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                            Management Department Faculty Publications                                                                                      Management Department 
                            2009 
                            OrOrganizational ganizational NarNarcissism and cissism and VirVirtuous Behatuous Behavior vior 
                            Dennis Duchon 
                            University of Nebraska-Lincoln, dduchon2@unl.edu 
                            Brian Drake 
                            University of Texas at San Antonio, brian.drake@utsa.edu 
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                            Duchon, Dennis and Drake, Brian, "Organizational Narcissism and Virtuous Behavior" (2009). Management 
                            Department Faculty Publications. 90. 
                            https://digitalcommons.unl.edu/managementfacpub/90 
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                             Published in Journal of Business Ethics 85 (2009), pp. 301–308; doi: 10.1007/s10551-008-9771-7   
                                                  Copyright ©  2008 Springer. Used by permission.
                                                                          
                         Organizational Narcissism and Virtuous Behavior  
                                                                          
                                              Dennis Duchon, University of Tennessee, Knoxville
                                                Brian Drake, University of Texas at San Antonio
                                                                            log to an individual’s personality (Whetten, 2006), 
           Abstract                                                         essentially determines whether or not that organi-
           Extreme narcissistic organizations are unable to behave ethi-    zation will be a moral agent (MacIntyre, 2007). Sec-
           cally because they lack a moral identity. While such organiza-   ond we argue that organizations can adopt collec-
           tions are not necessarily unethical intentionally, they become   tive narcissistic identities that will produce wrong 
           self-obsessed and use a sense of entitlement, self-aggrandize-   (i.e., non-virtuous) behavior. This happens because 
           ment, denial, and rationalizations to justify anything they 
           do. Extreme narcissistic organizations might develop formal      the organization’s narcissistic identity—including the 
           ethics programs, but such programs will have little effect on    corresponding motive to protect its identity—is more 
           behavior.                                                        powerful than a motive to behave morally.  
           Keywords: organizational narcissism, virtue                       
                                                                             
                                                                            Organizational identities  
                I think what I didn’t understand when I was young            
                was that corporations have personalities just like             Organizations have identities. They are distin-
                humans do. It is possible for companies to be               guishable; they have names, occupy physical space, 
                virtuous.                                                   and are accorded legal rights much the same as peo-
                   —Larry Brilliant, Executive Director, Google.org         ple. Whetton (2006) defines organizational identity as 
                                                                            the “… central and enduring attributes of an organi-
                                                                            zation that distinguish it from other organizations” 
           Introduction                                                     (p. 220). These attributes allow the organization to le-
                                                                            gitimize and substantiate claims of uniqueness that 
              Ethics is not missing from corporate life, but it can         has functional value in terms of its ability to both de-
           be obscured or marginalized (Roberts, 2001) by the               fine a competitive domain and to present itself as an 
           character of the corporation itself. That is, a corpo-           idealized actor within that domain (i.e., this is what 
           rate system lacking a virtuous identity can manipu-              we are; this is who we are). The attributes structure 
           late and constrain moral agency (Nielsen, 2006). We              activity in the organization as shown in its core pro-
           define moral agency as the capacity (1) to make judg-            grams, policies and procedures, and they also pro-
           ments about the goodness and badness of organiza-                vide a reference point for decision making and com-
           tional behavior and (2) to take actions that comport             munication (i.e., this is what we do; this is how we do 
           with moral standards. However, rather than being                 it). This reference point comes to be the foundation 
           the result of bad intentions or faulty judgments, un-            upon which the organization acts – an embodiment 
           ethical behavior can be a consequence of a corpora-              of its assumptions about the world and the organiza-
           tion’s self-concept; a consequence of how it defines             tion’s role in it. When the internally generated refer-
           itself.                                                          ence point acquires sufficient mass, it can partially or 
              Our argument is two-pronged. First, we argue                  completely eclipse the reference point that prevails 
           that an organization’s identity, operating as an ana-            more broadly external to the organization.  
                                                                        301
            302                                                     Duchon & Drake in Journal of Business ethics 85 (2009) 
               Within the boundaries of an identity, an organi-       norms, and routines become established as authori-
            zation develops distinctive preferences, commit-          tative guidelines for social behavior. These processes 
            ments, and practices (Whetton, 2006) that reflect col-    are argued to be deep and resilient aspects of so-
            lectively shared assumptions or ideologies about          cial structure (Scott, 2004). Social structures are then 
            its identity. That is, organizations develop belief       both imposed on and upheld by the actors within the 
            systems or cultures that help the members under-          structure. Thus, an institution becomes encoded into 
            stand behaviorally who they are as a collectivity,        an actor through a socialization process and, once in-
            how they got that way, what they should be, and           ternalized, is transformed into a script of patterned 
            how they should behave (Hatch and Schultz, 2000;          behavior. When the actor behaves according to the 
            Schein, 1992; Trice and Beyer, 1993). An organiza-        script, the institution is enacted (Bjorck, 2004). Insti-
            tion’s identity emerges and is shaped as it solves        tutional Theory allows conceiving of an organization 
            adaptation and integration problems, and the or-          as exhibiting properties of supra-individual units 
            ganization’s culture, as an analogue to personality,      of analysis that cannot be reduced to the direct con-
            will find ways to display those central and endur-        sequences of an individual’s attributes or motives 
            ing attributes that make up its identity. Culture is      (Powell and DiMaggio, 1991). Moreover, the institu-
            the social mechanism that will transfer the organiza-     tion will develop scripts, rules, and routines that are 
            tion’s identity to new members as the “correct” way       consistent with its identity and articulate what is and 
            to perceive, think, and feel (Schein, 1992, p. 4). As     what is not ethical behavior.  
            Trice and Beyer (1993) put it, being part of a culture     
            means “…believing what others believe and doing            
            as they do” (p.5). Among other central and enduring       Moral identity  
            attributes, cultures develop distinctive mechanisms        
            to cope with uncertainties (Trice and Beyer, 1993)           Virtue Theory argues that morality is a function 
            and thus protect their identities.                        of an entity’s character: What the entity is and has 
               Brown (1997) argues that collective entities have      will enable dispositions to act in virtuous/unvirtu-
            a need for self-esteem. Based on the work of Tajfel       ous ways (MacIntyre, 2007). Formal organizations 
            and Turner (cf. Tajfel, 1972; Tajfel and Turner, 1986;    can function like a moral person, and so be consid-
            Turner, 1985), Brown contends that “… organiza-           ered to possess an institutional character replete with 
            tions consist in the common social identification of      institution- level virtues and vices (Moore and Bea-
            participating individuals acting as their organiza-       dle, 2006). Weaver (2006) has argued that entities, 
            tion, and that organizational self-esteem consists of     including organizations, can possess a network of 
            the collective self-esteem of individuals acting as the   moral traits rooted in self-concepts and manifested 
            organization” (1997, 649). Organizations, as social       in actions. A moral identity exists when the entity is 
            categories, exist in their members’ common aware-         “…centrally oriented toward a collection of moral 
            ness of their membership, and so come to take on          traits that both define (what) one is and yield tenden-
            identities that are parts of their members’ identities,   cies toward paradigmatically moral action” (p. 345). 
            needs, and behaviors. When organization members           Moral identity is subject to contextual influences and 
            are motivated to preserve the part of their self-im-      to the waxing and waning of its own salience, but its 
            age derived from their social category, they are, col-    strength will match the degree to which it is a central 
            lectively, regulating the self-esteem of the social cat-  part of the self concept.  
            egory – the organization. Thus, the organization can         Moral identity formed at higher levels capture cog-
            regulate collective self-esteem with ego-defensive        nitive schemas that direct thought and action and ar-
            behaviors, not only to preserve identity, but also        range people into roles (Weaver, 2006). These higher-
            to enhance the legitimacy of the collective category      level identities influence the identities of lower-level 
            (Brown, 1997).                                            entities such that organizational identities influence 
               Our notion of identity and regulation of collective    individual identities. For example, organizational 
            self-esteem is consistent with an Institutional The-      identities  influence  the  identities  of  business  units, 
            ory view of organizations (cf. Powell and DiMag-          departments, groups, and ultimately individuals. The 
            gio, 1991). Institutional Theory examines the pro-        cognitive and symbolic order provided by the orga-
            cesses by which structures including schemas, rules,      nization’s identity both guides and delimits the be-
          organizational narcissism anD Virtuous BehaVior                                                                      303
          havior of individuals acting on the organization’s be-        be problematic. The extreme narcissistic organiza-
          half. Thus, even though individuals or groups may             tional identity seeks to justify and legitimize itself at 
          be responsible for making decisions in organiza-              all costs, with scant reference to market accountabil-
          tions, those decisions will tend to be consistent with        ity, civic responsibility, or ethical concerns (Ganesh, 
          the larger system’s moral identity (Weaver, 2006).            2003). Extreme narcissists are entirely self-absorbed, 
          Therefore, unethical behavior can emerge from orga-           out of touch, and not “reality based.” The extreme 
          nizations unintentionally, even without awareness.            narcissistic organization will institutionalize domi-
          Unless virtue is a central part of the organization’s         nance, control, entitlement, and exploitation (Greg-
          self-concept, ethical behavior will never be consid-          ory, 1999) to reinforce its maladaptive identity. 
          ered an appropriate metric or standard to judge the           Thus, it is possible to observe organizational attri-
          outcomes of decisions.                                        butes and activities that can be used to label a sys-
                                                                        tem as an extreme narcissist, although notions of 
                                                                        virtue and ethical behavior likely will not be among 
          Organizational narcissism                                     those attributes.  
                                                                           For example, Stein (2003) suggests that extreme 
             Narcissism is a term that generally connotes a per-        organizational  narcissism  will  possess  five  charac-
          son who possesses an extreme love of self, a grandi-          teristic attributes. First, members of a narcissistic or-
          ose sense of self-importance, and a powerful sense of         ganization will believe their organization to be ex-
          entitlement. The American Psychiatric Association             traordinarily special and unique. This belief does not 
          (2000)  defines  narcissism  as  a  personality  disorder     reflect normal feelings of pride and accomplishment, 
          characterized by “a pervasive pattern of grandiosity,         but is instead highly exaggerated to the point of de-
          need for admiration, and lack of empathy… and is              lusion. Second, a powerful sense of self aggrandize-
          present in a variety of contexts” (p. 717). The Manual        ment and entitlement leads to a kind of unconscious 
          suggests that narcissistic personality disorder is indi-      imperialism or an unconscious omnipotence: The or-
          cated by a person exhibiting a range of self-centered         ganization is all powerful and anything of potency is 
          behaviors,1 although a diagnosis of narcissistic per-         felt to legitimately belong to it. Such an organization 
          sonality disorder is somewhat imprecise and mostly            cannot recognize that anything of value might exist 
          the result of a clinician’s judgment.                         outside its boundaries. Third, the organization be-
             Narcissistic behaviors are generally seen as ego-          lieves itself to be omniscient; that is, it has access to 
          defense mechanisms used to bolster a fragile sense            all information, both internal and external, that is rel-
          of self. Organizations, like people, are also motivated       evant to the organization. Fourth, the delusion of the 
          to protect their collective sense of identity and legit-      narcissistic organization allows it not only to be dis-
          imacy, and, like people, can also sometimes engage            missive of other organizations, people and informa-
          in extreme narcissistic behavior. This narcissistic re-       tion, but also to treat them with a kind of triumphant 
          sponse is a coping mechanism intended to protect              contempt. Fifth, these attributes are so pervasive that 
          and preserve the organization’s identity, but extreme         they become permanently embedded in organiza-
          manifestations can lead to dysfunction, even ruin.            tional functioning (Stein, 2003).  
          People in organizations can collectively get off-track           Brown (1997) has argued that extreme narcissis-
          in their efforts to protect the system’s identity by be-      tic organizations use denial to cope with conflict and 
          having in ways that reinforce an exaggerated sense of         stress. For example, such organizations deny facts 
          system-self, and by ruthlessly exploiting both other          about themselves through spokespeople, annual re-
          organizations and members of their own system                 ports, and myths. They develop plausible and ac-
          (Brown, 1997).                                                ceptable justifications for their actions through ra-
             Organizations can create structures and processes          tionalization. They self-aggrandize by endowing 
          (enduring attributes) that will reinforce and ex-             themselves with a sense of rightness and making 
          tend a sense of both identity and legitimacy (Brown,          claims of their uniqueness. This is done in myriad 
          1997; Ganesh, 2003). Such efforts to institutionalize         ways. For example, they commission flattering cor-
          identity are necessary to maintain the organization,          porate histories; executives make speeches embed-
          and should be seen as normal; however, institution-           ded with claims of uniqueness; and they deploy 
          alizing an extreme narcissistic identity can prove to         their office layouts and architecture as expressions