CEO Narcissism and Business Strategy

Behavioral attitude of management has led to choosing strategy by managers in order to achieving organization targets and improving its performance, however with including sentiments and behavioral anomaly in decision making, the rationality of managers will be on doubt. In this regard, the aim of this article is empirical investigation of the effects of manager's narcissism (as one of the behavioral bias) on their attitude in choosing strategy for a sample of 54 companies in Tehran Stock Exchange, over a period from 2004 to 2015 (648 firm-years). In order to testing the hypotheses, some of the statistical methods, including ANOVA, Tukey test, LSD and pooling regression are used. The results of this study indicate that there is a statistical difference between manager's narcissism of the samples with different business strategies (prospectors, defenders, and analyzers), and the highest influence of manager's narcissism is on the defender strategy and the lowest influence is on the analyzer strategy. In addition, there is a relationship between manager's narcissism and business strategies (prospectors, defenders, and analyzers) and this relationship for the defender and analyzer strategies is negative and for prospector strategy is positive. This study can be desirable and useful in introducing narcissism at organizational level and species cognition of the strategies with respect to mentioned variables.