Leadership in the Face of Major Supply Chain Disruptions: Baseline and Contextual Traits

Abstract

Supply chain disruptions can be complicated, surprising, infrequent, and often unforgiving to mediocre decisions. Leading organizations through such disruptions can be extremely challenging. This raises a fundamental question: What types of leadership traits are best suited in handling supply chain disruptions? In this paper we offer theoretical and empirical evidence to help address the question. The paper starts by first differentiating characteristics that make supply chain disruptions challenging. Next, based on a thorough review of the literature in crisis leadership, we carefully select traits that seem relevant in effectively handling supply chain disruptions. After validating the selected traits with industry professionals, we hypothesize relationships between the leadership traits and different types of challenging supply chain disruptions. Our investigation uses a combination of archival and survey data from a cross-section of 286 manufacturing firms to empirically test our hypotheses. Results suggest that, leader decisiveness has a positive effect and deliberative leadership has a detrimental effect on mitigating the effects of major supply chain disruptions. The same two traits are also important to consider when facing complex disruptions. In the face of disruptions with limited warning, leader trust plays an important role. These results offer further explanations on the nuances of supply chain disruptions. Leaders should consider emphasizing certain traits to better respond and recover from supply chain disruptions.