eventually crisis in organizations 

(Bruckman, 2008; Warrick, 2009). In most of the organizations, crises are usually considered to be 

threats however, effective leaders can see crisis situations as opportunities, which can thrive with 

organizational change both within the organization and its stakeholders. Barbu and Nastase (2010) state 

that changes may constitute a complex environment which urges effective leaders to deal with 

numerous opportunities and threats in a faster and better way. Leadership plays a significant role in the 

current competitive era which is characterized by uncertainty; and it becomes the key enabler of the 

change process and implementation (Hayes, 2014). Leadership is critical to any attempt of change. 

Authors agree that organizations require leadership that will be able to foresee the necessary alterations 

for change and will manage to address correctly the need for change, convince, motivate and inspire 

employees to accept and adopt towards this change accordingly (Bass, 1990; Burke & Cooper, 2006). 

According to Kotter (1995), the leaders are the drivers for changes in organizations. Effective 

leadership brings effective changes (Deal & Kennedy, 1999). Any leader who deals with change is 

responsible to take initiatives for the successful change implementation in organizations (Beer & 

Nohria, 2000). Competent leaders are closely related to the successful change implementation. The 

same author supports that competence means to effectively manage knowledge, skills and capabilities. 

At this point, transformational leadership enters in discussion. Leadership has evolved from 

participative and task driven style, towards transformational leadership style, meaning that leaders can 

be both participative and directive to their efforts for successful and effective outcomes (Meyer & 

Kirsten, 2005). Apart from the desired outcomes, transformational leadership also influences 

employment relations, as it involves the followers’ participation to the change process. It entails a 

course where both leaders and followers put transcend their ego and work together for the best of their 

https://hbr.org/search?term=ron%20ashkenas


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organization; their co-operation also develops a high level of motivation and morale (Burns, 2010). 

Moreover, transformational leadership moderates the effects of crises deriving from organizational 

change failures. Crisis implies change for the routine procedures, which affects significantly both the 

organization and its stakeholders with possible positive or negative consequences (Mumford et al., 

2007). The same authors claim that the collective collaboration between the transformational leaders 

and the followers (through empowerment) may contribute to the generation of creative alternatives to 

handle a crisis. For successful changes, leaders must crack the code of change, meaning that they must 

deeply comprehend the process and the nature of the changes (Beer & Nohria, 2000). According to 

Ashkanasy and Daus (2002) it is the leader who is responsible to diagnose the soonest possible whether 

there are negative incidents in the business environment to deal with; it is the leader who must 

influence individuals to achieve the desired goals (Northouse, 2016). Lastly, in order to bring 

successful changes and deal with crisis deriving from them the transformational leaders must possess 

the right competencies, characteristics and skills.  

1.1 Aim of Research, Research Questions & Objectives 

This study introduces the need for organizational change and its significance for organizations’ survival. 

Further, it investigates the research on leadership in connection to successful change process. 

Reference is also made to the context of crisis resulting from changes due to external and internal 

forces and employees’ adverse reaction. The study also gives insights into the relationship between the 

transformational leader and the employees who resist to changes and determines the importance of 

transformational leadership. Finally, it expands research on how transformational leaders should act, 

and what are the characteristics, the competencies and the skills that they must possess to overcome 

any obstacles and motivate employees to react positively during organizational changes. The main 

research questions to be answered in this study are:  

1) Which factors influence transformational changes to fail? 

2) How transformational changes cause organizational crisis? 

3) What are the leaders competencies to lead change and crisis?  

4) What needs to be done for successful transformational changes;  

The objectives of this study are to examine and explore leaders’ role in transformational changes and 

crisis resulting from these changes, and, what they should do to manage them in order to get a 

positively successful outcome. 

 

 

 

 

 

 

 



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2. Method 

The study adopts the literature review method which was conducted to assess the current state of 

research on leading change and crisis. Literature review has the advantage to provide information in a 

short period time, that is why it is the most appropriate method to use when there is time restriction and 

limited access to support. The information for the study has been collected from various sources, such 

as books, scientific publications and articles, regarding transformational changes, leading changes and 

crisis; and leadership. These sources helped to identify what is already known about leading change 

and crisis and how extensively they have been researched. Moreover, with the literature review method 

the experts of the topic in discussion were identified.  

 

3. Change Management & Transformational Change  

In the present competitive era, modern organizations are faced with several challenges from the 

external environment which are political, social and economic in nature. Along with the pressures of 

such factors, the organizations have to compete by coping up with the challenges posed due to 

globalization, technological innovation, changes in the preferences/lifestyle changes, acute skill 

shortage and workforce issues, financial forces and also changes in the legislations internationally. 

3.1 The Importance and Need for Change in Organizations 

“Change” is as complex term with numerous meanings as it is synonymous with concepts like 

“transformation, growth, development, evolution, revolution, metamorphosis, innovation, and 

transition” (Stickland, 2002, p. 14). Change is a natural process that must be seen as any other normal 

situation in life, without fear and/or rejection (McCleskey, 2014). The need for change and 

transformation is a reality that affects all companies at some point in their lives although it differs from 

one organization to another since each organization is a different entity and having a different culture 

(Stace & Dunphy, 2001). It is commonly accepted that change momentum is greater than ever in the 

current business setting and it appears in all sizes, forms and shapes, affecting organizations of all 

business sectors (Todnem, 2005). Collerette, Delis and Perro (1997) state that organizational change is 

“a relatively sustainable change occurring in the micro-environment system of the organization, 

provided that this change can be detected by the individuals who are connected with that system” (p. 6). 

Burdus and Androniceanu’s (2000 as cited in Bruckman, 2008) support that the organizational changes 

are either the answer to external changes or the answer to other internal factors, like a manager’s desire 

to apply new methods. According to Grouard and Meston (1998) as cited in Hayes, 2014, the 

organizational change refers to minor or significant transformation of the structures and competences, 

which set up during the development process of the organizations. Skringer and Stevens (2008) as cited 

in Hayes, 2014 describe change as “a transition from one state to another state. Cummings & Worley 

(2005) support that organizational changes best describe how an organization moves for a current state 

to a desired future state, because future of the change is uncertain. Moreover, they claim that people 

who are involved in the change process need to be convinced that it is worthwhile to abandon current 



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status quo and adopt change. Pierce, Gardner and Dunham (2002) support there are two types of 

change, the reactive and the proactive change. The reactive change results from the external and 

internal forces to the organization while the proactive change happens when the organization decides to 

make changes. According to Ackerman (1997) and Anderson and Anderson (2001) there are three 

types of changes occurring in organizations: The developmental, which is either planned or emergent. 

According to Hayes (2014) incremental changes spotlight a process to do things better than the past 

through continuous, adaptation and modification. In current literature change is presented first, as 

undoubtfully necessary for organizational survival, second, as a threat to organizations and third, as an 

issue of leadership (Thurlow & Mills, 2009). For the individuals who will deal with the change it is 

important to identify the right change model in order to plan, manage, implement and evaluate the 

change (Pearson, Vaughan, & Fitzgerald, 2005). 

3.2 Transformational Changes 

Organizational changes sometimes are also called as organizational transformation actions (Cummings 

& Worley, 2005). Transformational change is large and significant. Transformational change means 

deep and profound change that organizations need to adapt and apply in order to align with the 

demands and challenges deriving from both external and internal forces of the new corporate 

environment (Pieterse, Caniels, & Homan, 2012, pp. 799-800). These incremental changes spotlight a 

process to do things better than the past through continuous, adaptation and modification (Hayes, 2014). 

Under these circumstances, employees are obliged to adopt these new changes and deal with any 

unexpected situations resulting from them (Zwick, 2002). Transformational change is about a process 

which requires a long time for its completion and necessitates excellent co-ordination and sturdy 

management support (Kotter, 1995; Zhou & Shalley, 2007). It concerns a process of organization’s 

reinvention and formulation of business with a vision for the future (Ashkenas, 2015). According to 

Stace and Dunphy (2001) the traits of transformational change refer to a new concept of the 

organization’s strategy that develops employees’ work commitment, creates new organizational culture 

and encourages employees to accept and support change. These views help to visualize the impact of 

transformational change on organizational strategies, and to understand its dimensions; the new set of 

cultural principles, new behaviors, renewal of processes and a revised management approach tuned 

with its initiative. Chapman (2002) suggested that transformational change means change in values, 

beliefs and behaviors. According to Cummings and Worley (2005) transformational change brings 

ideal adjustments for the individuals and therefore organizations. According to Anderson, D. and 

Anderson, L. (2001) transformational change is the most complicated type of change that organizations 

need to confront nowadays. Transformation implies significant change from one condition to another, 

which may completely change the way individuals see their work, their customers and themselves. 

According to Paton and McCalman (2008) to manage change effectively, organizations must follow a 

specific course; first, to identify possible damage, then to find alternatives and decide which one 

corresponds best for organization’s future survival and finally to implement the needed change. There 



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are leaders who have not yet realized that organizational changes differ from transformational changes 

and they are challenged to experiment and adopt new skills and capabilities in order to succeed their 

implementation. Therefore, it is crucial that leaders understand and clear out which type of change they 

have to lead in their organization, especially when it comes to transformational change (Ashkenas, 

2015). Moreover, it is critical to comprehend the driver for the change and set the appropriate ground in 

order to be successful (Anderson, D. & Anderson, L., 2001). 

3.3 Resistance to Change and Transformational Changes  

Research has shown that organizations’ transformational efforts fail to succeed by 70% (Hughes, 2011; 

Beer & Nohria, 2000). Schraeder (2004) discovered that only 34% of organizations could achieve a 

positive outcome from organizational changes. Many researchers and authors agree that the main 

reason for this failure of change initiatives is resistance to change. Erwin (2009) claims that “if 

resistance exists it constitutes an important cause of change initiatives’ failure” (p. 10). Resistance 

constitutes a phenomenon that affects the change process, in various ways. The persons involved in the 

process may either slow down its initiation or even prevent its implementation. Resistance may 

provoke distorted perception, barriers, wrong prioritization and low motivation among the employees 

as well lack of innovative response. People tend to perceive the need for change as a threat regardless 

whether changes are large or small, real or imagined, intended or unintended (Palmer, Dunford, & Akin, 

2009). Above this, if they are not well informed about the required changes they will certainly pose 

resistance against the process (Paton & McCalman, 2008). Fulop, Linstead and Lilley (2009) claim that 

individuals become hostile when they cannot embrace the change initiative or a component of the 

change progress. Van Toder (2004) adds that change, without any exception, is a stressful situation 

with negative outcomes which largely depends on the method leaders use during the change process. 

Employees prefer to stick to their traditional way of working rather than acquiring new methods. Thus, 

it is up to the leaders to make it either easier or harder for the employees to accept their method during 

change process. Ford et al. (2008, as cited in Palmer et al., 2009) claim that resistance can increase 

awareness among participants, emerge their participation and engagement and promote learning 

process for the past pitfalls (Erwin, 2009). Karyn (2002) claims that resistance can be prevented if there 

are major organizational changes, and in particular these changes modify values and visions, which are 

in accordance with the existing order. Resistance may have a positive effect to the decision making for 

transformation. From a positive perspective, resistance can play a catalytic role in the successful 

implementation of change. Although transformational changes are made for the benefit of the 

organization or its employees, they are more prone to resistance, thus it is more difficult for the 

employees to adopt them. According to Reardon et al. (1998) as cited in Scheele (2013) these changes 

can be accepted only with the contribution of effective leadership that will make people understand the 

benefits from change and will reinforce their willing to change. Active resistance proves the existence 

of strong emotions and values that could help people who resist change to become supporters of the 

change. Understanding resistance to change means to exam the individual reasons for resisting, which 



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are associated with system dynamics at the organization’s level (Yukl, 2013).  

3.3.1 Factors That Provoke Resistance to Change and Transformational Change 

Armenakis and Bedeian (1999), claim that people resist to change efforts mainly because of the 

employees’ emotions, the fear for the unknown, the stress, anxiety and uncertainty, which changes may 

bring. Many authors/researchers agree that there are several common forces for employees’ resistance 

(Lunenburg & Ornstein, 2008; Mullins, 2005): Fear of the unknown future, Habit, Economic 

implications, Security, Interference with need for fulfillment, Selective information processing, 

Inconvenience or loss of freedom, Threats to power or influence, Knowledge and skill obsolescence, 

Organizational structure, Limited resources, Groups inertia. De Jager (2001) states that people resist to 

changes due to an ability deficiency (“I can’t or don’t know how”) and due to a willingness deficiency 

(“I don’t want to,” “there’s nothing in this for me,” “change hasn’t worked well for me in the past”). 

Resistance is caused by individual factors, personality traits like high need for control, need for 

achievement etc.; group factors, that is social norms and participation in decision making and 

organizational factors, such as challenges to the status quo; threats due to the unknown. According to 

Kotter and Schlesinger (2008) there are four common factors for human resistance to change: Parochial 

self-interest, Misunderstanding and lack of trust, Different assessments, Low tolerance for change. 

Oreg (2006 as cited in Lunenburg et al., 2008) has developed a theoretical model of resistance to 

change which describes the relation of acceptance towards organizational transformation and shows 

why employees resist, the kinds of resistance and its implications. Other factors affecting employee 

resistance to change are the lack of communication, employees’ non-participation and the lack of 

change facilitation procedures in the change process (Griffin et al., 2006), as well deficient employee’s 

motivation and the quality of leadership. Good communication leads to employees’ openness and 

readiness. Interactional and procedural justice are also connected to employees’ reactions to 

organizational changes (Armenakis et al., 2007; Bernerth et al., 2007) as they seem that their influence 

to the way people perceive justice mitigates resistance to change. According to Kotter and Cohen (2002) 

as cited in Kotter et al. (2008) the role of principals (change agents or managers) in change efforts is 

very important, as their possible failure to support change may demotivate employees. Furthermore, 

principal support is connected to higher readiness to change and lower negative perceptions of change 

effectiveness (Logan & Ganster, 2007). Principal support has a great impact to effective and behavioral 

resistance towards organizational restructuring. 

3.4 Transformational Changes Cause Organizational Crisis 

Understanding the importance of changes’ imposed in organizations is one of the most challenging 

duties to be carried out by managers and leaders. As already presented, most of the organizations are 

compelled to tremendous change due to various external factors like the globalization, e-business and 

technological developments, the economic and political instability world-wide, as well internal factors 

such as culture. However, it is likely that these changes will lead to organizational crisis (Burke et al., 

2006). Beal (2007) supports that crises appear to be new unexpected situations to the organization, 



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outside its typical structure, therefore, the unpredictable need for change which comes unplanned may 

also trigger organizational crisis. Venette (2003) advocates that crisis is a transformation process where 

the old regime can no longer exist; therefore, there is need for change.  

The process of change affects both the organization and its employees, more specifically it influences 

what and how the organisation operates and the way the organisation’s departments work together and 

communicate. Strong emotions may revolt from any type of change whether it is an opportunity or a 

crisis arise. In general, unpredictable changes threaten employees’ motivation, increase their resistance 

(Leana & Barry, 2000; Leana & Van Buren, 1999) and may lead to organizational crises. In fact, there 

are organizations which because of rapid transformational change have totally collapsed. 

Crisis is a fundamental element of the human journey, which will always accompany change. Crisis 

appears in all forms, driving people into chaos and uncertainty. For example, people technology 

expansion has radically changed human lives and has improved their quality, however, it is 

accompanied by complexity leading to crisis. The more complex an infrastructure is the more possible 

it is to encounter the malignancies of external and internal forces which cause the crisis. Internal forces 

like the relational interactions of people in their organizations, in combination to the complexity and 

diversity of the business environment makes it difficult for individuations to adapt to the changing 

conditions thus conflicts are created between them and the organizations (Malloch & Porter O’ Grady, 

2009). 

 

4. Leading Change and Crisis 

Leading change is one of the most important and difficult responsibilities for leaders who deal with 

change. It entails inspiring, guiding, encouraging, and facilitating followers’ effort to adopt changes in 

order to improve or even survive their business, which for some authors this is cornerstone of 

leadership (Yukl, 2013). According to Griffin and Moorhead (2006) the essence to successfully lead 

change is the leaders’ ability to influence their followers. To lead a change presupposes that the leader 

has to recognize the problem, diagnose it, find possible solutions and implement the right one. Not all 

the attempts for corporate change are successful (Scheele, 2013). Leading change as the increasing 

effort to improve the success rate of the change initiatives, and the leadership effort to obliterate 

policies and behaviors that erode the change efforts. The same authors claim that leaders should 

persuade their followers of their honest effort to implement changes so that the latter can do the same. 

Moreover, leaders must be good listeners, to show understanding and be ready to change their 

behaviour if it is required to minimize followers’ resistance. Spiro (2011) as cited in Scheele (2013) has 

suggested eight steps for leading change successfully: Determine the change strategy, in terms of 

timelines; Assess readiness, make it better for all parties; Analyse the stakeholders, recognize the 

motivation levels; Secure a small early win; Minimize resistance; Engage the key players in 

collaborative planning, both internal and external parties; Scale and sustain the change strategy; Build 

in on-going monitoring and cause corrections. Kotter (2011) has identified that 70% of major efforts in 



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organizations fail. To avoid failure and increase the chances of success Kotter (2011) developed 

another process of steps which will help organization to succeed transformational changes in today’s 

wrap-speed world. The first four steps help mitigate a hardened status quo; the steps from five to seven 

introduce many new practices and the final step imports the changes and helps them integrate into 

organization’s culture. Namely: Step #1. Establish a sense of urgency, Step #2. Form a powerful 

guiding coalition, Step #3. Develop a vision and strategy; Step #4. Plan for and generate short-terms 

wins; Step 5. Consolidate improvements and produce more change; Step 6. Institutionalize new 

approaches.  

Kotter (1996) claims that for successful change it is important to follow the eight steps in the same 

sequence as described here above. He states that some people may try to detour one or more steps 

during a change effort. Especially, when it comes to a “simple” decision about reorganization or an 

acquisition, people may try to transform their organizations only with steps five to seven. The truth is 

that if the phase of steps one to four is avoided the base on which change will occur is not solid. 

Additionally, if step eight is not completed, changes will never be consolidated. Finally, he claims that 

even if, only one step is skipped from the specific order various problems may arise. Griffin and 

Moorhead (2006) stress that the ability of the leaders to influence their followers is the cornerstone of 

leading change successfully. According to them success will stem from three particularly changes: 

change in perceptions, change in attitudes, change in behaviors. 

4.1 Key Success Factors for Leading Transformational Changes 

Successful transformational change requires that leaders focus to three critical areas: content (external, 

impersonal), people (internal, personal) and process. Content refers to the factors which organization 

needs to change and concerns mostly external ones, like strategy, systems, structure, technology etc. 

People is about subjective and internal drivers which include behaviors, the emotions, skills and the 

mindset of the persons who are participating in the change process either planning for, designing, 

implementing it or being impacted by the change. It also includes cultural changes. Process is about all 

the resulting actions or strategies from both content and people (external and internal) changes used to 

drive the change initiative with success (Anderson, D. & Anderson, L., 2010, p. 24). The bonding of 

these three areas content (what), people (who) and process (how) form an integrated process approach 

to lead transformation. The breaking up of the content changes and the people changes is one of the 

reasons leading to failed transformational efforts. Moreover, process requirements cannot be ignored. 

For successful leading change, transformation leaders must concentrate on content, human factors and 

the change process (Anderson, D. & Anderson, L., 2010). Kotter and Schlesinger (2008) suggest that in 

order to lead change successfully leaders must determine the type of resistance they will confront and 

respond appropriately to deal with it. Organizational changes urge the organizations to learn how to 

change (Poell, Yorks, & Marsick, 2009). The element of learning is considered to be a crucial principle 

for successful change (Franz, 2010; Schein, 2004; Weick & Quinn, 1999). According to Miller (2012) 

as cited in Mitchell (2013) employees must be ready and willing to accept changes and leaders must 



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transform their organizations on a regular basis in order to remain competitive. Both organizations and 

employees must realize the value and purpose of the change initiatives, how they are of benefit to them 

and manage to maintain them for a long time.  

4.2 Leading Crisis 

As the business environment is constantly changing, the organizations meet strategic challenges and 

therefore they are compelled to amend their strategies so that they adopt new changes and deal with 

potential crisis deriving from them, in order to survive and remain competitive (Crandall, Parnell, & 

Spillan, 2014). By this way, the leaders will achieve a long-term, proactive attitude to their strategic 

planning. However, leaders must be cautious as it may be difficult to distinguish between their strategic 

challenges and traditional organizational crises (Crandall, Parnell, & Spillan, 2014). The leaders are not 

always ready to handle crisis and this has a negative impact to orgnaisation’s profitability, market 

position and reputation (Garcia, 2006) and although they are aware about these consequences their 

agenda does not include training on crisis leadership. Therefore, attributes like leading the change 

process, taking risks and advancing organizational agility during a crisis may lose the lead from other 

issues related to communication and public relations (James & Wooten, 2005). According to the 

organizational psychologist, Erika Hayes James, there are two types of organizational crisis. Firstly, 

sudden crises which happen without any warning and the organization and its leaders are not aware of 

them, and therefore, they are not accountable for them and secondly, smoldering crises which start as 

minor internal situations which develop further due to leaders’ negligence, therefore, it is them to 

blame for.  Robert and Lajtha (2002) state that each crisis is unique, thus leaders should react 

differently as per the situation they confront. Crisis situations require competent leaders to manage and 

lead crisis with strategies that will enable them to benefit from crisis and accomplish change and 

growth within organizations with success (Fragouli & Ibidapo, 2015). Researchers have identified a 

Five-Stage framework (Mitroff, 2005) which represents the stages of a crisis and the leaders’ practices 

to be effective during leading crisis. The stages along with the areas that crisis leaders must focus 

through key questions about each one of them are presented as follows (James & Wooten, 2004): 

Signal detection; preparation/prevention; containment/damage limitation; recovery; organizational 

learning. Learning is the final stage where crisis leaders try to understand which organizational factors 

led to crisis and then leverage this understanding to apply the necessary changes to organization’s 

systems and processes. Moreover, they encourage learning from crisis’ effects from past occurrences.  

4.2.1 Crisis Leadership Competencies  

Companies and communities worldwide have been devastated by domestic terrorism, natural disasters, 

power outages, white collar crimes cyberattacks, economic and fiscal crises and life threatening 

pandemias. These crises bring organizational crises associated with negative impacts like loss of profits, 

decreased productivity expensive costs needed for business recovery (James & Wooten, 2011). During 

these times of crises the most important issue is how the leader will handle the crisis than the crisis 

itself, meaning that the leader must acquire the appropriate competencies to limit the degree of damage 



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or even avoid it, although crises happen inevitably. In addition, it is important that the leader learns 

from the crisis to prevent repeat occurrences (James & Wooten, 2011). Organizational crises may be 

generated by organizations’ failures and managerial incompetency. Therefore, leaders must develop the 

appropriate set of knowledge, skills and behaviors to prevent and confront crisis and strategic issues 

effectively (Garcia, 2006; Mitroff, 2005) and determine what are the necessary actions that must be 

taken (Walsh, 1995). Leadership behaviour is responsible for the effective responsiveness to 

organizational crisis. Moreover, leaders must encourage employees’ engagement in knowledge 

acquisition and formulate the right strategies to resolve crisis (Dutton & Jackson, 1987; Wooten & 

James, 2004). That is why a crisis mindset requires that leaders have the worst-case scenario in mind, 

and at the same time they suggest solutions. Organizations and leaders must have contingency plans in 

mind, in order to respond to emergencies requiring analysis, assignments and actions (Bernstein & 

Rakowitz, 2012). There are five competencies which leaders must acquire in order to have a holistic 

approach about organization, crisis, environment and the stakeholders, during and after a crisis (James 

& Wooten, 2004; James, 2008): a) To build trust in the company, b) to reform the organisation’s 

mindset, c) to identify clear and disputable vulnerabilities of the organization d) to be wise, courageous 

and decide rapidly, e) to learn from crisis to effect change. All the above mentioned leaders’ 

competencies are the ideal for all business leaders to acquire both during times of crisis and all other 

business situation like transformation (James & Wooten, 2011).  

4.3 Leadership Style, Transformational Changes & Transformational Leadership  

Leadership style is part of the overall leadership concept which reveals how a leader can lead and 

support his followers to perform a task successfully (Chan, Ng & Jee, 2012). There are many 

leadership styles, which along with the leadership theories emanate from three main categories: 

personality traits; context, situation or task; and/or philosophical. In 1978, James McGregor Burns 

argued about transactional and transformational leadership style. Transaction leaders lead through 

social exchange (Bass & Rigio, 2006) while transformational leaders motivate and inspire their 

followers to achieve success. According to Derungs-Ruhier (2011), these two leadership styles are the 

new models connected to charismatic and strategic leadership. In 1991, Avolio and Bass introduced the 

full range of leadership model which is the most appropriate and commonly used leadership model 

focusing on leaders’ behaviors towards the labor pool; and includes three leadership styles: the 

laissez-faire, the transactional and the transformational style (Antonakis, Avolio, & Sivasubramanian, 

2003). The laissez faire or free reign leadership style or non-leadership style describes a leader who has 

given the control to his followers on everything without any involvement by his side. The leader’s 

limited participation demonstrates escaping responsibilities and avoidance to complete tasks. This 

behavior frustrates followers and triggers their demotivation. The transactional style assumes 

transaction, a beneficial relationship between the leader and his followers. The leader rewards the 

followers’ efforts and ensures their behavior meets organisation’s expectations (Bass, 1998; Burns, 

2010). Specifically, the leader set goals and states explicitly what he expects from his followers then he 



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organizes, supervises and provides feedback so that everyone is on task, and when the followers 

succeed to perform positively they are rewarded unlike, if they fail they are punished. Transactional 

leadership style encompasses different kinds of behaviors (Bass & Rigio, 2006). Contrariwise, 

transformational leadership style differs from both above-mentioned styles as it entails a philosophy 

about the future with long-term goals and high values that augment employees’ commitment and their 

satisfaction. Bass (1990) separated the concepts between transactional and transformational leadership 

and suggested that leaders should exercise each leadership depending on the situation (Wofford & 

Goodwin, 1994).  

James MacGregor Burns (2010) in his work Leadership, first referred to the transformational 

leadership theory by stating the diametrically opposites with transactional leadership, and supported 

that transformational leadership is needed today opposed to the old style of transactional leadership. 

Transformational leadership demonstrates a positive correlation to organizational effectiveness. It 

brings positive results at many sectors, such as the managerial; the team’s performance (Waldman, 

Bass, & Einstein, 2011) and the employees’ improved attitudes, like job satisfaction. According to 

Northouse (2016, p. 161), “transformational leadership is a process that changes and transforms 

people” and thus organizations can transform as well. Bass (1990) in his pioneering book, suggested 

that transformational leadership is more possible to appear during periods of organizational change and 

transition. Transformational leadership theory belongs to modern leadership theories, which are 

associated with leadership effectiveness in changes and in particular it refers to the relationship and 

trust developed between the leaders and the followers (Higgs, 2003). According to Paton and 

McCalman (2001) change is an integral part of the organizations which can neither disappear nor 

dissipate and leaders need to possess certain transformational leadership behaviors to lead change 

process effectively. According to Krishnan (2002), the major ingredient of the transformational 

leadership is the leader’s ability to motivate his followers to accomplish more than they ever expected. 

Transformational leadership increases the influence at the highest leadership level because they act like 

role models to the employees. Transformational leaders have a high level of competences, skills and 

experience in their working field and they are characterized by strong commitment, integrity and ethics, 

deep-rooted in the culture through vision (Lowder, 2009). They are charismatic personalities with high 

moral and ethical who wish to motivate and inspire their employees and help them fulfill their potential 

(Higgs, 2003). Transformational leaders influence employees’ attitudes by alleging a positive vision for 

the future, develop an interactive intellectual dialogue with them about change and nourish their 

confidence in implementing change. They motivate employees to overcome themselves, inspires 

collective work rather than individual in order to successfully manage organizational changes and 

achieve the organization’s goals.  

 

 

 



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4.3.1 The Dimensions of Transformational Leadership 

There are four common dimensions (Bass & Riggio, 2006): Idealized Influence (Yukl, 2013; Bass & 

Rigio, 2006) Inspirational Motivation (IM). According to Tims et al. (2011), through intellectual 

stimulation leaders develop a culture of active thinking which enhances employees’ participation in the 

organization. Research has shown that all four dimensions influence organizational changes in a 

different way (Avolio & Bass, 2004) and they are linked to leadership effectiveness and high 

performance of the employees. More specifically, it results that with idealized influence followers are 

willing to trust and emulate the leader. The leader increases confidence and ethical standards. Shamir 

(1993) as cited in Bass and Rigio (2006) posits that leaders with high confidence and 

self-determination can transform their followers through regular communication and the provision of 

confidence and self-esteem and lead them to achieve great accomplishments. Leithwood and Jantzi 

(2000) suggest that there are six dimensions of transformational leadership that the leader holds and 

applies: To build vision and goals, to provide intellectual stimulation, to offer individualized support, to 

symbolize professional practices and values. To demonstrate high performance expectations, to 

develop structures to enhance participation in decisions. Ancona et al. (2007) refer to four behaviors 

that a leader processes: sense making, visioning, relating and inventing. If a leader shows weakness in 

solving out a case his employees will lose their enthusiasm and energy and will be ineffective in 

implementing changes. Yates also supports that leaders have a 4-E framework of capabilities that 

includes: envisioning a values-driven set of goals and strategies, enabling their achievement by 

selecting appropriate methods, tools and people, empowering others by developing trust and 

interdependence between leaders and followers, energizing everybody to drive the change. Northouse 

(2016) states that although the transformational leader has a crucial role in the transformation process 

he is inextricably linked with the followers. Moreover, Northouse (2016) supports that a 

transformational leader has the following qualities: creates a vision; is a role model with high ethical 

and values; is a change agent and illustrates how to initiate and implement change; helps others so that 

they contribute to the organization’s growth, thus help the organisation; empowers followers to do their 

best for the organization; listens to all aspects and develops cooperation. Posdakoff et al. (2016), 

recognize six behaviors that characterize the transformational leaders: The provision of an appropriate 

model; The identification and articulation of a vision; Promotion of group goals; Provision of 

individual support. The leader shows respect to the needs and feelings of his followers; Intellectual 

stimulation. High performance expectations. Higgs and Rowland (2011) as cited in Hayes (2014) have 

reported that successful change implementation includes five behaviors of leaders: creating the case for 

change ,ensuring that change is based on an in-depth understanding of the issues, engaging others and 

building commitment, developing effective plans and good monitoring practices facilitating and 

developing the capability of those involved. Transformational leaders act with ethics and values that go 

beyond their agenda and conviction. Their main characteristic is their ability to comprehend 

interpersonal relationships and to view the qualities, beliefs and personality of their team’s individuals. 



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However, transformational leadership and ethical behaviors are not easy to relate, but situational 

factors like the type of the industry can bring the desired equilibrium. The end values of the 

transformational leaders like honor, justice, integrity can transform followers and make them change 

their own beliefs, attitudes and goals and thus bring positive coherence between the leaders’ and 

followers’ value systems (Krishnan, 2002). Transformational leaders are confident about being 

successful without relying on luck to achieve their goals. Ιt is this belief they have for themselves, that 

helps them to transform the people around them (Chammas, 2010). They lead changes in strategies, 

mission and culture through qualities like shared values, vision and relationship building and thus 

create compelling change to both an organization and its employees (Griffin, 2003).  

 

5. Conclusion  

The aim of this study is to investigate the relationship between leadership and successful 

transformational changes and crisis situations as their outcome. In order to examine this a literature 

review was presented and was critically reviewed in order to develop an essential understanding. 

Change is inevitable. It has become a key component for organizations who seek to perform 

successfully and maintain the competitive edge, though innovation and sustainability efforts. Once the 

need for change is identified, organizations are forced to adopt large-scale changes, the 

transformational changes, at some point of their lives so that effectively respond to the new trends of 

the global spectrum. However, the process of transformational change in an organization is very 

challenging and complex. Transformational changes rise strong emotions to the change recipients, 

which may emerge their resistance and result in failure of the whole change process, followed by 

organizational crisis. Within this context, leadership plays a significant role in leading change and crisis. 

Leadership is important to practice throughout the organizational initiatives as contributes to the 

provision of support, collaboration and transfer of knowledge within the organization (Davis, 2014). 

Moreover, leadership is also important for managing crisis, which appears unpredictably and 

unexpectedly and requires immediate attention and response. Leading change and crisis also require 

specific competencies of the leaders. The main conclusion of the study is that there can be no 

separation between leadership and change due to their interdependence. It is also concluded that 

transformational leadership is the most appropriate style to conquer transformation. Transformational 

leaders possess the appropriated competencies, attributes and behaviors to motivate, inspire and 

convince change recipients of the necessity of change and accept it, enabling them to bring successful 

change.  

 

 

 

 

 



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