CEO narcissism, top management team transactive memory systems, and firm performance: an upper echelons perspective on CEO admiration and rivalry narcissism

Abstract

ABSTRACT A growing body of conceptual and empirical research has drawn on transactive memory systems (TMS) theory to understand the functioning of a wide range of teams, including top management teams (TMTs). At the same time, there has been increasing interest in how personality factors, and in particular chief executive officer (CEO) narcissism, shape corporate decision-making, and behaviour in TMTs. However, these streams of research have developed independently from one another. Leveraging a sample of 64 firms, we integrate TMS theory and upper echelons theory to explain how the performance consequences of TMTs are shaped by two competing dimensions of CEO narcissism: admiration-based narcissism and rivalry-based narcissism. CEO narcissism is an important area of research because of the strategic implications of the impact that this personality trait can have on the functioning of the TMT. We find that TMT TMS has a positive influence on firm performance at higher levels of admiration-based narcissism, but not rivalry-based narcissism. With this focus, we provide further substantiation of the firm-performance implications of TMS, and the critical role played by a dimensional focus on CEO narcissism in the TMS context.