Effects of CEO narcissism on decision-making comprehensiveness and speed

Abstract

PurposeThe purpose of this paper is to examine the relationships between CEO narcissism and strategic decision-making (SDM) processes (decision comprehensiveness and decision speed), and to explore the mediating role of top management team (TMT) members’ participation in decision making and the moderating role of TMT power distance.Design/methodology/approachData were collected from a multisource, time-lagged survey of 103 CEOs and their corresponding TMT members in China. Structural equation modeling was used to test the hypothesized relationships.FindingsThe results indicated that CEO narcissism was negatively related to decision comprehensiveness and positively related to decision speed. These relationships were mediated by TMT members’ participation in decision making, especially when TMT power distance was high.Practical implicationsThe results show the potential negative effects of CEOs’ narcissistic personality and suggest ways to attenuate it by increasing TMT participation and decreasing TMT power distance.Originality/valueThis study is an initial attempt to empirically examine how and under what conditions CEOs’ narcissism is a barrier to more comprehensive and more deliberate (slower) SDM.