The economic recession that began in 2008 is the most significant downturn in the economy since the Great Depression. Cuts to public higher education the last three years in a large, western state have been over $2 billion, with an additional $1.5 billion in cuts proposed for the 2012-2013 fiscal year. The university system under study is an economic driver and produces educated workers necessary for the state's economy. State budget cuts are impacting not only the mission of the university system, but also numerous initiatives created to better serve students. Using frameworks of university organization and leadership models, the critical importance of lecturers for meeting the needs of diverse students, and collective bargaining constructs, this study investigates the impact of budget cuts on lecturer retention and resulting demographics. In addition to understanding how faculty positions are impacted, the perspectives of the administration and the faculty union leadership to the budget cuts were analyzed using artifact analysis of public statements by both groups. By using organizational effectiveness models, the administration and the faculty union leadership responses to the cuts were compared and contrasted. The results of this study on the short-term impact of the budget cuts provide for a deeper understanding of the current economic environment facing public higher education and how leaders manage organizations through such chaotic conditions. Efficiency and effectiveness are discussed using a lens of positive organizational scholarship as models to assist higher educational leaders navigate their organizations through financial downturns. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://bibliotheek.ehb.be:2222/en-US/products/dissertations/individuals.shtml.]