Influence of leadership and culture on financial performance: A case study in a troubled industry

This was a study designed to analyze the contributing factors to a successful organization's financial achievement competing in an industry that has experienced significant correction. Specifically, using a case and field design, this research explored the cultural characteristics and leadership style used within the participant organization to examine whether stakeholders believe they have an effect on the firm's ability to perform successfully relative to its competitors while competing in a distressed industry. This study used qualitative methods to answer the research questions and provides a detailed understanding and description of the organization's leadership and cultural experience and their perceived effect on corporate profitability. Although prior research exists concerning how leadership style and culture affect organizational performance, there is a gap in the literature concerning whether leadership style and culture are perceived to be contributory factors to financial success specifically for organizations competing in distressed industries, such as the U.S. housing industry. Once the housing bubble burst in 2006, suppliers in the U.S. housing industry suffered a significant decrease in revenues. In spite of its competitors' depressed operational and financial performance, the participant organization consistently demonstrated success, relative to its competitors, based on all key financial metrics of profitability. Investigating an organization that experienced discernable success competing in a distressed industry where others have struggled is a logical step in the progression of the literature. Participants in the study perceived that four cultural and leadership characteristics were significant in understanding the participant organization's success over the years 2005 through 2008, during which time the industry in which the organization competes witnessed significant correction and in which major competitors have struggled, including (a) The organization's culture is caring and nurturing; (b) The organization's culture reflects honesty, integrity and trust; (c) The organization demonstrates workplace spirituality; and (d) The leadership demonstrates servant leader characteristics.