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Sustainability 2018, 10(7), 2425; https://doi.org/10.3390/su10072425

Is Narcissism Sustainable in CEO Leadership of State-Owned Enterprises?

1
Graduate School of Public Administration, Seoul National University, Seoul 151742, Korea
2
The Korea Institute of Public Affairs, Seoul National University, Seoul 151742, Korea
Received: 15 June 2018 / Revised: 4 July 2018 / Accepted: 7 July 2018 / Published: 11 July 2018
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Abstract

The state sector has been an important part of many economies. This study measures the narcissism of the chief executive officers (CEOs) of state-owned enterprises (SOEs) unobtrusively, and examines the effect of narcissism on the performance and accounting earnings management of firms. This study shows that the narcissism of CEOs positively affects the performance of SOEs, and that the positive effect is a result of real management decisions rather than accounting earnings management. It also shows that CEO narcissism does not affect the earnings management of SOEs. However, this relation changes as the tenure of the CEO gets longer. As tenure gets longer, a CEO’s narcissism negatively affects the performance of a SOE, and a CEO with high narcissism is likely to be involved in earnings management to make up for weak performance. This study suggests that narcissism is not a sustainable leadership style. It also suggests that the personal characteristics of executives in public corporations are important in determining the performance of firms. While a longer tenure ensures that a CEO will pursue his/her strategy steadily, the leadership of a narcissistic CEO becomes negative and ineffective as their tenure gets longer. Considering the importance of SOEs in the economy, this is an important policy implication, as the appointment of a CEO and length of tenure are likely to be determined by the government. View Full-Text
Keywords: state-owned enterprises; performance; earnings management; narcissism; leadership state-owned enterprises; performance; earnings management; narcissism; leadership
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).
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Kim, B.H. Is Narcissism Sustainable in CEO Leadership of State-Owned Enterprises? Sustainability 2018, 10, 2425.

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