Wealth, narcissism, and leadership

 

The income disparity between the ‘haves’ and ‘have nots’ is greater today than it has been at any time since the Great Depression. As a result, children are spending their formative years in vastly different environments: Some grow up in resource-rich environments; others, in poverty. The sociological and psychological research indicates that these differences matter: Parental income has important consequences for people’s lives. Research shows that individuals with higher-income parents exhibit better health and lower mortality rates, but were found to be less generous than individuals with lower-income parents.

These findings suggest an interesting possibility that has received little attention in the management literature: Growing up in a rich or poor environment may have implications for how people interact in organizations. In particular, parental income may be important for leadership.

In my recent paper with Sean Martin of Boston College and Todd Woodruff of the United States Military Academy at West Point, we developed and tested a theory about how parental income relates to the behaviour and effectiveness of leaders. In this article I will summarize our results. 

Because the basic life conditions of higher and lower-income parents differ in fundamental ways, the set of behaviours that parents model and encourage likely depends somewhat on their income. Research regarding the psychological consequences of income suggests a ‘self-sufficiency hypothesis’, whereby high income allows individuals to procure the goods and services that are required to meet their needs, thereby reducing dependency and increasing separation from others. Higher-income parents own larger houses in safer neighbourhoods, have more reliable transportation (e.g., vehicles) to shuttle children to various activities, and can pay for more activities, such as lessons, camps, or tutors. These conditions lead higher-income parents to feel highly independent and to perceive little need for assistance from others.

By contrast, lower-income parents have smaller houses in more dangerous neighborhoods and rely more on time-consuming and unreliable public transportation. These conditions cause lower-income parents to perceive that they struggle to meet their needs on their own and increase their dependence on others for access to resources (e.g., transportation, childcare). This dependence, in turn, increases closeness to others among lower-income individuals.

Independence from others, in turn, might create tenuous relationships between higher-income parents and others—relationships that are characterized by more self-serving behaviour and less sensitivity to others’ needs. Studies on the correlates of income have shown that higher-income individuals feel less compassion and are less helpful to a stranger in need than lower-income individuals. Higher income—but not higher education—has also been associated with increased unethical behaviour performed to benefit the self. 

These findings suggest that higher-income parents model and reinforce behaviours prioritizing the self over others. Through mimicry and reinforcement, higher-income parents could transmit more self-serving behaviour to their children than lower-income parents. Supporting this reasoning, in one study, four-year-old children of higher-income parents donated fewer stickers to friends and fewer prize tokens to sick children than did children of poorer parents.

This line of reasoning suggests that leaders who had wealthy parents might be more narcissistic—exhibiting grandiose self-views, impulsiveness, reduced empathy, beliefs that they deserve special treatment, strong feelings of uniqueness, and a dominant orientation towards others.

Once established in youth, narcissism has been shown to persist beyond childhood. A 20-year longitudinal study using observer-based measures of narcissism found that narcissism identified in preschool-aged children tended to remain through adolescence and early adulthood. This suggests that narcissistic tendencies learned early in life will persist and influence how people act as adults. Thus, our first hypothesis was that parental income would be positively related to future narcissism.

We posited that higher levels of narcissism are associated with less engagement in three broad facets of leadership behaviour: 

1. Relational-oriented behaviour;

2. Task-oriented behaviour; and 

3. Change-oriented behaviour. 

Research has shown that engaging in these behaviours is associated with multiple dimensions of leadership effectiveness. I will now delve deeper into how narcissism affects each of the three key leadership areas.

Relational-oriented behaviours. Relational-oriented behaviours are actions in which leaders show concern for followers, look out for their welfare, build their respect, and encourage followers to focus on the welfare of the group. In enduring relationships, grandiosity—a defining characteristic of narcissism—might cause narcissists to acts in ways that are less interpersonally sensitive than non-narcissists, because, when individuals believe that they are more important and worthy than others, they might over-claim credit and deny others the appreciation or recognition they deserve. Narcissists also tend to derogate others in order to rate their own traits more favorably. Impulsivity— another defining facet of narcissism—causes narcissists to be arrogant and aggressive, and to belittle others and exploit their weaknesses.

In past studies, narcissists have exhibited low levels of empathy and low interest in establishing and maintaining warm interpersonal relationships. These tendencies should lead narcissistic leaders to show little concern for their followers. Thus, narcissism could negatively relate to relational-oriented leadership behaviour. 

Task-oriented behaviours. Task oriented behaviours reflect the extent to which a leader defines and organizes the work and roles of team members, models and asks that others follow standard rules and regulations, establishes well-defined patterns and channels of communication, and rewards those who meet expectations. The grandiosity and impulsivity that are hallmarks of narcissism are likely to stifle engagement in task-oriented leadership behaviours in enduring relationships between leaders and followers.

Moreover, narcissists’ grandiose sense of self, combined with their tendency to derogate others, should make it less likely that these leaders delegate tasks to others, potentially believing that they, and only they, are capable of accomplishing tasks. These arguments suggest that, in enduring relationships where narcissists engage in more negative behaviour, they will be less conscientious in structuring tasks, more likely to deviate from plans, and more focused on short-term motives for recognition than long-term systems, resulting in less task-oriented leadership behaviour.

Change-oriented behaviours. Change-oriented leadership behaviours are those that develop and communicate a compelling vision and encourage innovative thinking and the sharing of different perspectives. On the one hand, narcissistic leaders might take more risks, helping them develop creative ideas that make their vision compelling; on the other, their focus on their own priorities may cause them to articulate visions that omit the goals of their organization and, thus, fail to attract followers’ commitment. 

Past findings suggest that narcissistic leaders encourage less innovative thinking and sharing of perspectives among group members, the other central aspects of change-oriented leadership behaviour. Among the takeaways, narcissists perceive and seek to show that they are smarter and more capable than others; self-aggrandizing leader behaviours may evoke obedience in some, but can also stifle followers’ self-initiative and reduce their desire to associate with the leader; and narcissists’ combination of felt superiority and impulsivity can make them aggressive communicators. 

Thus, we also hypothesized that narcissism would be negatively related to relational-, task-, and change-oriented behaviors.

Finally, we expected that engagement in the aforementioned leadership behaviours relates to leaders’ effectiveness as rated by their followers: Relational- and change-oriented behaviours create healthy communication, good interpersonal dynamics, an open environment for improvement-oriented ideas within a team, and early identification of opportunities for improvement; additionally, clearly structuring tasks can direct effort, lead to more efficient functioning, and boost performance outcomes.

We also proposed that leaders who engage in more relational-, task- and change-oriented behaviours will role model and create conditions that foster more organizational-citizenship behaviour and less counterproductive behaviour. ‘Citizenship behaviours’ are actions concerned with helping others, going above and beyond, and taking more responsibilities. Relational-oriented behaviours develop supportive relationships with subordinates that increase followers’ satisfaction with the work and builds strong reciprocal relationships, which are antecedents of citizenship behaviours. In addition, change-oriented leadership encourages extra-role behaviours such as sharing ideas and helping the collective. Finally, clearly structuring work is helpful to followers, and taking the time to do so establishes a norm for helping others, which is related to citizenship.

‘Counterproductive behaviours’ are those that violate organizational norms and are harmful to organizational interests. When leaders engage in relational-oriented behaviours that are just and supportive, followers’ motivation to harm the group or inhibit performance should be less, as counterproductive behaviour is often a response to perceived injustice or poor treatment. By engaging in task-oriented behaviours, leaders set clear guidelines about what is to be done and how it should be accomplished, direct effort, and establish rewards for staying on task and consequences for deviating. 

The study: We recruited leaders and followers who were active duty soldiers in the United States Army, contacting two alumni classes of the United States Military Academy at West Point (USMA). At the time of data collection, these soldiers were serving in one of two leadership roles: lieutenants (‘Class A’) and captains (‘Class B’). We sent an online survey to all members of Classes A and B, asking them to complete a survey about themselves, and to nominate up to five followers to complete a survey about their leadership. After matching leader and follower data with archival information, we obtained a sample of 229 leaders who had complete data. 

Parental income was obtained from USMA archival data, while narcissism was assessed using a nine-item scale. Using a scale of ‘1’ (strongly disagree) to ‘5’ (strongly agree), participants rated their level of agreement with statements including, ‘I know that I am special because everyone keeps telling me so’ and ‘Many group activities tend to be dull without me’.

Followers rated leaders’ engagement in relational- and task-oriented leadership behaviours by indicating their level of agreement with statements concerning their leaders’ behaviours using a ‘1’ (strongly disagree) to ‘7’ (strongly agree) scale. Example items reflecting relational-oriented behaviour included ‘Is friendly and approachable’ and ‘Does the little things to make it pleasant to be a member of the group’. Example items reflecting task-oriented behaviours included, ‘Lets group members know what is expected of them’ and ‘Encourages the use of uniform procedures’. Change-oriented behaviours were assessed using four items including ‘Enables others to think about old problems in new ways’ and ‘Provides appealing images about what we can do’ using a ‘1’ (strongly disagree) to ‘5’ (strongly agree).

Followers then indicated their agreement with statements assessing their leaders’ effectiveness compared to other leaders with whom they had had experience. Ratings employed a 7-point scale, with items including, ‘Compared to others, this leader can do most tasks very well’ and ‘Even when things are tough, my leader can perform quite well.’

Followers also rated the extent to which they perceived people in their group engaging various citizenship behaviours. Example statements included, ‘People in my group volunteer for things that are not required’ and ‘People in my group help others who have heavy workloads’. Ratings were done using a 5-point scale.

Counterproductive behaviours were then assessed using six items. Using a ‘1’ (never) to ‘5’ (all of the time) scale, participants rated the frequency with which they witnessed group members engage in each behaviour. Example statements included ‘Put little effort into their work’ and ‘Neglected to follow a leader’s instructions’.

The results: The income of an individual’s parents was positively associated with later narcissism. Further, through higher levels of narcissism, parental income was indirectly associated with less engagement in relational-, task and change-oriented behaviours that are traditionally viewed as central to strong leadership.

Finally, we detected a pathway by which higher parental income was associated with lower leadership effectiveness as rated by followers (through higher narcissism and lower engagement in relational-, task-, and change-oriented behaviours).

These findings suggest that there is a psychological ‘residue’ from growing up wealthier or poorer that relates to future leadership effectiveness. In addition, the findings advance the idea that the macro social trend of increasing income disparity—through the relationship between income and narcissism—has implications for our understanding of management scholarship and practice.

Our findings document pathways through which high parental income may negatively influence leaders’ effectiveness. Organizations might benefit from taking active steps to curtail the entitlement and grandiosity that at least some leaders with

wealthy backgrounds are likely to exhibit. 

One possibility consists of eliciting compassion in leaders. In past research, an experimental manipulation of compassion (a clip showing children in need) increased the helpful behaviour of participants with higher parental income to a level that was comparable to that of participants with lower parental income. Similar interventions could be designed to reduce the entitlement

and grandiosity, and, in turn, improve the effectiveness of leaders with higher parental income. Alternatively, organizations could potentially counteract narcissism by prioritizing and valuing humility. 

Although our findings may suggest that leaders could be selected at least in part on the basis of their parental income, we caution against this practice. In our view, the practical implications of our findings concern attenuating the negative pathways we identify, rather than suggesting that employees with high parental income should not be promoted to leadership positions, or that leaders with higher parental income are incorrectly placed in their organizations. 

Our findings suggest they may simply lead differently and rely on different abilities, and the negative outcomes that accrue via narcissism and subsequent behaviours should be mitigated. Indeed, it is entirely likely that parental income exerts some positive effects on outcomes other than those we studied.

Our findings open the door to future explorations of how societal trends such as income disparity might influence leader–follower relationships and other organizational dynamics. They also suggest that macro trends such as increasing income disparity can influence organizational life by altering the traits and behaviours of those entering the workplace. After all, as economic inequality rises, we may expect to see an increasing number of leaders who had wealthy parents, are more narcissistic, and do not rely on classic leadership behaviours to lead.

We also may come to see less-narcissistic leaders from lower-income backgrounds in a different light, recognizing they might engage in these behaviours to a greater extent, and that their style, if given the opportunity, may be particularly well suited to some contexts. Given the increasing gap between the ‘haves’ and the ‘have nots’, understanding the relational and leadership tendencies of

people from each income group is an important question for the future of organizational—not to mention societal—scholarship.