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Assumption: Narcissism is believed to help entrepreneurs successfully pursue business ventures.
In fact: While researchers do not have a definitive stance on this issue, mediating factors in the relationship between narcissism and business performance have been identified as workaholism and family support. However, they have the exact opposite effect!
An international team of researchers including Professor Galina Shirokova, Director of the Strategic Entrepreneurship Centre at HSE University in St Petersburg, and her students Nailya Galieva and Diana Doktorova, examined the impact of narcissism on young entrepreneurs' success. The study was conducted on a sample of 1,518 student entrepreneurs from 43 countries. The authors have demonstrated that a company founder's workaholism can amplify the influence of narcissism on a new venture's performance. In other words, leaders with narcissistic traits are likely to attain greater success in business when they have a tendency toward workaholism. Ironically, emotional support from family diminishes the positive impact of workaholism on performance. This might be attributed to the fact that strong family relationships motivate young individuals to dedicate their time not only to business but also to their loved ones. The study findings have been published in Small Business Economics.
This paper uses findings from the project 'Human autonomy: theoretical modelling of proactive (agent-based) action in the context of emerging new opportunities, risks, and in-depth empirical analysis using student entrepreneurship issues in a comparative perspective,' carried out within the framework of the HSE Basic Research Programme in 2023.
Narcissism is a personality trait that has attracted significant interest in the field of management studies. As one of the so-called ‘ dark triad’ personality traits considered socially undesirable, narcissism can nevertheless be linked to positive outcomes in business, since it motivates leaders to work diligently towards an external goal which they consider crucial for attaining and sustaining a grandiose self-image.
Moreover, leaders with narcissistic personalities are capable of motivating others to strive for achievement and recognition. Fuelled by the need for admiration from others, narcissists are inclined to take risks and develop new products or services that appeal to investors.
On the flip side, aside from the positive impact, a CEO's narcissism may also be a contributing factor to a decline in their firm's performance and to inconsistent outcomes. Narcissistic personality traits tend to foster conflict and undermine relationships, leading to negative consequences for businesses.
The authors of the new paper highlight the absence of a shared understanding in the academic community regarding how leaders' narcissism influences firms' performance. Similarly, there is limited research available on the connection between narcissism and the performance of new business ventures. Thus, they focus their research on examining the impact of workaholism and family support on the success of young entrepreneurs with narcissistic traits.
While workaholism is generally considered an unhealthy condition, narcissistic leaders may be prone to it because it is crucial for them to pursue success and power, and to demonstrate their superiority over others. The authors explore the research question, 'How does workaholism mediate the relationship between a founder's narcissism and the success of a new venture?'
Among other factors, workaholism often poses a challenge to maintaining a balance between family and work. In this scenario, an entrepreneur may control their inclination toward workaholism to preserve positive family relations. However, it remains unclear how the family environment influences one’s tendency to overwork. This prompted the author's second research question, 'How does family support moderate the mediating effect of workaholism on the narcissism–new venture performance relationship?' The researchers examine two types of family support: instrumental, which involves providing tangible resources such as finances, connections, and advice; and emotional, in the form of psychological support and encouragement.
The authors used data from the 2021 GUESSS, the Global University Entrepreneurial Spirit Students' Survey. The final sample consisted of 1,518 new firms created by student entrepreneurs in 43 countries. The age of respondents ranged from 18 to 34, with an average age of 23.4 years, and their business ventures were between 0 to 8 years old; 59% of the respondents were men. The majority held a bachelor's degree (83%), and over a third had formal training in business and management (39%).
Given that the GUESSS project does not collect objective data on firm performance but relies on self-reporting by young entrepreneurs, the current study also employs subjective metrics. A four-item scale was used for measuring narcissism, with an example of a rated statement being: 'I tend to strive for prestige and status.'
Workaholism was assessed using a ten-item scale, with an example statement being, 'It’s important to me to work hard even when I don’t enjoy what I’m doing.'
Family support was examined using two distinct tools addressing its different categories. The tool measuring emotional support included statements such as 'When I have a problem at work, members of my family express concern,' while an example of a statement for measuring instrumental support was 'Family members often contribute to my business without expecting to be paid.'
The analysis confirms a positive relationship between narcissistic personality traits in young entrepreneurs and the performance of their business ventures. New ventures led by narcissistic founders tend to be more successful. Workaholism mediates this relationship, since entrepreneurs with narcissistic traits seem to achieve greater success when they also exhibit a tendency to overwork. The authors have thereby confirmed the hypothesis that workaholism acts as a mediator between a founder's narcissism and a new venture's success.
Regarding family support, the study has found that an emotionally supportive family mitigates the influence of workaholism on the connection between narcissism and business performance. In other words, an excessively high level of emotional involvement from family can undermine the success of a new venture.
The researchers attribute this to the idea that narcissistic workaholics may allocate more attention to their family when they receive substantial emotional support from them. The impact of instrumental support from the family on the studied relationship was found to be insignificant.
The study contributes to the body of research on entrepreneurship and management. First, it sheds light on how a founder's narcissism can impact their firm's performance. Second, it highlights the role of family support for young entrepreneurs.
The authors note that further research is needed in this area, including a focus on the impact of the other two traits of the dark triad—psychopathy and Machiavellianism—on firm performance. The authors also acknowledge limitations in their study, such as the absence of objective data on the new ventures' financial performance.
IQ
Galina Shirokova, Professor, Department of Management; Director, Strategic Entrepreneurship Centre, HSE Campus in St Petersburg
Nailya Galieva, Master's graduate, HSE Campus in St Petersburg
Joshua V. White, University of Dayton, USA
Diana Doktorova, Master's graduate, HSE Campus in St Petersburg
