Erika Hayes James
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  • Mary Barra and the GM Recall Crisis, Part II

    In Part I of this blog series, we talked about the importance of early verbal responses to a crisis as an acknowledgement. When the leader recognizes the situation and even apologizes for the negative impact on stakeholders, stakeholders perceive it as a firm’s willingness to take corrective action and is correlated with a leader and his or her organization taking on a learning orientation.

    Framing the issue as a threat vs. opportunity
    How a crisis is framed by leaders also matters to the subsequent handling of the crisis.  Crises are negative events that evoke an emotional response.  According to psychological research, events that are perceived negatively are interpreted as threats, and in turn spark negative emotions (e.g., anger, anxiety, and despair) and negative behavior (defensiveness, deception, paralysis).  Under these circumstances it is difficult for leaders to recognize the potential opportunities for positive change that can manifest from crisis.  In fact, there is evidence to suggest that in response to situations interpreted as threats, leaders become more restricted in how they process information and less generative and creative in identifying solutions.

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