Influence of Leadership on Market Performance - Metro Property Development and Blackburne Property Group - Case Study Example

Influence of Leadership on Market Performance (Name) (Course) (Instructor) (Institutional Affiliation) (Date) Introduction According to Nemanich and Vera (2009), a leader’s approach can influence the productivity of staff thus impacting the market performance for the company. Besides, organizational efficiency is often dependent on each department, led by its leader, carrying out its job and contributing to the prosperity of the company. As such, the way in which the leader, delegates responsibilities, makes decisions, as well as interacts with the company employee, often affect the organization’s market performance. However, leaders often face significant pressures with regards to understanding the global trend and economic forces to stay ahead of their competitors. Moreover, leaders are expected to be savvy about the world economy and its connection with the company’s operational, financial and human capital needs (Nemanich &Vera, 2009). Further, the continuous shifting business cycles, ensuring organizational sustainability as well as harmonizing short-term performances with long-term growth are added challenges. More demanding, the leaders are expected to provide impeccable service to the increasingly sophisticated and challenging patrons. Thus, this paper will analyze two companies: Metro Property Development and Blackburne Property Group, with regards to the influence of leadership on market performance. A brief Overview of Metro Property Development Founded by Luke Hartman, Ken Woodley, and David Devine, Metro Property Development is a publicly listed property organization founded in 2010 (Metropropsa.com.au, 2015). Operating in five states, which include Sydney, Adelaide, Perth, Melbourne, Brisbane and Perth, the company has a portfolio of more than $ 1billion and is well equipped (Metropropsa.com.au, 2015). The company provides its customers with knowledge and expert advice to their customers with regards to building a home. Moreover, the company is both a wholesale home builder and an integrated property developer. Within a span of five years, Metro Property Development Company has managed to deliver more than five thousand homes. Accordingly, Metro is known nationally and has grown to become one of Australia’s leading home property developers. Metro’s mission is associated growing its apartments, home business segments, communities thus with such a mission, the company is in a position to maximize its profits across Australia at any given time. Commendably, Metro recorded a turnover of $221million between 2013 and 2014 fiscal year (Brw.com.au, 2015). A brief Overview of Blackburne Property Group Incepted in 2003, Blackburne is engaged in the property development and Real Estate business. Headquartered in West Perth, WA, the company started with only five employees under the leadership of its C.E.O Paul Blackburne. Later on, it acquired part of Blackburne & Joyce Property Group, of which John Blackburne was a partner. The name Blackburne has been synonymous with the property industry in Australia since 1966 (Blackburne.com.au, 2014). With the idea of establishing his company, Paul has built Blackburne Property Group on this exceptional brand. So far, Blackburne has built developed, marketed and sold over 4,660 apartment buildings and as statistics Indicate, between 2013 and 2014 the company had a turnover of $60.15million (Brw.com.au, 2015). Blackburne Property Group and Metro Property Development: Compare and Contrast Blackburne and Metro companies are recognized nationally as fast growing organizations that deal with property development and real estate. In of spite being young in the industry, both Blackburne and Metro have been ranked by one of Australia’s renowned business magazine, BRW, among the top three best performing companies in Australia. Metro Property Development and Blackburne Property Group companies have been ranked position two and three respectively under the BRW Fast 100 2014 category. Moreover, both are Limited Companies, which started off with small capital and a few staff. On the other hand, Blackburne Property and Metro Property Development contrast in several ways. To begin with, unlike Blackburne, which was founded by one entrepreneur, Paul Blackburn, Metro was founded by three individuals, Luke Hartman, Ken Woodley and David Devine. Contrastingly, Metro recorded a turnover of $221million while Blackburne had a turnover of $60.15million between 2013 and 2014. This indicates that Metro made more sales than Blackburne in the property development and real estate industry due its marketing strategies. In terms of human resource, Blackburne has 64 employees while Metro Property Development has 100 employees. Leadership styles adopted by key leaders in Metro and Blackburne Both Luke Hartman, C.E.O Metro, and Darren Cooper, C.E.O Blackburne, demonstrate a transformational type of leadership as they often identify the needed change, which is risk-oriented and lead their members towards that vision. This can be illustrated when Metro’s C.E.O Luke Hartman came up with a proposal of constructing Brisbane Casino Towers,’ a project that would cost the company nearly $ 161million (Financial Review., 2015). Although the project was associated with many risks, the C.E.O managed to convince the management that the location of the property was enough to take the risk. Luckily enough, the project turned out to be a success such that 71% of the apartment had already been sold prior to its launch. Similarly, Darren Cooper managed to convince his colleagues the need to take part in the $160million project that took place in Rivervale. Fascinatingly, before the project was complete, 90% of the projected sales had been attained (Business News, 2014). In contrast to Metro, which exhibits an autocratic type of leadership with major decisions being made by the three founders, Blackburne employs a participative leadership style, whereby it incorporates the expertise opinion of its 100 employees. This can be illustrated when Metro hints to the Financial Review Magazine that the Metro’s major success has because of three courageous and brilliant co-founders. On the opposition, Blackburne values its 64 employees such that it has profiled them on the company’s official website (Blackburne.com.au, 2015). Moreover, during an interview Darren Cooper, Chief Executive of Blackburne, postulated that involving all the staff in coming up with new ideas is very critical to a company. The impact of leadership on Metro’s and Blackburne’s Growth According to Adeyemi-Bello, (2001), the company’s growth is often dependent upon the organization’s leadership. The company leaders must continuously identify needs and involve the followers in coming up with strategies and plans of achieving those changes and objectives. In effect, the rapid growth that is evidenced in Metro such as the 224% annual growth over the last three years was largely contributed by the incredible leadership of its three co-founders. For example, Luke Hartman led the company into identifying an opportunity in South Brisbane, while the other directors led the staff in researching and liaising with financial institutions thus completing the Brisbane Casino Towers. Equally, the leadership of the Metro was behind the decision to float the company on the Australian Stock Exchange in June. However, upon evaluating the stock market as well as the property development and real estate industry, the Metro’s leadership changed the decision to go public as advised by the experts. Similarly, Blackburne’s impeccable leadership has seen the rapid growth of the company as it has recorded annual growth rate of 216% in the last three years. The leadership of the top directors, who often consult their staff, is behind the development as well as marketing of more than a thousand properties valued at approximately $500 million. In 2013, the company came up with an award scheme that would see the most successful staff or site employees with most sales getting more than a million dollars. With this kind or rewarding scheme and other factors, the company managed to be ranked position three under the BRW Fast 100 2014 category, which recognizes fast-growing companies every year. Other factors more important than leadership in achieving growth Other than leadership, there are other important aspects that a company should factor in for the growth of the organization. To begin with, Metro Property Development should have factored the aspect of consistent team quality. Evidently, the company used a considerable amount of resources in hiring temporary economists and actuarialists to evaluate the market trends as well as the Australian stock market. With qualified market research analysts, the company could have saved more money and have bigger investments. The other important factor as Zhang and Bartol, (2010), indicate is employee motivation and empowerment. Both Metro and Blackburne need to employ this important aspect, as the company cannot run effectively without passionate and committed staff. The two companies must incorporate a strategic human resource scheme, which takes care of the employee’s intrinsic and extrinsic rewards. Empirical Limitations to Proving Leadership's Influence on Market Performance To begin with, the two companies are not listed on the Australian Stock Exchange Market thus difficult to access important company documents that could have otherwise been in public domain. These documents could have indicated the structure of leadership in the two organizations as well as their employees’ job descriptions and organizational culture. Further, it is difficult to access the clients' comments on their experiences with these companies. Ultimately, it is a challenge in accessing the companies’ details of its annual income, expenses and other important aspects that are often provided in the financial report. This would have necessitated an easier analysis with respect to the major contributors to their rapid growths. Conclusion In summation, this report has highlighted the influence of leadership on the market performance by analyzing two companies: Metro Property Development and Blackburne Property Group. Besides, the paper compared and contrasted the two companies in general as well as the leadership styles adopted by their key leaders. The paper also indicated the extent to which leadership is responsible for the growth of the two companies. Ultimately, the paper also delineated other important factors other than leadership that can help in achieving growth and the empirical limitations to proving that leadership influences the market performance. References Adeyemi-Bello, T. (2001). The impact of leadership style on organizational growth. Work Study, 50(4), 150-154. Blackburne.com.au,. (2014). Blackburne. Retrieved 9 October 2015, from http://blackburne.com.au/ Blackburne.com.au,. (2015). Blackburne. Retrieved 9 October 2015, from http://www.blackburne.com.au/staff Brw.com.au,. (2015). BRW Fast 100 2014. Retrieved 9 October 2015, from http://www.brw.com.au/lists/fast-100/2014/ Business News,. (2014). $160m project for Rivervale. Retrieved 9 October 2015, from https://www.businessnews.com.au/article/160m-project-for-Rivervale CourierMail,. (2015). David Devine’s Metro Property Development halts sharemarket float. Retrieved 9 October 2015, from http://www.couriermail.com.au/business/david-devines metro-property-development-halts-sharemarket-float/story-fnihsps3-1227403673719 Financial Review,. (2015). Luke Hartman hopes to follow in some BRW Young Rich IPO footsteps. Retrieved 9 October 2015, from http://www.afr.com/real-estate/luke-hartman hopes-to-follow-in-some-brw-young-rich-ipo-footsteps-20150615-ghohud Metropropsa.com.au,. (2015). Read Our Story - Metro Property Development. Retrieved 9 October 2015, from http://www.metropropsa.com.au/about/our-story Nemanich, L.A., and D. Vera. 2009. “Transformational Leadership and Ambidexterity in the Context of an Acquisition.” The Leadership Quarterly 20:9–33. Zhang, X., & Bartol, K. M. (2010). Linking empowering leadership and employee creativity: The influence of psychological empowerment, intrinsic motivation, and creative process engagement. Academy of Management Journal, 53(1), 107-128. Read More