Effect of Crisis Leadership on Performance of SMEs During Covid-19 Pandemic in Nairobi County, Kenya

Abstract

The relationship between crisis leadership and organizational success amidst the COVID-19 pandemic, particularly in the context of Small and Medium-sized Enterprises (SMEs) in Nairobi County, Kenya, remains understudied. This study aimed to address this gap by investigating the impact of crisis leadership on SME performance during the pandemic. Employing a descriptive and correlational research design, data were collected from 237 respondents representing various SME industries in Kenya through a stratified random sampling method and a questionnaire. Analysis of the data using SPSS version 23 revealed significant findings. Firstly, crisis management was found to be positively correlated with safeguarding the reputation of organizations, which in turn can influence long-term sales and profits positively. Secondly, there was a significant linear relationship between crisis leadership and SME performance, with crisis leadership explaining 56.2 percent of the variance in performance. Additionally, the intercept between crisis leadership and performance showed improvement, underscoring the importance of effective crisis leadership in enhancing organizational outcomes. In conclusion, the study highlights the importance of crisis leadership in ensuring business continuity and mitigating the impact of crises, such as the COVID-19 pandemic. It emphasizes the need for leaders to possess the requisite skills, knowledge, and abilities to navigate turbulent times successfully. Furthermore, the study underscores the role of SMEs in developing strong leadership capabilities to enhance performance and mitigate potential crisis-related disruptions. It recommends that executive and management teams within SMEs in Nairobi County focus on strengthening leadership competencies and developing organizational guidelines for effective crisis management across various operational domains. Implementing these recommendations enables SMEs to enhance their crisis preparedness and responsiveness, thus fortifying their continuity and bolstering overall performance amidst adversities. This study enriches the crisis management and organizational resilience literature, especially within the SME domain, offering pertinent insights for practitioners, policymakers, and researchers.