| Course | LDR 731 Contemporary Issues in Leadership (LDR/731) |
|---|---|
| Week | 6 |
| Paper type | Doctoral leadership and performance analysis |
| Length | about 1,154 words, 4 double-spaced pages plus title page and references |
| Format | APA 7 student paper |
| School | University of Phoenix |
| Program | DBA |
| Updated | October 2026 |
Free sample paper for LDR 731 Week 6
How Much Does the Chief Executive Matter? The CEO Effect, the Romance of Leadership and Financial Results at a Glass Manufacturer
[Student Name]
University of Phoenix
LDR/731: Contemporary Issues in Leadership
Week 6 Assignment
[Instructor Name]
[Date]
Maumee Glass Group, its financial results and its executives are composites written for a model paper.
The invented Maumee Glass Group has been followed through five leadership questions, from how its new top team sets direction to how it balances stakeholders. This week considers results. In chief executive Laura Brandt's first full year, operating profit rose 34 percent, from $97 million to $130 million, on revenue growth of 8 percent. A regional business publication profiled her as the leader who turned around a sleepy manufacturer, and the private equity investor proposed a large special bonus. Vice president of global operations Daniel Okafor, preparing an analysis for the board's compensation committee, noticed that natural gas prices, which make up about a fifth of the company's costs, fell sharply that year, and that glass prices rose across the industry. This paper examines how much senior leaders affect financial performance and analyzes the year's results.
Has the CEO Effect Grown?
Quigley and Hambrick (2015) examined variance decomposition studies of firm performance over several decades. They found that the share of variance in firm performance associated with chief executives increased substantially in recent decades compared with earlier periods. They suggested explanations including greater managerial discretion, more dynamic markets and changes in governance, and noted that the growing effect helps explain the growing attention paid to corporate leaders.
Charisma and Uncertainty
Waldman et al. (2001) studied chief executives of large firms and found that charismatic leadership was associated with later profitability only when top managers perceived high environmental uncertainty. Under stable conditions, charisma had little effect. Transactional leadership showed no significant relationship with profitability. The findings suggest leadership's influence on financial results depends on conditions.
The Romance of Leadership
Meindl et al. (1985) studied how people explain organizational performance and found a strong tendency to attribute outcomes to leaders, especially when performance was extremely good or bad. In archival and experimental studies, interest in leadership rose with extreme results, and observers credited leaders more when they had little information about other causes. They called this the romance of leadership.
Decomposing the Year's Results
The analysis separated the $33 million profit increase into components. Lower natural gas prices reduced energy costs by about $19 million. Industry-wide price increases for glass, matched by competitors, added about $9 million after accounting for volume. The new branded architectural line contributed about $4 million in profit. Cost reductions, mostly deferred maintenance, added about $6 million, while the Gliwice furnace failure that deferred maintenance helped cause subtracted about $6 million. Other factors netted about $1 million, bringing the total to the $33 million increase.
What the Leader Contributed
On this analysis, the chief executive's distinct strategic contribution, the branded line, accounted for about $4 million, roughly 12 percent of the profit increase. Deferred maintenance added short-term profit but was offset by the Gliwice failure. Most of the gain came from market forces shared by competitors, whose profits rose by similar percentages.
The company's best year in a decade was mostly a gift from the gas market, delivered to a chief executive who happened to be in the chair.
Comparing With Competitors
The clearest test of leadership effects is comparison with peers facing the same conditions. Two publicly traded glass makers reported operating profit increases of 28 and 31 percent in the same year, citing lower energy costs. Maumee's 34 percent increase was slightly better, consistent with a modest company-specific contribution such as the branded line. Peer comparison removes much of the market effect that the press profile attributed to leadership.
The Executive's Own View
To her credit, Laura Brandt told the board that energy prices had helped substantially. The romance of leadership operates mainly among observers, but leaders can also be drawn into it when praise is offered. Her candor provides a basis for a fairer evaluation.
Why the Story Took Hold
The profile and the bonus proposal fit the romance of leadership: an extreme result, a new leader and little public information about gas prices produced an attribution to leadership. Board members, eager to justify their hiring decision, were inclined to accept it.
Do Leaders Matter at Maumee?
The analysis does not show that leadership is irrelevant. Quigley and Hambrick (2015) found substantial and growing CEO effects, and Maumee's strategic shifts, such as branding, digital sales and the Fremont decision, will shape results for years. Given what Waldman et al. (2001) found about uncertainty, leadership effects may be greater in coming years, as energy markets, tariffs and solar demand create uncertainty.
Timing and Lags
Many of the year's results reflect decisions made before Brandt arrived, such as long-term gas contracts negotiated by her predecessor and the Monterrey plant's efficiency gains. Her decisions, such as delaying furnace rebuilds, will show their full effects later.
Implications for Executive Evaluation
The compensation committee should evaluate executives on performance relative to peers, removing industry-wide effects such as energy prices, and on measures leaders control, consistent with the balanced scorecard from Week 3. Bonuses should include deferred components tied to multi-year results.
Implications for the Board
Boards are not immune to the romance of leadership, especially soon after a hiring decision they want to see vindicated. The board should request decompositions of results each year, distinguishing market effects, prior decisions and current leadership contributions.
A Better Evaluation Framework
A fairer annual evaluation would have four parts: results relative to a peer group, progress on the balanced scorecard from Week 3, quality of strategic decisions judged by the board with outside advice and multi-year outcomes of major decisions, assessed as they mature. This framework rewards leaders for what they influence while keeping attention on long-term value.
The Special Bonus
The analysis recommends against the special bonus as proposed. A smaller award recognizing the branded line's contribution, with deferred elements tied to furnace reliability, would reward leadership without crediting market luck.
What Investors and Employees Took From the Story
The narrative of a turnaround affected behavior beyond the board. The private equity investor raised its valuation expectations, which increased pressure for growth. Plant employees, watching maintenance budgets fall while the chief executive was celebrated, grew more skeptical of the new values. Misattributed success can shape decisions in ways that later prove costly.
Limits
A single year is also a short window for judging any chief executive. Decompositions involve judgment, and some effects, such as the new values or morale, are hard to quantify. The analysis should be treated as an estimate.
Conclusion
Research shows that chief executive effects on performance are real and have grown, that leadership matters most under uncertainty and that observers romanticize leaders when results are extreme. Maumee's record year owed most of its gain to energy prices and industry pricing rather than leadership, though the new strategy contributed and will matter more over time. Evaluating executives relative to peers, on controllable measures and over multiple years can reward leadership without rewarding luck.
References
Meindl, J. R., Ehrlich, S. B., & Dukerich, J. M. (1985). The romance of leadership. Administrative Science Quarterly, 30(1), 78-102. https://doi.org/10.2307/2392813
Quigley, T. J., & Hambrick, D. C. (2015). Has the "CEO effect" increased in recent decades? A new explanation for the great rise in America's attention to corporate leaders. Strategic Management Journal, 36(6), 821-830. https://doi.org/10.1002/smj.2258
Waldman, D. A., Ramirez, G. G., House, R. J., & Puranam, P. (2001). Does leadership matter? CEO leadership attributes and profitability under conditions of perceived environmental uncertainty. Academy of Management Journal, 44(1), 134-143. https://doi.org/10.5465/3069341
What the LDR 731 Week 6 instructions ask
In Week 6, LDR 731 commonly asks how strongly top leaders shape financial and market results. Expect to review research on the magnitude of chief executive effects, conditions under which leaders matter more, such as environmental uncertainty and discretion, and attribution biases that lead observers to over-credit or over-blame leaders. Some versions ask for a close look at one company's results under a particular leader. A strong paper uses econometric and attributional research, separates leadership effects from industry and economic factors with evidence, considers time lags and draws implications for how boards evaluate and reward executives. Use peer-reviewed research in APA style.
How this LDR 731 Week 6 example is built
In Laura Brandt's first full year as chief executive, Maumee Glass's operating profit rose 34 percent, and business press coverage credited her new strategy. A closer look showed that most of the gain came from a sharp fall in natural gas prices, the company's largest variable cost, and from price increases across the glass industry. The paper examines how much leaders matter. Research on the chief executive effect found that the share of firm performance variance associated with chief executives has grown over recent decades. A study found that charismatic leadership related to profitability only under perceived environmental uncertainty. The romance of leadership study showed that observers attribute outcomes to leaders more when results are extreme. A decomposition of the year's results separates leadership from market forces.
LDR 731 Week 6 grading rubric: where the points go
Graders of leadership and performance papers reward careful separation of what leaders cause from what surrounds them, supported by numbers rather than impressions. They also look for comparisons with competitors' results in the same year. They expect accurate use of research on the size of chief executive effects and on attribution biases, analysis of real financial results with factors decomposed and attention to timing, since strategic decisions often pay off years later. Implications for boards, such as evaluating executives on factors they control, show practical insight. A paper that is skeptical of both heroic and dismissive views of leadership, and supports its conclusions with numbers, meets the doctoral standard.
LDR 731 Week 6 help: mistakes to avoid
A frequent mistake is accepting press narratives that credit or blame chief executives for results driven largely by markets. Decompose results into industry, economic and company-specific factors. Another common gap is ignoring time lags; decisions made this year may affect results years later, and this year's results may reflect predecessors' choices. Address timing. Some papers conclude that leaders do not matter, which overstates the case. Research shows meaningful effects under some conditions. Others ignore attribution biases among boards and investors. Discuss how evaluations can be made fairer. Finally, connect findings to how the organization measures and rewards leaders, building on earlier weeks' work on incentives.
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LDR 731 Week 6 questions, answered
What does LDR 731 Week 6 usually cover?
It usually covers the relationship between senior leadership and financial and market performance, including the size of CEO effects, conditions that strengthen them and biases in how leaders are credited.
Where can I find a free LDR 731 Week 6 sample paper?
The Week 6 doctoral analysis separating a chief executive's influence from market forces at a composite glass company appears above.
How much do CEOs affect firm performance?
Research suggests chief executives account for a meaningful share of performance differences among firms, and that this share has increased in recent decades, though industry and economic factors remain large.
What is the romance of leadership?
It is the tendency to attribute organizational outcomes to leaders, especially when results are extremely good or bad, even when other factors played a larger role.
When does leadership matter most for performance?
Research suggests leadership, such as charismatic leadership, has stronger effects on performance when environments are uncertain and leaders have discretion to act.
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