First Person: Narcissistic Leadership and Organizational Performance

The term "narcissism" was originally introduced to portray a personal form of self-admiration named after the mythological Narcissus, who fell in love with his own reflection. Sigmund Freud defined narcissism as a state of mind where the individual exposes exclusive self-absorption, while bearing an inflated self-image which is reflected on unusual behavior. Freud believed that narcissism is an essential part of any individual, but up to a certain extent. Similarly, Morrison concluded that a reasonable amount of healthy narcissism enables the individual to achieve a balance of own needs in relation to others. Today, the term narcissism is used to describe a pattern of pathological traits and behaviors, including Narcissistic Personality Disorder (NPD), inferiority complex, low self-esteem, self-obsession, and egoistic supremacy.

Defining Narcissistic Leadership

Exposing a snobbish sense of self-importance, arrogance, overconfidence, low self-esteem, and aggression, narcissistic leaders believe in the effectiveness of their leadership style because they are obsessed with dominance, power and admiration. They typically overstress their special talents and achievements and they rarely assume mutual responsibility. They behave with dominant superiority and are often thoughtless toward their subordinates, exposing feelings of rage, dishonor, and disgrace, especially if their self-esteem is threatened of contradicted.

Narcissistic leaders favor the pattern of authoritative leadership, eliminating their subordinates from participating in the strategic decision making. Organizational members are required to perform their tasks effectively, although they are eliminated from participating in strategic decision-making. In the context of authoritative leadership, leaders are power-driven individuals, experts in their field. They process all the necessary information and take the sole responsibility for the final decision.

On the other hand, narcissistic leaders may be effective in times of organizational change. Their narcissist illusions may be beneficial in regards to the choices they make and the commitment they show to the organization. During the adaptation period, the leader should have the ability to motivate employees and maximize commitment to organizational goals by clearly conveying to subordinates the message of strategy implementation, for which the leader has the absolute responsibility. In this context, the transformative vision of a narcissistic leader can instill employee loyalty and have a strongly positive impact on the organizational performance.

Relationship between Leadership and Organizational Performance

There is an inherent relationship between leadership and organizational performance. Today's dynamic market environment features healthy competition, decreasing returns and rivalry between organizations. In this context, effective leadership contributes positively to the improvement of organizational performance when organizations face challenging situations.

Effective leadership creates the grounds for enhanced organizational performance and sustained competitive advantage. Democratic leaders create a strategic vision and focus on building commitment to that vision aiming to motivate employees toward the achievement of organizational goals.

The strategic role of leadership is highly researched from the perspective of how leadership behavior potentially enhances organizational performance. Leadership culture, skills and motivation are broadly viewed as increasingly important toward the improvement of organizational performance.

Effective leadership has a strong impact on customer satisfaction, employee satisfaction and financial performance. However, we should also consider the environmental variables that affect the relationship between leadership and organizational performance. For instance, micromanagement practices affect greatly the way leaders influence employee performance and consequently, organizational performance as a whole.

Narcissistic Leadership and Organizational Performance

Narcissistic leadership has a profound impact on organizational performance. By denying effective communication and delegation to subordinates in the strategic decision making, narcissistic leadership cultivates employee resistance and lack of confidence to the top management. By being highly unlikely to empathize with their subordinates, they are even less likely to motivate or encourage others to take an initiative. Therefore, although healthy narcissism could lead to employee commitment, unhealthy narcissism leads to internal competition within the organization because organizational members are greatly affected by irrational decision-making .

Narcissistic leaders are not active listeners. They are emotionally volatile and often prone to a variety of destructive impulses and dysfunctional behaviors expressed as egoism, arrogance and despotism. Their fragile self-esteem leads to ignore real facts and live in their own, fantastic world, where they can be undisputed leaders and confront any opposite view as irrational. By denying active listening, narcissistic leaders basically deny any involvement in organizational teams. Yet, their insistence on showing themselves as self-sufficient puts organizational performance at stake. Team structures in modern organizations ensure strong organizational culture and balance as team members are forced to act collectively to ensure corporate and individual prosperousness.

Narcissist leaders do not accept any kind of responsibility for their actions, thus hindering the organization to achieve its mission. Irrational insistence on having their own way, lack of empathy, and eagerness to exploit others alienates organizational members and leads to lack of strategic consensus. In the context of denial, narcissistic leaders contribute negatively to organizational performance.

Narcissist leaders do not promote a learning organization by denying sharing and exchanging knowledge. They don't allow other organizational members to recognize and assess the organizational culture, thus creating weak social bonds within the organization. Employees do not trust their leader, but even more they do not trust the organization and therefore, it is easier for them to quit their job. Often, although organizational members may love their job description, they are forced to leave the organization because they cannot align with their leader or perform their tasks under authoritative leadership patterns. In this context, narcissist leaders are highly unlikely to positively contribute to organizational performance because organizational members do not derive job satisfaction. Consequently, the organization cannot grow and meet its goals.

In conclusion, narcissistic leadership denies any responsibility for the failure of organization in the fear of admitting failure of own decisions. Yet, leaders need to learn from their mistakes and align their esteem rewards with organizational goals in order to improve organizational performance. To that end, leaders may evaluate their past performance and plan for future action aiming to eliminate the risk of repeating the same mistakes. Moreover, they should use their power to provide strong incentives to employees to stay in the organization and strive to meet organizational goals.

More from this contributor:
Being a Manager Vs Being a Leader
The Basics of Strategic Planning and Vision
Coping with Middle Management Resistance in Strategy Implementation