Abstract
Geopolitical shocks can disrupt businesses on multiple fronts, such as sudden loss of buyers or suppliers, supply disruption and demand fluctuations, wielding the power to profoundly undermine a firm's ability to meet customer demands. The imperative to grasp the repercussions of geopolitical tumult and devise effective countermeasures has therefore drawn the attention of scholars and business leaders alike. Nevertheless, the empirical research in this area remains limited. This study addresses this gap by using 247 Australian manufacturing and distribution firms with a global footprint. We find that geopolitical shocks are inextricably linked to a decline in firms' supply chain agility. Our analysis further reveals that while crisis leadership and transformational leadership, when practiced alone, have limited effectiveness in mitigating the adverse effects of geopolitical shocks on supply chain agility, their combined application significantly reduces the negative impact. The synergistic approach highlights the significance of crisis leadership for immediate needs and swift action, along with transformational leadership for long-term strategies, vision, and continuous improvement, ensuring lasting business success. These insights are valuable for businesses aiming to enhance their resilience in the face of geopolitical uncertainties and stay competitive.
•There is negative association between geopolitical shocks and supply chain agility.•Crisis leadership does not mitigate the influence of geopolitical shocks (GS) on SCA.•Transformational leadership does not mitigate the influence of GS on SCA.•Both leadership styles significantly reduce the influence of GS on SCA.
