The COVID-19 pandemic has hit hard lots of businesses across different industries and disrupts the economic activities nationwide in Indonesia. Unlike any other crisis, this crisis catches everyone by surprise; no one has a full understanding of the situation; it impacts everyone worldwide on a large scale; and, it lasts months and changes almost every aspect of people's life. For the organization, major disruption can threaten business continuity. How an organization reacts to crises is critical. Leaders play a key role in crisis management. However, not all types of leadership are the best suit for a crisis. Transformational leadership has been claimed to be effective in turbulent and uncertain environments. However, the effectiveness of transformational leadership in a crisis is still inconsistent. Moreover, there are still limited studies on leadership roles in the crisis. The quality of communication is also important in crisis management. This study aims to fill the gap in the role of transformational leadership in crisis. This study also aims to see the influence of communication to perceived organization effectiveness during crisis and employee engagement and retention. A descriptive quantitative study was conducted in May 2020 with 252 respondents from the various organizations in Indonesia using structured questionnaires as the instruments. SEM – LISREL was used for data analysis. The finding showed that transformational leadership, communication quality, and employee engagement significantly had an impact on perceived organizational effectiveness during the crisis. Transformational leadership and communication quality positively influenced employee engagement. There was also a positive influence on employee engagement to employee retention. This study contributes to the literature on crisis management and transformational leadership.
Volume 12 | 07-Special Issue
Pages: 773-787
DOI: 10.5373/JARDCS/V12SP7/20202169