Wisdom and Narcissism as Predictors of Transformational Leadership

Paul B. Baltes and his colleagues from the Max Planck Institute for Human Development in Berlin were among the first researchers to thoroughly define and operationalize wisdom as a psychological, individual difference construct, and the Berlin wisdom paradigm is probably the most well-known, best validated, and systematically researched theory of wisdom to date.

Finally, Nonaka and Takeuchi postulated that wise leaders make decisions after careful consideration of their beneficial impact for the organization and society, understand the fundamental nature of situations and problems, facilitate interactions between employees and leaders, communicate in inspiring ways, use political power to solve conflicts, and foster other people's wisdom.

There were no significant differences in transformational leadership ratings between employees with three colleague questionnaires and employees with two colleague questionnaires returned 1.46, p 0.148, d 0.34). Due to the relatively small number of employees in the school and our high response rate, some of the participating employees and colleagues rated more than one of their colleagues; for reasons of anonymity, we were not able to assess who rated which employee, and therefore were not able to control for this dependency in the colleague ratings.

There is evidence for the validity of the measure indicating that the five dimensions assess distinct aspects of wisdom, and that experts received higher wisdom ratings for their transcribed responses than participants in a control group that was matched for age and professional background.

In which the authors investigated relations between venture growth and business managers' practical knowledge, a concept similar to the wisdom dimensions "Rich factual and procedural knowledge about life." Similarly, hardly any theorizing and empirical research on lifespan-related issues and leadership exists so far despite its potentially important implications for an aging workforce.

One possible explanation for the non-significant relationships between transformational leadership and the three wisdom dimensions rich factual knowledge about life, rich procedural knowledge about life, and lifespan contextualism may be that transformational leadership is a rather value-based and emotion-related leadership style that is particularly effective in the context of organizational change and uncertainty.

Wisdom is an individual virtue that has been characterized as “the pinnacle of insightinto the human condition and about the means and ends of a good life” (Baltesand Staudinger, 2000, p. 122). Wise people have been described as well-balanced,interpersonally competent, concerned with the well-being of themselves, others, andsociety, and as possessing superior knowledge, judgment, and advice-giving skills(Ardelt, 2004; Baltes and Staudinger, 2000; Sternberg, 1990). While wisdom is an ancienttopic that has been discussed by philosophers and theologians for many centuries,behavioral researchers have become interested in wisdom only relatively recently,particularly in the context of increased research on lifespan development (Baltes andSmith, 1990; Clayton and Birren, 1980) and in relation to the emerging positivepsychology movement (Peterson and Seligman, 2004; Schwartz and Sharpe, 2006).

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Posted on:2016-02-15

Narcissistic CEOs and executive compensation

Narcissism is characterized by traits such as dominance, self-confidence, a sense of entitlement,
grandiosity, and low empathy. There is growing evidence that individuals with these characteristics
often emerge as leaders, and that narcissistic CEOsmaymake more impulsive and risky decisions.
We suggest that these tendencies may also affect how compensation is allocated among top
management teams. Using employee ratings of personality for the CEOs of 32 prominent
high-technology firms, we investigate whether more narcissistic CEOs have compensation packages
that are systematically different from their less narcissistic peers, and specifically whether these
differences increase the longer the CEO stays with the firm. As predicted, we find that more
narcissistic CEOs who have been with their firm longer receive more total direct compensation
(salary, bonus, and stock options), have more money in their total shareholdings, and have larger
discrepancies between their own (higher) compensation and the other members of their team.
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Posted on:2015-11-04

Reality at Odds With Perceptions: Narcissistic Leaders and Group Performance

Although narcissistic individuals are generally perceived as arrogant and overly dominant, they are particularly skilled at
radiating an image of a prototypically effective leader. As a result, they tend to emerge as leaders in group settings. Despite
people’s positive perceptions of narcissists as leaders, it was previously unknown if and how leaders’ narcissism is related to
the performance of the people they lead. In this study, we used a hidden-profile paradigm to investigate this question and
found evidence for discordance between the positive image of narcissists as leaders and the reality of group performance.
We hypothesized and found that although narcissistic leaders are perceived as effective because of their displays of authority,
a leader’s narcissism actually inhibits information exchange between group members and thereby negatively affects group
performance. Our findings thus indicate that perceptions and reality can be at odds and have important practical and theoretical

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Posted on:2015-11-05