Direct and interactive effects of narcissism and power on overconfidence. (2016)

“…when narcissism is paired with power, there is a heightened probability of risky decision-making.”

Lee A. Macenczak, Stacy Campbell & Amy B. Henley all of Kennesaw State University, Georgia; & W. Keith Campbell, University of Georgia
Personality and Individual Differences, 91, 113-122

“Narcissism has been increasingly investigated as a factor influencing behavior in organizations. In particular, the link between narcissism and leadership has long been recognized and research has shown the high likelihood of narcissists to emerge as leaders.

“…it is still unclear whether narcissists are more or less effective once they achieve these positions.

“…Part of the issue is that narcissism is linked to risk taking and overconfidence, which can have a range of effects on outcomes

“…our goal is to understand the narcissism-overconfidence link …Across four studies, we found evidence that (a) narcissism predicts overconfidence, (b) narcissism and power additively predict overconfidence, and (c) when high narcissism is overweighted there is an interactive effect (creating) especially elevated overconfidence.

“…The results suggest that … when narcissism is paired with power, there is a heightened probability of risky decision-making.”

“…the combination of narcissism and power will be potentially more problematic than either predictor by itself.

“…As power exists in all organizations, leaders should be aware of the effects and specifically, how states of power and the trait of narcissism together can impact outcomes in an organization. Organizations should ensure that processes are in place to monitor and balance the decision-making of top managers to prevent the negative effects of overconfidence from disrupting decision-making.

“While there may be some situations in which overconfidence produces positive results, like the beginning of a bull market, in general, when left unbalanced, managers may believe that their decisions are more precise than they are in reality and may overestimate their accuracy leading to poor organizational outcomes.”

Access the full paper here: Direct and interactive effects of narcissism and power on overconfidence.