CEO narcissism and strategic entrepreneurial behaviors: the moderating role of industry environment
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Abstract
The role of firm-level entrepreneurial behavior in explaining firm performance is well established in the entrepreneurship literature. Scholars can capture firm-level entrepreneurial behavior employing strategic entrepreneurial behavior (SEB) that embodies innovativeness and proactiveness of firms as its dimensions. SEB constitutes one of the strategic outcomes of firms, and Upper echelon theory argues that executives’ characteristics and experience explain strategic actions. This dissertation draws from Upper echelon theory and argues that the psychological attributes of CEOs influence SEB. This dissertation focuses on CEO Narcissism, the escalated self-importance among CEOs. Narcissists seek constant attention and admiration and emphasize personal goals over organizational goals. Therefore, this dissertation argues that while striving to achieve admiration, narcissistic CEOs commit a vast amount of resources in projects entailing innovations and new markets, as they are likely to garner accolades from such projects. Therefore, firms with narcissistic CEOs are likely to exhibit higher SEB than other firms. Though CEOs perform a prominent role in explaining SEB, firm-level entrepreneurship research remains incomplete if researchers ignore the environmental externalities. Therefore, we examine the contingency role of the industry environment on the relationship between CEO narcissism and SEB. Narcissists inherently love to stand out in the crowd, and therefore narcissistic CEOs push their firms to become more entrepreneurial than other firms. However, when the environment shifts from munificent to hostile, while other CEOs curb the entrepreneurial behaviors of their firms, narcissistic CEOs find higher incentives to push their firms to become more entrepreneurial. If they succeed at growing their firms during a hostile environment, stakeholders will likely celebrate them as heroes. In addition, narcissists believe they retain higher control over their surroundings. Therefore, environmental hostility moderates the relationship between CEO narcissism and SEB such that the relationship is stronger in a hostile environment. This dissertation conducts two separate studies to test its hypotheses. Both studies render consistent findings suggesting that, contrary to the hypotheses, (1) CEO narcissism deters SEB and (2) environmental hostility does not moderate the relationship between CEO narcissism and SEB. In other words, firms with narcissistic CEOs exhibit lower SEB, and this relationship remains unaltered with conditions of the environment.
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Introduction -- Literature review and research model -- Methodology -- Analyses and results -- Summary, discussion, and conclusion
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Ph.D. (Doctor of Philosophy)