Leadership as a Change Trigger in Unsettling Conditions: The Case of Werenbach Watches

Leadership as a Change Trigger in Unsettling Conditions: The Case of Werenbach Watches

Vasilios Stouraitis (Glasgow Caledonian University, UK), Andres J. Arenas F. (Universidad Antonio de Nebrija, Spain), Kostantinos Tsanis (Hult International Business School, USA) and Jessica Bayón Pérez (Universidad Antonio de Nebrija, Spain)
DOI: 10.4018/978-1-7998-6948-1.ch016
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Abstract

The case focuses on Werenbach watches, a micro SME based in Switzerland which managed to survive the current crisis of COVID-19 in an innovative way. The focus is on the behavioural aspects of leadership present in the case and which have led to tangible innovations. The innovations examined have led to the ability to source extensively and access funding to create a stronger global presence. The reasons for choosing servant leadership as an example are presented and the moderating links between attitude and implementation are listed and examined. Suggestions for managers and further research are presented. The chapter aims to be a toolkit for micro SMEs' CEOs willing to understand the fundamental behaviours behind access of funds and sources for a small firm.
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Introduction

Small and medium-sized enterprises (SMEs) in the European Union (EU), consist of firms employing less than 250 employees, and account for 99.8 percent of all firms (European Commission, 2005). However, despite their significance, SMEs are vulnerable to several issues –dependency on debt, and in particular bank loans, for liquidity. Usually, in stable economic conditions, liquidity shortages can be controlled using short-term loans or capital without jeopardising the survival chances of the company. Nevertheless, in times of a crisis such as COVID-19, SMEs’ reliance on financing, reliance on sourcing, and the lack of ability to procure other streams of funds in the short-run can turn a liquidity issue into a serious solvency issue. Eventually this issue has transformed into a critical concern for policymakers globally (Gourinchas et al., 2020).

Werenbach watches is a micro SME based in Zurich, Switzerland with 2 partners and a CEO, and a strategy based on mostly word of mouth, which managed to achieve; a very successful online strategy using social networks, funding and a worldwide presence including a succesful crowdfunding, and a succesful pricing strategy in several markets all during the Covid-19 period. Werenbach watches has a varied pricing strategy aiming at varied layers of customer base from high end to mainstream (e.g. 200USD to 600USD). Having interviewed the CEO using semi-structured questions, this case study aims to analyze how servant leadership (particularly providing direction and stewardship) helped the SME grow within the Covid-19 period. Intrinsic case study reseach involves in depth analysis of an individual unit. The following chapter is an intrinsic case study which does not aim to be used for theory building but for a better understanding of the particular case. This can be seen as a deviant case as it is quite unusual due to the extensive final media presence generated from a small firm size (Baskarada, 2013). Although our case is focused on behaviour, the case study collected evidence of the results and of factors encouraging the behaviour rather than perceptions of potential results.As case study research is based on analytical generalisation and is made to theory and not to population, the chapter focuses on servant leadership theory as a foundation of comparison. The reason for its selection is seen below. The findings are also shown below.

The company essentially secured funds and a survival throughout 2020 using an intertwining of innovations led and selected by a proactive attitude towards servant leadership. In essence, all innovations undertaken complement each other and intersect to create the situation the company is in. As in most entrepreneurial decisions, the action taken can be reactive or proactive (Stouraitis et al, 2017). In the case of Werenbach, most of the decisions seem to come from a proactive leadership stance showing a sense of direction (a servant stance) which was coined by Greenleaf (1970). The following sections will examine the three innovations and present a background on the company followed by the three innovations and then recommendations for management. Entrepreneurial action is directly linked to the entrepreneurs’ evaluation of the opportunities and surroundings in which the company operates. Therefore, the issue for entrepreneurial action is not just if a rapid change in the business model could be of use. It is more about comprehending the meaning for the company inside and the environment outside, during the process of fixing their plans or business model. As Hoch et al. (2016) mention, leaders can be transformational but also unethical, abusive of followers and act in way that may be contrary to the values and organizational intersts, at times also without realising.

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