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Leadership attributes, masculinity and risk taking as predictors of crisis proneness

Zachary Sheaffer
Department of Management and Economics, Ariel University Centre, Ariel, Israel

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Ronit Bogler
Department of Psychology and Education, The Open University of Israel, Raanana, Israel, and

Samuel Sarfaty
Prot Group, Tel Aviv, Israel
Abstract
Purpose The purpose of this paper is to examine the extent to which leadership attributes, masculinity, risk taking and decision making affect perceived crisis proneness. Design/methodology/approach The paper draws mainly on the literature about gender, leadership and organizational crisis to explore whether masculinity predicts crisis proneness, and the extent to which leadership attributes as well as risk-taking and decision-making style are efcient predictors of perceived crisis preparedness (CP). Utilizing pertinent literature and concepts, the paper evaluates a database of 231 female and male managers. Findings As hypothesized, masculinity is positively associated, whereas transformational leadership is inversely associated with perceived crisis proneness. Both participative decision making and passive management predict higher degree of perceived crisis proneness and so does risk taking. Research limitations/implications More in-depth research as well as larger and more diverse sample is required to explore more denitively why and how masculinity is positively associated with crisis proneness. Practical implications The paper provides preliminary evidence regarding the merits of feminine leadership traits as facilitators of CP This nding does not, however, preclude the usefulness of masculine attributes in managing actual organizational crises. The ndings appear particularly relevant given the current turbulent business environments and the increasing frequency and magnitude of corporate crises. Originality/value The paper synthesizes evidence on CP proneness and gender, and the evidence of feminine attributes as an important antidote to perceived crisis proneness. The paper outlines reasons for this phenomenon and implications for placement of managers in current business arenas. Keywords Gender, Leadership, Risk management, Decision making Paper type Research paper

Sheaffer (corresponding author) and Bogler have contributed equally to the writing of this paper. The authors appreciate the helpful comments of Avi Carmeli on earlier versions of this paper and thank Jean Vermel for her assistance. They are also grateful to Editor Sandra Fielden for constructive feedback and guidance and to two anonymous reviewers for their insightful suggestions.

Gender in Management: An International Journal Vol. 26 No. 2, 2011 pp. 163-187 q Emerald Group Publishing Limited 1754-2413 DOI 10.1108/17542411111116563

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Repercussions of the current global recession accentuate the indispensable role of crisis management (CM) in post-modern organizational arenas. Despite a plethora of scholarly work addressing corporate downturns in recent years, organizations nd themselves devoid of coping mechanisms intended to address crises (Stern, 2009). Consequently, organizations often fail in developing comprehensive CM programs (Wang et al., 2009, p. 26) since they fail in implementing systematic planning across increasingly fragmented and often dispersed units (McConnell and Drennan, 2006). Concurrent with the prevalence of crises, ascendance of women to higher managerial echelons (Avolio et al., 2009) is also becoming normative in business and non-prot organizations (Sampson and Moore, 2008). This has taken place despite the fact that the percentage of women decreases gradually but sharply towards the highest echelons (Haslam and Ryan, 2008, p. 531). Increasing awareness as to the centrality of gender in management (Broadbridge and Hearn, 2008) and women executives in particular coalesces in a timely manner with the ascendance of CM as an indispensable coping mechanism. However, the relationship between gender and crisis proneness or preparedness has attracted but a marginal scholarly attention. Moreover, intuitively CM requires seemingly quintessential masculine traits and thus we will examine this relationship by focusing on masculine traits as forerunners of crisis preparedness (CP) or proneness. Key to understanding managerial functioning in crises is which leadership style(s) would be conducive to CP. Leadership characteristics have long been associated with a variety of adverse corporate circumstances, yet little empirical evidence posits them as possible predictors of crisis proneness or CP. The purpose of this study is to test leadership, decision making, masculinity and risk-taking literatures regarding their ability to explain potential variance in the managerial perception of CP proneness. Building on these literatures, we aim at testing a model on a group composed of the sample of managers and on the two subgroups in this sample: male and female managers, respectively. Specically, and following Mano-Negrin and Sheaffer (2004), we propose that masculine traits is instrumental in explaining crisis proneness as but not necessarily CP. We also argue that key leadership traits, primarily those associated with transformational and transactional types, decision-making style and risk-taking propensities constitute conspicuous antecedents of perceived crisis proneness or preparedness. While predicting perceived rather than actual effectiveness of CM, we posit a number of instrumentally important organizational crisis predictors that point more accurately to potential crisis proneness. Most organizational crisis studies have accentuated exogenous forerunners of crisis (Yu et al., 2008) with fewer empirical studies (Carmeli and Halevi, 2007; Sheaffer and Mano-Negrin, 2003) addressing internally and managerially induced crises. We focus, therefore, on a lacuna the relationship between gender and CP and proneness in the extant organizational crisis literature, primarily by incorporating the hitherto marginally studied effect of masculine traits and archetypal leadership styles on CP proneness. Our motivation in highlighting key managerial characteristics as a backdrop against which to explicate ingrained, albeit perceived CP proneness derives from the need to delineate a comprehensive research model in which autogenic or endogenously engendered factors form the key predictors. Following this preliminary discussion, our research question ensues: to what extent do leadership and managerial attributes, masculinity and risk taking predict perceived crisis proneness in a population of 231 Israel top executives?

Literature review and hypotheses CP and proneness Crisis is addressed by many and varied disciplines (Pearson and Clair, 1998); hence, denitions draw on a particular point of departure. Typically, a crisis is perceived as being an uncommon event that demands swift and resolute response while constituting a considerable threat to survival. The extant crisis literature focuses on such characteristics as high vagueness with unknown causes and effects and with a low likelihood of occurrence (Sayegh et al., 2004). CM constitutes organizational procedures aimed at sustaining normal business operations, reducing stakeholders loss and managerial unlearning to improve future CM processes (Pearson and Mitroff, 1993). Irrespective of the growing awareness to the increasing probability of crises and their overwhelming impact on rms and stakeholders, organizations fall short of preparing adequate CM plans (Regester and Larkin, 2008). Fegley and Victor (2005) indicate that typically organizations prepare for highly probable events rather than addressing the issue comprehensively by visualizing worst case scenarios. Next, we elaborate on crisis proneness and preparedness. Sheaffer and Mano-Negrin (2003, p. 575) dene CP as:
[. . .] a state of corporate readiness to foresee and effectively address internal or exogenous adversary circumstances with the potential to inict a multidimensional crisis, by consciously and proactively preparing for its inevitable occurrence.

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Crisis proneness is dened as the lack of readiness on the part of the top echelon, in terms of awareness, and the dearth of contingency plans and coping mechanisms. According to Perrow (1984), organizations are complex and imperfect; hence, they are inherently prone to crisis. The more complex the business, the more crisis prone it is (Yu et al., 2008). Consequently, organizations should be so designed that effective CM will be effectuated whenever required. According to Sommer and Pearson (2007), CP involves contingency plans, procedures and mechanisms aimed at the detection of early warning signals and the ability to contain them prior to further escalation. Crisis-prepared organizations audit their operations continuously and proactively monitor potential aws. Crisis-prone organizations tend to let pass or discount early warning signals (Sheaffer et al., 1998). As Mitroff and Alpaslan (2003) argue, crisis-prepared organizations invest heavily in prevention and risk management, while crisis-prone ones invest in CP solely to the extent that it is short term and cost effective. Crisis proneness is often engendered endogenously, thus dubbed autogenic (Akgun et al., 2006) or a self-generated adverse occurrence negligently triggered by top leaders (Barnett and Pratt, 2000, p. 80). Crisis-prone leaders are typied by centralization, overcondence (Richardson, 1993) and risk taking (Watkins and Bazerman, 2003), generally implying a transactional style. Overcondence and paranoid tendencies in this vein disrupt aficted managers judgment (Bar-Joseph and Sheaffer, 1998). Schwartz (1987, p. 56) referred to this behavioral pattern as narcissistic or a denial of reality. The latter connotes cognitive biases presumed to lead managers to disregard or underrate looming crises. Leadership and CM Leadership may prove a crucial factor in facilitating an effective response and managing anxieties that characteristically accompany adverse occurrences (Boin and McConnell,

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2007, p. 53). Leaders are expected to perform effectively during crises when external stakeholders expect transparency, resoluteness and purposefulness (Wang et al., 2009), while internal ones seek empathy, a sense of direction and personal example (Ulmer and Sellnow, 2000). Inspirational leaders who articulate organizational vision that enthuses their underlings would seem to be better prepared when crises occur. Consequently, we believe that it is important to establish what leadership style would be more conducive in terms of CP and likewise what style would be more crisis prone. The two styles that come to mind are the transformational and transactional modes. Transformational and transactional leadership Over the past 25 years, the transformational and transactional leadership styles have dominated the study of leadership. Bass (1985) suggested that leaders who succeed in affecting their followers to transcend self-interests for the benet of the group or organization to achieve extraordinary goals would be characterized as transformational. Contrastingly, managers who solely induce the most basic exchanges with their followers embody transactional leadership (Bass and Riggio, 2006). Bass (1985) described four transformational and two transactional leadership factors. Transformational leadership is comprised of: . inspirational leadership or leaders motivational skills that enhance performance by portraying an optimistic future through an idealized vision and by inspiring a sense of attainability of that vision (Antonakis et al., 2003); . charismatic leadership leaders socialized charisma and their ensuing actions based on values, beliefs, and a mission to induce followers to pursue their vision (Waldman and Javidan, 2009); . intellectual stimulation, leaders ability to challenge followers to think of innovative solutions (Keller, 2006); and . individualized consideration, leaders awareness of followers needs and interests aimed at facilitating self-actualization (Rafferty and Grifn, 2006). Transactional leadership is comprised of: . a contingent reward or leadership behavior centered on transparent role and task requirements for which the followers gain rewards contingent on the fulllment of contractual obligations (Walumbwa et al., 2008); and . management by exception, the leaderships active and passive behaviors aimed at ensuring that standards are met and intervention occurs whenever things go awry (Antonakis et al., 2003). Interestingly enough, contingent reward subscale has been found to be related more to the transformational leadership style (Judge and Piccolo, 2004; Silins, 1992,) but Hinkin and Schriesheim (2008, p. 512) argue that the contingent reward subscale should be used separately. Hence, we refer to management-by-exception only to represent transactional leadership. In sum, inspirational leadership entails a vision that refers to charisma that appeals to organizational constituents primarily during downturns, intellectual stimulation of underlings that necessarily induce innovative solutions, and individualized consideration that empowers underlings self-actualization.

We postulate that these attributes would enhance CP, hence be instrumental in CM. Formally we hypothesize: H1. Managers acting as transformational leaders will tend to be positively associated with CP perceptions. Passive leadership and crisis proneness Passive leadership is a form of management-by-exception leadership. Passive leaders fail to respond to situations and problems systematically (Bass and Avolio, 1995). They respond to problems only if they surface in an unavoidable way (Eid et al., 2008, p. 5). Passive leadership is akin to a laissez-faire style; both have negative impacts on followers. Consequently, these styles are jointly grouped as passive-avoidant leadership (Avolio et al., 1999). The extant leadership and organizational crisis literatures only implicitly refer to a potential linkage between passive leadership and crisis proneness. Passive leadership appears to be crisis prone rather than prepared because inaction necessarily involves inattention that, in turn, precludes managerial activities geared towards crisis prevention. Passive management-by-exception is a key type of transactional leadership (Howell and Avolio, 1993) that motivates through extrinsic rewards or discipline (Fry, 2003). Necessarily then, transactional leaders would be more likely to wait passively for subordinates to err prior to initiating corrective action (Peters and Peters, 2007). In this vein, crisis proneness may be associated with error detection and correction through altering presumptions and strategies (single-loop learning) within a steady context of performance norms (Barnett and Pratt, 2000, p. 85). Since single-loop learning ends following detection and correction and induces neither restructuring of norms or strategies, nor learning to learn schemas (Visser, 2007), it necessarily precludes unlearning which is key to CP. Indeed, Schimmel and Muntslag (2009, p. 404) argue that an authoritarian leadership (often transactional) style scuttles double-loop learning while Colville and Murphy (2006) allude to the passive style as a hindrance to unlearning. In sum, while passive leadership is not directly associated with crisis proneness, allusions to its negative aspects suggest that passive leaders would be more likely to be crisis prone. We, therefore, offer the following hypothesis: H2. Passive leaders will be positively associated with perceptions of crisis proneness. Decision making and crises Participative decision making is dened as joint power sharing between hierarchical superiors and their underlings (Lam et al., 2002). Extensive research has shown that participative decision making is linked with positive effects on commitment and job satisfaction (Bogler and Somech, 2005; Somech and Bogler, 2002). Individuals involved in decision-making processes have the power to address internal and external processes which facilitate exibility and spontaneity (Carmeli and Halevi, 2009). The relationship between participative decision making and CP has yet to gain inroads into the extant organizational crisis literature. In advancing the idea of ecocentric management, Shrivastava (1995) argues that participative decision making is instrumental to maintaining a structure that inherently enhances CP.

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Taking a different, if complementary angle, Kersten and Sidky (2005) indicate that decient CP typies organizations where decision making is non-participative. Similarly, Richardson (1995, p. 6) argued that crisis-prone organizations fail to inspire a collaborative and communicative culture which innately involves participative decision making. While the degree to which management centralizes power is contingent on leadership style, it seems not to concur with what would be conducive to inculcating awareness to crisis. Therefore, it does appear to be advantageous to CP. Contrary to participative decision making, centralized decision making is unreective and impulsive. Consequently, power is necessarily channeled upwards and the centralized structure impedes upwards or lateral communication that would facilitate joint preparation for and increased awareness of looming crises. Based on empirical ndings, Mano-Negrin and Sheaffer (2004) conclude that democratic orientation that enhances consensual decision making would be more likely to improve CP. While participative decision making would be advantageous as a mechanism with which to enhance CP, during crises participative leaders usually may become highly directive because exigencies require quick and decisive action (Eagly, 2007, p. 2). Moreover, since during crises, organizations encounter a higher level of uncertainty, managers would ideally share reliable, accurate and timely information with lower level echelons (Kapucu, 2006). These circumstances, however, differ markedly from normal organizational routines during which CP should be instrumentally part of strategic boundary-spanning activities. Formally, we hypothesize: H3. Managers supporting participative decision making will be positively associated with perceived crisis proneness. Gender and managerial roles Early work (Scheil, 1975) about gender stereotypes found that men were more likely to possess the characteristics associated with managerial success. Indeed, most descriptors of male managers portrayed them as being assertive, self-reliant, competitive, objective, forceful, ambitious, emotionally stable and self-condent (Paris et al., 2009). These results have not changed substantially over time, as aptly noted by Berthoin-Antal and Izraeli (1993, p. 63), and that presumably the most important obstacle for women in management is the persistent stereotype that associates management with maleness. Furthermore, the perceived association between management and maleness seems to be robust and universally accepted (Ryan and Haslam, 2007, p. 550). This predilection stems from peoples embedded theories of gender and management that are not merely descriptive but essentially prescriptive. Consequently, if managerial positions are perceived to be inherently masculine, then males would necessarily be more qualied than women (Scheil, 2007). Evidence suggests that a male executive with the above traits is perceived as behaving properly and exhibiting leadership whereas a female who behaves likewise is regarded as inappropriately forceful (Ryan and Haslam, 2007). Consequently, if women executives behavior concurs with the (masculine) gender stereotype (Powell et al., 2008), they are not regarded as performing accepted as performing in an appropriate manner (Carbonell and Castro, 2008). However, should their behavior concur with the leader stereotype, they are not thought to be behaving appropriately as women.

Gender, leadership and crises The extant gender and crisis literatures refer only implicitly to masculine attributes as facilitators of CP or catalysts of crisis proneness. In light of this theoretical predisposition, we can postulate only positive relationships between masculinity and crisis proneness. Mano-Negrin and Sheaffer (2004, p. 118) found that CP perceptions are gendered in the sense that it is the difference between masculine and feminine managerial orientations that inuences CP, and thus crisis proneness is gender based rather than gender neutral. Male respondents were signicantly more likely to acknowledge that crisis is a matter of luck, hence nothing can be done to prevent it (Mano-Negrin and Sheaffer, 2004, p. 117). However, as Richardson (1995) contended, crisis-prone leaders often display a higher degree of one-sidedness, meaning, their behavioral patterns are over-biased, hazardously and disproportionately stressing a single extremity (being too competitive or too authoritative, etc.). Again, these behavioral patterns may be only indirectly associated with maleness, although such purportedly feminine attributes as espousing harmonic relationships, participative decision making, care and empathy (Wann-Yih et al., 2000) are at the other extreme. Hence, during crises, the almost instinctive interrelatedness between what it takes to be a leader and what it means to be masculine may well be attenuated if not refuted. It is plausible to assume, therefore, that during crises, we must not instinctively associate management with masculinity. Rather, we would be more inclined to think of females whenever crises come to mind (Ryan et al., 2007). The question remains, however, whether such feminine traits as empathy or emotional intelligence would be advantageous for CP. Scheil (1973) conrmed that these traits were associated with managerial success and showed that women are more likely to possess them. It should be asked, however, whether these feminine traits would be useful in managing crises. Ryan et al. (2007) found that when respondents were asked to describe idyllic managers, the think manager, think male relationship was attenuated when successful rms were involved while there was a strong association between management of an unsuccessful rm and the female stereotype. According to Ryan and Haslam (2004), women executives are more likely to be appointed to relatively risky or precarious leadership positions which are logically more probable to involve management of crisis-beset units (Haslam and Ryan, 2008, p. 531). Necessarily, such appointments are more likely to involve failure, thus they are exposed to greater criticism in that they shift attention onto individual leadership competencies rather than onto situational and contextual factors. Consequently, women appointed to these positions will not only draw criticism but they will also be blamed for the negative outcomes, which should be attributed to previous managers. The question remains as to the ability of women executives to perceive crises differently than their male counterparts. Likewise, we ask, whether, owing to an inherent and a different array of leadership qualities, feminine leadership traits would be more conducive to CP. We need to explore what feminine traits would be more advantageous in reinforcing CP. The distinction between people- (supposedly women) versus task-oriented (supposedly men) leadership styles has generated prolic literature (Kaiser et al., 2008), and it largely corresponds with transformational and transactional leadership (Purvanova and Bono, 2009). Accordingly, women tend to endorse the people-oriented style (Avolio et al., 2009). Generally, a transformative-oriented managerial style is typied by empowerment, participatory teamwork and a decentralized structure. This managerial pattern facilitates decision making based on

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consensus, and diversity of ideas that often enhance cooperation during crises (Bartunek et al., 2000), and it primarily nurtures a culture that facilitates CP. Richardson (1993) alluded to crisis-prepared versus crisis-prone leaders suggesting that such leadership traits as care and empathy characterize CP. While not indicating specically that these characteristics are necessarily feminine, these have been identied as typifying feminine leadership (Johanson, 2008). James and Wooten (2005, p. 146) highlight trust-building as a leadership competence critical for CP. Contrastingly, Richardson (1993) suggests that crisis proneness is often accompanied by such masculine traits as narcissism and selshness. Convergence of the literature addressing compatibility between feminine traits and transformational leadership (Powell et al., 2008) with CP seems plausible, notably given that empathy, holism, harmonic relationships or equity principles facilitate CP. Contrary, however, to this partly supported conjecture, Rosenthal et al. (1991) argue that CM would, in fact, require temporary concentration of powers, hence centralized decision making. Consequently, we may conclude that feminine traits normally facilitate CP while masculine traits would be conducive in actual CM. We, therefore, postulate that feminine characteristics would be helpful in enhancing CP. Thus, it is reasonable to expect that both male and female managers endorsing transformational leadership would be more crisis prepared. Formally, we hypothesize: H4. Female and male managers use of a gender-based masculine style will be positively associated with crisis proneness perceptions. Risk taking and crisis proneness Risk is dened as a situation where results and probabilities are unclear during the decision-making process (Rode et al., 1999). Risk perception is subjective and risk taking is tantamount to a continuum from active searching to deadlock (Mythen and Walklate, 2008). Categorizing risk depends on the context, industry, the selected strategy and on the effect, timing and likelihood of occurrence (Drew and Kendrick, 2005). Hence, managers tendency to take risks depends not only on human/managerial and situational factors (Das and Teng, 1998) but also on the perception of control (Mayer et al., 1995). When the perceived control is low, managers whose organizations are suffering a (nancial) loss or experiencing a crisis may prefer to take risks in order to enhance their chances to start and gain again (Sweeny, 2008). According to behavioral theory, a decision makers risk preferences alter with the framing of problems (McElroy and Seta, 2007). Accordingly, problems are framed as either negative or positive, employing a reference point to weigh against anticipated outcomes from the options on-hand (Andersen et al., 2007). Hence, problems can be framed as a choice among potential losses or gains. Therefore, decision makers weigh up results against some reference point and then become risk averse when outcomes are above that specic reference point (i.e. the domain of gains) but increasingly risk seeking when outcomes fall below the reference point (i.e. the domain of losses (Fiegenbaum, 1990). Decision makers prefer to sidestep loss even if this means accepting a higher risk. Consequently, risk preferences of loss-averse decision makers will vary with the framing of problems in order to prevent losses to accumulated endowment (Wiseman and Gomez-Meja, 1998, p. 135). From this vantage point, risk bearing is slanted, symbolizing perceived threats to decision makers endowment (Gomez-Meja et al., 2007).

Generally, managers are uncertain in attempting to predict the future when making decisions based on existing information. This situation is further exacerbated when uncertainty surrounding crises complicates evaluation and performance (Emsley, 2003) which leads to differential levels of risk taking. Most studies addressing risk taking and concomitant organizational downturns focus on organizational decline and notably on the decline-innovation phenomenon (Mone et al., 1998) but ignore the linkage between risk taking and crisis proneness as opposed to CP. Specically, the question of managerial risk taking and the repercussions of this propensity on rms crisis proneness have yet to be adequately studied. The magnitude and extent of business failures following the subprime mortgage crisis vividly illustrates this linkage. It becomes rather noticeable that most failing top management teams (TMTs) in related industries took unwarranted risks prior to the 2008 nancial crisis and thus negligently exacerbated their rms crisis proneness (Plantin and Rochet, 2009). We, therefore, postulate that crisis proneness may ensue whenever managers consistently and knowingly expect low after-the-fact levels of regret (Dembo and Freeman, 2001) in making critical decisions without consciously weighing adverse repercussions associated with their expectations. Hence, we argue that calculated risk taking (Carmeli and Sheaffer, 2009) would be more likely to prevent crisis proneness as it involves a chance of failure, the probability of which is estimated before some action is taken. In light of these arguments, we formally hypothesize: H5. Risk taking will be positively associated with perceived crisis proneness. Method Sample and data collection A total of 600 Israeli organizations with at least ten employees were randomly picked using the Dun & Bradstreet Directory. The sample included 231 senior Israeli executives, having a ratio of 60 per cent men. Distribution To circumvent inherent managerial reluctance to answer questionnaires (Morishima, 1991), we distributed the questionnaires in several ways. A total of 550 pre-addressed questionnaires were mailed off to chief executive ofcers (CEOs) or vice presidents (VPs) with a return rate of 14 per cent (77 questionnaires), a low percentage despite a phone call follow-up. Additionally, 200 questionnaires were sent to CEOs and VPs to whom explanations concerning the study were elaborated over the telephone with a return rate of 65 per cent (130 questionnaires. We also used corporate web sites of rms known for their emphasis on women executives (www.wol.co.il; www.digitaleveisrael.org). From this category of rms (n 29), 83 per cent agreed to post the questionnaires on their web sites (24 returned questionnaires; Table I).
Type of distribution Questionnaires sent Returned (n) Returned (%) Pre-addressed 550 77 14 Sent following explanations 200 130 65 Corporate web sites 29 24 83 Total 774 231 30

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Table I. Distribution of questionnaires

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We applied a two-stage data collection process. First, a questionnaire was pre-tested with 30 executives for construct validity and clarity. Second, following minor renements of the instrument, the questionnaires were administered to the CEOs or VPs, as detailed above. The questionnaire had two parts. Part I was comprised of demographic information; Part II was comprised of validated scales (Table I) addressing crisis proneness, masculinity, decision making, leadership and risk taking. We applied several measures to reduce social desirability bias. First, anonymous self-administration was used to provide detachment, neutrality and reassurance. Returning the questionnaires by mail or e-mail further guaranteed anonymity (Chambaere et al., 2008). Second, neutralized administration through PC was applied (McBurney, 1994), though, as indicated, only 83.3 per cent of the rms agreed to post the questionnaires to their web sites. Awareness as to the limitations emanating from self-report prompted us to undertake remedies. First, scale reordering (Sprangers and Schwartz, 1999) was employed to reduce the effects of consistency artifacts. We reordered the items on the questionnaire such that the items making up the dependent variable followed, rather than preceded the items making up the independent variables which were also reordered. Second, Harmanss one-factor test was used (Richard et al., 2009) to ensure that no common method variance is present. We factor analyzed all items of this study to ensure that no single factor emerged from this procedure (Podsakoff and Organ, 1986). Indeed, the items loaded onto thematic factors. Measures A structured questionnaire was developed based on theoretical sources and validated scales. The questionnaire is composed of ve-point Likert scale managerial-behavioral statements that examine perceived behavior in different managerial situations, where 5 represents the strongly agree response and 1 represents strongly disagree response. Leadership style Multifactor leadership questionnaire (MLQ) Short Form 6S was used to measure transformational and transactional leadership styles (Bass and Avolio, 1992) based on 24 items. We used 14 items for transformational leadership (a 0.85) and seven items for passive leadership (a 0.63). Decision making We used Vroom and Yettons Decision-Making Index (1973) to distinguish a centralized decision-making style from a collaborative one. Since we were interested in the collaborative decision-making style, we used a factor that loaded a single variable (Table I). While in many cases, multiple-item measures would be preferable, empirical ndings would be unaffected if solid single-item measures were substituted for these constructs in lieu of the frequently employed multiple-item measures (Bergkvist and Rossiter, 2007, p. 183), which is the case in this instance. Risk taking This index distinguishes rapid and calculated risk-taking styles and is composed of two sources (Miller and Lee, 2001). Five items comprised of the risk-taking index (a 0.67).

Masculinity Bems Androgyny Index (1974) was used. The index maps masculine and feminine styles. The masculinity index was comprised of ve items (a 0.80). Crisis perception This measure constituted our dependent variable for testing H1-H7. The variable proxies crisis proneness as opposed to preparedness. This index distinguishes crisis-prone and crisis-prepared styles accentuating managerial rationalizations as to why crises occur (Sheaffer and Mano-Negrin, 2003, pp. 594-5). The crisis proneness index was comprised of 14 items (a 0.78). Control variables Respondents age We contend that the older and more experienced the managers, the more likely they are to employ fewer rationalizations with respect to such negative occurrences (Petty and Wegener, 1991) as crises occurrences, antecedents and outcomes. Statistical analyses Exploratory factor analysis Since we posited no well-specied a priori restrictions concerning the number of factors to extract or specic patterns of relationship between measured variables and common factors, we used exploratory factor analysis (EFA) (Fabrigar et al., 1999). A standard eigenvalue of 1.0 and an inspection of a screen plot (Black and Porter, 1996) were used in all scales (Table II). Regression analyses Since a priori, we assumed no precedence of any of the predictors, we resorted to forced entry, hence enabled each of the predictors effects to be measured concurrently. This procedure is consonant with Richardsons (1995) double-sidedness theory, alleging that a simultaneous focus should be placed on diverse rather than on any single corporate dimensions to reinforce CP. Previous attempts to use gender dichotomously to predict CP proved unsatisfactory, possibly because of a comparatively large number of managers who had androgynous traits, gender wise. To account for gender, we estimated a model on the full group composed of the entire sample of managers and on two subgroups: male and female managers, respectively. Results Table III reports descriptive statistics and correlations for the variables used in this study. There was no anomalous multicollinearity among the research variables. The variables means indicate that only transformational leadership proved statistically signicant between female (M 4.15; SD 0.46) and male executives (M 3.94; SD 0.46) (t 2 3.32; p , 0.001), implying that women executives are signicantly more inclined than their male counterparts to endorse transformational leadership. No other statistically signicant differences between female and male managers were identied. To test the effects of masculinity, gender, decision making, leadership and risk taking on perceived crisis proneness, three regression models

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Index/variable used in analyses Crisis proneness

Questionnaire items loaded onto factor

Number of items used in EFA model 14

Total variance explained by EFA model 60.542

a 0.78

174

Table II. Factor loadings, variance explained and Cronbach a of indices used

Recurrent successes induce me to be complacent; crises have only negative impact on the organization; it is impossible to prepare for crises since they are unexpected; it sufces to take measures when crises occur; most crises are resolved by themselves; I mostly attribute organizational failures to external parties Masculinity I am manipulative; I am haughty; I am coercive; I like to be attered; I am aggressive Decision making I prefer not to make my own decisions Age Respondents age Transformational I make others feel better when they are leadership near to me; I let my employees develop themselves; I let my employees know what I think about their work; I help my employees nd meaning in their work; I devote time to instruct and tutor my employees Passive I do not demand more of others than is leadership essential for accomplishing their work; As long as things work I do not change anything; I avoid intervening until problems become severe Risk taking I tend to opt for high risk projects; I constantly renew organizational technology; I consider daring actions to gain high rewards

5 5 14

70.345 61.98 60.90

0.80 a 0.85

58.461

0.63

59.494

0.67

Note: aFor the purpose of this study, we adopted a factor onto which only this single variable was loaded

Mean 1. 2. 3. 4. 5. 6. 7. Table III. Means, SDs and correlations Masculinity Decision makingb Passive L.b Risk takingb Transformational L.b Crisis proneness b Agec
a

SD 1.17 0.89 0.59 0.47 0.72 1.36

2 0.27 * * *

3 0.004 20.03

4 0.02 0.09 0.48 * * *

3.22 2.83 2.85 3.68 4.02 2.08 3.72

1.14 0.13 * 0.08

0.19 * * 0.03

0.24 * * * 2 0.12 0.34 * * * 2 0.04 0.48 * * * 0.05 0.07 2 0.12 2 0.03 0.06 2 0.22 * * *

Notes: n 231; signicance at: *p # 0.05, * *p # 0.01, and * * *p # 0.001; arating scale: 1 strongly disagree, 7 strongly agree; brating scale: 1 strongly disagree, 5 strongly agree; cordinal scale: 1 20-25, 2 26-30, 3 31-35, 4 36-45, 5 46-55, 6 56-65, 7 66

Hypothesis number and predicted direction

SE

t 3.17 2.45 3.82 2 3.14 7.18 2.53 2 3.45 3.34 2.73 3.33 2 1.93 4.37 0.49 2 2.32 1.08 0.94 2.12 2 2.64 5.83 3.07 2 2.35

Signicance 0.002 0.015 0.000 0.002 0.000 0.012 0.001 0.001 0.007 0.001 0.056 0.000 0.662 0.022 0.285 0.349 0.038 0.010 0.000 0.003 0.022

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Model 1: entire population (constant) 1.287 0.406 Masculinity 4: 0.087 0.035 0.142 Decision making 3: 0.134 0.035 0.224 Age 20.093 0.030 2 0.179 Passive leadership 2: 0.374 0.052 0.421 Risk taking 5: 0.205 0.081 0.166 Transformational L. 1: 2 20.340 0.099 2 0.225 R 0.618; R 2 0.382; adjusted R 2 0.363; F 20.072 (6,195); p , 0.001 Model 2: male managers (constant) 1.746 0.523 Masculinity 0.131 0.048 0.212 Decision making 0.151 0.045 0.261 Age 20.077 0.040 2 0.148 Passive leadership 0.294 0.067 0.341 Risk taking 0.055 0.111 0.045 Transformational L. 20.318 0.137 2 0.209 R 0.604; R 2 0.365; adjusted R 2 0.332; F 11.011 (6,115); p , 0.001 Model 3: female managers (constant) 0.700 0.650 Masculinity 0.051 0.054 0.084 Decision making 0.119 0.056 0.190 Age 20.120 0.045 2 0.229 Passive leadership 0.482 0.083 0.523 Risk taking 0.384 0.125 0.305 Transformational L. 20.370 0.158 2 0.234 R 0.677; R 2 0.458; adjusted R 2 0.413; F 10.278 (6,73); p , 0.001

175

Table IV. Predictors of perceived crisis proneness (three models)

were run. The rst involved the entire population (Table IV, Model 1). The second involved male executives (Table IV, Model 2) while the third refers to female executives (Table IV, Model 3). Test of hypotheses As can be seen (Table IV, Model 1), transformational leadership is inversely associated with perceived crisis proneness, meaning that charismatic, inspirational and caring leaders would be less crisis prone. The results for the entire population corroborate H1 (b 2 0.225; p 0.001). The results for the solely male executives (Table IV, Model 2) also support this hypothesis (b 2 0.209; p 0.022), and so do the results for the female managers (Table IV, Model 3; b 2 0.234; p 0.022). H2 is also supported by our data (Table IV, Model 1) concerning the entire population of executives. According to the results, passive leadership is a typical forerunner of perceived crisis proneness (b 0.421; p 0.000) and is equally deleterious in terms of higher crisis proneness among both male executives (Table IV, Model 2) (b 0.341; p 0.000) and female executives (Table IV, Model 3) (b 0.523; p 0.000). With regard to participative decision making, the results support H3 (Table IV, Model 1). Joint decision making is positively associated with crisis proneness in each of

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the sampled groups: entire population (b 0.224; p 0.000), male executives (Table IV, Model 2 b 0.261; p 0.001) and female managers (Table IV, Model 3) (b 0.190; p 0.038). Accordingly, participative decision making is likely to increase rather than decrease perceived crisis proneness. Our results partially support H4 (b 0.142; p 0.015): gender-related masculine traits affect perceived crisis proneness positively. In other words, respondents exhibiting conspicuous masculinity, males and females alike, would be more likely to be crisis prone. Predictably, among male respondents (Table IV, Model 2), the results are similar to the entire sample (b 0.212; p 0.007). Expectedly, female executives (Table IV, Model 3) would be far less likely to exhibit masculine traits. Apparently, this is why the results in this model are statistically insignicant. As to risk taking, the results support H5 (b 0.166; p 0.012) for the entire population and for the female executive model. This result means that managers typied by noticeable risk taking would be more likely to be crisis prone. We were expecting to receive similar results among male executives (Table IV, Model 2), but surprisingly, the results were statistically insignicant, apparently owing to fewer than expected risk takers among male respondents and higher than expected female risk takers. Indeed, risk taking among women executives (Table IV, Model 3) is evident (b 0.305; p 0.003). Discussion This study focuses on two critical managerial aspects, both of which have recently captured scholarly attention albeit for different reasons. While both domains of CM and gender have been important on both the scholarly and the hands-on managers levels, they have nonetheless rarely coalesced into an integrated research theme. Aspects of organizational crisis and particularly CM are seen as critically important in current turbulent business environments. The current global recession and consequent business failures exemplify the acute need in improved CM capabilities that highlight earlier scholarly exhortations regarding managerial awareness to crisis proneness and preparedness. Concurrently, the ascendance of women to higher managerial echelons raises the advantages of feminine traits in management and the adoption of these attributes by male executives. Viewing both aspects simultaneously raises such questions as to which gender-based traits would be advantageous in coping with crisis; notably, what attributes would be conducive to CP or otherwise would aggravate crisis proneness. We investigated leadership CP and proneness with the view of linking them with key facets of transformational and transactional leadership. Essentially, transformational leadership motivates followers to go beyond their self-interests to achieve higher order goals for the good of the organization. Thus, during crises, managers endorsing transformational attributes are more likely to motivate underlings to be engaged in CM collective efforts. Transformational leaders succeed in arousing subordinates aspirations to achieving goals considered to be beyond their original expectations. Hence, these leaders can rely on their subordinates cooperation in addressing collective and individual tasks deemed critical during crises. Our analyses support the hypotheses regarding transformational and passive leadership styles. Accordingly, male and female managers typied by transformational leadership attributes are more likely to be associated with perceptions of CP as opposed to passive leaders who are predisposed to be crisis prone. We have corroborated the hypothesis

postulating that managers who articulate inspirational vision heed the needs and interests of followers. Transformational managers are conscious and likewise proactive in terms of their overall perception of and attitude towards crises (Sheaffer and Mano-Negrin, 2003). Transformational leadership has been found to be more proactive, hence more effective (Rubin et al., 2005), reecting attributes seen as critical in addressing uncertainties and intricacies associated with crises. Indeed, the literature points to the positive relationship between visionary leaders and CP (Antonakis et al., 2003). Leaders concerned with careful and meticulous delineation of corporate vision will more likely be prepared for crises, and hence they demonstrate personal example deemed crucial in leading subordinates when havoc and ambiguity prevail. Outstanding leaders are compelled to offer some form of sense-making to their underlings; to interpret the situation and offer direction and comfort in stressful and ambiguous circumstances (Hunter et al., 2009, p. 384). Specically during crises, underlings are inclined to seek and follow directions. Thus, leaders articulation of a vision that reects attention to and care of subordinates as well as their ability to tackle problem-solving creatively (Reiter-Palmon and Illies, 2004) is crucial during crises. In this vein, charisma would be noticeably conducive during crises when inspiring and leading by example seems indispensable. Passive leadership, on the other hand, has been theorized to be associated with the transactional leadership style (Hinkin and Schriesheim, 2008). As hypothesized, we found that this sub-type of transactional leadership is positively associated with crisis proneness. This is because passive leaders intervene reactively. These managers by exception wait until problems have escalated although early warning signals have been observed ( Judge and Piccolo, 2004; Peters and Peters, 2007). Specically, while active leaders act proactive in terms of detecting latent but potentially dangerous organizational deciencies, passive leaders take corrective action only after problems have surfaced (Bass, 1998). In the same vein, similar circumstances were reported following the current global recession when executives were blamed for being passive, ignoring a host of early warning signals and acting belatedly and ineffectively on symptoms rather than on the root causes (Mintzberg, 2010). Hence, to be prepared for crises, leaders need to be active and initiating as well as stress that crises are inseparable from the organizational life cycle. Passive leaders, males and females alike, lack this capability. Importantly, passive leadership was the most salient predictor of crisis proneness among our predictors. This nding complements the line of research that considers transformational leadership to be more effective, notably since it provides direction and reassurance (Nemanich and Vera, 2009, p. 21). Literature on decision making is inconclusive as to the relationship between decision-making styles and CP proneness. Decision making is argued to be centralized during crises because of the need to take fast and decisive action (Eagly, 2007). However, participative decision making is encouraged during harsh times (Mishra, 1996) primarily because this enhances the ow of additional and creative insights emanating from underlings. TMTs in turn may benet from and build on the diversity of views, attitudes and experiences, all of which have the potential to improve the quality of critical decisions made at higher echelons. We conjectured that decisions made during crises are subject to a host of exigencies. Consequently, these decisions emerge from a state of ux and volatility. Hence, we hypothesized a positive relationship between participative decision making and crisis proneness. However, organizations beset by a crisis, facing a

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high level of uncertainty coupled with an imminent threat, would benet from strong-minded and decisive, if temporarily autocratic managers, rather than passive or sociable ones who rely on joint decision making. During a crisis, therefore, participative decision making could prove counterproductive owing to the need to make swift, calculated while well-informed decisions. Clearly, participative decision making precludes these fundamental requirements, essentially because involvement of additional parties in the decision-making process is evidently time consuming, hence subject to vacillations and delays. Indeed, we found that participative decision making is positively associated with crisis proneness, implying that it is likely to raise perceived crisis proneness rather than diminish it. This nding is also in congruence with the few sources in the literature addressing transformational leadership and crisis proneness, which assert that during crises, followers prefer to docilely follow directions (Hunter et al., 2009) rather than actively partake in decision-making processes. Our ndings indicate that masculine traits are positively and signicantly associated with perceived crisis proneness. We may conclude that other things being equal, noticeable masculinity is more likely to be deleterious to CP. This nding may seem to be paradoxical, as theoreticians (Kirschenbaum, 2002) have long since postulated that, owing to severe time constraints and incessant pressures by worried stakeholders, temporary dictatorial measures are called for. In other words, temporary concentration of powers aimed at conveying a message of control and calmness to key stakeholders in the midst of chaos would best serve a rms image (Clair and Dufresene, 2007). However, while authoritativeness and resoluteness would seemingly be benecial at the height of crises, they would not be advantageous in inculcating a corporate culture that fosters CP. Rather, quintessential feminine traits (Richardson, 1993) would be more appropriate in terms of stimulating a sense of mutual understanding and primarily readiness to engage in unlearning. These managerial virtues, whether espoused by male or female executives, necessarily facilitate willingness to engage in preventive measures. Dearth of empathy, conspicuous authoritativeness and selshness are more likely to obstruct rather than advance CP. We may conclude, therefore, that the application of masculine managerial traits is contingent on the circumstances. Whereas pronounced masculinity would be advantageous in managing crises, it would not be as conducive as leadership attributes that facilitate CP. Several questions merit additional explanations. For instance, why would such perceived masculine attributes as rmness, persistence, self-reliance and ambitiousness (de Pillis et al., 2008) be counterproductive in terms of CP? The answer is neither straightforward nor denitive. We conjecture that a certain combination of these and potentially other male-related attributes would apparently be less conducive in delineating a corporate culture that fosters on-going introspection, critical thinking and unlearning. One may not preclude the possibility that, in fact, some of these or other masculine attributes would be conducive to CP rather than detrimental. In the same vein, not every combination of so-called feminine traits would necessarily be conducive to inculcating CP. There are contextual factors that might potentially mediate the association between feminine attributes and CP. Future investigators would serve this open-ended question well if they incorporated such variables as the type of corporate culture, TMT makeup, industry or the nature of the specic task-environment. We were able to corroborate the hypothesis postulating that risk taking among managers is positively associated with crisis proneness. Intuitively, the propensity to

take risks is liable to increase crisis proneness as the choice for risky strategies necessarily exposes rms to risks that innately exacerbate crisis proneness. This is because risk taking inevitably amplies a rms exposure to hazards that could be avoided if the TMTs were more cautious in opting for and pursuing strategies that would seem highly alluring but would also entail the probability of failure and crisis. The current global nancial crisis provides numerous instances where managers haphazardly opted for highly risky investments that initially seemed lucrative and promising. Indeed, Landskroner and Raviv (2009) point to managers excessive c risk-taking incentives motivated by short-term gains. Demirgu -Kunt and Serven (2009) impute part of the blame for lending institutions crisis proneness on excessive risk taking among executives who, based on false securities, attracted funding independent of the risks they took. The propensity to take risks, despite the impact of the current nancial crisis, did not deter managers of insolvent institutions to persist in their predisposition for risk taking, thus further aggravating these institutions crisis proneness. Excessive risk-taking typifying lending institutions have been pivotal in turning these institutions into archetypal crisis-prone organizational entities with a growing number defaulting on their debts (Diamond and Rajan, 2009). Excessive rather calculated risk taking is, therefore, inherently intertwined with higher levels of crisis proneness. Since risk taking is intrinsically associated with executives, one may be aware of key human tendencies that underpin this well-ingrained human propensity. Decision making under uncertainty is inherently tricky because managers are often biased towards optimistic scenarios, and they tend to suppress low probability-high consequence events (Korhonen et al., 2008). A key lesson is that normally crises, and typically the recent global nancial imbroglio, are a predictable surprise (Ambachtsheer, 2009). Risk taking is an inevitable part of management, but it seems that opting for calculated rather than excessive risk taking demarcates the difference between crisis proneness and CP. Limitations and future research Despite being among the rst studies that point at and analyze the effect of key forerunners of CP, our empirical design did not allow us to control for and assess the impact of additional antecedents. Future studies addressing similar relationships would gain much if structural equation modeling were used primarily concerning a path design where leadership and managerial attributes, risk taking and other organizational characteristics, moderated by gender traits, affect CP. Additionally, we are aware of the methodological limitations concerning potential inaccuracies stemming from a self-report-based study. Though we employed conventional remedies with the view of reducing inherent problems concerning social desirability and self-report, using two sources where applicable might ameliorate these limitations. We adopted the shorter version of the MLQ that excluded such variables as contingent reward and active management-by-exception. Replication of this study or employing different research populations with the full range leadership theory (FRLT) (Avolio and Bass, 1991) is called for because it would be advantageous in exploring avowedly important relationships with potentially additional predictors. The omitted FRLT items would explore additional and hitherto unexplored dimensions, particularly regarding the extent to which they predict CP and proneness. Essentially, we employed perceived CP rather than actual states of crisis. While indicative, concrete crisis

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occurrences constitute more realistic scenarios, hence it would be valuable in exploring how and why gender-related traits, leadership attributes and risk taking could foretell CP and proneness. While our sample size was statistically adequate, we conjecture that extending the research population would be advantageous as additional participants might necessarily increase the number of respondents characterized by more clear-cut male or female attributes. Likewise, exploring androgynous traits as a predictor is a potentially interesting gender facet that appears to be on the upswing with both male and female executives adopting counter stereotypic traits interchangeably (Sczesny et al., 2007). Owing to an apparently large number of executives with androgynous rather than clear-cut gender traits, we were unable to include a dummy for gender because the results were unsatisfactory. Future studies would serve this purpose better by including additional respondents so as to enable the removal of outliers, thus generating a more dichotomous distribution between male and female executives. Our sample was based on respondents from a single nation, thus they inevitably reect a specic national cultures leadership and gender orientations. To complement this limitation, the inclusion of managers from diverse national-cultural backgrounds would add potentially important insights to gender, leadership and CM literatures. Based on this studys ndings, several implications for management come to mind. First, while overstating the merits of feminine leadership attributes may not be ` practicable vis-a-vis corporate hiring policies, implicit predilection to accentuate quintessential masculine qualities ought to be attenuated by the merits of feminine leadership attributes chiey with respect to CP. Second, since organizational crises will most likely increase in frequency and magnitude, managements ought not to overlook concrete and well-structured CM mechanisms. Costs incurred by CP are necessarily and noticeably lower than those sustained by multidimensional crises, for both organizations and their stakeholders. Third, transformational leadership is likely to decrease crisis proneness. Thus, on top of the myriad of merits associated with this leadership style, managements would benet should they acknowledge that endorsing this style is likely to enhance CP. Fourth, calculated risk taking is intertwined with corporate cultures that nurture innovativeness and creativity. Furthermore, (excessive) risk taking is often an alluring alternative but it is concurrently and inherently related to crisis proneness and thus should be regulated by conventional risk management mechanisms and primarily cautious and well-informed TMT.
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Further reading Dichev, I.D. and Tang, V.W. (2009), Earnings volatility and earnings predictability, Journal of Accounting and Economics, Vol. 49 Nos 1/2, pp. 160-81. Kets de Vries, M. (2004), Dysfunctional leadership, in Goethals, G.R., Sorenson, G.J. and Burns, J.M. (Eds), Encyclopedia of Leadership, Vol. 1, Sage, Great Barrington, MA, pp. 368-72. Meindl, J.R., Ehrlich, S.B. and Dukerich, J.M. (1985), The romance of leadership, Administrative Science Quarterly, Vol. 30 No. 1, pp. 78-102. Sen, F. and Egelhoff, W. (1991), Six years and counting: learning from crisis management at Bhopal, Public Relations Review, Vol. 17 No. 1, pp. 69-83. Corresponding author Zachary Sheaffer can be contacted at: zacharys@ariel.ac.il

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