Research Article
Crisis Management, and Charismatic Leadership Communication as Antecedents to the
Organizational Reputation
Tariq Saeed Khalfan Barshoud Almarshoodi#1, Ahmad Bashawir Abdul Ghani*2, Mohammed R A Siam#3
1,2,3Universiti Utara Malaysia, Kedah, Malaysia
tariq.barshoud@yahoo.com1, bashawir@uum.edu.my2, r.a.siam@uum.edu.my3
Article History: Received: 10 November 2020; Revised: 12 January 2021; Accepted: 27 January 2021; Published online: 05 April 2021
Abstract:The aim of this study is to measure employees’ perceptions of UAE police’s reputation. Even though these
perceptions are formed in the public domain, this study focused on the public sector employees’ evaluation of the Commission’s reputation and credibility. This is solely because they work in it and will be directly affected by negative perceptions, as evident in most alternative media and blogs. Like many other organizations, employees and other internal stakeholders know the organization better than the outsiders, so measuring their perceptions is essential. This study attempts to reflect how UAE police, through its charismatic leadership communication and organizational credibility, earns the trust and confidence of its employees in times of crisis, which is further reflected in its reputation. The present study chooses the situational crisis communication theory to develop its theoretical framework. Originating in attribution theory, the SCCT has been widely used in crisis communication research to test the link between crisis situation and crisis response strategies. The study has employed the SEM-PLS is statistical technique for the analysis of the data. The findings of the study have provided support to the hypothesized results.
Keywords:Crisis, Leadership, reputation, UAE Police
1. Background
Public or government organizations have long been associated with having unfavorable reputations (Frandsen, & Johansen, 2019). For decades, they have been portrayed as incompetent, inefficient, rigid, indulge in too much red tape and bureaucracy. These negative perceptions are associated with the government’s reputation which is reflected in constant criticism such as being unreliable and not having a customer service orientation. This has resulted in the decline of public support for the government and public organizations or agencies. To worsen this situation, a ‘bad’ reputation and stakeholders’ distrust may signal a lack of legitimacy in public sector organizations (Canel et al., 2020). Fortunately, research in public organizational reputation has indicated that public entities are becoming more cognizant of the value of a favorable reputation and have begun to put an interest in improving and protecting their reputation (Anastasopoulos, &Whitford, 2019). These concerns are expressed in terms of actions taken to implement measures to nurture, maintain, and protect their reputation. As a result, a great deal of research has been dedicated to public organizational reputation in recent years.
A wide range of scholarly interests in this area focuses on the issues and criticisms concerning the problem of reputation management which threatens public organization’s reputation. Among the issues and challenges are those concerning public safety, which involves matters of life and death, and other situations that directly affect citizens, such as general elections and public policies, which rely on trust from the public (Howlett, 2019).
Reviews on corporate communication literature indicate that knowledge on the concept of favorable reputation in the public-sector context, in terms of benefits and implications, is still limited when compared to the private sector. There are limited studies on this area, though increasing attention has been given to explore the causes and consequences of crisis occurring in public sector organizations. According to Waeraas and Maor (2014) found that these crises are placing negative impact on the reputation of these public sector organization. In the continuation of their argument they said that increasing number of crisis has increased the focus of the researchers toward the impact of these crisis on the reputation of the organization. In addition to that, increasing globalization has changes the cause of crisis as well as their treatments. Now Firm cannot solely rely on local strategies rather international learning playing a major role in crisis management
Learning orientation is a dynamic process of creation, acquisition; distribution; application and integration of knowledge aims at the development of capabilities (intangible resources), which would contribute to better organizational performance through of individual and collective learning (Lopez et al., 2005). For instance, an individual learning may be relatively easy to be imitated, however, a continuous and collective organizational learning, which has greater cumulative effects and are much difficult to be imitated by its competitors (Howlett, 2019). Organizational learning may constitute an individual; idiosyncratic, intrinsic and complex process through a collective collaboration and interaction in exchanging information knowledge and message.
Furthermore, the firm should develop systems to codify the tacit knowledge into tangible procedures and processes (organizational capital). Henceorganization should put the effortinto establishing the knowledge management system. In that study the Basheer et al., (2018) argued that organizational learning is underlying dynamism to build up the organizational capitals, including human and social capitals, leading to firm level sustainable competitiveness.
As unlike private organizations where financial performance acts as the key indicator of success, and competition among business rivals is commonly acknowledged, public organization entities are assumed to benefit from cultivating and protecting their reputation. In order to achieve this, bureaucratic organizations such as ministries, federal and local government agencies, and regulatory bodies are working together to secure, enhance or establish a favorable reputation collectively. Thus, it is crucial for reputation to be consistently established, nurtured, and protected.
The increased awareness in managing reputation is also due to the increased incidents involving public organizations. As such, with more crises occurring across and throughout specialized public organizations, communication scholars have realized that the management of public organizations’ reputation is equally as important as private sector organizations, as the impact will determine the survival of the public organization (Christensen et al., 2020). In particular, the role of charismatic leadership during the crisis as well as organizational credibility and its effects on organizational outcomes is critical.
2. Theoretical Framework
The need to expand current explanatory theories is pressing due to the underrepresented theory-based research emphasizing key indicators in organizational crisis and reputation. In the context of a theoretical framework, several attempts had been made to explain organizational crisis such as the situational theory of publics (Kriyantono, & McKenna, 2019), attribution theory (Zhou &ki, 2018) and image repair theory (Benoit, 2014). Another theory which has been used to understand organizational crisis is an integrated four-step symmetrical model. These models, even though succeeding in analyzing a crisis, have limitations in identifying the crisis types as well as the response strategies for a specific crisis.
Weiner’s (1985) attribution theory, for example, provides empirical evidence on the link between crisis and reputation but is not able to guide crisis leaders with robust decision-making when a situation erupts. While image repair theory often studied in a context of organization reaction to a crisis which neglects another possible element in the crisis management phase. In this regard, the application of the image repair theory often is descriptive rhetorical, while causal research approach is relatively scarce (Holtzhausen& Roberts, 2009) which refrained the possibility of multiple issues affecting the image restoration efforts being analyzed. Therefore, using a death incident of a non-employee as a preventable crisis context, this research tries to accommodate situational CC theory (SCCT) developed by Coombs (2006) in order to understand the development of crisis from the victim type to the preventable type of crisis. Furthermore, the response strategies employed by the organization as well as the impact it has on the organizational reputation are also examined.
However, the effectiveness of the strategies being implemented could not be assessed solely using the existing theory since SCCT mainly focuses on crisis type and crisis response strategy in explaining the impact of crisis on an organization’s reputation. In the organizational communication perspective, there are many other factors that have the potential to influence organizational outcomes, especially when the crisis arises. Among those factors are those originating from within the organization itself such as leadership communication and the crisis responsibility. For example, previous research has proven that leadership communication (De Vries et al., 2010) and organizational credibility (Kouzes & Posner, 2012) have direct links with an organization’s reputation. Thus, the current research proposed to expand the SCCT by incorporating leadership communication and organizational credibility in the theoretical framework in an attempt to analyze public organizations’ reputation following a crisis.
Organizations’ leaders can impact on the dynamics of organizational reputation in a crisis through their charisma, which will enhance the credibility of their respective organization as the source of information (Coombs, & Holladay, 2012). This is particularly important because in times of crisis, organizations are urged to minimize the impact on their reputation, which force the organizations to rely on their leaders. Leadership literature shows that there are many factors contributing to the leaders’ success in managing crises, among others: 5 charismatic leadership (Antonakis et al., 2011); leadership style, leadership communication style, leadership credibility, effective communication, dialectics, non-verbal communication, and competence. Some research has even investigated the emergence of leadership during a crisis and environmental uncertainty (Gagné
et al., 2019). What is missing in the literature is the importance of the issue of charismatic communication of a leader in determining the organization’s success in overcoming a problem.
Organization reputation and crisis communication literature indicates that leadership behavior directly and indirectly drives and reinforces perceptions of crisis responses (Gistri et al., 2019) and perceives organizational reputation. The role of the leaders (or CEOs) during the crisis response stage is paramount in maintaining organizational reputation and identity (Flatt et al., 2013). The behaviors of the leader himself are determining factors in the success or failure of crisis management. However, to date, the crisis communication literature has yet to include charismatic leadership communication (CLC) as a meaningful variable that can influence the link between crisis communication and reputation, whether directly or indirectly (Levine et al., 2010). Therefore, lack of CLC employed by the organization during a crisis can be problematic because the public can be sensitive to the way in which information is received from the organization, hence affecting their perceptions of it. This may indirectly or directly affect the public’s attitude to the institution or organization. Although there are implications of 6 CLC during the crisis for business and management practices, they have not been theoretically and empirically tested in a systematic manner (Gagné et al., 2019).
It is also worth noting that charismatic leadership, as the core element in leadership theory, has been widely explored, yet no analysis has studied the communication aspect of it in an organization setting (Jamal, & Abu Bakar, 2017). On the other hand, in the field of crisis communication, research on leadership indicates that the criticality and centrality of crisis leadership has emerged as the cardinal rule in crisis communication (Dückers et al., 2017). Recently, research has highlighted that communication plays a major role in constructing and protecting government bodies’ reputations (Liu et al., 2012) and forming many stakeholders’ perceptions of their reputation especially in crises (Maor, 2016). Whilst the literature indicates guidance, this important aspect of leadership communication has been afforded little attention by researchers, resulting in a knowledge deficiency in crisis communication, and its impact on organizational reputation from the internal stakeholders’ perspective, specifically employees at the executive and managerial levels.
Moreover, the diverse demographic factors of leaders in managing crises appear to be largely unexplored, and understanding these factors constitutes an opportunity to bridge the gap in the crisis literature. Nevertheless, a review on previous research on charismatic leadership has recommended several areas to be investigated in order to bridge the gap in the CLC literature. First, there is a need for further validation studies, given the limited research attention that the subject has received to date (Kammerhoff et al., 2019). Second, there is a need to investigate the causal relationship between leadership communication and reputation in 7 times of crises (Coombs, 2014). An understanding on the role of charismatic communication during a crisis can help generate guidelines for leaders to employ more of the CLC in mastering risks. Third, previous research on crises and charismatic leadership was mostly experimental and/or laboratory studies conducted on students’ samples (Coombs, 2014). As such, this study is designed to investigate managerial samples to reflect the management’s perspective on their leadership communication and perceived organizational reputation (POR) (Boin et al., 2005). Not included in the list, nevertheless, is what is being considered as equally important – the role of the leader as the organization’s spokesperson, where the flow of information originates from the inside and goes to the outside world. Besides setting the direction for the organization, a leader re-establishes confidence among stakeholders through CLC. In other words, the CEO’s role is not only planning and managing the strategy to overcome the crisis, but also communicating the strategy that is being implemented to the public. Appointing a visible, charismatic leader to manage the crisis shows that organizations pay much attention to handling the crisis (Molenaers et al., 2010). As such, further examination on many aspects of CLC is necessary to determine the exact nature, influences and consequences of the CLC in organizations. As Levine (2008) argues, apart from the main elements such as influence and motivation and key characteristics of charismatic leadership, communication variables also need to be given equal attention, as these elements are communication-based messages and behaviors.
In the same vein, Christensen et al., (2020) stressed that, investigating charismatic leadership in an organizational perspective is crucial, and the leader communication aspect during crisis should be considered because it will be significant in widening the scope of this field of study. In addition, further research on charismatic leadership by Frese et al, (2003) and leadership communication by earlier researchers has provided interesting results that serve as the platform to embark on investigating the mediating role of CLC in this study (Wissmath et al., 2010).
Organization reputation (OR) and crisis communication (CC)literature indicates that leadership behavior directly and indirectly drives and reinforces perceptions of crisis responses (Nizamidou&Vouzas, 2017) and perceives OR. The role of the leaders (or CEOs) during the crisis response stage is paramount in maintaining
organizational reputation and identity (Flatt et al., 2013). The behaviors of the leader himself are determining factors in the success or failure of crisis management. However, to date, the CC literature has yet to include CLC (CLC) as a meaningful variable that can influence the link between CC and reputation, whether directly or indirectly (Wissmath et al., 2010). Therefore, lack of CLC employed by the organization during a crisis can be problematic because the public can be sensitive to the way in which information is received from the organization, hence affecting their perceptions of it. This may indirectly or directly affect the public’s attitude to the institution or organization. Despite of noted implications and entanglement of CLC during the crisis situation for both the organziati0on and managerial team, it is one of the least studied issue in the literature (Nizamidou&Vouzas, 2018).
Appointing a visible, charismatic leader to manage the crisis shows that organizations pay much attention to handling the crisis. As such, further examination of many aspects of CLC is necessary to determine the exact nature, influences and consequences of the CLC in organizations. As Levine (2008) argues, apart from the main elements such as influence and motivation and key characteristics of CLC variables also need to be given equal attention, as these elements are communication-based messages and behaviors. In the same many authors stressed that investigating charismatic leadership in an organizational perspective is crucial, and the leader communication aspect during a crisis should be considered because it will be significant in widening the scope of this field of study. In addition, one of the pioneering studies on charismatic leadership by Wegge et al. (2019) and another on the leadership communication by earlier researcher has provided interesting results that serve as the platform to embark on investigating the mediating role of CLC in this study.
With a communication-centered approach, this study hypothesizes that CLC is the primary process variables that mediate the relationship between crisis responsibility and POR variables. This line of research answers Coombs and Holladay’s (2012), and Coombs’s (2014) call to identify the underlying process variables linking crisis and organizational reputation. This study also answers Lange, Lee and Yee Dai’s (2011) assertion to examine the antecedents of reputation and their effects in a more complex reputation model, particularly in Asian countries. Thus, this study tests a communication-centered model using members of public sector organizations or agencies in UAE. Unlike many other homogeneous Asian countries (e.g., China, Japan, and South Korea), UAE is rather heterogeneous in its cultural and ethnic composition, which includes the ethic community from across the globe. Therefore, the findings can contribute to leadership and communication literature from both communication points of views, diverse cultural background and a non-Western perspective.
This study extends the research on the effect of crisis responsibility on organizational reputation and its interaction with crisis response strategy, international learning orientation and CLC in a public organization setting to address the importance of assessing the role of leadership communication and organizational credibility during crisis situations in UAE’s public sectors. Both CLC and organizational credibility will be tested as public organizations’ weapons to combat declining public trust while securing its reputation. This research seeks to fill the lacuna in existing studies by comprehensively investigating and understanding the dynamics of two core aspects of organizational reputation: firstly, CLC; and secondly, organizational credibility during a crisis in public organizations in UAE. UAE is a developing country where organizational reputation has recently received its fair attention from both the public and private sectors. However, in general, it is found that UAE public organizations’ reputation has received little attention when compared to private sector bodies.
Organizational reputation does not occur by chance because it is closely related to the role of an organization’s stakeholders and leadership communication (Wegge et al., 2019), and public trust and organizational credibility. The everchanging interplay of leadership communication, organizational credibility and employees’ perception of organizational reputation during a crisis serves as a new mechanism in understanding CC. Given the established links between crisis and reputation in Western countries’ corporate sector, the present study investigates such links and develops a framework to examine the extent to which these relationships are mediated by CLC and organizational credibility in public organizations in UAE.
This study, which is among few pioneering studies on the issue basically extends the existing research on the effect of credibility on organizational reputation and its interaction with crisis responsibility and CLC in a public organization setting to address the importance of assessing the role of leadership communication during crisis situations in public sectors firms of UAE. CLC and international learning orientation will be tested as public organizations’ weapons to combat declining public trust while securing its reputation.
Figure 1.Conceptual Framework
Hypothesis 1: Crisis response strategy has significant impact on the crisis responsibility. Hypothesis 2: Crisis response strategy has significant impact on the POR.
Hypothesis 3: Crisis responsibility has significant impact on the POR. Hypothesis 4: Crisis responsibility has significant impact on the CLC. Hypothesis 5: CLC has significant impact on the POR.
Hypothesis 6: CLC mediates between the crisis responsibility and POR.
3. Methodology
A structured and a close-ended questionnaire with five-point Likert scale was developed in this study to conduct a survey. The literature indicates various researches which have adopted different interval Likert scales, i.e. five, six, seven and nine. In current study, we adopted a 7-point Likert scale which was mainly chosen because if a scale has mid-point it is perceived to give reliable and accurate outcomes, which thus allow the respondents of the survey to precisely and conveniently explain their position about their choice selection for a particular point (Hafeez et al., 2018). As a result of all the efforts, a 31% response rate was obtained by retrieving 226 questionnaires from 730 distributed survey questionnaires.
4. Results
A reflective measurement model is assessed in this study through reliability assessment of the indicators as well as measuring each reflective construct’s convergent and discriminant validities and construct reliability or internal consistency reliability (Muneer et al., 2019). All the mentioned criteria are discussed as follows:
Figure 2.Measurement Model
The present study examined the outer loadings of each indicator to determine the indicators’ reliability, which is defined as the percentage of explainable variance by the study’s latent construct (Hameed et al., 2018). Only those reflective indicators were retained in current study who exhibited outer loadings from 0.70 to 0.99, while those items were omitted whose loadings fall below this range, following a rule of thumb (Hameed et al., 2019: Muneer et al., 2019). H1 H2 H4 H5, H6 H3 Crisis Responsibility Charismatic Leadership Communication Perceived Organizational Reputation Crisis Response Strategy
Table 1. Outer loadings CLC CRS OCR POR CLC1 0.876 CLC10 0.892 CLC11 0.916 CLC13 0.860 CLC14 0.834 CLC15 0.794 CLC16 0.887 CLC17 0.881 CLC18 0.839 CLC23 0.704 CLC3 0.855 CLC4 0.857 CLC5 0.800 CLC6 0.846 CLC7 0.837 CLC9 0.909 CRS1 0.889 CRS10 0.878 CRS2 0.837 CRS3 0.903 CRS4 0.892 CRS5 0.911 CRS6 0.851 CRS7 0.818 CRS8 0.864 CRS9 0.878 OCR2 0.890 OCR3 0.898 OCR4 0.882 OCR5 0.911 OCR6 0.882 POR1 0.773 POR10 0.789 POR13 0.765 POR14 0.793 POR15 0.810 POR17 0.842 POR18 0.820 POR19 0.834 POR2 0.796 POR3 0.766 POR5 0.773 POR8 0.761
POR9 0.772
OCR1 0.887
Internal consistency reliability shows the consistency of a set of items, for instance to what extent all items measure the same thing (Hair et al., 2014; Salem and Salem 2019). Basheer et al., (2017) referred internal consistency reliability as the interrelatedness between the set of items. In this regard, there are two common estimators to examine an indicator’s internal consistency reliability under organizational research, these are: 1) Cronbach alpha coefficient (α) and 2) composite reliability (CR). Hair et al. (2014) argue that Cronbach alpha coefficient shows each indicator’s reliability based on its interrelationship.
Table 2.Reliability
Cronbach's Alpha rho_A CR (AVE)
CLC 0.974 0.975 0.977 0.724
CRS 0.965 0.966 0.970 0.762
OCR 0.949 0.949 0.959 0.795
POR 0.951 0.954 0.956 0.628
Assessing convergent validity is an important step to estimate the measurement model. According to Hair et al. (2014) convergent validity refers ‘as an extent that for a particular construct, each of its items are positively correlated to the rest of the items of the same construct’. Thus, if all the items of a particular construct are found to be positively correlated to the other items, then convergent validity is achieved. To measure the convergent validity, outer loadings of indicators and average variance extracted (AVE) can be used.
However, Fornell and Larcker (1981) proposed a criterion to assess the discriminant validity. According to this criterion, the AVE values for each construct are obtained and thus compared their square root values to the correlations of a particular construct with other latent constructs in the study. Putting differently, the square roots AVEs are assumed to be greater in comparison to its correlation with other model constructs (Zahra et al., 2019). The rationale behind this criterion is the fact that more variance is perceived to share between the items and their respective construct. Table 3. Validity CLC CRS OCR POR CLC 0.851 CRS 0.741 0.873 OCR 0.631 0.847 0.892 POR 0.706 0.787 0.764 0.792
According to a rule of thumb proposed by Fornell and Larcker, the value of average variance extracted (AVE) must be above or equal to 0.50. Table 2 presents the AVE values which were found to be ranged between 0.502 and 0.635, indicating acceptable level of discriminant validity(Salem and Alanadoly 2020). Thus, the AVE square root values and latent constructs’ correlation were compared and presented in Table 3 which clearly indicates that square root AVEs exceeded in value than the correlations between the constructs. When this occurs, discriminant validity is achieved (Fornell-Larcker, 1981).
Research Article
Therefore, a standard bootstrapping method was opted in this study to carry out the path coefficient analysis for the purpose of testing the hypothesized relationships among the model’s latent constructs (endogenous and exogenous). This method is also supported by Chin (1998a), therefore in this study we used 226 cases and 5000 number of bootstrap samples to perform the bootstrapping procedure as well as to estimate the path coefficient’s significance. Resultantly, beta coefficients, standard errors, t-statistics and path coefficients significance for the hypothesized relationships were obtained (Basheer et al., 2019: Hameed et al., 2018; Hair et al., 2014).
Table 4. Direct Results
(O) (M) (STDEV) (|O/STDEV|) P Values
CLC -> POR 0.270 0.276 0.110 2.463 0.007 CRS -> CLC 0.534 0.538 0.070 7.673 0.000 CRS -> OCR 0.847 0.847 0.035 23.993 0.000 CRS -> POR 0.731 0.733 0.054 13.596 0.000 OCR -> CLC 0.631 0.634 0.069 9.176 0.000 OCR -> POR 0.513 0.510 0.107 4.817 0.000 Table 5. Mediation
(O) (M) (STDEV) (|O/STDEV|) P Values
OCR -> CLC -> POR 0.170 0.175 0.075 2.286 0.011
In PLS-SEM’s structural model estimation, R-square acts as an important criterion which measures that how much variance in the study’s endogenous latent construct that can be explained by the hypothesized model. R-square is also known as coefficient of determination and is denoted by R2. The coefficient of R2 always fall within 0 and 1, with 0 indicating no predictive accuracy and 1 indicating perfect predictive accuracy (Hair et al., 2014).
Figure 4. R-square
Furthermore, the resultant changes in R2is represented by estimating effect size (f2), these changes in R2 occur as a result of omitting an exogenous construct from the model. Alternatively, it enables to determine the substantive impact of exogenous construct on the model’s endogenous construct (Gim, Desa, &Ramayah, 2015).
Research Article
Figure 5. Blindfolding
While calculating R2 to check the model’s predictive accuracy, path coefficients and effect size (estimating the impact of particular exogenous variable on model’s endogenous construct), another noteworthy criterion is the predictive relevance measure. This measure is sometimes used in PLS-SEM as a supplementary assessment to measure the goodness of fit and is named as the Stone-Geisser’s (Q2) criterion (Duarte &Raposo, 2010). According to this criterion, a cross-validated redundancy measure is obtained by using a blindfolding method.
Table 6. Q-square
SSO SSE Q² f Square
CLC 3472.000 2509.835 0.277 0.305
OCR 1302.000 570.126 0.562 0.459
POR 2821.000 1644.112 0.417 0.506
5. Conclusion
In an attempt to expand the SCCT further, as well as to better understand the organizational perspectives while in crisis, this study proposed a structural model in which CLC, partially mediated the relationship between crisis responsibility and POR. Using PLS software, a methodological contribution of this research also lies in the validation of construct and testing of research hypotheses using the structural equation model (SEM). Crisis responsibility, CLC, organizational reputation and organizational credibility as latent constructs were also measured simultaneously. This is different to the current practice where these constructs are individually measured using SPSS or SAS, hence the link between constructs cannot be scientifically analyzed. These constructs were also measured through public sector employees’ perceptions or, unlike previous studies where perceptions were usually measured in the private sector. Even though the finding does contrast that of Coombs and Holladay (2014), in that they consistently indicate crisis responsibility is negatively related to organizational reputation, it aligns with the argument that an outstanding reputation could mitigate the risk and secure organization from crisis threats. Employees’ positive perceptions may be due to the fact that they perceive the crisis as something that is manageable and could be controlled by the organization. A reputation is not stagnant but changes over time. Through a dynamic process of corporate communication, it is hoped that by incorporating the meaningful constructs in this study, it will help organizations to move from having a good to a better reputation. As suggested by the results a crisis is merely a perception, and ultimately, public perception is reality. This is held true as UAE POLICE ’s reputation and credibility in the eyes of government officials implies a favorable support for UAE POLICE to get through the difficult times. Taking into consideration the level of international recognition received by the UAE POLICE, these outstanding achievements clearly have served as a development of ‘reputational capital’.
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