It's all about me: narcissistic chief executive officers and their effects on company strategy and performance

It's all about me: narcissistic chief executive officers and their effects on company strategy and performance

Article Type: Abstracts From: Strategic Direction, Volume 24, Issue 8.

Chatterjee A., Hambrick D.C. Administrative Science Quarterly, September 2007, Vol. 52 No. 3, Start page: 351, No. of pages: 36

Purpose to examine the effect of CEO narcissism on company strategy and performance. Design/methodology/approach draws on existing literature to discuss the effects of narcissism on company strategy and performance, with a focus on the concept of narcissism, narcissism in CEOs, the distinction between executive narcissism and related constructs associated with self-esteem, and the consequences for company strategy and performance. Develops a series of hypotheses reflecting the relationships between CEO narcissistic tendencies, strategy dynamism, company acquisitions, and company performance, which are tested on a sample of CEOs in the computer software and hardware industries. Measures five indicators of narcissistic tendencies: prominence of the CEO’s photograph in the company’s annual report, CEO prominence in company press releases, CEO use of first-person singular pronouns, CEO cash compensation; and CEO non-cash compensation. Findings confirms that the greater the narcissistic tendencies of a CEO: the greater the dynamism of the company’s strategy; the greater the number and size of acquisitions made by the company; the more extreme the company’s performance; and the greater the fluctuation in the company’s performance. Research limitations/implications recommends directions for future research with regard to the prevalence of narcissistic CEOs in other industries, how the interaction between CEO narcissism and recent performance affects risk taking and other strategic behaviour, and the effect of CEO narcissism on individuals who interact most closely with CEOs. Originality/value adds to the limited research into the effect of CEO narcissism on company strategy and performance, demonstrating that in the computer hardware and software industries, it is related to extreme and irregular company performance. ISSN: 00018392 Reference: 37AF884

Keywords: Chief executives, Corporate strategy, Organizational performance, Self-esteem