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Article

The Influence of Responsible Leadership on Strategic Agility: Cases from the Taiwan Hospitality Industry

by
Ariana Chang
1,
Tian-Shyug Lee
2,
Hsiu-Mei Lee
2 and
Jing Wang
2,*
1
Bachelor’s Program in Interdisciplinary Studies, Fu Jen Catholic University, New Taipei City 242062, Taiwan
2
Graduate Institute of Business Administration, Fu Jen Catholic University, New Taipei City 242062, Taiwan
*
Author to whom correspondence should be addressed.
Sustainability 2023, 15(3), 2760; https://doi.org/10.3390/su15032760
Submission received: 8 January 2023 / Revised: 30 January 2023 / Accepted: 1 February 2023 / Published: 3 February 2023
(This article belongs to the Special Issue Sustainability in Corporate Governance and Strategic Management II)
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Abstract

:
The COVID-19 pandemic has taken business uncertainty to an unprecedented level and put business agility and leadership under harsh tests, confronting a diverse and complicated stakeholder reality. Through original interview data and case studies from the hospitality industry in Taiwan collected and compiled since the beginning of the COVID-19 pandemic in 2020, the present research explores how strategic agility can be built, fostered, and enhanced through responsible leadership and CSR initiatives during a time of grand challenges in the hospitality industry. We also discuss and highlight the role played by one stakeholder, namely, the local government, in contributing to strategic agility through reinforcing and possibly enabling responsible leadership during hardships. This paper sheds light both empirically and theoretically on the roles played by business leaders in contributing to strategic agility, which, in turn, helps to build a more socially responsible organization.

1. Introduction

The COVID-19 pandemic has greatly impacted the global economy [1]. The hospitality industry is where the crisis hit the hardest among other sectors of the economy, particularly the service sector [2]. There has been a steep decline in hotel occupancies and venues, and almost all restaurants were required to limit their operations to only take-outs at one or another point in time during the pandemic [3]. Survival and recovery have been the top concerns or even desperate struggles for many businesses, especially in the hospitality industry, where dwindling cashflows have cast immediate threats to businesses, and competition has been fierce even without any external shock.
Hospitality firms have traditionally been propelled to project a favorable organizational identity through corporate social responsibility (CSR) activities [4]. Previous research has shown that CSR initiatives can help firms better position their images toward primary and secondary stakeholders [5]; therefore, many firms engage in CSR activities as a way to be differentiated from their competitors, and to build sustainable relationships with their stakeholders [6]. Previous crises such as the 2008 financial crisis have incited questioning about capitalism and the role of business in society [7]. Continuous investment in CSR initiatives has proven to be an essential part of management practices through such difficult times, for example, by positively influencing employee creativity [8].
In times of increased uncertainty such as the COVID-19 pandemic, firms are fraught with the unprecedented need to quickly react and adapt to changes in the environment, and to navigate and shape the diverse stakeholder expectations. Responsible leaders look to the risk management aspects of corporate social responsibility as one of their main priorities. We propose that responsible leadership plays an important role in building, fostering, and enhancing strategic agility through actively adapting existing strategies, processes, cultures, and structures.
Having formidable power to influence society, business leaders navigate how a firm operates, whether it operates fairly, and the extent to which it impacts our surrounding environment. To counter the complexity of both internal and external environments, strategies can and need to take a more holistic approach to organizations [9] as corporate sustainability is innately a strategic concept [10]. In light of the responsible leadership discourse, leaders need to have different roles [11] because they need to impact various stakeholders and broaden the firm’s objectives [12]. Moreover, a responsible leader must embrace CSR [13]. Founded on stakeholder values and ethical principles, responsible leadership has evolved as a strong framework for understanding the influence process of leadership that can benefit organizations and society at large by imparting sustainable outcomes [11]. In the responsible leadership discourse, the concept of values is central [14]. Illustrated by COVID-19, the most essential stakeholders of a business have been redefined, which include frontline workers in healthcare and those keeping the economy alive [15], and the role of local government support has been discussed [16]. Firms that are under the guidance of responsible leadership need to proportionally consider the responsibilities of various stakeholder groups [17,18] and take the interests of stakeholders into account in a dynamic way.
The COVID-19 pandemic is considered as a “grand challenge” as collective effort is needed to cope with such a crisis and the consequences of such a pandemic have no boundaries [19]. To navigate through such unbounded uncertainties and risks, firms need to demonstrate strategic agility and strong strategic commitments by managing and adjusting to continuous change [20]. More specifically, researchers have identified three meta-capabilities in the discourse of strategic agility: strategic sensitivity, resource fluidity, and leadership unity, which a firm must obtain concurrently in order to be recognized as strategically agile [10,20,21].

Research Objectives and Research Questions

The present research explores how strategic agility can be built, fostered, and enhanced through responsible leadership in the hospitality industry in a crisis. The hospitality industry has borne the brunt of economic and social disruption caused by COVID-19. To the best of our knowledge, scant attention has been paid to responsible leadership in the hospitality industry. Yet, at the forefront of surviving and fighting this ongoing global pandemic, hospitality leaders are charged to reprioritize and take accountability for different stakeholders more than ever.
The main objectives of the present research are threefold: (1) to explore how responsible leadership and CSR are executed and maintained in the hospitality industry in times of grand challenges; (2) to examine the relationships between responsible leadership and strategic agility; and (3) to pinpoint some potential pathway between responsible leadership and strategic agility through the collective commitment of a diverse stakeholder community. We propose that the government as a secondary stakeholder may play an important role in linking responsible leadership and strategic agility in a crisis by effectively managing some of the most pressing risks of corporate social responsibilities.
More specifically, we will be testing the following research questions:
First, how are responsible leadership and CSR practiced during the COVID-19 pandemic in Taiwan’s hospitality industry?
Second, what, if any, is the evidence for strategic agility during the COVID-19 pandemic in Taiwan’s hospitality industry that has helped businesses through hardships? We will look for evidence and categorize it according to the three meta-capabilities of strategic agility: strategic sensitivity, resource fluidity, and leadership unity.
Third, how are responsible leadership and CSR practiced in relation to strategic agility and, in particular, in terms of the meta-capabilities of strategic agility?
Finally, what factors link responsible leadership and strategic agility?
Answers to these questions shed light both empirically and theoretically on the roles played by business leaders in contributing to strategic agility, which, in turn, helps to build a more socially responsible organization that could survive and navigate through challenging times nimbly, as well as swiftly recovering and thriving post-pandemic.

2. Literature Review

2.1. Socially Responsible Organizations

Our society consists of competing doctrines such as religions and philosophies that provide us with what a “good society” means [22]. New values such as “responsibility” and “sustainability” have been voiced by scholars to become the norm of organizations [14]. With urgent calls for responsible global capitalism [23], responsible global leadership [24], and more regulation, there is an expectation that corporations should respond to stakeholder demands [7]. In stakeholder theory, one of the most embraced classifications is to categorize stakeholders into primary and secondary stakeholders [25]. With profuse conflicting aims and objectives, pressures have emerged from diverse stakeholders such as institutional shareholders, customers, employees, suppliers, community groups, and governments to dedicate resources to CSR [26]. Public policies have been adopted by the government over the last decade to drive CSR in order to promote responsible businesses [27,28]. Although reporting on corporate social responsibility (CSR) is not required in most countries, firms are increasingly being pressured by other stakeholders to address social and environmental concerns [29]. For instance, in industrialized nations, stakeholder concerns about social and environmental issues have risen to the point that businesses can no longer get away with misconduct [30], while emerging nations are dominated by implications of Western frames [31].

2.2. Responsible Leadership and Strategic Agility

Previous research has empirically linked responsible leadership to CSR [32,33,34], yet only until more recently have researchers started to examine the antecedents and outcomes of responsible leadership [35]. For firms in the hospitality industry, CSR implementation can add positive value to their organizational image [4]. Furthermore, research has shown that CSR is a valid source of intangible competitive advantage by effectively boosting brand value [36]. Thus, hospitality companies can be differentiated from their competitors when CSR is executed, as CSR is regarded as an expression of organizational behavior [6]. Internally, engagement in CSR enhances collective commitment and boosts productivity through various channels, such as by nurturing employee psychological safety [8].
A responsible leader will be proportionally concerned with the demands from diverse stakeholder groups, which requires the leader to have behavioral complexity [17,18]. A responsible leader is both a facilitator and an expert who tries to achieve performance goals, to take accountability for the consequences of business decisions for society, and to care for their employees [35]. By virtue of definition, responsible leadership also needs to address the risk management aspects of CSR. The COVID-19 pandemic clearly calls for research on responsible leadership [12] when business performance, stakeholder demands and values, and even the sustainable operation of businesses have all been put under severe distress under unbounded risks and uncertainties.
Strategic agility refers to firms that can continually respond to a changing environment by making necessary strategic moves [37]. This definition of strategic agility is more comprehensive as it progressed on the definition in [38] that strategic agility is having the ability to avoid collusions by altering direction, and rapidly recognizing and seizing opportunities. Furthermore, under this framework, strategic agility refers to the ability of an organization to continuously adjust strategic directions and thrive with innovative ways to create value. More specifically, according to [37], strategic agility is not about responding to a particular crisis but about encompassing the ability to adapt to changes in order to maintain competitive advantage. Strategic agility comprises three meta-capabilities: strategic sensitivity, resource fluidity, and leadership unity [39]. We propose that, during challenging times, responsible leadership, in fact, helps to foster, build, enhance, and integrate all meta-capabilities of strategic agility. The current research presents novel and original empirical evidence for the impact of responsible leadership on business survival and recovery during crises by enabling and integrating all aspects of the strategic agility of an organization.

3. Research Methodology

Our aim is to provide original and timely empirical evidence that offers rich insights into the impact of a dynamic shock on business operations as it unfolds. We therefore chose qualitative research and, in particular, in-depth interviews as well as case studies as our main research methodology.

3.1. Qualitative Research

Qualitative research is multimethod in focus, involving an interpretative, naturalistic approach to its subject matter [40]. It is an iterative process in which an improved understanding of the scientific community is achieved by making new significant distinctions resulting from getting closer to the phenomenon studied [41]. Qualitative research aims to address questions concerned with developing an understanding of the meaning and experience dimensions of humans’ lives and social worlds. Central to good qualitative research is whether the research participants’ subjective meanings, actions, and social contexts, as understood by them, are illuminated [42].

3.2. Case Study

Case studies are particularly useful in gaining insights into a challenging issue, especially when, as in our cases, businesses face different problems and adopt different strategies [43]. Moreover, events that occur in contemporary times where subjects have very little control over influential factors are most suitable for case study research, as researchers resort to direct observation and interaction with event participants to obtain insights [44].

3.3. Research Design

The semi-structured in-depth interviews were conducted in both English and Mandarin Chinese, recorded, and then transcribed for further analysis. Each of the interviews was 45 to 60 min long. All interviews were held in person and notes were taken during the interview.
The authors took several months to create contacts and gather participants for the interviews. All authors engaged in the data collection. The executive management team was contacted for interviews through professional relationships, and the interviews took place in the informants’ workplace. In-depth interviews were conducted face to face, with 14 informants from 10 hotels in northern Taiwan. All the hotels in this sample have been accredited by the Tourist Bureau of Taiwan. Data collection for this research spanned from 2020 to 2021, while all interviews were conducted during the latter half of 2020, and empirical data were also collected from various sources of documents.
The interview questions that were asked include: How does the company view CSR and sustainability? What have been some of the initiatives and activities that the company is currently engaged in? Who impacts decisions in regard to the inception of CSR initiatives? How do you communicate to your stakeholders? What were the precautionary measures taken against COVID-19? How did your company make that decision (precautionary measures)? Were COVID-19 relief and stimulus available?

3.4. Sample

Purposive sampling was used to conduct cross-case comparisons [45]. We selected our samples based on the following principles:
First, only leading 5-star hotels with major ongoing operations in Taiwan were chosen. This controls, to a certain degree, for the tremendous variations in the operating standards across different hotels while allowing for sufficient variances among samples.
Second, we selected hotels with varying years of operation, with a minimum of 10 years’ operating history. Hotels in our samples have a very large variation in operating history, ranging from the youngest of 10 years by the time of the data collection to the most seasoned with over 60 years of history. Such a wide range of hotels allows for cross-comparisons in our case studies.
Third, we also tried to include hotels and hotel groups of varying sizes in operating capacity and number of employees. The number of rooms operated by the hotels in our sample ranged from under 1000 to more than 3000. The total number of full-time employees ranged from 200 to 800 in our sample. This, again, was to ensure we had a heterogeneous sample.
Fourth, all hotels must have prior CSR engagement and personnel designated to execute CSR practices.
Last but not least, we screened and retained hotels that had not announced that they had shut down or had forced closure on any floors at the time of the data collection.
Top-level hospitality managers were chosen as the sample since they are in the Chinese diaspora [46]. With an exploratory approach [47], a suitable method for this analysis is to conduct a retrospective and explorative case study based on a dataset from various sources [45].
The profile of the 10 hotels is listed in Table 1.

3.5. Data Collection

We started our data collection process at the height of the global pandemic in 2020, when it initially had a smaller impact in Taiwan than in most other industrialized countries. This temporarily tamed period (the number of active cases surged and hit Taiwan hard the following spring) could be attributed to various efforts including stringent government regulations on social distancing. This effectively suppressed consumer spending and business activities associated with hospitality industries as early as the start of 2020, much earlier than in most other countries. This means COVID-19 has had an even longer and more pronounced impact on Taiwan’s hospitality industry, yet, at the same time, it has pushed organizations and, in particular, business leaders to practice responsible leadership to survive and fight the pandemic.
The data collection focused on the top-level managers and those involved in CSR practices of each hotel. Fourteen interviews of ten cases were conducted in person, and non-disclosure agreements were signed. Respondents were chosen from the hospitality industry only. In particular, the informants brought profound richness to our data so we can decipher key themes to obtain theoretical saturation [48].

3.6. Interview Protocol

To enable the participants to talk freely without pressure, an interview script outline was provided for their confirmation and preparation before the interview. Additionally, a confidentiality agreement was signed. During the interview, in addition to discussing matters with the participants based on the script outline, researchers engaged and explored specific and enriched connotations whenever appropriate. A verbatim transcript was also prepared after the interview.

3.7. Data Analysis

Each interview was recorded with permission from the interviewee. The researchers first transcribed each interview based on the audio recording files. Transcriptions were then cross-checked by all the researchers. Then, the researchers designed coding principles to organize the transcripts. The four researchers checked and confirmed the interview content after inductive coding. Finally, the research findings were summarized and analyzed.
Table 2 shows the general classification and sources of the data used in this research.

4. Findings and Discussion

The technique of grounded theory was used to analyze the empirical data [49], and the continual comparative method [50] was utilized. COVID-19 has redefined stakeholders and reprioritized their involvement in CSR, which, in turn, affects organizational adaptability in a time of uncertainty. The pandemic exposed organizations in the hospitality industry to the new political economy of CSR [15]. The role of the government was highlighted because support is quintessential during a crisis. From our study, the results indicate that all hotel companies acknowledged the government for its support during the crisis. It is a central component in their operations during the pandemic.
The Ministry of Transportation and Communications (M.O.T.C.) announced the “M.O.T.C.’s Measures to Alleviate and Revitalize the Hardships in Operation of Industries Affected by COVID-19” in March 2020 to assist tourism industries (Article 6) with a total budget of over TWD 7 billion in subsidies and revitalization measures [51]. Later, the M.O.T.C released the “Relief Measures 2.0 for Tourism-related Industries” in April 2020 to help cover a portion of the operational expenses (USD 200,000 minimum for each firm). To encourage domestic tourism, the M.O.T.C announced a USD 130 million plan to encourage domestic tourism between 1 July and 31 October 2020, and travelers with a valid national ID received subsidies and discounts for hotel stays and admissions. To tackle grand challenges, other actors and the government have been re-centered as crucial actors that businesses should side with [15].
Our study found that the safety of workers and the integrity of the workforce became the top priorities for all the hotels that were investigated in this study. The executive team focused on providing adequate protective equipment and care for its workers. For CSR engagement, there is a heavy emphasis on the social dimension. All the hotels that were examined in this study continued to engage in philanthropy and, most notably, to continue to fund training and education programs both for the primary stakeholders, i.e., employees, and the secondary stakeholders (e.g., local communities). Under responsible leadership, strategic agility is built, maintained, and even enhanced. Even though there is no absolute definition of strategic agility, the three widely embraced high-level capabilities for obtaining strategic agility have been depicted as strategic sensitivity, resource fluidity, and leadership unity [52]. Below, we present empirical evidence for how these three capabilities are built through responsible leadership during a time of tremendous financial and social distress induced by a crisis.

4.1. Strategic Sensitivity

In turbulent times, the ability of firms to adapt to a constantly changing environment becomes crucial. We observed three major categories of responses from our sample that indicate strategic sensitivity enabled by responsible leadership.
First, most notably in our data, we found that, amid the spike in local cases, hotels quickly adapted and learned to work with the fewest number of resources. Several hotels turned into quarantine hotels at the start of the outbreak. On the other hand, these quarantine hotels require special handling, bespoke setups and management, and training and protection of frontline workers.
Most hotels in our sample operate in metropolitan areas of various cities and rely heavily on foreign tourists. One of the hotels in our sample reported that more than 90% of the hotel guests were foreign travelers before the pandemic. Due to the extreme and sudden shock of the pandemic, the occupancy rate dropped to less than 5%, and the sales volume dropped from 30 million to about 1 million within three months. The hotel quickly converted itself into a quarantine hotel, despite the fact that the conversion was projected to recover only 7–10% of the performance according to the interview.
At the beginning of the pandemic in January 2020, one hotel reported that a pandemic prevention team was established right away to purchase and distribute special healthcare and protection materials, such as disinfectants, ear thermometers, and bleach, and to monitor the body temperature of each employee and reinforce disinfection protocols to protect the health of employees. One of our interviewees decidedly claimed that they had been practicing, in full faith, the philosophy “Take care of the health of our employees first to enable and empower them to take care of our guests and residents in our communities”.
According to another hotel in our sample, a policy was swiftly put in action that requires all visitors, third-party suppliers, employees, and distributors to enter and exit through the designated employees’ entrance. The security checked that masks and disinfectants were provided well in advance. “We have more than 600 employees, and top executives procured and provided medical masks to all of us out of their own pockets. Those were very expensive at the onset of the pandemic. It was not only employees they are protecting but also our customers”, as reported by the interviewee.
Second, we observed agile responses from hotels to consolidate resources at the onset of the crisis. For example, due to the significant challenges brought by the COVID-19 pandemic, Formosa International Hotels Corp (FIH) decided to sell its stake in Domino’s Taiwan to an Australian firm to protect the interests of its employees and shareholders.
Third, we also observed evidence for empowerment of local operations and decentralized decision-making units to build business agility. For example, to tackle the steeply declining occupancy rates and dwindling consumer confidence, a few of the hotels swiftly converted many of their venues that are conventionally used for conferences, forums, and weddings into playground and play areas for children to help attract and cater to the local weekend family crowds. “We converted some guest rooms into dining bubbles, so that guests can eat with peace of mind”, according to one interviewee. Another interviewee told us, “The occupancy rate of the presidential suite is very low, so we abolished the presidential suite and converted it to a cowboy club. In fact, we refitted the entire hotel facility into a kids-friendly environment. We also built an in-door racing track, and movie halls exclusively for children”.
This level of creative and agile responses to the financial and social distress brought by the pandemic is impossible without the empowerment of the local branches and teams, and we find that decentralized decision-making units build confidence in and commitment to the organization and brand, which increases business agility. Both of these factors are strong indicators of responsible leadership as well.

4.2. Resource Fluidity

We found that all the organizations made their best effort to keep their personnel intact and motivated during this unprecedented crisis. We observed two types of behaviors and, moreover, behaviors indicating responsible leadership that enable, build, and enhance resource fluidity, which helps to achieve maximum strategic agility.
First, we found that the hotels provided frontline workers with professional development shifts with multiple workstations to keep as many staff on board and active as possible. For example, according to one of our interviewees, “The occupancy rate at our branches in Taipei is very low, but the hotels in the south are not affected as much at the beginning, so we sent some of the employees in Taipei to the south to support and to be trained for different skillsets. We saw this as an active training and staff communication opportunity”. Another hotel told us, “The staff of the guest services department are transferred to support the food and beverage department (which became busy with take-out and home delivery orders), so that those who have nothing to do can have something to do, and the busy departments wouldn’t be overwhelmed”.
With multiple workstations, responsible leaders enable employees to build skills and confidence, and to cultivate commitment to the organization.
Second, we found evidence for creative and fluid sharing of resources within the hospitality community. For example, we found that a local alliance was initiated and formed between hotels to distribute coupons to boost the hotel occupancy rate. In some cases, these coupons were distributed in lieu of the conventional annual bonus to the employees, by which they could take their family and friends to travel and stay at any of the hotels in the alliance. In the words of one of our interviewees, “We formed strategic alliances with resort hotels and business hotels to issue coupons that could be accepted and redeemable at all branches. At first, we planned to use them instead of the employee annual bonus and travel allowances. Sending our employees to other hotels in the alliance group will encourage them to reflect upon their own work and hopefully think about how to improve the services at their own hotel. Later on, these coupons were offered on sale to our customers as well, which gave them flexibility and more choices of dining and staying at all hotels in our alliance”.
In so doing, greater internal communication based on an in-depth understanding of different service units and their corresponding roles in the organization allows employees to learn new skills and to interact above and beyond their original posts.
This corroborates previous research [15], which shows that essential stakeholders of businesses have been realigned due to COVID-19 to achieve maximum agility through the most challenging times. The frontline hospitality staff need a lot of tangible and intangible support from responsible leadership. With weekly organized virtual team meetings and informal meetings, employee morale has been carefully nurtured, maintained, and even boosted. All the interviewees expressed a sense of enhanced workforce commitment and integrity through these initiatives despite the tremendous uncertainties brought by the crisis. We show this as evidence for the practice of responsible leadership and CSR to enable, build, and enhance resource fluidity.

4.3. Leadership Unity

The capability of top management teams to make swift and bold decisions can contribute to an organization’s overall collective commitment. We found several classes of evidence for leadership unity in our analyses, which illustrate the dynamic relationships between responsible leadership and strategic agility.
First, during COVID-19, a flexibly flatter structure of an organization enables more efficient communication, a faster response to emergencies, and a smoother flow of information across and within different levels of the organization.
Second, the ability to perform judgement under pressure and to demonstrate initiative, problem solving, and resourcefulness in handling matters of a non-routine and complex nature is needed for leadership during a crisis.
Third, a more collaborative approach to otherwise routine work was adopted to effectively manage multiple tasks and priorities. From our interviews, the executive management team indicated that they still need to foresee recovery scenarios even without any clarity in future operations. Thus, solutions to tackle measures to curb the impact of the pandemic and to increase hotel revenue (rates/packages and operations of restaurants and amenities) need to be on a rolling basis and require ongoing assessments and evaluations while the decision environment might be changing constantly. All the employed strategies have been focused on the domestic/regional markets as they will pick up first. More specifically, for instance, one interviewee told us, “I personally told all the employees what to do in each step. At that time, I had to calm my mind and promised them that I would never lay off staff, but everyone had to cooperate and work together. We made some business changes, started selling bento boxes, and increased our earnings by NT$800K per month. Then, to attract guests to come to the guest house, we launched a special promotion plan”. According to another interviewee, “It was a blessing in disguise, which made the entire organizational structure much more flexible. The guest service department was transferred to the guest activity management group, or the frontline staff was transferred to help take care of children of the guests”.
Fourth, as essential stakeholders of a business have been re-illustrated during COVID-19 [15], the necessity of addressing primary stakeholders is ever so prevalent. For firms, the absence of primary stakeholders will threaten a firm’s survival [25], and such stakeholders include employees, customers, and investors [35]. Secondary stakeholders refer to those who do not have direct transactions with the firm such as social groups, communities, and NGOs [35]. As demonstrated in our analysis, primary stakeholders such as employees are prioritized in times of crisis. Prior to the pandemic, it is interesting to note that CSR engagement was mostly addressed to secondary stakeholders such as local communities and NPOs. All the hotels made philanthropic contributions to NPOs or social groups at one point or another in time. During the pandemic, however, all hotels we interviewed indicated a shift in CSR priority to care for their employees, especially through training and education programs. For example, as told in the words of one of the interviewees, “During the most difficult times where we were experiencing historic low occupancy rate, I encourage everyone to go out to take any kind of training classes, to learn something that interests them, to enrich themselves, and to see if they can develop a second specialty”.
Taken together, we find that under responsible leadership, the leader acts as a conduit between the firm and stakeholders. With diverse stakeholder expectations, responsible business behavior is viewed from various perspectives since the distribution of a firm’s resources is allocated differently [53,54]. Prioritization of stakeholders can be enabled by responsible leadership during a crisis of deep and prolonged impact such as the COVID-19 pandemic. In our research, we find that the foremost concern of a business is to make sure that employees are protected and that the lowest number of jobs are shed. To respond to the changing dynamics and rapidly changing conditions, leadership agility is critical. Our research shows that responsible leadership can foster and enhance the meta-capabilities of strategic agility and more tightly integrate these capabilities for a more socially responsible organization (Figure 1). The following is a powerful quote from one of our interviewees that illustrates this idea: “In the beginning of the pandemic, I conducted personal talks with my employees and told them that I will never lay off any of them. The first thing we do is to terminate contracts with the outsourcing suppliers, and then stop hiring contractual staff to ensure that every full-time employee can stay and survive the crisis together”.

4.4. The Role of Government

Many governments around the globe issued emergency relief measures for businesses in different scopes and at various levels to help reduce the impact of the COVID-19 pandemic. To the best of our knowledge, the Taiwan government was among the few that initiated measures specifically targeted to aid the hospitality industry. Furthermore, we have noticed that some of these measures seemed to be aligned with enabling and enhancing the strategic agility of businesses during the crisis. For example, according to the “Relief Measures 2.0 for Tourism-related Industries” released by the Ministry of Transportation and Communications (M.O.T.C.), the government promises to provide up to 40% of the salary subsidy for firms, and on top of that, it holds a number of training courses to help employees improve their work skills and to develop a secondary specialty skill if the firm manages to maintain all its workforce during the pandemic. These measures were mentioned by many of the hotels we interviewed as effective stimulants to help them achieve resource fluidity, to stabilize manpower, and to move towards the goal of sustainable operations throughout the pandemic. Thus, we see here that, as a secondary stakeholder, the government plays an important role in contributing to strategic agility through reinforcing and possibly enabling responsible leadership during hardships by managing some of the most pressing risks of corporate social responsibilities.
One of our interviewees told us, “For the hotel industry, the government provided a relief subsidy of 40% of the salary in addition to reductions or exemptions of housing taxes. To qualify for these subsidies and benefits, the entity shall not lay off full-time employees. So, we complied and worked extra hard with this additional layer of motivation and help from the government. Everyone shouldered the hardships together”.
Taken together, we conceptualize our research findings relating to the responsible leadership discourse in Figure 1. The unprecedented shock of the pandemic prompted businesses to realign and reprioritize stakeholder engagement. To cope with the pandemic, responsible leadership is necessary since it has a profound effect on both primary and secondary stakeholders. Between the company and its stakeholders, the leader serves as a conduit. In order for businesses to act swiftly and have the ability to remain fluid, strategic agility is required so that available resources can be flexibly reallocated. Strategic agility and its meta-capabilities can be enhanced and fostered through responsible leadership. With the integration of these capabilities, organizations can strive to be even more socially responsible. Amid disruption, this process is continual, cyclical, and dynamic.

5. General Discussion

5.1. Conclusions and Contributions

This paper explores the influence of CSR and responsible leadership on strategic agility. The impact of CSR and responsible leadership on strategic agility among hotels in Taiwan is investigated with the aim of broadening the understanding of how firms can navigate through a crisis successfully. We find evidence that responsible leadership fosters, builds, and enhances all three meta-capabilities of strategic agility by effectively managing the risk aspects of corporate social responsibilities during a crisis. Responsible leadership helps to integrate the three capabilities of strategic agility to achieve sustainable operations throughout difficult times.
Our research investigates how responsible leadership is practiced during challenging times and helps manage the risk aspects of CSR. We study how responsible leadership is linked to strategic agility by examining cases from the hospitality sector in Taiwan. Through a multi-case study approach, we interviewed managers, supervisors, and professionals who are responsible for implementing CSR practices. Our research indicates that responsible leadership enables and enhances all three meta-capabilities of strategic agility: strategic sensitivity, resource fluidity, and leadership unity. Responsible leaders demonstrate flexibility and allow for realigning and reprioritizing stakeholder demands to survive on severely limited resources by motivating collective commitment from a diverse stakeholder group. We found that employee welfare becomes a top concern during a crisis for building sustainable commitment, morale, and integrity of the workforce, which may have a prolonged impact on the business and brand post-crisis. The findings from this research indicate that, under responsible leadership, firms will be able to manage the risks associated with CSR and adapt to the shocks of uncertainty more swiftly, reduce the short-term impact of the pandemic on its primary stakeholders, and be prepared to recover faster as soon as the macro situations improve, with a well-maintained staff and a more integrally aligned stakeholder value system.
Our findings highlighted a potential pathway between responsible leadership and strategic agility through engaging, motivating, and realigning a diverse stakeholder base to form a flexible and limber partnership to survive and fight a crisis. We also highlight the role of the government as a secondary stakeholder that could contribute to building strategic agility by providing risk management measures for a firm’s CSR practices.
Taken together, our research provides three main contributions. First, we provide novel and original empirical evidence on how responsible leadership and CSR are executed in the hospitality industry in times of grand challenges. Second, we offer rich insights into how responsible leadership and CSR are linked to strategic agility and how they might complement each other. Third, we pinpoint how responsible leaders can contribute to strategic agility specifically through navigating and motivating collective commitment from various stakeholders by forming limber partnerships through arduous times. We discuss and highlight the role of the government as a special secondary stakeholder in linking responsible leadership and strategic agility. Our data reveal particularly positive attitudes of the business leaders toward the emergency relief program rolled out throughout the COVID-19 pandemic by the local government. We believe these time-sensitive policies, especially those targeted at personnel maintenance and training, enabled and reinforced responsible leadership by effectively managing some of the most pressing risks of corporate social responsibilities, which, in turn, helped to contribute to building strategic agility for the survival, recovery, and growth of the businesses.

5.2. Managerial Implications

We believe our findings offer at least several broad managerial implications: First, neither responsible leadership nor strategic agility should be conceived as an abstract concept. We show empirical evidence that strategic agility defined by the three meta-capabilities can be fostered, built, enhanced, and integrated by responsible leaders. Second, strategic agility is a vital strength and competitive advantage when coping with uncertainties and surviving disruptions. Leaders should seek to build sensitivity and fluidity, to achieve unity, and to consider adopting metrics that track these capabilities indicating agility. Third, collective commitment of the stakeholder community should be a leader’s top priority as we identify it as a potential pathway between responsible leadership and strategic agility. As we have shown in this research, collective commitment could be motivated by various creative means depending on the type and role of the stakeholder as well as macro- and firm-level contexts.

5.3. Responsible Leadership and CSR

The concept of responsible leadership is broad [55]. Our research had a special focus on CSR in our investigation based on the following motivations: First, prior research has established both responsible leadership and CSR as major metrics for the sustainable performance of an organization [56]. In particular, research has shown that it takes a responsible leader to transform a company into a sustainable, socially responsible enterprise. This suggests that the broad and abstract concept of responsible leadership could be viewed and evaluated through the relatively concrete CSR initiatives. Second, CSR has been established as a significant factor of competitive advantage (e.g., [57]). This has at least two implications for the current research: (1) CSR plays an important role in coping with COVID-19 and post-pandemic recovery; (2) CSR is an important aspect of responsible leadership. Future research should certainly look at the diverse indicators of responsible leadership and examine the concept from a broader perspective to uncover new insights into its relationships with strategic agility and building sustainable organizations.

5.4. Responsible Leadership and Strategic Agility

Extant research on responsible leadership has largely focused on its conceptual development rooted in the broader domain of leadership [58] and has just begun to recognize it as a process rather than a state [59]. A recent meta-analysis on responsible leadership research has identified shifts and trends in the field and calls for multiple levels of analysis, as well as cross-level analysis, and a focus on both the antecedents and outcomes of responsible leadership [55]. The current research contributes and answers to these new developments in the field of responsible leadership by examining and identifying some of its important consequences—more specifically, its impact on strategic agility.
Similarly, the concept of strategic agility had begun to be discussed in a generic and fuzzy manner. The review of the literature suggests that strategic agility is a concept with an ambiguously defined scope and with very limited analyses at competitive or functional levels. However, strategic agility has gained considerable attention and become particularly important in recent times, especially since the COVID-19 pandemic, which triggered tremendous disruptions across all industries globally [60]. We contribute to this promising and growing line of research by showing that the agility in organizational response is decisive for the survival of hospitality firms through a crisis.

5.5. Limitations and Future Research

Our study is not without some limitations. First, our primary data sample is composed of fourteen informants. This notably small number of informants is the result of a challenging tradeoff between rich and timely empirical data and sample size. Nevertheless, this leaves tremendous space for future research to validate and generalize our findings.
In a related vein, we adopted purposive sampling and had rather stringent selection principles. For example, only leading 5-star hotels with major ongoing operations in Taiwan were chosen and analyzed. This admittedly is a small subset of firms in the hospitality industry. Even though we justified our sampling method with the richness and quality of the data, future research could fruitfully target and explore a much larger sample from the hospitality industry.
In addition, the scope of our research implications is certainly limited by the very nature of qualitative research methods. Future research should benefit from cross-level analyses and the incorporation of quantitative methods to identify and tease apart causal relationships among variables. This would take our findings from the descriptive level of implications toward the predictive and even prescriptive level of power.
Taken together, research on both responsible leadership and strategic agility represents a relatively young yet promising field with many gaps in the literature. Future research on the antecedents and consequences of either concept alone or the relationships between them is bound to come to fruition and contribute to richer insights into building sustainable businesses.
In times of a global pandemic such as the ongoing COVID-19 pandemic, the constantly emerging challenges put all the essential roles of a responsible leader to harsh tests. Yet, we find that a responsible leader helps to build, foster, and maintain the meta-capabilities of a strategically agile organization through flexible and innovative management decisions to create, maintain, and deliver value for all stakeholders. While we certainly hope that the impact of the pandemic on the entire human race will subside as soon as possible, and that businesses will recover and rejuvenate in as little time as possible, the lessons from the crisis, nonetheless, should help shed light on building more strategically agile organizations through responsible leadership and CSR initiatives in the face of dire situations filled with uncertainties.

Author Contributions

Conceptualization, T.-S.L. and J.W.; methodology, A.C. and H.-M.L.; design of research structure, H.-M.L.; design of interview script, A.C., J.W. and H.-M.L.; formal analysis, H.-M.L.; investigation, J.W.; resources, H.-M.L.; data curation, H.-M.L.; writing—original draft preparation, A.C.; writing—review and editing, J.W.; visualization, A.C.; supervision, H.-M.L.; project administration, A.C. and H.-M.L.; funding acquisition, J.W. All authors have read and agreed to the published version of the manuscript.

Funding

This research was funded by the National Science and Technology Council, grant number MOST111-2410-H-030-007, and the APC was funded by MOST111-2410-H-030-007.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Informed consent was obtained from all subjects involved in the study.

Data Availability Statement

Not applicable.

Conflicts of Interest

The authors declare no conflict of interest.

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Sustainability 15 02760 g001 550
Figure 1. Conceptualization of the influence of responsible leadership on strategic agility.
Figure 1. Conceptualization of the influence of responsible leadership on strategic agility.
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Table
Table 1. List of respondents.
Table 1. List of respondents.
HotelRespondent’s PositionInterview Date
AVice President
Controller		12 October 2020
BAssistant General Manager20 October 2020
CGeneral Manager22 October 2020
DGeneral Manager29 September 2020
EManaging Director
Public Relations Manager		5 October 2020
FVice Chairman
Assistant Manager
Marketing Director		7 October 2020
GCEO8 October2020
HChairman6 November 2020
IGeneral Manager22 October2020
JVice Chairman6 November 2020
Table
Table 2. Data sources and classification.
Table 2. Data sources and classification.
Types of Data SourceData Source
PrimaryInterviews with upper-level management team, those who have direct involvement in CSR practices, and the Vice Chairman of the Hotel Association.
SecondaryMedia reports/interviews, news articles, organizational documents (annual financial reports, CSR reports, and dedicated CSR sections).
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Chang, A.; Lee, T.-S.; Lee, H.-M.; Wang, J. The Influence of Responsible Leadership on Strategic Agility: Cases from the Taiwan Hospitality Industry. Sustainability 2023, 15, 2760. https://doi.org/10.3390/su15032760

AMA Style

Chang A, Lee T-S, Lee H-M, Wang J. The Influence of Responsible Leadership on Strategic Agility: Cases from the Taiwan Hospitality Industry. Sustainability. 2023; 15(3):2760. https://doi.org/10.3390/su15032760

Chicago/Turabian Style

Chang, Ariana, Tian-Shyug Lee, Hsiu-Mei Lee, and Jing Wang. 2023. "The Influence of Responsible Leadership on Strategic Agility: Cases from the Taiwan Hospitality Industry" Sustainability 15, no. 3: 2760. https://doi.org/10.3390/su15032760

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