Abstract
Despite anecdotal evidence showing that some CEOs possess narcissistic personality traits, research on this individual characteristic is still lagging behind. While literature established that narcissistic CEOs may have implications for firm performance, it is not clear whether these individuals act as constructive or destructing forces in family firms. This is particularly important given family firms’ attention towards the preservation of socioemotional wealth, which might in turn minimize the likelihood that individuals with such personality will succeed in climbing the organizational hierarchy. Still, the family business literature has remained largely silent on the presence of narcissistic CEOs and their implications for this type of business organization. By drawing on a behavioral agency perspective, we first study whether the level of CEO narcissism varies depending on family firm nature and CEO status. Second, we investigate whether and how CEO narcissism relates to the exploitation of innovation opportunities by family firms. Our analysis of unique data from Italian CEOs – collected through a survey and the administration of a psychometric test – reveal that CEO narcissism is lower in family firms, and family CEOs and heir CEOs report less narcissistic traits compared to nonfamily and founder CEOs, respectively. Moreover, in family firms, more narcissistic CEOs do exploit a greater amount of innovation opportunities, which is made possible as they favor a higher TMT strategic decision comprehensiveness