Corroborating upper echelons theory, this study picks up the notion that narcissistic chief executive officers take advantage of accounting choices to enhance their firms’—and inherently their own—personal track records. Using a set of 15 indicators, reflecting the narcissistic trait of 1126 CEOs for the period 1992 to 2012, we find evidence of highly narcissistic CEOs engaging in accrual-based earnings management. In contrast to prior research, the results show evidence not only for income-increasing but also for income-decreasing ABEM. This indicates that (...) highly narcissistic CEOs not only strive to influence stakeholders’ perception of current performance. We conclude that they also assess their potential to influence perception of current and future earnings. The results imply that highly narcissistic CEOs’ accounting choices are driven by self-serving behavior rather than by the intention to provide additional information to the market. When earnings management techniques are used to derive personal advantage from the presentation of a firm’s earnings, the literature refers to this as a case of low earnings quality reflecting unethical behavior. Accordingly, this study contributes to the field of business ethics by showing that CEO narcissism is related to low earnings quality in that it is associated to discretionarily decreasing accruals. (shrink)

This article explores the link between CEOs’ language and hubristic leadership. It is based on the precepts that leaders’ linguistic utterances provide insights into their personality and behaviours; hubris is associated with unethical and potentially destructive leadership behaviours; if it is possible to identify linguistic markers of CEO hubris then these could serve as early warnings sign and help to mitigate the associated risks. Using computational linguistics, we analysed spoken utterances from a sample of hubristic CEOs and compared them with (...) non-hubristic CEOs. We found that hubristic CEOs’ linguistic utterances show systematic and consistent differences from the linguistic utterances of non-hubristic CEOs. Demonstrating how hubristic leadership manifests in CEO language contributes to wider research regarding the diagnosis and prevention of the unethical and potentially destructive effects of hubristic leadership. This research contributes to the wider study of hubris and unethical leadership by applying a novel method for identifying linguistic markers and offers a way of militating against the risk of unethical and destructive CEO behaviours induced or aggravated by hubristic leadership. (shrink)

This paper argues that public sector organizational failure may be best understood from a perspective of collective denial. The rise of this phenomenon is examined using testimony from a Public Inquiry into the downfall of a UK hospital, where falling organizational standards led to unethical decision making and an unacceptable number of patient deaths. In this paper, we show how collective denial, over time, became a process that resided within the fabric of organizational life. To explore the organizational processes associated (...) with collective denial, and how and why it occurs, we identify the influence of a ‘narrative of silence.’ This narrative allows ever more serious failings to be justified as organizational members lose contact with reality entering a downward spiral with no recovery. The combined impact of assumptions about leadership capability, enculturated professional identities, and organizational loyalty create an environment where a narrative of silence can develop. (shrink)

Pride has rarely been explored in the context of moral disengagement and unethical decision-making. Although some research has examined the associations between “authentic” and “hubristic” pride and unethical behaviour, little attention has been paid to potential mechanisms. Across two correlational studies (N = 379), we explore the associations between two facets of pride rooted on comparisons – social comparison-based pride, and self-based pride, moral disengagement, and unethical decision-making. Results show that social comparison-based pride consistently (positively) relates to moral disengagement, and (...) that moral disengagement accounts for the association between social comparison-based pride and unethical decision-making. In sum, our findings contribute in novel ways to the understanding of how pride based in different comparison frames may lead to antisocial decision-making. (shrink)

This article comments on the recent study “CEO hubris and firm pollution: state and market contingencies in a transitional economy” of Zhang et al. :459–478, 2020) in this journal. We very much appreciate the valuable initiative of Zhang et al. to study the potential effect of CEO characteristics on corporate pollution. At the same time, we are concerned with the authors’ interpretation of the regression results and their operationalization of CEO hubris. We hope to contribute to the literature on managerial (...) hubris in two ways. First, we repair the authors’ inferences and conclusions about the actual effect of CEO hubris on firm pollution with respect to their conflicting regression results. Second, we unpack and clarify the authors’ vulnerable operationalization of CEO hubris. We hope to stimulate more research on the relationship between CEO hubris and firm pollution, and managerial hubris more generally through a more rigorous operationalization and measurement of hubris. (shrink)