New research suggests that narcissistic CEOs tend to attract and retain top management team members who are also narcissistic — a personality trait characterized by an inflated sense of importance and entitlement. The study, published in The Leadership Quarterly, indicates that companies can benefit from narcissism among upper management, but only under certain conditions.
“A lot is written in the popular press about the most successful CEOs today who are widely acknowledged narcissists, and who lead their companies to unprecedented heights (see Elon Musk as a prime example),” said study author Daniel G. Bachrach, a professor of management at The University of Alabama.
“It is important to acknowledge through what processes or mechanisms these narcissistic CEOs are able to achieve these successes, and what we show is that it may be through the actions of the top management team that these outcomes emerge. But, importantly, it is really only when the top management team works together, and in a considered way – through what we call ‘deliberative integration’ – that these narcissistic CEOs are able to generate the kinds of high-profile corporate wins that show up in the news.”
For their study, the researchers visited mid-sized firms in South Korea and asked the companies’ top five executives to complete the Narcissistic Personality Inventory and other assessments. They ended up with a final sample of 520 top management team members from 104 different firms. All of the firms had objective performance data available in the form of annual sales reports.
Bachrach and his colleagues found that CEO narcissism was positively related to top management team narcissism. In other words, firms with a highly narcissistic CEO tended to also have top management team members who were highly narcissistic as well.
Highly narcissistic top management teams tended to have greater sales growth, but only among teams with high levels of collaborative behavior and slower strategic decision-making speeds. Having a more integrated and deliberative team appears to allow narcissistic executives “to harness positive aspects of narcissism while mitigating the negative underlying behavioral patterns otherwise associated with a narcissistic personality,” the researchers wrote.
The findings held even after controlling for gender, tenure, education level, and firm capital.
“In order to be victorious, and chalk up the high-profile wins they crave, the high-powered, narcissistic CEOs who steal the media limelight through their attention-seeking behaviors ultimately rely on the deliberate and considered actions of their top management team to be successful,” Bachrach explained to PsyPost. “Although from the outside it can seem like the exploits of the narcissistic CEOs we see on television are a ‘one-person show,’ in the end it is a team-effort that is ultimately going to be responsible for generating wins.”
While the findings indicate that narcissism can boost sales growth under the right conditions, having a highly narcissistic management team might include other pitfalls. For example, research has found that narcissistic business leaders tend to promote a sense of uncertainty among middle management, especially when the organization is facing difficulty.
“In this research, the outcome we focus on is firm sales growth because it is this kind of high-profile outcome, which can increase their public profile, that narcissistic CEOs are most likely to be enthusiastic about,” Bachrach said. “So, we can draw some conclusions about the processes leading from CEO narcissism to sales growth, but we can’t necessarily extrapolate to other important outcomes like firm profitability, reflected in – for example – return assets (ROA) or return on invested capital (ROI).”
“The top management team plays a crucial role in helping to explain organization-level successes associated with CEO narcissism,” Bachrach concluded. “When top management teams are collaborative and make decisions in a deliberative way, CEO narcissism can have a strong, positive – but indirect – impact on visible firm-level performance outcomes like firm-level sales growth.”
The study, “Birds of a feather?: Firm sales growth and narcissism in the upper echelons at the CEO-TMT interface“, was authored by Daniel G. Bachrach, Kyoung Yong Kim, Pankaj C. Patel, and P. D. Harms.