This longitudinal case study reports on a charity in the UK which gained a new CEO who was reported by two middle managers who worked in the charity, to embody all or most of the ten characteristics within a measure of corporate psychopathy. The leadership of this CEO with a high corporate psychopathy score was reported to be so poor that the organisation was described as being one without leadership and as a lost organisation with no direction. This paper outlines (...) the resultant characteristics of the ensuing aimlessness and lack of drive of the organisation involved. Comparisons are made to a previous CEO in the same organisation, who was reportedly an authentic, effective and transformational leader. Outcomes under the CEO with a high corporate psychopathy score were related to bullying, staff withdrawal and turnover as effective employees stayed away from and/or left the organisation. Outcomes also included a marked organisational decline in terms of revenue, employee commitment, creativity and organisational innovativeness. The paper makes a contribution to both leadership and to corporate psychopathy research as it appears to be the first reported study of a CEO with a high corporate psychopathy score. (shrink)

This article reports on empirical research that establishes strong, positive, and significant correlations between the ethical issues of bullying and unfair supervision in the workplace and the presence of Corporate Psychopaths. The main measure for bullying is identified as being the witnessing of the unfavorable treatment of others at work. Unfair supervision was measured by perceptions that an employee's supervisor was unfair and showed little interest in the feelings of subordinates. This article discusses the theoretical links between psychopathy and bullying (...) and notes that little empirical evidence confirms the connection in management research. The sample of 346 Australian senior white collar workers used in the research is described as is the measure of behavior for identifying psychopaths. The findings are then presented and discussed showing that when Corporate Psychopaths are present in a work environment, the level of bullying is significantly greater than when they are not present. Further, that when Corporate Psychopaths are present, supervisors are strongly perceived as being unfair to employees and disinterested in their feelings. This article concludes that around 26% of bullying is accounted for by 1% of the employee population, those who are Corporate Psychopaths. (shrink)

We add texture to the conclusion of Duchon and Drake (Journal of Business Ethics, 85, 2009, 301) that extreme narcissism is associated with unethical conduct. We argue that the special features possessed by financial accounting facilitate extreme narcissism in susceptible CEOs. In particular, we propose that extremely narcissistic CEOs are key players in a recurring discourse cycle facilitated by financial accounting language and measures. Such CEOs project themselves as the corporation they lead, construct a narrative about the corporation and themselves (...) using financial accounting measures, and then reflect on how their accounting-constructed performance is perceived by stakeholders. We do not present empirical evidence about whether the use of accounting language and measures leads to unethical behaviour by extreme narcissistic CEOs — although the conclusions of Duchon and Drake (2009) suggest empirical support is probable. Rather, we focus on developing alertness to the potential for accounting, when engaged by an extremely narcissistic CEO, to be a precursor or implement of unethical behaviour. (shrink)

This study examines the antecedents of corporate scandals. Corporate scandals are defined as rare events occurring at the apex of corporate fame when managerial fraud suddenly emerges in conjunction with a significant gap between perceived corporate success and actual economic conditions. Previous studies on managerial fraud have examined the antecedents of illegal acts in isolation from strategic decisions and in terms of CEOs’ individual responses to the external context. This study frames the antecedents of corporate scandals in terms of the (...) interplay of CEOs’ personal traits with corporate strategy and stakeholders’ cohesion. With this aim, this study builds on extant theory to examine the case of Banca Popolare di Lodi, an Italian bank involved in a corporate scandal in year 2005. The model contributes to advance understanding of the complex dynamics underlying the emergence of corporate scandals. (shrink)

This paper presents a comparative analysis of three American and three European corporate failures. The first part of the analysis is based on a theoretical framework including six areas of ethical climate; tone at the top; bubble economy and market pressure; fraudulent financial reporting; accountability, control, auditing, and governance; and management compensation. The second and third parts consider the analysis of these cases from fraud perspective and in terms of firm-specific characteristics and environmental context. The research analyses shed light on (...) the fact that, despite major differences between Europe and U.S. in terms of political institutions, laws and regulations as well as managerial practices, there are significant similarities between six groups. The analysis also demonstrates that, the ethical dilemma has been coupled with ineffective boards, inefficient corporate governance and control mechanisms, distorted incentive schemes, accounting irregularities, failure of auditors, dominant CEOs, dysfunctional management behavior and the lack of a sound ethical tone at the top. Significant similarities were also observed in the analysis from the fraud triangle perspective. However, there are several major differences between the six corporate failure cases particularly with regard to ownership structure, coverage in media, and legal, regulatory and governance frameworks. This research study may have several academic and practical contributions, particularly because of multidisciplinary, international features, and comparative analyses used in the paper. (shrink)

This study explores the aspects of the relationship between possible indicators of CEO narcissism and fraud. Highly narcissistic CEOs undertake challenging or bold actions to obtain frequent praise and admiration. The pursuit of narcissistic supply may result in a stronger likelihood of a CEO to undertake bold actions with potential detrimental consequences for the organization. The sample consists of all S&P 500 CEOs from 1992 till 2008 with more than 3 years of tenure. The measurement of CEO narcissism is based (...) on 15 objective indicators and fits the main conceptualization of narcissism. This data collection provides a score for all S&P 500 CEOs according to their narcissistic tendencies. The Accounting and Auditing Enforcement Releases on the SEC’s website are the indicators of managerial fraud. The findings confirm the expected influence of plausible proxies for CEO narcissism on fraud by showing a positive relationship. This confirms the psychologic perspective of CEO narcissism as a potential cause of fraud. (shrink)

This study expands theoretical understanding of organizational misconduct through qualitative analysis of widespread deceptive sales practices at a large U.S. life insurance company. Adopting a symbolic interactionist perspective, this research describes how a set of taken-for-granted interpretive frames located in the organization’s culture created a worldview through which deceptive sales practices were seen as normal, acceptable, routine operating procedure. The findings from this study extend and modify the dominant theoretical ‘pressure/opportunity’ model of organizational misconduct by proposing that the process engine (...) driving misconduct is not amorally rational organization members, but rather is organizational members acting on socially constructed views of the organization that normalize misconduct. (shrink)

Most research on ethical leadership to date investigates the consequences of ethical leadership rather than its antecedents. Here, we aim to contribute to this field by studying leader personality as a potential antecedent of ethical leader behavior. In two multisource studies, we investigated the relationships between personality traits and ethical leader behavior. Leader personality was measured through self-ratings using the five-factor personality framework. Two subordinates rated their leaders' ethical behavior. Study 1 used a unidimensional Ethical Leadership Scale (ELS). In study (...) 2 we used this scale as well as an instrument distinguishing three different ethical leader behaviors, namely, fairness, role clarification, and power sharing. Further, in study 2 we controlled for the influence of the relationship between leader and followers (LMX). As expected, conscientiousness and agreeableness were most consistently related to ethical leadership. In study 1, after controlling for the other personality traits, conscientiousness related positively with ethical leadership. In study 2, after controlling for other traits and LMX, conscientiousness related positively with ethical leadership and the behavior role clarification, and agreeableness with power sharing and fairness. Also, emotional stability related positively with ethical leadership and role clarification after controlling for LMX. As expected, openness to experience and extraversion were unrelated to ethical leader behaviors. (shrink)

Boddy and his colleagues have published several articles on “corporate psychopathy” using what they refer to as a Psychopathy Measure—Management Research Version. They based this measure on the items that comprise the Interpersonal and Affective dimensions of the Hare Psychopathy Checklist-Revised, a widely used copyrighted and controlled instrument. The PM-MRV not only misspecifies the construct of psychopathy, but also serves as an example of the problems associated with an attempt to form a “new” scale by adapting items from a proprietary (...) scale. The PCL-R measures a superordinate construct underpinned by four correlated dimensions or first-order factors, not just the two in the PM-MRV. The other two dimensions are Lifestyle and Antisocial, which together form Factor 2 of the PCL-R. As defined by the PCL-R, psychopathy requires high scores on both Factor 1 and Factor 2. Lack of validity aside, even if the PM-MRV were to be a useful measure of Factor 1, it would not discriminate between psychopathy and other “dark personalities,” such as Machiavellianism and narcissism, which, along with psychopathy, form the Dark Triad. This lack of discrimination stems from the fact that each of these personalities shares features measured by Factor 1 and, by implication, by the PM-MRV. Research findings based on the PM-MRV may have some meaning with respect to dark personalities in general, but their relevance to psychopathy, as measured with the PCL-R, is tenuous at best. (shrink)

This paper develops a typology of moral problems in business. The cross-classification of two fundamental dimensions of ethical conduct: judgment and motivation, is employed to distinguish four types of moral problems: genuine dilemmas, compliance problems, moral laxity, and no-problem problems. Actual cases are brought to illustrate each type of problem, and corresponding coping strategies are presented. The paper highlights the need to design a dynamic strategy that will take into account the relationships among different types of ethical problems. In its (...) capacities as both an analytical tool for identifying and clarifying an ethical problem and a strategic tool for handling it, the typology has direct implications for developing ethical awareness, assigning accountability, and unfolding typical rationalizations in business activity. (shrink)

THE FIRST EDITION of this book was based primarily on experience with adult male psychopaths hospitalized in a closed institution. Though a great many other psychopaths had come to my attention, most of the patients who were observed over years and from whom emerged the basic concepts presented in 1941 were from this group. During the next decade a much more diverse group became available. Female patients, adolescents, people who had never been admitted to a psychiatric hospital, all in large (...) numbers, became available for study and afforded an opportunity to observe the disorder in a very wide range of variety and of degree. This additional clinical experience, helpful comment in the reviews of the first edition, enlightening discussion with colleagues, and an improved acquaintance with the literature all contributed to modify concepts formulated approximately ten years earlier. In attempting to revise the book for the second edition (1950), I found it was impossible to do justice to the subject by minor additions, deletions, and modifications. It was necessary to write a new and much larger book. (shrink)