Narcissism and acquisitions
Just as I suspected! The Economist ("The brand of me", 8/ 2006) reported that two Penn State professors Arijit Chatterjee and Donald Hambrick have done research on the narcissistic manager, One of their conclusions - companies with self-involved bosses make more mergers and acquisitions. In other words, vainglory can ahve a big part in "rational" business deals.
Unfortunately, I can't find the paper, "It's All About Me", online, It was presented at the annual meeting of the American Academy of Management.) The Economist reports that the researchers measure narcissism in several clever ways, These include:
the prominence of the boss's photo in the annual report; his prominence in company press releases; the length of his "Who's Who" entry; the frequency of his use of the first person singular in interviews; and the ratios of his cash and non-cash compensation to those of the firm's second-highest paid executive.
They rated execs in the software and technology businesses, a notorious breeding group for egomaniacs. Spoiling our fun, they did not publicly list the rankings.
The study sees business plusses and minuses in self-absorbed bosses. Sometimes the self-confidence and ambition lead to results; other times, other times, ego-tripping leads to disastrous decisions. But tit is clear that a significant motive for buying out other companies is personal aggrandizement. No surprise, but not something that ever enters into the press releases and is rarely commented on in the business mags or newspapers, where M&A moves are generally seen as the result of careful calculation and business savvy.
