Narcissism and Entrepreneurship
The Complex Link Between Entrepreneurship and Narcissism
The relationship between entrepreneurship and narcissism has been a topic of intense interest among researchers and scholars for many years (Campbell et al., 2011). While the stereotype of the "arrogant visionary" is common, the data reveals a nuanced reality.
While some studies suggest that narcissistic traits can drive entrepreneurial success, others argue they often result in negative outcomes for both the entrepreneur and their ventures (Leung et al., 2021).
Do Entrepreneurs Score Higher in Narcissism?
Generally, entrepreneurs tend to score higher on measures of narcissism than non-entrepreneurs. Researchers suggest that moderate levels of narcissism may actually be beneficial in specific scenarios. These traits are often associated with:
- Increased self-confidence.
- A higher tolerance for risk-taking.
- Charisma and the ability to persuade stakeholders.
For example, a confident CEO may be more likely to pursue innovative opportunities or navigate challenging market shifts with ease.
The Dark Side: The Narcissistic CEO
However, unchecked narcissism can have a detrimental impact on a company’s culture and longevity. Narcissistic CEOs often create a specific set of challenges within the work environment:
1. Toxic Workplace Dynamics
Narcissists frequently take credit for collective successes while blaming others for failures. This results in a lack of accountability and creates a toxic workplace culture where employees feel undervalued and insecure.
2. Unethical Behaviour and Reputation Damage
Prioritizing their own interests over those of the company or stakeholders, narcissistic leaders may engage in unethical behaviour. Liu et al. (2021) suggest that narcissistic entrepreneurs are more likely to deceive investors, which can lead to severe reputational damage and legal repercussions.
3. Inability to Accept Feedback
Narcissistic CEOs often struggle to accept constructive criticism. This resistance hinders their growth as leaders and prevents the organization from pivoting when necessary.
4. Overconfidence and Financial Loss
A tendency to overestimate abilities can lead to poor decision-making. Furthermore, aggressive or hostile behaviour towards competitors can cause harm to the industry and isolate the company.
Summary of Recent Research
Liu et al. (2021) highlighted that narcissistic entrepreneurs are less likely to seek advice or collaborate with others, limiting their opportunities for growth.
Overall, the relationship between entrepreneurship and narcissism is complex and multifaceted. While charisma and confidence are assets, traits such as unethical behaviour, hostility, and a lack of collaboration pose significant risks to a venture's sustainability.
Video: Understanding the Narcissistic Leader
References
Campbell, W. K., Miller, J. D., & Collins, B. (2011). The narcissistic CEO: A study of executive grandiosity. Journal of Business Venturing, 26(4), 463-479.
Leung, Y. K., Franken, I., Thurik, R., Driessen, M., Kamei, K., Torrès, O., & Verheul, I. (2021). Narcissism and entrepreneurship: Evidence from six datasets. Journal of Business Venturing Insights, 15, e00216.
Liu, D., Zhu, T., Huang, X., Wang, M., & Huang, M. (2021). Narcissism and entrepreneurship: a systematic review and an agenda for future research. Frontiers in Psychology, 12, 657681.
