Me, myself, and I: influence of CEO narcissism on firms’ innovation strategy and the likelihood of product-harm crises

This research examines the relationship between narcissistic personality characteristics in Chief Executive Officers (CEOs) and firms’ innovation outcomes. The authors argue that firms led by narcissistic CEOs are likely to exhibit a higher rate of new product introductions and a greater proportion of radical innovations in their new product portfolios, but they are also more likely to encounter product-harm crises. The impact of CEO narcissism on these innovation outcomes is partially mediated by firms’ higher competitive aggressiveness. High power of the marketing department in the top management team, however, increases firms’ customer orientation, which in turn weakens the relationship between CEO narcissism and product-harm crises. A longitudinal analysis of a sample of 395 publicly listed U.S. firms in the period 2006–2010 provides considerable support for the authors’ hypotheses. This research underscores the importance of studying CEOs’ personality traits as antecedents of firms’ innovation outcomes, highlights the positive and negative impact of CEO narcissism on firms’ innovation-related behavior, and delineates the process through which this impact takes place.