CEO Machiavellianism and Strategic Alliances in Family Firms

Abstract

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.