The harder they fall, the faster they rise: Approach and avoidance focus in narcissistic CEOs

• Published in: Strategic management journal Vol. 35; no. 10; pp. 1528 - 1540
• Main Authors: Patel, Pankaj C., Cooper, Danielle
• Format: Journal Article
• Language: English
• Published: Chichester, UK John Wiley & Sons, Ltd 01.10.2014; John Wiley & Sons; Wiley Periodicals Inc
• Subjects: approach motivation; avoidance motivation; Business entities; Business management; CEOs; Chief executive officers; Economic crises; Economic crisis; Economic motivation; Economic recessions; Experiments; Financial management; Investment risk; Investment strategies; Motivation; Narcissism; Organizational behavior; Personality traits; RESEARCH NOTES AND COMMENTARIES; Strategic management; Studies
• ISSN: 0143-2095; 1097-0266
• DOI: 10.1002/smj.2162

Drawing on theoretical underpinnings of approach-avoidance motivation and CEO narcissism, we provide a framework examining stronger approach focus (motivation towards desirable outcomes) and weaker avoidance focus (motivation away from undesirable outcomes) in narcissistic CEOs using a quasi-natural experimental setting—the economic crisis beginning in 2007. Because highly narcissistic CEOs possess lower avoidance motivation in the precrisis period, their firms face greater declines in the onset of the crisis. However, their greater tendency towards approach motivation enables narcissistic CEOs to increase firm performance in the postcrisis period. While narcissistic CEOs are less likely to protect against potential shocks, they are adept at helping firms recover from such shocks. Using a sample of 392 CEOs representing 2,352 CEO firm-years, we find support for the proposed framework.