The Crayola Company’s Management Analysis

Introduction

This report provides information on the operations of Crayola, the largest arts and crafts company in the marketplace. In the first quarter of 2020, the company incurred significant losses for the first time in its 100 years of operation due to the lockdown in effect. The situation associated with the lack of meaningful sales revenues, rising costs, and other problems associated with the spread of the virus had a detrimental effect on the morale of the company staff, generating anxiety and fears. Thus, Crayola found itself in a challenging position. ‘For many years, the company focused its products on one target audience: children, moms, and schools’ (Gruszka 2017). For the 100-year-old brand to stay in business, meaningful, transformational changes were needed.

This report will provide a literature review on leadership in crisis through the lens of situational leadership from a theoretical perspective. This report presents information on the significance of a leader and the management strategy they employ in maintaining company resilience, improving employee morale during the pandemic and the company’s recovery process. Besides, the text pays special attention to situational leadership, the most relevant leadership style in a crisis.

What Is Leadership

At the height of the COVID-19 pandemic disruption, there was an apparent demand for answers, promises, and direction indications in society. In moments of crisis, all responsibility rests on the shoulders of the leader, while vision, inspiration, recovery strategies, and confidence begin with leadership. ‘For businesses to survive and thrive again, leaders must be adept at crafting new roles, crafting new identities, and finding new meaning for their organization and those they lead’ (CCL 2021). Within the different sciences, there are different understandings of leadership and the role of the leader. ‘a leader is someone who makes things happen that would not have happened otherwise’ (Rubenstein 2020).

‘Leadership is an individual’s ability to develop effective strategies that, through their impact on staff, will help employees work effectively through various challenges. It requires a clear vision of desired goals and the ability to explore different avenues’ (The Investors Book 2021). Regardless of the competencies and dedication of the leader, the leadership style they use plays a fundamental role in creating employee trust and commitment. It is worth understanding that the workforce plays an essential strategic role in the organization’s recovery process.

What Is Situational Leadership

‘Situational theory is a model that emphasizes that leadership is composed of both directive and supportive dimensions and that each has to be applied appropriately in a given situation’ (Virkus 2009). However, the premise of the situational approach to leadership is that different situations require different types of leadership.

‘Situational leadership is based on the idea that a leader must change their leadership style to successfully adapt to the current environment and market needs while effectively carrying the team along. It is also important that this type of leadership does not depend on a leader’s skills. It relies on a leader’s ability to adapt to the situations to be a better and more effective leader’ (Indeed 2022).

The uniqueness of the COVID-19 situation requires a leader’s ability to adapt their style to the demands of subsequent upheavals quickly. This leadership perspective can affect a company’s challenges, resilience, and recovery after a crisis. ‘Situational leadership influences behaviors that have the potential to boost employee(s) morale, trust and workforce buy-in of leadership’s vision and strategy for recovery'(Northouse, 2007, p.91). Another essential aspect of an organization’s recovery process is employee morale. One of Crayola’s mantras is ‘when imagination is unleashed in a company, employees’ power, and the sky’s the limit on what operations and supply chain can do’ (Josh S 2021).

Situational Behavior Influencers

‘Directive behavior is the extent to which leaders tell their employees what should be done and how it should be done. Supportive behavior is the extent to which the author is constantly in dialogue with his team, actively listening to the employees and ensuring their progress is recognized or reinforced in their assigned tasks. Both behaviors are key and very important in times of crisis and are critical to recovery, especially for Crayola’ (Virkus 2009). This leadership perspective suggests the importance of competence, commitment, and the value of teamwork in times of crisis. ‘Situational leadership comprises two parts; the learner’s development level and the leader’s leadership style’ (Imperial College London 2017).

Development Levels

‘The combination of competence and level of commitment directly affects an individual’s level of development. Different levels of development of individuals may imply different needs and consequently require different leadership styles from the leader.

Competence refers to the mastery of various skills, knowledge, experience, and behaviors relevant to a particular task. Commitment, in turn, refers to motivation and confidence in one’s ability to learn’ (Imperial College London 2017).

Outcomes of Situational Leadership

‘The situational leader understands that the skills and motivation of any group member are not static, and the leader’s combination of supportive and directive actions must change depending on the situation’ (Northouse, 2007, p.91). ‘After a disruption occurs in a company’s operations, recovery should become a central concept in the leader’s forward-looking program. Leaders do not need pre-planned response plans; they need to have strategic thinking skills and the ability to behave in a way that prevents them from overreacting to the pandemic’s consequences and be forward-thinking about the real challenges the business will face’ (Gemma and Aaron 2020). ‘Situational leadership is about motivating people to believe in the vision set for the company and for leadership to work with its workforce on achieving these goals’ (go2HR 2018).

Conclusion

The uniqueness of the COVID-19 pandemic and the conditions it presented to business requires a leader capable of rapidly adapting his management style to the demands of crisis times. A theoretical perspective on situational leadership demonstrates how a leader’s style and chosen effective management strategy can affect how a company responds to emerging challenges in the process of organizational recovery and what the level of company resilience and staff morale will be in a pandemic or crisis.

‘Situational leadership ‘demonstrates the critical importance of character, competence, commitment, and teamwork in crisis times when leadership leads and influences behaviors’ (Northouse, 2007, p.91). ‘For businesses to survive and begin to recover, leaders must be able to try on new roles, create new identities and find new meaning for their organization and those they lead’ (CCL 2021). Situational leadership influences behaviors that have the potential to increase employee morale, trust, and support for the recovery leadership vision and strategy. Leadership will be strengthened if the leader can surround himself with professionals or a group of specialists who can make their dreams come true.