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Signs of Narcissism of CEOs: Validating a Widely Used Measure

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Abstract

Recent research on CEOs' narcissism has mostly used unobtrusive measures, even though such measures have not been validated. In two online experiments (Study 1 with 601 participants from various occupations and Study 2 with 97 managing directors), we analyze the construct validity of the commonly used narcissism index (NI). We find that the NI is only moderately correlated with the established and validated Narcissistic Personality Inventory (NPI), which calls into question the convergent validity of the NI. We further alter the company's financial development in our experimental design to test whether performance affects the NI. Experimental results show that individuals have different levels of NI after a period with a positive compared to a negative financial development. This casts doubt on previous findings in leadership research using the NI and other unobtrusive measures because it indicates endogeneity problems.

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... This is important, as managers are likely unwilling to participate in psychological tests in the first place. However, the recent literature has also questioned the validity of these proxies (particularly signature size and first-person singular pronoun use) for narcissism (Carey et al., 2015;Koch & Biemann, 2014). ...
... First, a directly observable measure of management personality would be ideal. As self-rated measures and professional psychological assessments of managers are difficult to come by Koch and Biemann (2014), we employ informant-based ratings via the dirty dozen scale. The dirty dozen scale is a commonly used and validated measure of personality characteristics . ...
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We investigate the relationship between the dark triad personality traits (Machiavellianism, narcissism, and psychopathy) of managers and the practice of reporting manipulation using a primary survey of 837 professionals working in accounting and finance departments. We find that (a) managers who exhibit dark personality traits are associated with a higher prevalence of fraudulent accounting practices in their accounting and finance departments and (b) traditional risk management mechanisms are only partially effective in mitigating this effect. Internal audits are effective in curtailing the negative behavior of managers with dark triad traits only if these internal audits are outsourced and performed by independent external personnel but not if they are conducted by internal personnel. This suggests that managers with dark triad traits are able to manipulate other employees quite effectively. Consequently, having external personnel perform the auditing task provides a safeguard against such unethical practices and manipulation. This finding has strong practical implications, as it provides support for outsourcing internal audits rather than keeping them in-house.
... Their review of the literature suggests that research relying on this measure may suffer from serious issues due poor reliability and validity. A recent experimental study by Koch and Biemann (2014) examined the measurement validity of Chatterjee and Hambrick's narcissism measure and found only a small correlation with the NPI and problematic evidence of endogeneity. Abatecola and Cristofaro (2018) observed that the Chatterjee and Hambrick narcissism measure is "worthy of attention for the way by which narcissism is measured, i.e. through non-psychometrically validated operationalizations" (p. 7, section 2.3). ...
... Dealing with systematic (non-random) measurement errors presents a greater challenge. In addition to content validity issues impacting measurement deficiency and contamination (Hill et al. 2014;Ketchen et al. 2013) some of the error in the disturbance term is likely due to endogeneity (Koch and Biemann 2014). For example, narcissistic CEOs not only assert their impact on company policies and practices in order to obtain higher relative compensation, and higher prominence in press releases and annual reports, they are also likely to self-select into certain organizations based on firm size, organizational prestige, and their perceived ability to extract a higher level of relative compensation or prominence. ...
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Using an unobtrusive archival narcissism measure (Chatterjee and Hambrick in Adm Sci Q 52:351–386, 2007; Adm Sci Q 56:202–237, 2011), CEO narcissism has been linked to important strategic issues: overpayment for acquisitions, risk taking, fraud, etc., but measurement unreliability raises important questions about this research. Six studies (N = 791, comprising 5.3% of CEOs in this review) reported Cronbach’s alphas that met minimum standards (.71 ≤ α ≤ .75) along with other reliability results that were often mixed (e.g. poor test–retest reliability and factor analysis results). However, 37 studies (N = 14,165, 94.7% of CEOs) had unacceptable reliability or failed to report any evidence of reliability at all. Out of 43 studies (total N = 14,956 CEOs), 10 studies (N = 3582) obtained unreported (calculated) Cronbach’s α ≤ .58, 10 studies reported no evidence of reliability or indicator correlations, despite using multiple indicators, and 10 studies justified a measure of narcissism by citing Chatterjee and Hambrick’s (2007) work, but actually relied on only a single archival indicator. Recent studies using the unobtrusive archival approach for CEO narcissism have failed to find acceptable reliability, failed to report low reliability, and have engaged in questionable data transformations. In an operational replication study, data collection procedures were carefully followed, but acceptable results were not obtained in three CEO samples. This article concludes by considering implications for CEO narcissism research and recommendations for future research involving unobtrusive measures.
... Prior studies have utilized measures such as the CEO's prominence in annual reports and press releases or the CEO's compensation relative to other executives. 2 However, these previously used measures are largely unavailable for CFOs, are likely influenced by others, and are largely outside of the CFO's control. 3 Further, recent research has questioned the construct validity of previously-used narcissism measures (Koch and Biemann 2014;Carey et al. 2015). Instead, we utilize a measure that is publicly available for a large representative sample of CFOs and is unlikely to be influenced by others in the firm: their signature size. ...
... 4 The use of signatures in societies has a long history, with specific instructions on signatures included in the Talmud from the fifth century. A substantial body of literature in psychology highlights the importance of signatures as a "powerful symbolic !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1 Executives are understandably unwilling to complete surveys or questionnaires to directly measure personality traits such as narcissism (Koch and Biemann 2014;). 2 See, for example, Chatterjee and Hambrick (2007), Schrand and Zechman (2012), and . ...
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We investigate the effect of CFO narcissism, as measured by signature size, on financial reporting quality. Experimentally, we validate that narcissism predicts misreporting behavior, and that signature size predicts misreporting through its association with narcissism. Empirically, we examine notarized CFO signatures and find CFO narcissism is associated with more earnings management, less timely loss recognition, weaker internal control quality, and a higher probability of restatements. The results are consistent for within-firm comparisons focusing on CFO changes and are robust to controlling for CFO overconfidence and CEO narcissism. The results highlight the importance of CFO characteristics in the domain of financial reporting decisions.
... This can mainly be explained by the visibility of board members and the ready availability of proxies for this personality trait, such as signature size (Ham et al., 2018), the use of first-person pronouns (Raskin & Shaw, 1988) or the size of photos in annual reports (Chatterjee & Hambrick, 2007). However, the validity of these proxies for narcissism are being questioned (Carey et al., 2015;Koch & Biemann, 2014). Also, readily available proxies for the other two dark triad traits, Machiavellianism and psychopathy, have yet to be discovered. ...
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Middle managers responsible for sustainability operationalize top management decisions on the organization's social and environmental activities. With their focus on sustainability, they could be expected to consider ethical issues particularly well in their decisions and to possess ethical personality traits. While earlier research has focused on top management this paper examines the influence of personality traits of middle managers on their corporate sustainability preferences. Based on a primary survey sample of 204 professionals responsible for sustainability in their company, we study the relationship between dark triad personality traits (Machiavellianism, narcissism, and psychopathy) of sustainability managers and their environmental and social responsibility preferences. The analysis shows that managers who score higher on the dark triad personality scale are less concerned about environmental and social responsibility issues. The business environment, analyzed in a cross-cultural comparison between the United States and Europe, and the organizational context function as a moderator of the influence of personality traits on sustainability preferences. The results suggest that dark triad personality traits should be considered in recruitment and assessment processes of middle managers responsible for corporate sustainability.
... Second, it measures narcissism through the Narcissistic Personality Inventory (NPI, Raskin & Terry, 1988), which is recognized as the most reliable tool to measure this personality trait. In fact, the nascent unobtrusive measures developed by Chatterjee and Hambrick (2007) are not yet validated and have shown to have a limited correlation to the NPI (Koch & Biemann, 2014). Our empirical analyses revealed that narcissism has a significant positive effect on how quickly individuals advance to the CEO position. ...
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It is widely acknowledged that narcissism is a peculiar characteristic of leaders, such as CEOs. However, the role of narcissism in CEO emergence and appointment has not been studied yet. We overcome this gap by studying whether having a highly narcissistic personality allows individuals to become CEOs sooner. We posit that these individuals have quicker career development, climbing the hierarchical chain faster. We also hypothesize that this relation may be moderated by the firm's characteristics, comparing family and nonfamily firms. Family firms are the most widespread organizational form of firms around the world, and their peculiarities might affect the appointment of narcissistic CEOs. Estimates on a sample of 172 individuals partially confirm the hypotheses. Highly narcissistic individuals become CEOs quicker, regardless of whether the firm is a family business or not. Narcissistic individuals thus benefit from their personality when aiming at becoming CEOs faster in their career advancement.
... First, we collected the CEO's letter to the shareholders for the fiscal year 2009 (number of letters = 25) and the transcripts of quarterly earnings calls for that year in which the CEO participated (average number of earnings calls per CEO = 2.38). Previous research has suggested that people who are more narcissistic use first-person singular pronouns more frequently (DeWall, Buffardi, Bonser & Campbell, 2011;Koch & Biemann, 2014). To test this, we used the Linguistic Inquiry and Word Count (LIWC) text analysis program (Pennebaker, Francis & Booth, 2001) and found that CEO narcissism was positively though modestly correlated with the CEO's use of firstperson singular pronouns ("I") in fiscal year 2009 letters to shareholders (r = .27, ...
... Although these measures provide advantages in situations where interview or questionnaire responses might be difficult or impossible to obtain, it is important to consider the validity of unobtrusive constructs (see Hill et al. 2013). For instance, although single dimensions such as the usage of first person pronouns have attracted criticism regarding its validity of narcissism (Koch and Biemann 2014), several studies still rely on single dimension measurements (Aktas et al. 2016;Kim 2013). The usage of several constructs (that can be aggregated statistically) may mitigate validity concerns. ...
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... First, we use a unique measure of narcissism that we validate in laboratory studies. This is critical because the most commonly used narcissism measures in extant literature have been found to correlate relatively poorly with narcissistic personality scores (Koch and Biemann 2014;Carey et al. 2015). 1 Second, prior research on CEO narcissism and performance (Chatterjee and Hambrick 2007) has focused on firms within the computer software and hardware industries. This research finds an effect of narcissism on performance extremeness but not directional performance. ...
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... First, we collected the CEO's letter to the shareholders for the fiscal year 2009 (number of letters = 25) and the transcripts of quarterly earnings calls for that year in which the CEO participated (average number of earnings calls per CEO = 2.38). Previous research has suggested that those high on narcissism use first-person singular pronouns more frequently (DeWall, Buffardi, Bonser, & Campbell, 2011;Koch & Biemann, 2014), although there is some recent evidence questioning the validity of this commonly used measure (Carey et al., 2015). To test this, we used the Linguistic Inquiry and Word Count (LIWC) text analysis program (Pennebaker, Francis, & Booth, 2001) and found that our measure of CEO narcissism was modestly though positively correlated with the CEO's use of first-person singular pronouns ("I") in fiscal year 2009 letters to shareholders (r = 0.27, p < 0.10), as well as with use of personal pronouns (r = 0.24, p < 0.10) in fiscal year 2009 earnings call transcripts. ...
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The seven culture/society level cultural value orientations are appropriate for comparing cultural groups to one another and for relating to societal level characteristics (e.g., average family size, level of corruption, country wealth, level of democratization, etc.). They are not appropriate for characterizing the values of individual people and studying the relationships of individuals’ values to other individual differences. For that purpose, a different theory and set of individual value dimensions have been developed. The cultural value orientations were derived conceptually by asking what problems every society confronts and what polar value preferences might evolve to deal with these issues. Brief descriptions of the basic problems and the conceptual definitions of the 7 orientations follow. To understand the scores and apply them effectively, you should read some of the references below. Autonomy vs. Embeddedness: The first problem is to define the nature of the relations and boundaries between the person and the group: To what extent are people autonomous vs. embedded in their groups? In autonomy cultures, people are viewed as autonomous, bounded entities. They are encouraged to cultivate and express their own preferences, feelings, ideas, and abilities, and to find meaning in their own uniqueness. There are two types of autonomy: Intellectual autonomy encourages individuals to pursue their own ideas and intellectual directions independently. Affective autonomy encourages individuals to pursue affectively positive experience for themselves. In embeddedness cultures, people are viewed as entities embedded in the collectivity. Meaning in life is expected to come largely through social relationships, through identifying with the group, participating in its shared way of life, and striving toward its shared goals. Embedded cultures emphasize maintaining the status quo and restraining actions that might disrupt in-group solidarity or the traditional order. Egalitarianism vs. Hierarchy: The second societal problem is to guarantee that people behave in a responsible manner that preserves the social fabric. That is, people must engage in the productive work necessary to maintain society rather than compete destructively or withhold their efforts. People must be induced to consider the welfare of others, to coordinate with them, and thereby to manage their unavoidable interdependencies. Egalitarian cultures seek to induce people to recognize one another as moral equals who share basic interests as human beings. They try to socialize their members to internalize a commitment to cooperate and to feel concern for everyone's welfare. People are expected to act for the benefit of others as a matter of choice. Hierarchy cultures rely on hierarchical systems of ascribed roles to insure responsible, productive behavior. They define the unequal distribution of power, roles, and resources as legitimate and even desirable. People are socialized to take the hierarchical distribution of roles for granted, to comply with the obligations and rules attached to their roles, to show deference to superiors and expect deference from subordinates. Harmony vs. Mastery: The third societal problem is to regulate people’s treatment of human and natural resources. Harmony cultures emphasize fitting into the social and natural world, trying to appreciate and accept rather than to change, direct, or exploit. Mastery cultures encourage active self-assertion in order to master, direct, and change the natural and social environment to attain group or personal goals. In sum, the theory specifies three bipolar dimensions of culture that represent alternative resolutions to each of three problems that confront all societies. A societal emphasis on the cultural orientation at one pole of a dimension typically accompanies a de-emphasis on the polar type with which it tends to conflict. The following scores for the seven cultural value orientations are based on data gathered with the 56-57 item Schwartz value survey between 1988 and 2007. Research on many countries indicates that change in cultural value orientations is very slow even in the presence of major political and institutional change. The selection of items to index the 7 orientations was validated empirically through multi-dimensional scaling of 45 value items that had demonstrated reasonably similar meaning across societies. Correlations among the mean ratings of these items by societal groups served as the input data. Each group (not individual) served as the unit of analysis. The reported scores are based on equally weighting scores of college students of varied majors and of school teachers of varied topics (K-12) who teach in the majority type school in an urban area of the country. In countries where either a student or teacher sample was missing, scores for the missing sample were estimated by regression based on the first 59 countries in which both types of samples were available. The means for observed and estimated samples were then averaged. This dataset has a wider country coverage compared with the teacher or the student samples alone. Because some scores are imputed this entails some measurement error. Using the teacher sample alone avoids this problem and also has the advantage of using a well-matched sample. (see source for teacher data below) The scores differ somewhat from the separate teacher and student scores published in Schwartz (1994). This is because samples have been added in some countries and measurement of some of the seven cultural value orientations has changed. Moreover, the theorizing, conceptualization, and labeling have been updated and modified. For more detail on the theorizing and measurement, consult the following references: Schwartz, S. H. (2004). Mapping and interpreting cultural differences around the world. In H. Vinken, J. Soeters, & P Ester (Eds.), Comparing cultures, Dimensions of culture in a comparative perspective (pp.43-73). Leiden, The Netherlands: Brill. Schwartz, S. H. (2006). A theory of cultural value orientations: Explication and applications. Comparative Sociology, 5, 137-182. Also in Y. Esmer & T. Pettersson (Eds.), Measuring and mapping cultures: 25 years of comparative value surveys (pp. 33-78). Leiden, The Netherlands: Brill (2007) Schwartz, S. H. (2009). Culture matters: National value cultures, sources and consequences. In C.-Y. Chiu, Y.Y. Hong, S. Shavitt, & R. S. Wyer, Jr. (Eds.), Problems and solutions in cross-cultural theory, research and application. New York: Psychology Press. Schwartz, S. H. (2014). National culture as value orientations: Consequences of value differences and cultural distance. In V. Ginsburgh & D. Throsby (Eds.), Handbook of the Economics of Art and Culture, Vol.2 (pp. 547-586). Elsevier/North Holland. For a discussion of the differences between the cultural and individual level values and the questions for which each is appropriate, see: Schwartz, S. H. (2011). Values: Individual and cultural. In F. J. R. van de Vijver (Eds.), A. Chasiotis, & S. M. Breugelmans, Fundamental questions in cross-cultural psychology (pp. 463-493). Cambridge: Cambridge University Press. Electronic files with these references are available from Shalom.Schwartz@mail.huji.ac.il For the teacher sample scores and further comparison with the student and combined datasets, see: Siegel, J. I., Licht, A. N. and Schwartz, S. H., (2007) "Egalitarianism and International Investment". Available at SSRN: http://ssrn.com/abstract=899082 The following table indicates the values that are averaged to provide the scores for each cultural value orientation. In the questionnaire, each item is further explained in a parenthetical expression. The scores for each cultural group are centered around the mean score for all 56-7 items in that group. Thus, the score for each cultural orientation within a group indicates its importance relative to the other 6 orientations in that group. A constant (4.0) has been added to each score to bring it back to its approximate location on the original -1 to +7 response scale. Cultural Value Orientation Value Items Harmony A world of beauty, a world at peace, protecting the environment, unity with nature, Embeddedness Clean, devout, forgiving, honoring parents and elders, moderate, national security, obedient, politeness, protecting my public image, reciprocation of favors, respect for tradition, self discipline, social order, wisdom Hierarchy Authority, humble, social power, wealth Mastery Ambitious, capable, choosing own goals, daring, independent, influential, social recognition, successful Affective Autonomy Enjoying life, exciting life, pleasure, varied life, self-indulgent Intellectual Autonomy Broadminded, creativity, curious, freedom Egalitarianism Equality, helpful, honest, loyal, responsible, social justice
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This study builds on insights from both upper echelons and agency perspectives to examine the effects on corporate social responsibility (CSR) practices of CEO’s narcissism. Drawing on prior theory about CEO narcissism, we argue that CSR can be a response to leaders’ personal needs for attention and image reinforcement and hypothesize that CEO narcissism has positive effects on levels and profile of organizational CSR; additionally, CEO narcissism will reduce the effect of CSR on performance. We find support for our ideas with a sample of Fortune 500 CEOs, operationalizing CEO narcissism with a novel media-based measurement technique that uses third-party ratings of CEO characteristics with validated psychometric scales.
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Past empirical studies relating Narcissism to leadership have offered mixed results. The present study integrates prior research findings via meta-analysis to make four contributions to theory on Narcissism and leadership, by: (a) distinguishing between leadership emergence and leadership effectiveness, to reveal that Narcissism displays a positive relationship with leadership emergence, but no relationship with leadership effectiveness, (b) showing Narcissism's positive effect on leadership emergence can be explained by leader Extraversion, (c) demonstrating that whereas observer-reported leadership effectiveness ratings (e.g., supervisor-report, subordinate-report, and peer-report) are not related to Narcissism, self-reported leadership effectiveness ratings are positively related to Narcissism, and (d) illustrating that the nil linear relationship between Narcissism and leadership effectiveness masks an underlying curvilinear trend, advancing the idea that there exists an optimal, midrange level of leader Narcissism. This article is protected by copyright. All rights reserved.
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The link between leader narcissism and follower perceptions of ethical leadership and leader effectiveness, including the potential moderating role of ethical context was investigated. Associations between narcissism and follower perceptions of both ethical and effective leadership were not significant. In highly ethical contexts, however, narcissistic leaders were perceived as ineffective and unethical. These results are interpreted in the context of the fit between leader personality and organizational ethical climate. Implications for research investigating the role that narcissism plays in leadership, as well as organizational responses to narcissistic leaders, are highlighted.
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Research Summary: While prior studies have predominantly shown that CEO narcissism and hubris exhibit similar effects on various strategic decisions and outcomes, this study aims to explore the mechanisms underlying how narcissistic versus hubristic CEOs affect their firms differently. Specifically, we investigate how peer influence moderates the CEO narcissism/hubris—corporate social responsibility (CSR). With a sample of S&P 1500 firms for 2003–2010, we find that the positive relationship between CEO narcissism and CSR is strengthened (weakened) when board‐interlocked peer firms invest less (more) intensively in CSR than a CEO's own firm; the negative relationship between CEO hubris and CSR is strengthened when peer firms are engaged in less CSR than a CEO's own firm. Managerial Summary: Some CEOs are more narcissistic while others may be more hubristic, but these two groups of CEOs hold different attitudes toward the extent to which their firms should engage in corporate social responsibility (CSR). Our findings with a large sample of U.S. publically listed firms suggest that narcissistic CEOs care more about CSR, but hubristic CEOs care less. Interestingly, when narcissistic CEOs observe their peer firms engaging in more or less CSR than their own firms, they tend to respond in an opposite manner; in contrast, hubristic CEOs will only engage in even less CSR when their peers also do not emphasize CSR. Our findings point to a fundamental difference between CEO narcissism and hubris in terms of how they affect firms' CSR decisions based on their social comparison with peer firms.
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Although some researchers have suggested that narcissistic CEOs may have a positive influence on organizational performance (e.g., Maccoby, 2007; Patel & Cooper, 2014), a growing body of evidence suggests that organizations led by narcissistic CEOs experience considerable downsides, including evidence of increased risk taking, overpaying for acquisitions, manipulating accounting data, and even fraud. In the current study we show that narcissistic CEO's subject their organizations to undue legal risk because they are overconfident about their ability to win and less sensitive to the costs to their organizations of such litigation. Using a sample of 32 firms, we find that those led by narcissistic CEOs are more likely to be involved in litigation and that these lawsuits are more protracted. In two follow-up experimental studies, we examine the mechanism underlying the relationship between narcissism and lawsuits and find that narcissists are less sensitive to objective assessments of risk when making decisions about whether to settle a lawsuit and less willing to take advice from experts. We discuss the implications of our research for advancing theories of narcissism and CEO influence on organizational performance.
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This research examines the relationship between narcissistic personality characteristics in Chief Executive Officers (CEOs) and firms’ innovation outcomes. The authors argue that firms led by narcissistic CEOs are likely to exhibit a higher rate of new product introductions and a greater proportion of radical innovations in their new product portfolios, but they are also more likely to encounter product-harm crises. The impact of CEO narcissism on these innovation outcomes is partially mediated by firms’ higher competitive aggressiveness. High power of the marketing department in the top management team, however, increases firms’ customer orientation, which in turn weakens the relationship between CEO narcissism and product-harm crises. A longitudinal analysis of a sample of 395 publicly listed U.S. firms in the period 2006–2010 provides considerable support for the authors’ hypotheses. This research underscores the importance of studying CEOs’ personality traits as antecedents of firms’ innovation outcomes, highlights the positive and negative impact of CEO narcissism on firms’ innovation-related behavior, and delineates the process through which this impact takes place.
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We examine how two seemingly contradictory yet potentially complementary CEO traits-humility and narcissism-interact to affect firm innovation. We adopt a paradox perspective and propose that individuals can have paradoxical traits and that, in particular, humility and narcissism can coexist harmoniously, especially among the Chinese, whose philosophical tradition embraces paradoxical thinking and behaving. CEOs that are both humble and narcissistic are hypothesized to be more likely to have socialized charisma, to cultivate an innovative culture, and to deliver innovative performance. Two studies using multisource data involving 63 CEOs, 328 top managers, and 645 middle managers in Study 1 and 143 CEOs and 190 top managers in Study 2 support the hypotheses and point to new directions for studying CEO traits and their effects on firm outcomes.
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Research about the impact of the CEO’s personality on firm-level outcomes has been ambiguous, partly because the underlying mechanisms remain largely unexplored. Given that the individuals most strongly influenced by a firm’s CEO are the top management team (TMT) members, this study focuses on the CEO–TMT interface as a salient intervening relationship. We hypothesize that CEO personality traits of extraversion and openness to experience would influence firm performance indirectly through TMT behavioral integration (TMT teamness). Using multisource survey data from 138 small- to medium-sized firms, we test and find general support for a mediation model in which the CEO’s personality traits are positively related to TMT behavioral integration, which, in turn, enhances firm performance. Limitations and implications for future research are also discussed.
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This analysis considers the impact of the top managers in an organization on the organization's outcomes, specifically strategic choices and performance levels. The focus is not on the chief executive alone, but rather on the entire top management team. Using a macro view, these organizational outcomes are perceived to be related to the values and cognitive bases of those high-power individuals in the organization. In developing the model, emphasis is on the background characteristics of the top managers as opposed to the psychological dimensions. A series of propositions that should be tested to support the upper echelons theory are presented. The topics of these propositions include age, functional track, other career experiences, education, socioeconomic roots, financial position, and group characteristics. The creation of this model is just the beginning of the work that is necessary to evaluate and understand the upper echelons theory. Further input is needed from areas such as the executive recruiting industry. Additionally, clinical and statistical studies are both necessary to fully develop this theory. (SRD)
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Management literature offers substantial insight about many aspects of CEO-related phenomena. Whether it involves aspects of the position of CEO, personal characteristics of the CEO, or the environment in which the CEO operates, research about the CEO has yielded a number of important findings. Despite the proliferation of research regarding the CEO, we find that the literature as a whole is fragmented. By this, we mean that the CEO is often used as a context to test discrete theories. In this article, we contend that the fragmentation in the literature is a result of scholarship existing within theoretical fault lines and rarely venturing to incorporate theories beyond a given domain. This fragmentation results in inconsistent and inconclusive findings in the CEO-related literature. We propose an integrative framework, which we call the configurational perspective on the CEO, to help resolve this fragmentation problem. The configurational perspective on the CEO highlights three separate CEO-related research domains: the position, the person, and the environment. In taking stock of research in each of these domains, we address how they can be integrated in different configurations to help reduce the fragmented nature of the literature.
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The authors developed hypotheses about the effectiveness of response rate techniques for organizational researchers surveying executives. Using meta-analytic procedures to test those hypotheses, the authors analyzed response rate data from 231 studies that surveyed executives and appeared in top management journals from 1992 to 2003. They found mean response rates to be declining over the period, yielding an overall 32% rate. Of the various methods suggested to increase response rates in other populations, none were found to be effective for executives. However, topical salience and sponsorship by an organization or person in the executive's social networks did bring about response rate increases. The authors provide recommendations about what (not) to do when trying to collectoriginal data from members of a firm's upper echelons.
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Justification of organizational performance was investigated by testing for self-serving attributions in corporate annual reports. Letters to shareholders were found to show strong evidence of self-serving attributions, and these attributions took both an enhancing and defensive form. Self-serving attributions appeared to be convincing to the investing public, since the use of these attributions was associated with subsequent improvements in stock price. It also appeared that self-serving attributions were a form of impression management rather than a genuine expression of optimism, since enhancement was associated with subsequent selling of stock by corporate officers. Further analyses explored how performance information was communicated in shareholders' letters and examined additional determinants and consequences of self-serving attributions.
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Extant research has shown that firms with high levels of entrepreneurial orientation (EO) outperform competitors. The present study sheds light on this performance relationship in large, publicly listed high-tech firms by examining whether the strength of this relationship depends upon the CEO’s narcissism, an executive personality trait recently debated controversially in both academic and practitioner publications. A theoretically derived research model is empirically validated by means of multisource secondary data for 41 S&P 500 firms from 2005 to 2007. Findings indicate that narcissistic CEOs usually weaken the EO-performance relationship, although the opposite is true under some conditions, such as in highly concentrated and dynamic markets.
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We advance a model that highlights contingent linkages between overconfidence and narcissism, entrepreneurial entry, and the successful realization of venture opportunities. Overall, our proposals point to a paradox in which entrepreneurs high in overconfidence and narcissism are propelled toward more novel venture contexts-where these qualities are most detrimental to venture success-and are repelled from more familiar venture contexts-where these qualities are least harmful and may even facilitate venture success. To illuminate these patterns of misalignment, we attend to the defining characteristics of alternative venture contexts and the focal constructs of overconfidence and narcissism.
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Among both laypersons and researchers, extensive use of first-person singular pronouns (i.e., I-talk) is considered a face-valid linguistic marker of narcissism. However, the assumed relation between narcissism and I-talk has yet to be subjected to a strong empirical test. Accordingly, we conducted a large-scale (N = 4,811), multisite (5 labs), multimeasure (5 narcissism measures) and dual-language (English and German) investigation to quantify how strongly narcissism is related to using more first-person singular pronouns across different theoretically relevant communication contexts (identity-related, personal, impersonal, private, public, and stream-of-consciousness tasks). Overall (r = .02, 95% CI [-.02, .04]) and within the sampled contexts, narcissism was unrelated to use of first-person singular pronouns (total, subjective, objective, and possessive). This consistent near-zero effect has important implications for making inferences about narcissism from pronoun use and prompts questions about why I-talk tends to be strongly perceived as an indicator of narcissism in the absence of an underlying actual association between the 2 variables. (PsycINFO Database Record (c) 2015 APA, all rights reserved).
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"Construct validation was introduced in order to specify types of research required in developing tests for which the conventional views on validation are inappropriate. Personality tests, and some tests of ability, are interpreted in terms of attributes for which there is no adequate criterion. This paper indicates what sorts of evidence can substantiate such an interpretation, and how such evidence is to be interpreted." 60 references. (PsycINFO Database Record (c) 2006 APA, all rights reserved).
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We examine the relationships between CEO personality, strategic flexibility (ability to adapt quickly to environmental changes), and firm performance, using a sample of 195 small and medium-sized firms from the Indian business process outsourcing industry. We hypothesize that strategic flexibility mediates the relationships between CEO personality and firm performance. Our results extend previous research by not only highlighting the importance of CEO personality in driving strategic flexibility, but also indicating how each facet of CEO personality either enhances or inhibits strategic flexibility.
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This study reconciles the positive and negative sides of CEO grandiose narcissism by examining the role that CEO organizational identification plays in moderating the effect of CEO grandiose narcissism on top management team (TMT) behavioral integration. We first distinguish between grandiose and vulnerable narcissism and we then draw on upper echelons theory and executive personality research to hypothesize and test a model in which CEO grandiose narcissism is positively related to TMT behavioral integration when CEOs are high in organizational identification. The relationship is expected to be negative when CEOs do not identify strongly with their organizations. TMT behavioral integration, in turn, predicts subsequent firm performance. Findings based on multi-source data from a sample of 97 CEOs and their firms supported the hypotheses. These results highlight the complex nature of CEO grandiose narcissism – namely, that the construct has both positive and negative aspects as it relates to top management team dynamics and firm performance and that the relationship is affected by CEOs' identification with their organizations.
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Drawing on theoretical underpinnings of approach-avoidance motivation and CEO narcissism, we provide a framework examining stronger approach focus (motivation towards desirable outcomes) and weaker avoidance focus (motivation away from undesirable outcomes) in narcissistic CEOs using a quasi-natural experimental setting—the economic crisis beginning in 2007. Because highly narcissistic CEOs possess lower avoidance motivation in the precrisis period, their firms face greater declines in the onset of the crisis. However, their greater tendency towards approach motivation enables narcissistic CEOs to increase firm performance in the postcrisis period. While narcissistic CEOs are less likely to protect against potential shocks, they are adept at helping firms recover from such shocks. Using a sample of 392 CEOs representing 2,352 CEO firm-years, we find support for the proposed framework. Copyright © 2013 John Wiley & Sons, Ltd.
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This study offers an examination of the relationships between chief executive officer (CEO) servant leadership, the executive characteristics of narcissism, founder status, and organizational identification, and firm performance in a sample of 126 CEOs in technology organizations. Analysis of data gathered over multiple periods revealed a negative relationship between CEO narcissism and servant leadership, and a positive relationship between founder status (i.e., founder or nonfounder) and servant leadership. Furthermore, CEO organizational identification served as a partial mediating mechanism linking narcissism and founder status to servant leadership. In turn, CEO servant leadership predicted subsequent firm performance (measured as return on assets). The results of this study have implications for researchers interested in better understanding the predictors and consequences of servant leadership and for practitioners concerned with combating negative or selfish executive leadership behaviors and employing servant leadership for the organization's benefit.
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This study examines whether top management team (TMT) personality and leadership are associated with organizational effectiveness beyond the effects of CEO personality and leadership, as suggested by upper echelons theory. Using direct measures of personality and leadership, rather than proxy variables from archival sources or demographic data, we found that mean levels of conscientiousness among TMT members were related to lagged indicators of organizational performance, as were CEO conscientiousness and transformational leadership. Follower commitment to the organization was found to be associated with higher levels of transformational leadership from both the CEO and TMT. The results are consistent with the upper echelons perspective that organizational effectiveness is influenced not only by the CEO but also by a dominant coalition of leaders. Yet, the results also show that the CEO plays a distinct role in influencing organizational financial performance and collective organizational commitment. Theoretical and practical implications of these results are discussed.
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Narcissism is characterized by traits such as dominance, self-confidence, a sense of entitlement, grandiosity, and low empathy. There is growing evidence that individuals with these characteristics often emerge as leaders, and that narcissistic CEOs may make more impulsive and risky decisions. We suggest that these tendencies may also affect how compensation is allocated among top management teams. Using employee ratings of personality for the CEOs of 32 prominent high-technology firms, we investigate whether more narcissistic CEOs have compensation packages that are systematically different from their less narcissistic peers, and specifically whether these differences increase the longer the CEO stays with the firm. As predicted, we find that more narcissistic CEOs who have been with their firm longer receive more total direct compensation (salary, bonus, and stock options), have more money in their total shareholdings, and have larger discrepancies between their own (higher) compensation and the other members of their team.
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We examine the responses of major pharmaceutical firms to the advent of biotechnology over the period 1980 to 2008 to explain why established firms vary in their adoption of technological discontinuities. Combining insights from upper echelons theory, personality theory, and research on organizational responses to new technologies, we posit that narcissistic chief executive officers (CEOs) of established firms will be relatively aggressive in their adoption of technological discontinuities. We propose, however, that the effect of a CEO’s narcissism on organizational outcomes will be moderated by audience engagement—the degree to which observers view a phenomenon as noteworthy and provocative—which varies over time. When audience engagement is high, narcissistic CEOs will anticipate widespread admiration for their bold actions and thus will invest especially aggressively in a discontinuous technology. Drawing from work on managerial cognition, we further hypothesize that CEOs’ narcissism will influence their top managers’ attention to a discontinuous technology, an association that will also be moderated by audience engagement. Finally, we suggest that managerial attention to the discontinuous technology will subsequently be reflected in company investments in the new technological domain. Results provide considerable support for our hypotheses and highlight the role of narcissism in the context of radical organizational change, the influence of audience engagement on executive behavior, and the effect of executive personality on managerial attention.
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This article examines the influence on organizational outcomes of CEOs’ political ideology, specifically political conservatism vs. liberalism. We propose that CEOs’ political ideologies will influence their firms’ corporate social responsibility (CSR) practices, hypothesizing that (1) liberal CEOs will emphasize CSR more than will conservative CEOs; (2) the association between a CEO’s political ideology and CSR will be amplified by a CEO’s relative power; and (3) liberal CEOs will emphasize CSR even when recent financial performance is low, whereas conservative CEOs will pursue CSR initiatives only as performance allows. We test our ideas with a sample of 249 CEOs, measuring their ideologies by coding their political donations over the ten years prior to their becoming CEOs. Results indicate that the political ideologies of CEOs are manifested in their firms’ CSR profiles. Compared with conservative CEOs, liberal CEOs exhibit greater advances in CSR; the influence of CEOs’ political liberalism on CSR is amplified when they have more power; and liberal CEOs’ CSR initiatives are less contingent on recent performance than are those of conservative CEOs. In a corroborative exploration, we find that CEOs’ political ideologies are significantly related to their corporate political action committee (PAC) allocations, indicating that this largely unexplored executive attribute might be more widely consequential.
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Motivated by a growing literature in the social sciences suggesting that the transition to fatherhood has a profound effect on men’s values, we study how the wages of employees change after a male chief executive officer (CEO) has children, using comprehensive panel data on the employees, CEOs, and families of CEOs in all but the smallest Danish firms between 1996 and 2006. We find that (a) a male CEO generally pays his employees less generously after fathering a child, (b) the birth of a daughter has a less negative influence on wages than does the birth of a son and has a positive influence if the daughter is the CEO’s first, and (c) the wages of female employees are less adversely affected than are those of male employees and positively affected by the CEO’s first child of either gender. We also find that male CEOs pay themselves more after fathering a child, especially after fathering a son. These results are consistent with a desire by the CEO to husband more resources for his family after fathering a child and the psychological priming of the CEO’s generosity after the birth of his first daughter and specifically toward women after the birth of his first child of either gender.
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This study explores the aspects of the relationship between possible indicators of CEO narcissism and fraud. Highly narcissistic CEOs undertake challenging or bold actions to obtain frequent praise and admiration. The pursuit of narcissistic supply may result in a stronger likelihood of a CEO to undertake bold actions with potential detrimental consequences for the organization. The sample consists of all S&P 500 CEOs from 1992 till 2008 with more than 3 years of tenure. The measurement of CEO narcissism is based on 15 objective indicators and fits the main conceptualization of narcissism. This data collection provides a score for all S&P 500 CEOs according to their narcissistic tendencies. The Accounting and Auditing Enforcement Releases on the SEC’s website are the indicators of managerial fraud. The findings confirm the expected influence of plausible proxies for CEO narcissism on fraud by showing a positive relationship. This confirms the psychologic perspective of CEO narcissism as a potential cause of fraud.