The Impact of Situational Leadership on the Effectiveness of Crisis Management: A Field Study at Banks Operating in the Republic of Yemen

Abstract

The study aimed to assess the impact of situational leadership – encompassing directive, supportive, participatory, and achievement-oriented styles – on the effectiveness of crisis management in Yemeni banks. Utilizing a descriptive analytical approach, the researchers developed a questionnaire to collect data from supervisory positions across eleven banks. Out of 400 questionnaires distributed via stratified random sampling, 303 valid responses were retrieved for analysis. The study employed structural equation modeling using Partial Least Squares Path Modeling (SmartPLS v.4.0.9.5) alongside the Statistical Package for the Social Sciences (SPSS v.28). The findings revealed a statistically significant positive impact of situational leadership on the effectiveness of crisis management within the banks studied. However, the directive leadership style showed no statistically significant impact on crisis management effectiveness. Based on these results, the study recommends that leaders of Yemeni banks should enhance their situational leadership skills, which are essential for adapting to changes and effectively managing crises. Additionally, they should implement comprehensive crisis management strategies at all stages, as these strategies ultimately determine the future of their institutions. A shift away from directive leadership to participatory, achievement-oriented, and supportive styles is advised, as these approaches foster employee trust and provide the stability and support needed for successful crisis management.