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CEO dark personality: A critical review, bibliometric analysis, and research agenda

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Abstract

Research in the area of chief executive officer (CEO) dark personality has significantly increased over the last two decades. This study provides a comprehensive summary of the extant literature on CEO dark personality traits (e.g., narcissism, Machiavellianism, psychopathy, sadism, overconfidence and hubris) and their impacts on organizational outcomes. We first synthesize the existing literature, highlighting the results produced by some of the key studies published on CEO dark personality. We next use bibliometric analysis to quantitatively assess the intellectual structure of the CEO dark personality literature and to identify its most prominent contributors. Finally, we address important gaps and general trends in the literature, providing future scholars with opportunities to integrate additional theories and methodologies in their studies on CEO dark personality.

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It has become common practice to refer to personality traits as being either bright or dark, and a wealth of research has provided support for the effects of both bright traits and dark traits in organizations. This research has largely focused on explaining the downside of dark traits and the upside of bright traits. However, a recent trend has emerged in which scholars are challenging the long-standing convention that bright traits are always beneficial and dark traits are always detrimental. Instead, novel research has begun to explore the potential upside of dark traits and downside of bright traits. In this review, we adopt a multidomain perspective—integrating work from organizational behavior, human resources, strategic management, and entrepreneurship—to highlight this growing body of research. Specifically, we focus on the work advancing our understanding of the complexity of personality, such as identifying situations in which dark traits may be advantageous or beneficial and detecting curvilinear effects that suggest too much of a bright trait may be disadvantageous. Furthermore, we provide a brief discussion on special considerations for the measurement of both bright and dark traits and close with a series of avenues for future research.
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Research Summary This study builds on insights from the upper echelons tradition in strategy to examine the effects of chief executive officer (CEO) Machiavellianism on relevant firm costs. While Machiavellianism has been usually construed as a purely negative trait, we argue that the pragmatic focus on the outcomes of exchanges and psychological obsession with winning in transactions that Machiavellian CEOs infuse in their organizations can have important effects on firm cost, a fundamental but frequently understudied driver of financial performance in strategic management research. In line with our arguments, we find that CEO Machiavellianism has negative effects on production costs, financing costs, and acquisition premiums. We find support for our ideas with a sample of S&P 500 CEOs, operationalizing CEO Machiavellianism using a videometric approach Managerial Summary In this study, we investigate the effect of CEO Machiavellianism on firms’ costs. We show that firms with more Machiavellian CEOs will have lower costs than other firms in the market. Rather counterintuitively, this study suggests an explanation for why a personal characteristic that is usually seen as problematic for organizations is rather common in their upper ranks. Ultimately, the study demonstrates the value of the bargaining attitude that Machiavellian CEOs bring to their organizations and suggests this value should be weighed against their risks or acknowledged to manage the risks this common personal characteristic implies.
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Upper Echelons Theory (UET) has become a dominant paradigm within organization sciences. However, despite scholarly desire to situate this literature within a cohesive framework, UET has instead branched off into a variety of niche literature streams. Qualitative reviews have struggled to ascertain the boundaries of UET, due to its lack of conceptual clarity. Consequently, it is unclear whether UET is a coherent literature faithful to its seminal authors, or one that is growing in ways that are untenable. We seek to better understand the UET literature stream by applying a bibliometric study to quantitatively survey the extant literature. We examine recent upward and downward trends and highlight what we believe are the most promising areas for future UET scholarship. Ultimately, we find that UET continues to grow expeditiously but is progressively becoming more theoretically insular and that methods are progressively becoming less proximal to firm leaders.
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In the past 20 years, the study of dark personality has seen a surge of interest among both academic researchers and practitioners. Although the research to date has documented that dark personality characteristics are important predictors of workplace behaviors and outcomes, there remain considerable challenges in the field in terms of both theorizing and assessment. The current chapter reviews the history of dark personality, competing models of dark traits, evidence of how and when dark personality impacts organizational outcomes and both current and emerging trends in dark personality assessment. We then suggest potential avenues for future theoretical development as well as for measurement and research design.
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A growing body of conceptual and empirical research has drawn on transactive memory systems (TMS) theory to understand the functioning of a wide range of teams, including top management teams (TMTs). At the same time, there has been increasing interest in how personality factors, and in particular chief executive officer (CEO) narcissism, shape corporate decision-making, and behaviour in TMTs. However, these streams of research have developed independently from one another. Leveraging a sample of 64 firms, we integrate TMS theory and upper echelons theory to explain how the performance consequences of TMTs are shaped by two competing dimensions of CEO narcissism: admiration-based narcissism and rivalry-based narcissism. CEO narcissism is an important area of research because of the strategic implications of the impact that this personality trait can have on the functioning of the TMT. We find that TMT TMS has a positive influence on firm performance at higher levels of admiration-based narcissism, but not rivalry-based narcissism. With this focus, we provide further substantiation of the firm-performance implications of TMS, and the critical role played by a dimensional focus on CEO narcissism in the TMS context.
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Using meta-analytic techniques, relations among the Dark Triad personality traits – Machiavellianism, narcissism, and psychopathy – were examined in relation to outcomes associated with two different stages of the entrepreneurial process: entrepreneurial intention and entrepreneurial performance. From 39 independent samples (N = 11,819), we found that Machiavellianism positively relates to entrepreneurial intention (rc = 0.16) and negatively relates to entrepreneurial performance (rc = −0.22), narcissism positively relates to entrepreneurial intention (rc = 0.24) and entrepreneurial performance (rc = 0.09), and psychopathy positively relates to entrepreneurial intention (rc = 0.17) and negatively relates to entrepreneurial performance (rc = −0.10). Amid conflicting empirical results and theoretical viewpoints, we leverage our findings to present an exploration into how and why the Dark Triad personality traits relate to the initiation and performance of entrepreneurship. We interpret the existing literature through the lens of Nietzsche's will to power and propose that power acquired over others (domination) is likely to be as viable a predictor of entrepreneurial agency as power removed from others (emancipation). Limitations to the primary studies included in our review are thoroughly examined, and we offer direction for future research.
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We argue that it is useful to distinguish between three key goals of personality science—description, prediction and explanation—and that attaining them often requires different priorities and methodological approaches. We put forward specific recommendations such as publishing findings with minimum a priori aggregation and exploring the limits of predictive models without being constrained by parsimony and intuitiveness but instead maximizing out-of-sample predictive accuracy. We argue that naturally occurring variance in many decontextualized and multidetermined constructs that interest personality scientists may not have individual causes, at least as this term is generally understood and in ways that are human-interpretable, never mind intervenable. If so, useful explanations are narratives that summarize many pieces of descriptive findings rather than models that target individual cause–effect associations. By meticulously studying specific and contextualized behaviours, thoughts, feelings and goals, however, individual causes of variance may ultimately be identifiable, although such causal explanations will likely be far more complex, phenomenon-specific and person-specific than anticipated thus far. Progress in all three areas—description, prediction and explanation—requires higher dimensional models than the currently dominant ‘Big Few’ and supplementing subjective trait-ratings with alternative sources of information such as informant-reports and behavioural measurements. Developing a new generation of psychometric tools thus provides many immediate research opportunities. © 2020 European Association of Personality Psychology.
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The top executive personality literature has grown significantly in recent years. We review this literature, consider its contributions to leadership research and practice, and discuss how future research on top executive personality should draw more heavily on the broader leadership literature. The paper first describes the top executive context and highlights the advantages and challenges of studying top executives. We then review the top executive personality literature in four areas that capture the bulk of the research: leadership of human resources, ethical leadership, strategic leadership and corporate governance, and firm performance. We examine how the top executive personality research in each area compares with other research on leaders’ and their personalities that has been conducted on similar topics. The paper concludes with a future research agenda, which identifies other leader, team, and contextual considerations to advance our understanding of top executive personality and its influence. We also address methodological challenges related to measurement and endogeneity, because they are important for theory development and have received much attention in top executive personality research. In short, our paper examines how the literatures on top executives and leadership inform one another, and it helps lay a foundation for integrating these literatures more thoroughly.
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The top executive personality literature has grown significantly in recent years. We review this literature, consider its contributions to leadership research and practice, and discuss how future research on top executive personality should draw more heavily on the broader leadership literature. The paper first describes the top executive context and highlights the advantages and challenges of studying top executives. We then review the top executive personality literature in four areas that capture the bulk of the research: leadership of human resources, ethical leadership, strategic leadership and corporate governance, and firm performance. We examine how the top executive personality research in each area compares with other research on leaders’ and their personalities that has been conducted on similar topics. The paper concludes with a future research agenda, which identifies other leader, team, and contextual considerations to advance our understanding of top executive personality and its influence. We also address methodological challenges related to measurement and endogeneity, because they are important for theory development and have received much attention in top executive personality research. In short, our paper examines how the literatures on top executives and leadership inform one another, and it helps lay a foundation for integrating these literatures more thoroughly.
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In this study, we build on upper echelons theory and insights from psychology to suggest that CEO Machiavellianism is manifested in the alliance behaviors of family firms. Specifically, we argue that more Machiavellian chief executive officers (CEOs) seek out strategic alliances—as doing so provides opportunities to manipulate, control, and exploit others—and that their tendency toward manipulative and controlling behaviors results in less sustainable alliances. We also argue that the effect of CEO Machiavellianism on the engagement and sustainability of strategic alliances is affected by operating in family firms. Since the owning family often intervenes and mitigates any concerns regarding the organization or its leadership, we argue that any concerns that alliance partners have regarding more Machiavellian CEOs will be weaker as family ownership increases; as such, we argue that as family ownership increases, the positive relationship between CEO Machiavellianism and strategic alliance engagement will be more strongly positive while the negative relationship between CEO Machiavellianism and alliance sustainability will be less strongly negative. Our study presents and tests a theory of how more Machiavellian CEOs affect the decisions surrounding strategic alliances by providing a novel antecedent of the decisions surrounding strategic alliances in family firms. We find support for our arguments with a sample of Standard & Poor’s 500 firms.
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Numerous studies show that high levels of Entrepreneurial Orientation (EO) in firms positively influence firm performance. Yet, high levels of Dark Triad (DT) traits – narcissism, Machiavellianism, and psychopathy – of managers might work detrimental to the EO. Our study empirically tests if top managers who score high on Dark Triad traits have a negative influence on firm performance, reducing the merits of the EO. Results of a survey study on 191 firms show that all three dimensions of the DT, narcissism, Machiavellianism, and psychopathy, suppress the positive effects that EO has on firm performance. Accordingly, selfish behaviour, emotional coldness, propensity for duplicity, and top managers’ quest for self-promotion, status, and dominance lead to behaviour that reduces the positive influences around innovativeness, proactiveness, and risk-taking of EO.
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Transformational leaders challenge the status quo, provide a vision of a promising future, and motivate and inspire their followers to join in the pursuit of a better world. But many of these leaders also fit the American Psychiatric Association classification for narcissistic personality disorder. They are grandiose, entitled, self-confident, risk seeking, manipulative, and hostile. This article reviews the literature on narcissism and shows how what we think of as transformational leadership overlaps substantially with grandiose narcissism. As grandiose narcissists can appear as transformational leaders, it is important to distinguish between what leadership scholars have characterized as “transformational” and these “pseudo-transformational” candidates.
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We find that powerful chief executive officers (CEOs) are associated with higher crash risk. The positive association between CEO power and crash risk holds when controlling for earnings management, tax avoidance, chief executive officer's option incentives, and CEO overconfidence. Firms with powerful CEOs have higher probability of financial restatements, lower proportion of negative to positive earnings guidance, and lower ratio of negative to positive words in their financial statements. The association between powerful CEOs and higher crash risk is mostly evident among firms with higher sensitivity of CEO wealth to stock prices and when CEOs have lower general skills. External monitoring mechanisms weaken but do not eliminate the association between powerful founder CEOs and higher crash risk.
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Are overconfident executives more likely to be promoted to CEOs? Using an option-based overconfidence measure, we show that firms with overconfident executives tend to hire internally. Further, when firms hire internally, they are more likely to pick a more confident candidate. The results suggest that governance and board inattention can play a role, with overconfident executives being more likely to become CEOs in firms with entrenched and busy boards, suggesting that such boards might confuse luck-with-skill following the confident executives’ tendencies towards greater risk-taking.
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The behavioral finance literature attributes failed M&As to CEO overconfidence. We investigate the source of CEO overconfidence that leads to failed M&As. Among various determinants of CEO overconfidence, we propose that power-led CEO overconfidence delivers undesirable consequences in corporate investments. Using CEO-level data, we find that CEO power increases the probability of a CEO being overconfident. We also show that power-led overconfident CEOs tend to complete more deals regardless of economic circumstances, do stock acquisitions, and make diversifying acquisitions, relative to non-overconfident CEOs. The results suggest that the findings of previous studies on M&As by overconfident CEOs could be driven by power-led overconfident CEOs.
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Sadism is a personality trait characterised by the enjoyment of other people's pain or suffering. In this narrative literature review, I provide an overview of the sadism research to date, appraising critical issues in the current literature and highlighting future research directions. I start with the issues surrounding the definition and measurement of sadism: there is debate regarding exactly what sadism is, which has led to a number of limitations with existing measures. I then discuss the relationship between sadism and antisocial behaviour: sadism is clearly associated with cruel behaviour towards others, but its exact role in such behaviour, and the precise distinction between sadistic and non-sadistic crimes, has proved hard to characterise. I consider sadism in the context of other antagonistic personality traits – psychopathy, Machiavellianism, and narcissism – and throughout the review I also discuss sexual sadism, a related construct characterised by sexual arousal to others' suffering. Finally, I consider future research directions: clear definitions and measurement tools, the development of sadism in childhood and adolescence, and the evaluation of possible treatments. Sadism often motivates antisocial behaviour, which takes a significant toll on its victims; understanding exactly what sadism is, and whether it can be treated, is of vital importance.
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Prior research on the personality characteristics of truck drivers and accident involvement has relied primarily on the Big Five personality factors (e.g., Extraversion), and has largely focused on self-reported number of accidents rather than more objective, independent records. We examined the association between personality characteristics and accidents among professional truck drivers at the facet level of personality using company records of accidents over time. Analyses suggested that more empathetic individuals had lower rates of accident involvement, whereas more anxious, guilt-prone, exhibitionistic, and risk-taking individuals had higher rates. We discuss implications for decreasing rates of accidents, the selection of drivers, and use in other industries where physical safety is a concern.
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We investigate the relationship between CEO narcissism and corporate social responsibility (CSR). We argue that narcissistic CEOs are more likely to place greater emphasis on externally oriented CSR activities than on internally oriented CSR activities. Based on a sample of 134 CEOs/firms from the Fortune 500 list for the years 2008–2013, we find that there is an overall positive relationship between CEO narcissism and CSR. Furthermore, we find that while CEO narcissism is positively related to externally oriented CSR, the relationship between CEO narcissism and internally oriented CSR is negative but not significant.
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Research Summary We introduce to the upper echelons literature a novel, linguistic measure of CEOs’ Big Five personality traits that we specifically developed and validated using a sample of CEOs. We then provide a predictive test of the measure by applying it to a sample of more than 3,000 CEOs of S&P 1500 firms to explore the direct and interactive effects of CEOs’ Big Five personality traits and firm performance on strategic change. Our validated, unobtrusive measure of CEO’s Big Five traits provides a strong foundation for future theory development on the firm‐level effects of CEOs’ personality traits. Our specific findings also extend our understanding of how CEO personality influences firm‐level change and how both person and situation‐based factors interact to jointly influence firm strategy. Managerial Summary This paper introduces a language‐based tool we developed to measure the Big Five personality traits (i.e., openness, conscientiousness, extraversion, agreeableness, and neuroticism) of more than 3,000 CEOs of S&P 1500 firms. After describing our process to develop and validate the tool, we test it by examining how CEOs’ Big Five traits influence strategic change, both in isolation and in combination with recent firm performance. Our results suggest that CEOs’ personality traits have a meaningful impact on strategic change, but that the nature of these effects differs based on the firms’ recent performance. Our tool also provides a strong basis for scholars seeking to measure the personality traits of large samples of public‐company executives.
Article
Failure of a prior business provides an opportunity for an entrepreneur to learn in the subsequent entrepreneurial endeavor, but learning from failure is not guaranteed. Why do some entrepreneurs learn less from failure than others? In this study, we propose that a narcissistic personality can create cognitive and motivational obstacles to learning. We further posit that the inhibiting effect of narcissism will be more salient when the costs of failure, especially social costs, are higher. Our analysis with a survey sample of startups provides the initial empirical evidence about the negative impact of narcissism on learning from entrepreneurial failure. The study adds to research on learning from failure and narcissism in entrepreneurship.
Article
Reseach Summary Integrating victimization into competitive dynamics and upper echelons theorizing, we develop and test theory articulating how rivals’ perceptions of a CEO precipitate attacks on the CEO's firm. Rather than treating CEOs’ characteristics solely as perpetrating action (a first‐order effect, like research integrating upper echelons into competitive dynamics), we argue firms with CEOs possessing characteristics perceived as more submissive or more provocative are subject to more competitive actions directed toward their firms (a second‐order effect, like victimization research). Empirical analyses of a sample of Fortune 500 CEOs supports our theorizing while interviews of executives corroborate our premise as well. Our framework offers a more complete and socialized understanding of CEOs’ roles in competitive dynamics, providing both theoretical and practical insights as well as future research avenues. Managerial Summary We articulate how CEOs possessing certain psychological, behavioral, and social characteristics may unknowingly precipitate competitive attacks on their firms. Our explanation integrates insights from victimology which explain how individuals are subject to more attacks if they possess characteristics others perceive as more submissive or more provocative. While prior research articulates that CEOs’ characteristics affect decisions such as attacking rivals, integrating theories of victimization into this line of inquiry paints a more socialized view of why firms may be subject to competitive attacks as well. The logic and evidence we provide advances theoretical explanations of firms’ competitive behaviors and executives’ roles therein. At the same time, providing knowledge about how CEO characteristics precipitate competitive actions toward their firms can aid in prevention and intervention strategies.
Article
The article conducts a meta–analysis on the relationship between internationalization and firm performance in international entrepreneurship. Empirical evidence from 15,648 internationalizing entrepreneurial firms nested in 43 independent samples reveals a positive relationship between degree and scope of internationalization and performance. Knowledge intensity positively moderates the relationship between speed of internationalization and performance and negatively moderates the scope of internationalization and performance association. In contrast, we neither find a relationship between speed of internationalization and performance nor for knowledge intensity's moderation on the degree of internationalization–performance association. Based on the findings, the article systematically points at future research opportunities.
Article
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.
Article
We provide the first empirical test of the relation between CEO narcissism and earnings manipulation. We test the hypothesis that narcissistic leaders over-identify themselves with the organizations they lead and expend considerable effort to achieve their goals, including by engaging in unethical behaviour. Earnings announcements are highly anticipated information releases by organizations. They are a key performance indicator used to evaluate the performance of CEOs. This study examines the use of first person singular pronouns by CEOs in response to questions at analyst conferences to measure narcissism. We provide evidence that firms with narcissistic CEOs engage in accruals management to manage earnings positively, highlighting the important effect of CEO personality on accounting choices.
Article
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.
Article
SYNOPSIS Prior research on CEO narcissism has focused on outcomes related to the CEO's firm. We extend this literature by examining how an important counterparty—the firm's external auditor—responds to a client having a more narcissistic CEO. Compared to other firms, firms with narcissistic CEOs are more likely to exhibit greater inherent risk and control risk. To maintain an acceptable level of audit risk when faced with the heightened risk of CEO narcissism, auditors must do additional work. Consistent with this notion, we find that CEO narcissism has an economically and statistically significant positive effect on external audit fees, indicating that auditors work more, charge a risk premium, or both when auditing a client with a more narcissistic CEO. We also find that firms with narcissistic CEOs are more likely to have internal control weaknesses, which suggests a possible mechanism for why auditors might need to perform more work. This is the first study to provide large-sample real-world evidence on how auditors respond to CEO narcissism and demonstrates the significant effect that executive personality characteristics can have in an audit setting.