University of St Andrews

Master of Letters (MLitt) in Marketing

Mirror, mirror on the wall, who is the least ethical of them all?
An Empirical Investigation of the Relationship between Narcissistic Tendencies of Students and Their Perception of Ethics and Social Responsibility in Business

Name: George Ferns Matriculation number: 100019739 Submission Date: August 31st 2011 Supervisor: Rob Gray

ACKNOWLEDGEMENTS
I would firstly like to thank Prof. Rob Gray for supporting me throughout the dissertation process. He challenged my intellect, made me question that which I never questioned, and guided me to discover something invaluable - a new worldview. I would like to thank my significant other for her help, support and love. I would also like to thank my family for their unconditional love and always letting me be who I am. I would like to thank the Irvine Computer Lab Crew for the stimulating discussions and helping me cope through the long nights working on my dissertation

DECLARATION
I hereby certify that this dissertation, which is approximately 15000 words by me and that it has not been submitted in any previous application for a higher degree. This project was conducted by me at the University of St Andrews from 05/2011 to 08/2011 towards fulfilment of the requirements of the University of St Andrews for the degree of MLitt in Marketing under the supervision of Professor Rob Gray

Signature: _______________________________

Date: ___________________________________

ABSTRACT
This study argues that prevalent societal narcissism could be partly responsible for growing unethical business practice. By exploring the construct of narcissism amongst students at the University of St Andrews, this study aims to test whether a relationship exists between narcissism and business ethics and social responsibility. Furthermore, this study also attempts to uncover whether students are more/less narcissistic and more/less ethical depending their choice of study. Indeed, findings indicated that a higher level of narcissism predicts a lower consideration for ethics and social responsibility. Moreover, students of economics were found to be the most narcissistic and least concerned with business ethics compared to finance students, finance and management students and management students.

Acknowledgements...............................................................................................................................i Decraration ............................................................................................................................................. ii Abstract .................................................................................................................................................. iii 1.

1.1 1.2 1.3 1.4 1.5

Chapter 1 - INTRODUCTION ..................................................................................................... 1

Background Information & Problem Description ........................................................................ 1 Importance of Study ....................................................................................................................... 3 Research Objectives ....................................................................................................................... 4 Outline of method ........................................................................................................................... 4 Layout of thesis ............................................................................................................................... 5

2.
2.1 2.2

Chapter 2 - LITERATURE REVIEW ......................................................................................... 6

Personality Disorders in Organisations ....................................................................................... 6 Narcissism ....................................................................................................................................... 8 2.2.1 2.2.2 Narcissism defined .............................................................................................................. 8 Types of narcissism ............................................................................................................. 9

2.3

Narcissism in Corporations ......................................................................................................... 12 2.3.1 Narcissistic CEOs and Employees .................................................................................... 12

2.4

Narcissism and Ethics .................................................................................................................. 14 2.4.1 Is narcissism immoral? ...................................................................................................... 14

2.5

Business ethics ............................................................................................................................. 16 2.5.1 2.5.2 Can business ethics be taught? ........................................................................................ 17 Do business schools encourage narcissism? ................................................................... 19

2.6

Conclusion ..................................................................................................................................... 22

3.
3.1

Chapter 3 - RESEARCH DESIGN .......................................................................................... 23

Introduction ................................................................................................................................... 23 3.1.1 3.1.2 Research Questions .......................................................................................................... 26 Research Strategy ............................................................................................................. 27

3.2

Survey tools NPI & PRESOR ..................................................................................................... 28 3.2.1 3.2.2 Narcissistic Personality Inventory (NPI) ............................................................................ 28 Perceived Role of Ethics and Social Responsibility (PRESOR) ....................................... 29

3.3

Study Participants ......................................................................................................................... 30 3.3.1 3.3.2 Population and Sample ..................................................................................................... 30 Collection of participants contact details .......................................................................... 31

3.4

Gathering of data .......................................................................................................................... 31 3.4.1 3.4.2 Main data collection ........................................................................................................... 31 Trial surveys ...................................................................................................................... 32

3.5

Data Verification ............................................................................................................................ 32

4.
4.1

Chapter 4 - FINDINGS AND ANALYSIS ............................................................................... 34

Research question 1 ....................................................................................................................... 36 4.1.1 4.1.2 Which study is the most/least narcissistic? ....................................................................... 36 Who perceives ethics and social responsibility as most important/unimportant? ............. 36

4.2

Research question 2 ....................................................................................................................... 37 4.2.1 4.2.2 Males vs. Females............................................................................................................. 37 Individual vs. Collective ..................................................................................................... 38

4.3

Research question 3 ....................................................................................................................... 39 4.3.1 4.3.2 4.3.3 4.3.4 4.3.5 4.3.6 Economics vs. Finance ..................................................................................................... 39 Economics vs. F&M ........................................................................................................... 40 Economics vs. Management ............................................................................................. 41 Finance vs. F&M................................................................................................................ 42 Finance vs. Management .................................................................................................. 43 F&M vs. Management ....................................................................................................... 44

4.4

Research question 4 ....................................................................................................................... 45 4.4.1 Do students who are more narcissistic perceive business ethics to be less important? .. 45

5.
5.1 5.2 5.3 5.4 5.5 5.6 5.7

Chapter 5 - DISCUSSION ....................................................................................... 47

A disturbing relationship .............................................................................................................. 47 Economics students NPI and PRESOR scores .......................................................................... 47 Whats the deal with finance? ........................................................................................................ 48 Low NPI scores? ............................................................................................................................ 49 Culture and gender differences ..................................................................................................... 49 Limitations and Future Research .................................................................................................. 50 Implications ...................................................................................................................................... 51

6. 7.

Chapter 6 - CONCULSION ..................................................................................... 54 REFERENCES ......................................................................................................... 1

References ............................................................................................................................................. iv Appendix 1 ............................................................................................................................................... v Appendix 2 ............................................................................................................................................ vi Appendix 3 ........................................................................................................................................... vii

1.

Chapter 1 - INTRODUCTION

1.1 Background Information & Problem Description

In his seminal publication, The Wealth of Nations, Adam Smith declares: All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind (Smith, 1776: 448). So, those in the position of greatest power place utmost consideration on individual need, rather than the needs of those at their mercy. In times of financial turmoil, ever-prevalent corporate misconduct, and a society that has seemingly misplaced its moral compass, Smiths adage extends not only to the masters of mankind but also to the masters of the marketplace. But how has the self-centred individual become such a predominant, and often successful, factor in society and business? To find a definitive answer to this question is difficult and ultimately not the objective of this paper. Rather, this paper will examine possible consequences of allowing individualism to take the reins of society as explained by Twenge and Campbell (2009: 4): Its what you have if youre a politician and youve strayed from your wife, and its why five times as many Americans undergo plastic surgery and cosmetic procedures today than did just ten years ago. Its the value that parents teach their children with song lyrics like "I am special. Look at me," the skill teenagers and young adults obsessively hone on Facebook and MySpace, and the reason high school students physically beat classmates and then broadcast their violence on YouTube for all to see. Its the message preached by prosperity gospel and the vacuous ethos spread by celebrity newsmakers. And its whats making people depressed, lonely, and buried under piles of debt. Twenge and Campbell are referring to narcissism or what they consider to be an epidemic. Narcissism is a natural human inclination; it is a facet of our personalities that gives us a sense of self and self-preservation. Yet in excess, narcissism can turn ugly, becoming a pathological disorder or a disturbance in self-identity. Pathological narcissists are generally viewed as a hindrance to themselves, those with whom they share a relationship, and the organization for which they work (Maccoby, 2003). Furthermore, highly narcissistic individuals are apparent in business pathological narcissism is associated with unethical behaviour, including unethical business practice (Amernic & Craig 2010). Moreover, pathological narcissists regularly exhibit an overwhelmingly strong

desire to attain power, not always used for good (e.g., Hitler, Stalin, Mao, Pot, Lenin, Hussein, Mugabe are all considered pathological narcissists) (Glad, 2002). While normal narcissism is often regarded as a characteristic necessary to climb the corporate ladder, pathological narcissists are often particularly successful when it comes to career development, climbing the corporate ladder through deception, manipulation of others and a mastery of gaining advantage through corporate politics rather than through honest means (Maccoby, 2003). When reaching the level of senior management, and especially in the case of a CEO, pathological narcissists frequently demonstrate high levels of strategic dynamism that results in inconsistent financial performance, unjustifiably risky decisions and decreased employee morale (Maccoby, 2003). Business schools perpetuate the rising trend of pathologically narcissistic managers by endorsing a lesser form of narcissism in the classroom; namely, self-interest. They do this by indoctrinating students in Friedmanite philosophy; teaching game theory, agency theory and transactional cost theory, and focusing almost solely on competition as the ultimate market mechanism and performance as the only measure of success (Ghoshal, 2003). As a young persons academic career progresses, especially those who studied finance and economics, research shows a significant drop in the consideration of ethical responsibility (Wolfe & Fritzsche, 1998). Furthermore, researchers argue that the state of business education focuses almost exclusively on individual interest, which ultimately restricts a students frame of reference to shareholder wealth (Ghoshal, 2003). This often leads to business students losing the capability to develop their moral reasoning skills and consider ethics as a part of everyday business. Not only is there often a decrease in a students ethical consideration during their business education career, but also business students exhibit greater narcissistic tendencies (Westerman et al, 2010; Brown et al, 2010). Furthermore, research indicates that students in US business schools have never been as narcissistic as they are today as Westerman et al, (2010) remark that "our future business leaders appear to be even more self-absorbed and entitled" than ever before. Future business leaders are effectively primed to only consider themselves evaluating their impact on the world through performance measurement, ultimately disregarding the effect their business decisions have on the natural environment and society.

1.2 Importance of Study

There are two principle reasons for conducting research on narcissism and business ethics amongst students. First, there is growing concern about the ethical conduct of business, born from examples of well-known scandals involving companies such as Enron, Tyco International, and WorldCom. For example, in their 2009 Fraud Survey, KPMG, the international audit, tax and advisory firm, conclude that corporate fraud remains a serious and growing trend. Out of the 5000 employees surveyed, nearly half indicate that they witnessed corporate misconduct that would cause significant loss of public trust if discovered (KPMG, 2009: 3). Furthermore, the Association of Certified Fraud Examiners (ACFE) estimates that corporate fraud results in a 5% loss of revenue, which equates to a staggering $2.9 trillion as a percentage of global GDP (ACFE, 2010). The ACFE also indicates that owners and executives who commit corporate fraud present the greatest burden to a company, costing an average of $723,000 per person. It is therefore important to identify trends associated with such behaviours, since the negative impact of their decisions is significant. Secondly, the concept of Corporate Social Responsibility (CSR) is becoming a widespread aspect of business which, to a certain extent, shares a relationship with ethical business conduct. The IBM Global CEO Study, which includes 1130 CEOs from 40 countries, indicates that CEOs have increased spending on social and environmental initiatives by 25% from 2008 to 2009 (IBM, 2009). Furthermore, market analytic firm Verdantix reported that CSR-related spending activities by firms with annual revenue of over $1 billion will increase from $28 billion in 2010 to $60 billion in 2014 (Verdantix, 2010). CSR is thus an important aspect of business considering current and future investment, but how do the personalities of business people effect decisions related to CSR? Furthermore, because the motivations behind CSR investment are sometimes encountered with scepticism (Bakan, 2004, Friedman 2001, Levit, 1998) we need to better assess how the personality of an individual affects their capability to make ethical decisions. Though business ethics has been researched from many aspects, there is little research regarding the relationship between narcissists and their perceptions of ethics. This study will build on previous research aiming to examine this relationship.

1.3 Research Objectives

This study will test the relationship between narcissism and business ethics, using student subjects. Students are a useful demographic as research suggests that business schools are perpetuating the rise in narcissism by indoctrinating students with teachings that emphasise the need for self-interested thinking (Ghoshal, 2003). This in turn becomes a self-fulfilling prophecy, as students study material which is, by nature, focused on selfinterested thinking, and as a result, they themselves may become self-interested and ultimately narcissistic. The main objective is to therefore discover whether an empirical relationship exists between students level of narcissism and their perception of ethics and social responsibility. Furthermore, this study also aims to determine which businessrelated study programme contains students with the highest/lowest levels of narcissism and business ethics. Overall, the results of this study should provide a conclusion as to whether narcissism and ethics/social responsibly share any relationship and also whether there is a difference in narcissism and business ethics amongst different study programmes.

1.4 Outline of method

Two main methods of research will be used to answer the above-mentioned questions. Firstly, secondary research, in terms of academic journals, business literature and newspaper articles, will be used to create a literature review. Secondly, primary research will be used to gather data on narcissism and business ethics, using two wellvalidated surveys: the Narcissistic Personality Inventory (NPI) (see appendix 1) and the Perceived Role of Ethics and Social Responsibility Survey (PRESOR) (see appendix 2). The NPI, comprised of 40 forced-answer questions, provides a score indicating narcissistic tendencies. The second survey focuses on business ethics and includes 16 questions that test a persons view on whether or not a firm should focus solely on profit maximization or shift its efforts to benefit society and the environment. Respondents answer the PRESOR based on a 9-point Likert scale. The surveys were combined to create one survey that was sent (via an online survey distribution service) to 240 students, 133 of which responded. These were all students of the University of St Andrews including Management (MLitt),
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International Business (MLitt), Finance and Management (MLitt), Finance (MSc), International Strategy and Economics (MSc), Money, Banking and Finance(MSc).

1.5 Layout of thesis

This study will begin by discussing relevant literature, which will entail an exploration of both narcissism and business ethics. Firstly, a broad overview will examine personality disorders in organizations, then switching focus to understand the concept of the corporate psychopath. Next, narcissism is discussed in order to differentiate between healthy and psychopathic narcissism, and to examine the effect narcissism has on an organization, lastly detailing ethical implications of narcissism. Next the literature review will investigate ethics, particularly business ethics in education. This will include an attempt to answer the question of whether ethics should be, and can be, taught in higher education. Lastly, the literature review will discuss the consequences of studying business and economics related subjects, analysing whether students of business and economics related subjects are more self-interested/narcissistic than other students. Following the literature review, the research design will firstly present a theoretical framework that was deduced from the literature, followed by introducing specific research questions. Thereafter, the research strategy, in terms of quantitative and qualitative techniques, is discussed. Next, the surveys (NPI and PRESOR) that will be used to attempt to answer the research questions will be introduced and discussed. After the surveys have been discussed the research design will focus on the study participants in terms of their composition and selection. Lastly, the validity of the research design will be discussed. The research design chapter is followed by presenting the findings. This chapter is structured in terms of the research questions. Each question is answered individually. Thereafter the findings are commented upon in the discussion chapter. This chapter is composed on themes that were drawn from the findings chapter. Lastly, a conclusion is presented that summarizes the findings and provides final remarks.

2.

Chapter 2 - LITERATURE REVIEW

Whoever loves becomes humble. Those who love have, so to speak, pawned a part of their narcissism Sigmund Freud

2.1 Personality Disorders in Organisations

Psychologists often argue that the self is defined in terms of our personality (Judge et al, 2002). Our personality affects our actions and helps others form an opinion of us - both in a social setting and in a business context. Certainly, people have different personality types that evolve throughout their life, which can be categorized into traits such as openness, conscientiousness, extraversion, agreeableness, and neuroticism (McCrae and Costa, 1985). Depending on the context in which a person finds him/herself, different personality characteristics play a more/less effective role in decision making and behaviour. Yet in some cases, an individuals personality can take a turn for the worst and develop into a disorder (i.e. paranoia, antisocialism, narcissism, schizophrenia, borderline personality disorder, psychopathy and obsessive-compulsive disorder). This often arises when there is an extreme imbalance between several personality traits or when one personality trait has an excessive dominance over other traits (Lee, Ogunfowora & Ashton, 2005). But what occurs when a disturbed person is in the business environment? Although research on personality disorders within business environments often examines various disorders from different academic perspectives, there is one increasingly widespread construct used in a business context the notion of Corporate Psychopaths (Hare, 2004; Babiak, 1995; Boddy 2010; 2005) or those people working in corporations who are self-serving, opportunistic, ego-centric, ruthless and shameless but who can be charming, manipulative and ambitious (Boddy, 2005: 30). These are people who exhibit a combination of disorders, namely: psychopathy, narcissism and Machiavellianism (Boddy, 2010). Although actual psychopaths account for approximately 1% of the general population, corporate psychopaths represent approximately 5% of the business world, (Hare, 2004) particularly within the finance, insurance, banking and communication industries (Boddy, 2010). These crazy business people are not just a hindrance to the

financial success of corporations, but are damaging to overall performance - including the welfare of stakeholders (Goldman, 2006). Some even hypothesise that the collapse of several US corporations may have been the result of senior managers exhibiting signs of psychopathy (Hercz, 2001). One serious concern amongst researchers is the lack in moral reasoning of corporate psychopaths. For example, McCormick and Burch (2005) indicate that these corporate psychopaths are significantly more prone to fabricate their performance figures and commit fraud, amongst other white-collar crimes. Weiss (2008) adds that the majority of rogue-traders (financial market traders who make unauthorised trades) such as Nick Leeson who was responsible for the loss of 872 million and the consequential collapse of Barings Bank (Tremewan, 1995) are highly narcissistic in their thinking and display distinct signs of corporate psychopathy. Moreover, Bobby (2010) concluded that there is a strong negative correlation between psychopathy and corporate social responsibility (CSR). In other words, the more psychotic a corporate psychopath is found to be, the more resistant he/she will be towards CSR. It could be argued that corporate psychopaths resist CSR not only because of their psychopathic tendencies, but also because of their drive to generate profits instead of investing money in ethical practices. Yet what motivates a corporate psychopath? Corporate psychopaths aspire to attain high-responsibility positions within large organizations because of their desire to access the power, influence, prestige, and money associated with these corporate positions (Boddy et al, 2010: 3). Although corporate psychopaths attempt to manipulate their co-workers into admiring them, Boddy (2006) argues that this is only a portrayal of a superficial leadership image which will always remain a faade. Moreover, corporate psychopaths use their charisma to attain promotions and are ruthless to opposition when climbing the corporate ladder. They achieve this by using their charm to fool and manipulate people through corporate politics (Deutschman, 2005). Maibom (2005) argues that corporate psychopaths are able to excel at their jobs given a focus on getting promoted and, because they lack any conscience, emotional distance from colleagues.

All in all, there are certain individuals working for corporations who suffer from personality disorders and are generally seen as a burden to the company. Yet corporate psychopaths are of a special breed because they exhibit a mixture of three personality disorders (psychopathy, narcissism and Machiavellianism) that all have the prevailing element of self-interest. Without remorse, empathy and a conscience they are addicted to promotions, salary increases and power. They manipulate their colleagues and the corporate system to portray themselves as leaders and the model employee. One of the three personality disorders found in a corporate psychopath narcissism is seen as predominant factor that distinguishes the corporate psychopath from its counterparts (Boddy et al, 2010). Particularly disturbing is that narcissistic tendencies not only lend to the manifestation of a corporate psychopath but also are increasingly present in even normal business people; this will be the focus of the section.

2.2 Narcissism
2.2.1 Narcissism defined Narcissism is a concept brought to light by Sigmund Freud (1914), metaphorically described by the Greek myth of Narcissus who falls in love with himself by staring at his own reflection in a pool of water. Not being able to stop staring at his own beautiful image, Narcissus starves and is turned into a white flower (Amernic & Craig, 2010). This myth has resulted in narcissists to be generally understood as people who have an overwhelming, and sometimes obsessive, love for themselves. Freud (1914), one of the most influential contributors to the study of narcissism, thought of narcissism as an essential part of human development and something that is evident from birth. Freud (1914) recognized that narcissism can be a positive personality trait, notably self-preservation, yet also acknowledged the destructive capacities of extreme narcissism. To identify an allencompassing definition of narcissism is difficult due to the lack of consensus amongst researchers and the varying forms of narcissism. The American Psychiatric Association (APA) defines narcissism as a pervasive pattern of grandiosity, self-focus, and selfimportance exhibited in individuals (Morf & Rhodewalt, 2001: 177). Campbell, et al (2010)

attempt to further clarify the concept of narcissism by arguing that it can be divided into three components: (1) The self: The narcissistic self is defined by positivity, specialness and uniqueness, vanity, a sense of entitlement and a desire for power and esteem (Campbell et al, 2010: 2). (2) Interpersonal relationships: The relationships of a narcissist are comprised of low levels of empathy and emotional intimacy (Campbell et al, 2010: 2). (3) Self-regulatory strategies: The self-regulatory strategies refer to the tendency of a narcissist to seek out opportunities for attention and admiration, brag, steal credit from others, and play games in relationship (Campbell et al, 2010: 2). Narcissism has been widely studied in the context of social science. Researchers have, for example, found men to be more narcissistic than women (Foster, Campbell & Twenge, 2003), apparently because of womens tendency to develop an interdependent self-construal compared to men who develop an independent image of themselves (Cross and Madson, 1997). Furthermore, research found collectivist cultures to be less narcissistic than individualistic cultures (Foster, Campbell & Twenge, 2003) since individualistic cultures are more focused on individual self-enhancement whereas collectivist cultures are relatively conductive of self-criticism (Kitayama et al, 1997). While the three aforementioned components provide an overarching framework for a general description of narcissism in the context of social science, it is a more complex construct that requires further description. Importantly, one has to separate healthy narcissism from pathological narcissism. 2.2.2 Types of narcissism Although narcissism often has a negative connotation, behavioural psychologists do tend to distinguish healthy narcissism from pathological narcissism (Brown, 1997). For example, Freud (1914) argues that narcissism is a naturally occurring personality

phenomenon that should not necessarily be considered destructive. Healthy narcissism refers to individuals who generally portray ambition, confidence, and high self-esteem (Maccoby, 2000) that helps them cope with daily frustrations, and [gives them] a capacity for introspection and empathy (Amernic & Craig, 2010: 84). Healthy narcissism has also been called constructive (Kets de Vries, 1994), reparative (Glad, 2002) or productive (Maccoby, 2003) as it often lends to personal and professional development. Furthermore, Dickinson and Pincus (2003: 366) argue that healthy narcissism is a normal expression of narcissism (and) may contribute to self-esteem by increasing an individuals sense of personal agency which leads to individuals being ambitious, satisfied, and relatively successful. For healthy narcissists, failing to achieve goals, receiving disapproval from others and failing to attain the success of others, could lead to disappointment, but rarely depression (Lubit, 2003). We humans all use narcissistic tendencies to protect our selfimage from being attacked by others; for example by believing that we are in some way more special than someone else (Maccoby, 2000). Furthermore, it is often assumed that a healthy dose of narcissism is necessary to build self-confidence, which enables us to deal with frustrations (i.e., I am still a worthy person, although Bob got the promotion) and defend our own personal values (i.e., I disagree with Bob because I believe that I am right). Many also argue that healthy narcissists usually do not feel the necessity to excessively indulge in fantasies of grandiosity as they have enough self-confidence, adaptability, and humour to stress real achievements (Kets de Vries & Miller, 1985: 593). All in all, healthy narcissism, even in small doses, is something that is apparent in most people. It is a part of everyday life and a necessary defence mechanism to protect our self-image and boost our self-esteem. Pathological narcissism, or the dark side of narcissism, differs from healthy narcissist because individuals exhibit destructive personalities in several cases exhibiting signs of psychopathy, as symptoms include manipulative tendencies, a desire for entitlement, and a lack of empathy (Maccoby, 2000). Pathological narcissists are also known as destructive (Lubit 2002), reactive (Kets de Vries, 1994), unhealthy (Stolorow, 1975) and non-productive (Maccoby, 2003). Pathological narcissists frequently display a fragile self-esteem that needs protection, which they attain by constructing a grandiose

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image of themselves (Lubit, 2002). They often demonstrate highly egocentric behaviour, which they defend by requiring others to constantly express admiration towards their selfcreated and regularly exaggerated self-image (Campbell et al, 2004). These narcissists generally suffer from a serious personality disorder that inhibits them from forming meaningful (versus superficial) relationships. Pathological narcissists often enter adulthood with a legacy of feelings of deprivation, insecurity, and inadequacy, (Kets de Vries, 2004: 189) as their upbringing may have lacked self-esteem development (Lubit, 2004). The American Psychiatric Association (APA) created the most widely used characterisation of narcissism as a pathological disorder. According to the APA, a narcissist: (1) Has a grandiose sense of self-importance; (2) Is preoccupied with fantasies of unlimited success, power, brilliance, beauty, or ideal love; (3) Believes that he or she is "special" and unique and can only be understood by, or should associate with, other special or highstatus people (or institutions); (4) Requires excessive admiration; (5) Has a sense of entitlement; (6) Is interpersonally exploitative; (7) Lacks empathy: is unwilling to recognize or identify with the feelings and needs of others; (8) Is often envious of others or believes others are envious of him or her; (9) Shows arrogant, haughty behaviours or attitudes (American Psychiatric Association, 2000). Although there is a clear distinction between healthy and pathological narcissism in the literature, these to concepts are not always irreconcilable. On the premise that personality can develop over time, Miller, et al (2007) argue that although healthy narcissism can help an individuals self-confidence and career aspirations, it may progress into a pathological form of narcissism or even to the more extreme corporate psychopath. The evolution from healthy to pathological narcissism often occurs because healthy narcissists easily turn pathological when they are overcome with feelings of grandiosity and paranoia (Campbell et al, 2010). Interestingly, Hogan and Kaiser (2005) observe that healthy narcissism can develop into pathological narcissism throughout the progression of ones career. In other words, the more an individual is paid, the higher their position, the more responsibility they have, the more narcissistic they become. Therefore, CEOs may often be most narcissistic (Kets de Vries & Miller 1984). Moreover, Hogan and Kaiser (2005) found that individuals who are highly narcissistic are more likely exhibit signs of

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pathological narcissism compared to those who are not highly narcissistic. Moreover, some researchers disagree with the notion that healthy narcissism is actually healthy. Twenge & Campbell (2009) argue that narcissism, even as a normal part of humans is in part responsible for the demise of American society a view is also expressed by Stern (1979), Lasch (1991) and Caldwell (2006). Twenge & Campbell (2009) further argue that because Americans are raised in a society that explicitly encourages self-admiration, competition and materialism, narcissism is actively promoted. This has dramatic consequences; for example, the mortgage meltdown that led to the financial crisis of 2008 was caused, in part, by the narcissistic over-confidence of homebuyers (Twenge & Campbell, 2009: 2). Lasch (1979) would concur as he argues that narcissism is actually the psychological consequence of capitalism in its bureaucratic form and that it results in a superficial, materialistic society.

2.3 Narcissism in Corporations

2.3.1 Narcissistic CEOs and Employees Top managers make decisions like any other person based on a mix between rational thinking and personal interpretation (Child, 1972). Considering the power held by top management, it would surely be disconcerting to discover that many CEOs have damaging psychological disorders influencing their decision-making skills, especially disorders of self-interest such as pathological narcissism or even corporate psychopathy. Research conducted by Kets de Vries (1984) examining narcissists and leadership indicates that narcissists are frequently encountered in top management positions. Indeed it is only to be expected that many narcissistic people, with their need for power, prestige, glamour, eventually end up seeking leadership positions. Their sense of drama, their ability to manipulate others, their knack for establishing quick, superficial relationships serve them as well (Kets de Vries & Miller 1984: 32). The CEO position thus often attracts narcissists. Hayward and Hambrick (1997: 766) concur, adding: CEO hubris and personal ambitions are potent influences on executive action and, by extension, organizational outcomes. Research done on the personality traits of CEOs by Judge et al (2003) concluded that extraversion, which is narcissistic personality trait, was the most common personality trait

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of CEOs. Interestingly, Maccoby (2000) argues that narcissistic personality traits played a paramount role in the career development of many CEOs including Bill Gates, Andy Grove, Steve Jobs, Jeff Bezos, and Jack Welch. Although narcissistic personality traits may suit a CEO, what is the effect of having a pathological narcissist as the head of a corporation? Pathological narcissists, similar to corporate psychopaths discussed in section 2.1, can be very destructive towards a corporation. Firstly, there is evidence of pathological narcissism being partly responsible for unethical behaviour within business. This is especially the case in accounting scandals such as Enron/WorldCom, as well as the majority of white-collar crimes, is often a result of narcissistic individuals (Blickle et al, 2006). Secondly, people who work for pathologically narcissistic CEOs suffer under the CEOs leadership. For example, CEOs and managers displaying signs of pathological narcissism may expect great dedication from others and may overwork them without regard for the impact on their lives (APA, 2004:14). Lastly, there are several studies that hint at volatile performance of companies that are run by narcissistic CEOs. Ketz de Vries concurs, stating: the real disease of many executives, CEOs in particular, is narcissism (Dearlove, 2003: 26). Furthermore, Campbell & Campbell (2009) argue that narcissistic leaders, specifically CEOs, cannot properly sustain an effective leadership position within a corporation since narcissists have a tendency to take uncalculated risks and have destructive interpersonal relations with co-workers. Chatterjee & Hambrick (2007: 351) agrees by indicating that narcissism in CEOs is positively related to the strategic dynamism and grandiosity, as well as the number and size of acquisitions, and it engenders extreme and fluctuating organizational performance. Soyer, Rovenpor and Kopelman (1999) found similar results: though they cannot find any conclusive results in terms of poor financial performance, they have identified extreme fluctuations in financial performance. In other words, narcissistic leaders in a corporation can be ineffective in achieving sustained growth over longer periods of time due to their erratic behaviour and risk-welcoming mindset. Yet there are many situations in which narcissistic leadership can prove effective for corporations and society. Firstly, a narcissistic leader can be seen as beneficial in times of crisis or turbulence as the narcissist is able to cope with extreme pressure due to their detachment from emotion, dynamic

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thinking and aspiration for short-term results which stems from their need for instant gratification (Rosenthal & Pittinsky, 2006). Secondly, in times of despair or economic depression narcissistic leaders are in high demand due to their charismatic personality and visionary thinking, which makes them an instiller of hope, a role that is in many respects essential to the effective mobilization of people facing adversity (Ouimet, 2010: 720). Though most research regarding pathological narcissism has focused on top management, its impact on mid-level managers and general employees has also been examined. A form of pathological narcissism the corporate psychopath that was previously discussed demonstrates that individuals of all organizational levels could potentially be Snakes in Suits (Babiak, & Hare, 2006). The consensus is similar to the findings of pathological narcissism and leadership research; that pathological narcissists can have a negative effect on several aspects of business, no matter their position. This is, for example, observed when pathological narcissists alienate subordinates as a result of their devaluation of others, insist on having their own way, have a lack of empathy, and are willinng to exploit others (Lubit, 2002, p. 130). Pathological narcissists at all levels also have the tendancy to overevaluate their own performance, engage in unethical practices, and exhibit in a volatile behaviour (Duchon & Drake, 2008). Amernic and Craig (2010: 80) concur, adding that pathological narcissists engage in creative accounting; and inflate reported financial results to boost their ego and self-esteem. The pathological narcissist endeavour into unethical practices without regarding the moral nature of their wrongdoings occurs because they become self-obsessed and use a sense of entitlement, self-aggrandizement, denial, and rationalizations to justify anything they do (Duchon & Drake, 2008: 301).

2.4 Narcissism and Ethics

2.4.1 Is narcissism immoral? Although narcissists can be highly successful when it comes to career development, their own self-enhancement, or when confronted with crisis or economic despair, the question of how, or the means by which narcissists operate, raises several ethical considerations. Given that pathological narcissists generally lack the emotional intelligence
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found in normal people which allows them to understand, accept and act upon social and moral norms, it is difficult to imagine a destructive narcissist having a moral compass (Maibom, 2005). Scottish philosopher David Hume may concur, arguing that emotion, rather than reasoning, is at the center of any moral decision and therefore: "Reason is, and ought only to be the slave of emotions" (Hume, 1740/2003:215). In other words, humans use reason to control or tame their emotions and therefore to make ethical decisions. Consequentially, without emotion there can be no moral reasoning and ultimately no capability to feel for others or empathize. In all, pathological narcissists generally lack emotion and therefore have difficulty making ethical judgments. Yet the argument is not so simple. One could argue that the unethical actions of a narcissist are not because the narcissist is acting as the moral agent, rather because he or she is primed or conditioned by his or her environment to act in a certain way. This view is shared by Weber (1968) and Bauman (1989) who argue that modern bureaucracy leads to the separation of the individual from morality because in a bureaucracy the performance of each individual worker is mathematically measured, each man becomes a little cog in the machine and aware of this, his one preoccupation is whether he can become a larger cog (Weber, 1968: 998). This is well illustrated through the example of Jerome Kerviel, the rogue trader who lost $7.2 billion (the largest fraudulent loss ever recorded in the financial sector) by making unauthorized risk-seeking trades whilst working for the French bank Socit Gnrale (Weiss, 2008). Kerviel insisted that he should not have been blamed for his actions because this behavior was common practice at Socit Gnrale and that the banks corporate culture was focused solely on making money regardless of ethics (Weiss, 2008) something that Kerviel argues was implicitly praised at the bank. In other words, Kerviel, a textbook case of a pathological narcissist, claims that he had no moral considerations whilst conducting his fraudulent activities at Socit Gnrale since he is a victim of the bureaucratic system that acted as a moral sleeping pill (Bauman, 1989: 26). Though one could make a case for the silencing of morality (Bauman 1989: 29) given bureaucratic influences, this does not mean that the actions of, for example Jerome Kerviel, are ethically justified a case similar to Nazi officers who were part of a bureaucratic system and thus also detached from their moral compass. There are several

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other reasons that support the argument that pathological narcissism within business can result in immoral actions, other than white-collar crime. Firstly, the manipulative nature of pathological narcissists who satisfy the fantasies of their followers although they appear to direct their followers towards transcendental purposes, but in fact tend to cater to the self-delusionary interests of their followers (Bass and Steidlmeier, 1999: 190) can have unethical implications. Secondly, pathological narcissists tend to disregard the common good and could potentially pose as a harmful threat to those around them and the organization for which they work. Lastly, Bass and Steidlmeier (1999) argue that pathological narcissists potentially lack morality because: (1) pathological narcissists rarely intend for their actions to be noble, (2) for the pathological narcissist, the ends almost always justify the means and (3) the consequences, both good and bad, of a pathological narcissists actions are not fairly distributed amongst those affected. What a narcissist may consider right and wrong, good or bad, is a very complex path to navigate and ultimately not the purpose of this paper. Yet one could assume that breaking the law, disregard for collective humanity and the harmful manipulation of others, which are often due to a pathological narcissists self-aggrandizement agenda, is ultimately immoral.

2.5 Business ethics

If you ask what is the good of education in general, the answer is easy: that education makes good men and that good men act nobly PLATO During the past century there has been an ever increasing sense of uncertainty regarding the ethics of corporations. Etzioni (in Gellerman, 1986) concludes that two thirds of Fortune 500 companies engage in criminal behaviour. Furthermore, cases such GMs exploding Ford Pinto, the fall of Enron/WorldCom, and white-collar crime (most recently Bernard Madoff and Jerome Kerviel) have triggered increased concern regarding the lack of ethics in business. Furthermore, a considerable amount of emphasis has been placed on the moral judgements made by banking professionals regarding the financial crisis of 2008/09. Unfortunately, unethical behaviours of these corporations and occasional unethical nature of business people diminish the confidence that government, society and shareholders

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have in business practice (Wood and Callaghan, 2003). Kenneth Andrews, professor of business strategy at Harvard Business School, states if it's black and white, and a man has normal courage and security, he'll say no. It's the grey areas that the businessman may more likely flounder (in Tsalikis and Fritzsche, 1989). But although ethics is on the decline, Bakan (2005:1) argues that a corporations legally defined mandate is to pursue, relentlessly and without exception, its own selfinterest, regardless of the often harmful consequences it might cause to others. Regardless of this legal mandate, consumer scepticism, anti-corporation demonstrations and shareholder activism related to the decline in corporate ethical conduct have all increased in recent years (LeClair et al, 2000). The concern for business ethics has sparked demand for business schools to incorporate ethical teachings within curricula (LeClair et al, 2000). Ghoshal (2003) even argues that business schools poor ethical training is responsible for corporate misconduct, a view shared by Schwartz, Kassem & Ludwig who assert: Business schools recognize and reward students for their grades and faculty members for their research and publications to the exclusion of their respective socially responsible behaviours, they make it impractical for students and faculty members to let their social concerns direct their energies (1991: 468). Weber (1990) and Phillips (2004) found current implementation of ethics courses in business schools to be quite ineffective. Moreover, after a comprehensive review of business school in the US, Porter and McKibbin (1988) found that there was a significant lack in the emphasis placed on the external environment of organizations. So, how important is it to ethically educate business students? Moreover, just how effective is ethical education? 2.5.1 Can business ethics be taught? To address the question of whether ethics should be taught and the effectiveness of such teachings at university level is multidimensional and complex. There are two opposing schools of thought when considering business ethics as a taught subject, to be further discussed below. On the one hand, proponents of ethics in business schools, making up the majority, argue that one can be educated to become more ethical and that schools need to ethically train future managers to better prepare them for imminent ethical

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decisions. On the other hand, some argue that business ethics cannot be taught because students have matured in terms of moral development upon entering university and further claim that academic institutions are not responsible for ethical upbringing. When considering the pro-ethics education school of thought, there is evidence that points to an ever-increasing number of business schools, both in the United States and Europe, offering ethics courses; though taught with varying degrees of intensity, of course (LeClair et al, 2000). Although ethics is on the rise in business schools, Baetz and Sharp (2004: 53) note that when considering the 25 most prominent business textbooks in the United States, one finds very superficial coverage of ethical issues. But are ethics courses beneficial? Several researchers have found signs of moral development in students after taking a course in ethics. A meta-analysis study conducted by Weber (1990) concluded that taking an ethics course improved students ability to make ethical judgements. Weber (1990) did though warn that the positive effects of ethics courses were short-lived, implying that continuous ethical education may be beneficial, perhaps even in the business environment. Another meta-analytic study that included 25 studies on ethics in education indicated that taking a course in business ethics did in fact improve students ethical awareness, but to an imperceptible degree (Waples, et al, 2009). Moreover, considerable research has been conducted understanding how an individuals moral development progresses over time. Academics generally agree that individuals progress through stages of moral development, a theory accredited Kohlberg (1976). Kohlberg (1976) argues that people develop their cognitive abilities to evaluate what they believe is moral and/or immoral over time which can be explained through six distinctive steps namely: Pre-conventional Morality (1) Obedience and Punishment Orientation (2) Individualism and Exchange Conventional Morality (3) Good Interpersonal Relationships (4) Maintaining the Social Order Post-conventional Morality (5) Social Contract and Individual Rights (6) Universal Principles

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Shenkir (1990) agrees, noting that, depending on age and level of education, students exhibit different periods in their cognitive moral development. Each stage denotes the level of an individuals moral reasoning; importantly, the immediate environment, including an individuals education, may affect the progress of these stages (Kohlberg, 1976). Some postulate that business students can be trained in ethics at various points of Kohlbergs stages (Davis & Welton, 1991), but Wood et al (1988) assert that a lack of ethical training has led to a stagnation of moral development: business students cannot reason beyond Kohlbergs Maintaining the Social Order stage, indicating a serious lack of awareness of, or commitment to, fundamental moral principles (1988: 251). However, some argue that an individuals ethical perspective has already been developed by the age of entering college, meaning that an ethics class would not be useful (Cragg, 1997). Hosmer (1988: 14) further asserts that the moral standards of students have already been set by their families, their schools, their churches, their peers, and their jobs by the time they reach a program. Berleson and Steiniers (1964) research indicates that a persons understanding of what is wrong and right is almost completely established by the age of 16. This view is often contested: although an individuals fundamental value system might be developed, it has often been observed that people do tend to change their moral perspective over time due to a change in national laws or a corporate code of conduct (Rockness & Rockness, 2010). While it is the prerogative of business schools to teach profit maximization, given the capitalistic society in which we live, the apparent degradation of morals in business settings may demand a reconsideration of ethical training in an education setting; though this may be difficult give the environment at hand. 2.5.2 Do business schools encourage narcissism? Currently, there are no longitudinal studies, of which I am aware, that confirm an increase in narcissism during a business students academic career. But overall, business students differ from other students in terms of their personality and ethics. Research, for example, suggests that business students are generally more narcissistic than non-business students (Arlow, 1991; Cadsby & Maynes, 1998; McCabe, Dukerich & Dutton, 1991; Westerman et al, 2010; Zopiatis & Krambia-Kapardis, 2008). Self-interest, a fundamental

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component of narcissism, is also more apparent amongst business and economics students. Academic evidence also suggests a decline in ethical development of students prior to beginning an economics degree compared to the completion of said degree (Wolfe & Fritzsche, 1998). Therefore, because business students are generally considered more unethical, narcissistic, self-interested and, in studying of business, become more self-interested and less ethical, one can understand that they think more with their head than their heart (Ruhe et al, 1998: 116). Ferraro et al (2005) highlights the self-fulfilling prophecy inherent in the study of economics: students that may tend toward self-interest become increasingly so given the content of what economics students are taught, namely driven by profit maximisation. Schwartz (1997: 21) concurs by referring to economics students studying transactional cost theory, agency theory and game theory: when people act on the basis of ideology, they inadvertently arrange the very conditions that bring reality into correspondence with the ideology. In other words, because the first principle of Economics is that every agent is actuated only by self-interest (Sen, 1977:317) students of economics are primed to accordingly act out of self-interest. Some academics see the current business school paradigm as disturbing; Brennan (1994: 39) argues that if we go on hammering into our students the mistaken notion that rationality is identical with selfinterest we shall make our agency models come true at the cost of producing a society that will not function. Ghoshol (2005) shares a similar view and furthermore argues that because business schools propagate ideologically inspired amoral theories, business schools have actively freed their students from any sense of moral responsibility. So, students studying business-related subjects are inherently more self-interested, a trait perpetuated by the very subject they study. Marwell and Ames (1981) found that students of economics would donate less to a public good if it does not benefit them. Similar results were found by Carter and Irons (1991) who conclude that finance majors exhibit more selfish behaviour and consequentially keep resources to themselves compared to their counterparts. Evidence also shows that economics students become more self-interested over time; for example, Frank et al (1993) demonstrate that selfinterest in students taking a class in economic game theory increase over a semester

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compared to students who studied economic development in Maoist China. Although business/economics students are usually contrasted to non-business/economics students, research has also looked at differences between business-related subjects. Brown, et al, (2010) for example, found students of finance to be the most narcissistic, compared to accounting and marketing students. Similar findings were shared by Sautter et al (2008) who found finance students to be the most narcissistic and least empathetic compared to students of management, accounting and marketing. And it is not just that business students are more self-interested/narcissistic, but that they also are also less ethical than non-business students. Frank and Schulze (2000) find that students of economics exhibit what is arguably corrupt behaviour when provided with an ethical dilemma, compared to those taking non-economics courses. Additionally, both Wood, et al, (1988) and Harris (1989) found that when presented with an ethical evaluation survey, business students had lower scores than non-business students. So, should universities adjust their focus to emphasise business ethics? It would be difficult to assume that teaching ethics in a business or economics course would be effective considering the conditioning of students both due to the ruthless nature of our competitive economy and the focus on outcomes (Ritter, 2006: 154) and consequentially the nature of business academia.

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2.6 Conclusion
Although all humans have narcissistic tendencies, some are more narcissistic than others. But narcissism can develop into a personality disorder that often results in excessive love for ones self and a general disregard for others, typically a result of a fragile sense of self-esteem. Recently, narcissism has permeated the business world, where, especially in the case of senior management, it can manifest itself in a damaging way. In some severe cases, a narcissist can turn from being slightly arrogant, ambitious and self-confidant into a pathological narcissist or even a corporate psychopath who is manipulative, controlling and power seeking. Consequently, one of the greatest concerns is the ethical implications of narcissism in business. With business education placing such an emphasis on self-interested thinking as a requisite for academic development, business schools are reinforcing self-interested behaviour and ultimately, narcissism. These two premises provide a platform for further exploration: the variables of business ethics and narcissism will be tested in this paper, with the goal of uncovering a correlation between the two to discover whether high narcissism truly results in a lesser emphasis on ethics.

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3.

Chapter 3 - RESEARCH DESIGN

3.1 Introduction
The following findings, deducted from the literature review, will be used to establish research questions:
Author(s) Westerman et al (2010) Participants Business students and psychology Findings (1)Business students are more narcissistic than psychology students Students of Finance were the most narcissistic and least empathetic, followed by accounting and marketing Narcissistic managers are less ethical than non narcissists (1) Economics students are more self-interested than non-economics students (2) Economics training inhibits cooperation and furthers self-interested behaviour Economics students were most likely to adopt a free rider position regarding giving to a public good. Economics students and business students are more selfish than nurses Category Narcissism/ self-interest

Brown et al (2010)

Students of finance, accounting and marketing

Narcissism/ ethics

Blickle et al (2006)

Managers

Narcissism/ ethics

Frank, Gilovich & Regan (1993)

Economics and noneconomics students

Narcissism/ self-interest

Marwell & Ames (1981)

Economics students and several groups from the general population Economics students, business students and nurses

Narcissism/ self-interest

Cadsby and Maynes (1998)

Narcissism/ self-interest

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Author(s)

Participants Economics students and non-economics students Students of Finance, Management, Accounting, Marketing Business and nonbusiness students

Findings Economics students are more self-interested than non-economics students Finance are the most narcissistic and the least empathetic Business students are more ethical than nonbusiness students Business students are less ethical than students of law Business students are less ethical than nonbusiness students (1)Individualistic cultures are more narcissistic than collective cultures (2)Men are more narcissistic than women

Category Narcissism/ self-interest

Carter and Irons (1997)

Sautter et al (2008)

Narcissism/ self-interest

Arlow (1991)

Ethics and social responsibility

McCabe, Dukerich & Dutton (1991)

Students of business and students of law

Ethics and social responsibility

Zopiatis and KrambiaKapardis (2007)

Business and nonbusiness students

Ethics and social responsibility

Foster, Campbell and Twenge (2003)

Individual cultures and collective cultures

Culture Gender

As such, I seek to test these theories to find a relationship between the following variables: Narcissism Score of the Narcissistic Personality Inventory (NPI) (See Appendix 1): although some studies have focused on narcissism as a construct, other studies, especially those which have focused on economics students, used self-interest as a dependant variable. Although the concepts of narcissism and self-interest are not the same thing, per se, strong correlations have been found between narcissism and self-interest. It would therefore be useful to further build on previous work done on self-interest by using narcissism as an extension of self-interest.

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 Ethics Score of the Perceived Role of Ethics and Social Responsibility survey (PRESOR) (See Appendix 2). Ethics is hard to measure. There are two quantitative scales commonly used to evaluate ethics PRESOR and ATBEQ (Attitudes Towards Business Ethics Questionnaire). This study will use PRESOR since its focus is on the contrast between profit maximization and social responsibility. Type of study programme When researchers conduct empirical studies on narcissism and business ethics with students, they usually compare groups of students according to what subject they are studying, categorising students in three main ways. First, some compare students from business-related subjects with students from non-business subjects: e.g., finance students compared to non-finance students, economics students compared to non-economics students and management students compared to non-management students. The non category of students typically includes students of several other study programmes. Secondly, some researchers compare a single study programme (i.e. economics) with a control group, which is normally a non-business related study (i.e. psychology). Thirdly, some researchers divide students into general groups which consist of multiple business related subjects. For example, a category may be titled business students which includes undergraduate students from management, finance, accounting, and MBA students. Because there are such dispersed ways in which researchers categorize students, especially those researchers who create groups with multiple studies incorporated in one group, it is difficult to generalize their research design and consequentially compare findings since different academic institutions and different study programmes are not always constructed similarly. This study will compare individual business-related subjects, with the aim of providing new insights regarding differences in narcissism and ethics between businessrelated subjects rather than comparing business and non-business related subjects. This lends to discovering differences in business-related subjects rather than illuminating an already established difference between business and non-business students. Although this study will not exactly replicate previous work, it will build on research by Brown et al
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A respondent therefore must to choose

between whether a company should focus on profits or should disregard profits for ethics.

(2010) and Sautter et al (2008) who also looked at individual business related subjects in terms of narcissism and ethics (although it should be mentioned that by Brown et al (2010) and Sautter et al (2008) used empathy to denote ethics; i.e. those who lack empathy lack morals). The following business related subjects will be individually compared: Economics, Finance, Finance and Management, Management 3.1.1 Research Questions Considering the theoretical framework deducted from the literature the following six research questions can be established:

Research Question 1
a. Students from which type of study are the most/least narcissistic?

b. Who perceives ethics and social responsibility as most important/unimportant? Research Question 2
a. Who is the most/least narcissistic and who perceives ethics and social responsibility to play the most/least important role - males or females? b. Who is the most/least narcissistic and who perceives ethics and social responsibility to play the most/least important role - collective or individual cultures?

Research Question 3
a. Who is the most/least narcissistic and who perceives ethics and social responsibility to play the most/least important role - Economics or Finance Students? b. Who is the most/least narcissistic and who perceives ethics and social responsibility to play the most/least important role - Economics or F&M students? c. Who is the most/least narcissistic who perceives ethics and social responsibility to play the most/least important role - Economics or management students? d. Who is the most/least narcissistic who perceives ethics and social responsibility to play the most/least important role - Finance or F&M students? e. Who is the most/least narcissistic who perceives ethics and social responsibility to play the most/least important role - F&M or Management Students? f. Who is the most/least narcissistic who perceives ethics and social responsibility to play the most/least important role - Management or Finance Students?

Research Question 4
a. Are students who are more narcissistic perceiving business ethics to be less important?

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3.1.2 Research Strategy The reason for choosing one research strategy over another is not because they produce more valuable result, per se, but it rather depends on the research questions at hand (Jankowicz, 2005). The main difference between quantitative and qualitative is therefore not a matter of quality but of procedure and therefore, on a basic level, quantitative methods employ measurement and qualitative methods do not (Ghauri and Grnhaug, 2005: 109). There are six main reasons why quantitative methods, compared to qualitative methods, will be utilized for this study (drawn predominately from Bryman & Bell, 2010). 1. A quantitative approach will be most helpful in addressing the research questions since variables (narcissism, ethics, study programme, gender and culture) measured in this research will be precisely identified, isolated and separated, (ultimately compared with each other) and numerical analyses used to deduce relationships. 2. Given that this study is testing pre-existing theory, a deductive approach will be adopted. 3. This type of research will lean more toward a positivist epistemology that embraces any approach which applies scientific method to human affairs conceived as belonging to a natural order (Jonker & Pennink, 2009:153) compared to an interpretivist perspective that seeks to understand meaning in social situations. 4. I will try to remain separated from the actual research and therefore perceive reality as external and objective, rather being involved and thus creating my own subjective view of reality. 5. I will attempt to gain a large sample, lending to the generalizability of the results. One main drawback associated with the use of a quantitative paradigm for this research is that it only identifies relationships between variables, so does not provide any new understandings in terms of why the relationships exist. Using a quantitative approach will therefore be unable to provide a detailed narrative to explain the results of this study. Moreover, a quantitative research approach will restrict respondents, as they will be

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limited to the variables of the questionnaire. In other words, I can attempt to find a relationship between narcissism and ethics but not understand why a narcissist perceives business ethics as being important or unimportant (Ulin, Robinson & Tolley, 2005).

3.2 Survey tools NPI & PRESOR

3.2.1 Narcissistic Personality Inventory (NPI) The NPI, developed by Raskin and Hall (1979), is currently the most widely used measure of narcissism as Cain et al (2008: 643) argue: since 1985, the NPI was used as the main or only measure of narcissistic traits in approximately 77% of social/personality research on narcissism. Originally based on the Diagnostic and Statistical Manual of Mental Disorders (DSM-III) (APA, 1980), the NPI is a self-administered survey that measures narcissism as a personality trait in non-clinical populations. The DSM-III, on the other hand measures narcissistic personality disorder (NPD). There is ample controversy amongst researchers in terms of the applicability of the NPI as a measure of NPD considering the emphasis place by the NPI on healthy narcissism traits (i.e. self-esteem and interpersonal dominance) compared to the pathological focus of the DSM (i.e. grandiose fantasies and lack of empathy) (Cain et al, 2008). Although the direct relationship between the NPI and NPD is not agreed upon, and although the NPI was not designed for clinical usage per se, meta-analysis by Miller, et al, (2009: 482) concluded that they are significantly correlated and generate similar personality profiles. The original NPI consisted of 54 items that have been rigorously tested for validity by, for example, finding negative correlations with empathy, a trait rarely possessed by narcissists (Detwiler & Byravan, 1994). Most notably, Emmons (1984) found substantial consistence reliability based on four correlated factors: Exploitativeness/Entitlement, Leadership/Authority, Superiority/Arrogance and Self-absorption/Self-admiration. Raskin and Terry (1988), based on the research by Emmons (1984), improved the NPI and reduced it to 40 questions, which was again proven to valid in terms of its seven new factors: Authority, Exhibitionism, Superiority, Entitlement, Exploitativeness, Selfsufficiency, and Vanity (Kansi, 2003). This seven-factor version most commonly used today. Each of the 40 questions contains two statements which the respondent is forced to answer
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(i.e. People always seem to recognize my authority / Being an authority doesn't mean that much to me; I hope I am going to be successful / I am going to be a great person). Narcissists generally score above 20 points on the NPI whereas non-narcissist score below 14 points (Rhodewalt & Eddings, 2002). As a comparative benchmark, the average NPI score a MBA student is 17.4, the average American scores a 15.4 and celebrities have an average NPI score of 17.84 (Young and Pinsky, 2006). 3.2.2 Perceived Role of Ethics and Social Responsibility (PRESOR) The Perceived Role of Ethics and Social Responsibility survey (PRESOR), developed by Singhapakdi et al (1995), is based on the Organizational Effectiveness Menu (OEM) created by Kraft and Jauch (1992). The PRESOR survey has been widely used by researchers (e.g., Etheredge, 1999; Valentine & Fleischman 2008; Vitell & Ramos Hidalgo, 2006) to evaluate participants perception of ethics and the role of social responsibility in business. Participants are required to evaluate the extent to which they agree or disagree with the statements based on a 9 point Likert scale ranging from very strongly agree to very strongly disagree. The PRESOR contains 16 statements that link ethics and social responsibility to a firms overall effectiveness (survival, profit and competitiveness). These 16 statements are further broken down into three distinct factors. In the first section, good ethics is good business, describes the relationship ethics has with social responsibility and compares this relationship with long term gains. If a person scores high in this section, it signifies that they tend to think that ethics and social responsibility are important to the long-term success of a business. The next dimension, profits are not paramount, adheres to the belief that there is more to business than just profits. A person who scores high in this dimension simply believes that a business has other responsibilities besides solely profit. The last dimension called quality and communication examines the importance participants place on output quality and communication compared to social responsibility. Overall the PRESOR is a widely used measure of a persons perspective towards business ethics. There are although two main shortcomings to the PRESOR. First, because the survey was created in 1995, and because businesses have seen major developments in terms of business ethics over the past decade (e.g., CSR), it may be considered relatively out-dated.

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Secondly, the PRESOR survey is sometimes ambiguous in nature because terms such as social responsibility and quality output can be interpreted in several ways

3.3 Study Participants

3.3.1 Population and Sample Participants of this study are postgraduate students from the University of St Andrews in Scotland, United Kingdom. More specifically, students from the following postgraduate programmes were selected (the titles in bold represent a collection of programmes that are combined due to their overlapping subject nature and to make data processing more efficient) Management (Management + International Business) Finance and Management (F&M) Economics (International Strategy and Economics) Finance (Money Banking and Finance + International Finance + Finance)

Students from Management, Management and Finance and International Business attain a Masters of Letters (MLitt) upon graduation and study at the School of Management compared to students from International Strategy and Economics, International Finance, Finance, Money Banking and Finance who receive a Masters of Science (MSc) upon graduation and study at the School of Finance and Economics. Additionally, the School of Management focuses more on the practical implementation of theory compared to the School of Economics and Finance, which has a less practical focus (School of Management, 2011). The following table provides an overview of the population size and sample size:

Management Total # students Students reached Response Rate 123 39 31.7%

Finance & Management 65 34 52.3%

Economics 23 18 78.2%

Finance 105 42 40%

TOTAL 316 133 42.1%

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3.3.2 Collection of participants contact details Due to privacy issues and fairness to other students, the School of Management and the School of Finance and Economics were not able to disclose email addresses of students. The schools were prepared to provide the total number of students per programme. Therefore, contact details of participants were collected by alternative means; namely: Management students and International Business students contact details were obtained through the class email list held by their respective class representative; Finance and Management students were contacted via their class representatives; Economics students contact details were obtained through an International Strategy and Economics students private email list which he created in order to build an alumni network; lastly, Finance students contact details were collected through a Facebook group that was set up at the beginning of the year. After collecting all the email addresses, from each of the seven classes, students were then contacted by email and asked to complete the online questionnaire.

3.4 Gathering of data

3.4.1 Main data collection After contact details were collected, participants were forwarded a hyper-link (http://edu.surveygizmo.com/s3/597324/businessethics) via their email or Facebook account with a message that indicated that their results would be confidential. The hyperlink led the participants to an online questionnaire, hosted by www.surveygizmo.com. Surveygizmo allows users to host their surveys for free, provided that the user is a student and is using the service for non-commercial purposes. The online survey was comprised of two sections (1) the PRESOR survey and the NPI (2) totalling 56 questions. Participants took the online survey, which took approximately 8 to 10 minutes, and their results were stored on surveygizmo.com after completion. This method of gathering data proved to be highly efficient. Firstly, it was easy to administer because I had to simply send the link to all the collected email addresses. Secondly, respondents could fill in their answers on their own time (i.e. when they had spare time). Lastly, respondents could relax in a comfortable/private environment (i.e. at home in front of their computer). It should also be
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mentioned that, to gain additional participants, NPI data was anonymously and confidentially acquired from another masters student who was also writing a dissertation on narcissism. Participants whose data was shared were accordingly informed and assured that their data will remain confidential. 3.4.2 Trial surveys There were cases where students were approached personally on campus, as a trial for the surveys. Some of these participants were personal acquaintances. Respondents were provided with a printed copy of the NPI and PREOR questionnaires and were asked to complete both.

3.5 Data Verification

To verify data is an important aspect of any research, whether qualitative or quantitative, since without verification, research is less credible (Silverman, 2006). Denscombe (2007) specifies four distinct areas which act as a means of data verification. The first criterion, to evaluate the credibility of the research, refers to validity or whether or not a measure of a concept really measures that concept (Bryman & Bell, 2011: 159). Both the NPI and the PRESOR survey have been tested for validity. The PRESOR survey has been tested for its convergent validity, discriminant validity, content validity and predictive validity in all cases a significant and positive correlation was found with dependant and independent variables (Singhapakdi et al, 1995). Etheredge (1999) conducted further regression analyses based on the work of Singhapakdi et al (1995) and confirmed their validity results. The NPI, created by Raskin and Terry (1988), indicate that the survey has been tested for its validity, a view also supported by Prifitera and Ryan (1984) who confirmed their results. The second criterion, reliability, looks at whether a research instrument is neutral in its effect and consistent across multiple occasions of its use. For the PRESOR, reliability was measured through Cronbachs alpha the reliability coefficients were 0.71, 0.67 and 0.64 for each subscale identified through exploratory factor analysis (Singhapakdi et al, 1996). The NPI has also been checked for reliability based on the seven factors described in section 3.2.1 all factors scored above a ~0.6 in terms of its alpha coefficient (Raskin and Terry, 1988). Since, according to Bryman & Bell
32

(2011: 159), a coefficient of 0.60 or above could be used as a rule of thumb for minimum reliability, both the PRESOR and the NPI are considered to be reliable.

33

4.

Chapter 4 - FINDINGS AND ANALYSIS

After all surveys were completed, analysis was conducted with SPSS Version 17. The following chapter will present the findings of that analysis, which is structured by answering each of the research questions individually: Students from which type of study are the most/least narcissistic? Students from which type of study perceive ethics and social responsibility as most important/unimportant? Who is the most/least narcissistic and who perceives ethics and social responsibility to play the most/least important role - males or females? Who is the most/least narcissistic and who perceives ethics and social responsibility to play the most/least important role - collective or individual cultures? Comparisons of study programmes in pairs Are students who are more narcissistic perceiving business ethics to be less important?

The table below presents a breakdown of participants:

Females Economics Finance F&M Management Total
8 19 17 20 64

Males
10 22 18 19 69

Total
18 41 35 39 133

All the above mentioned questions are answered by presenting statistics illustrated through the use of bar charts. On the vertical axis, one either finds NPI (Narcissistic Personality Inventory) or PRESOR (Perceived Role of Ethics and Social Responsibility survey) scores. The NPI is composed of 40 questions (see Appendix 1) and each question is made up of two forced answers one of these answers will indicate a narcissistic inclination that is counted as 1 point. The more narcissistic answers are provided, the more points a respondent receives: 0 points being the lowest possible score and 40 being the highest (for comparative benchmarks of NPI scores see 3.2.1). The PRESOR scores, also

34

indicated on the vertical axis, will have separate bar charts from the NPI yet compare the same independent variables. PRESOR scores rate the importance a respondent places on ethics and social responsibility in business. These scores are based on rating 16 statements such as Business has a social responsibility beyond making a profit. Scores range from 0, which indicates that the respondent very strongly disagrees with the statement, to 9 which indicates that they very strongly agree to the statement a score of 5 will indicate that they are neutral to the statement. For purposes of comparison, scores were Average PERSOR scores, based on are then calculated and presented on the bar charts. The higher the PRESOR score the more a respondent agreed with the importance of ethics and social responsibility. Aside from the bar charts, t-tests are used to test the significance of the differences in mean scores. These tests will indicate wheter the difference in means scores of the NPI and PRESOR survey is significant, or simply coincidental. For example, if we want to know whether men or women scored higher on the NPI survey then we look at the average NPI score of men and compare their score to the average NPI score of women. Though the NPI scores of men might be higher than those of women, their scores might not be statistically meaningful. Therefore we test for significance (at a 90% confidence level) to make sure that the differences in women and mens NPI scores are statistically meaningful. If the t-test produces a figure that is less that 0.10 as a "Sig. (2-tailed)" value, then we can assume that the difference in mean scores is significant. Lastly, the findings did produce interesting results in terms of cultural differences and gender differences regarding narcissism scores and ethics scores. It was thus worthwhile to include an analysis of these findings. Cultures were divided by Hofsedes (1991) cultural dimension, specifically in terms of individualistic cultures and collective cultures. This strategy has also been adopted by other researchers who sought to test for a difference in NPI scores or PRESOR scores namely: Brown et al (2010) and Sautter et al (2008)

35

4.1 Research question 1

4.1.1 Which study is the most/least narcissistic?
25

Study Programme
20

(NPI) Mean 21.44 15.85 13.63 13.54 16.12

Economics Finance

15 NPI

F&M Management TOTAL

10

0
Economics Finance F&M Management

These figures show that economics students scored highest on the NPI, followed by finance students, F&M students and management students respectively.

4.1.2 Who perceives ethics and social responsibility as most important/unimportant?

7 6 5 PRESOR 4 3 2 1 0
Economics Finance F&M Management 36

Study Programme Economics Finance F&M Management TOTAL

PRESOR Mean 4.29 5.04 5.54 5.84 5.31

The inverse trend in apparent when considering ethics and social responsibility. Economics students placed less importance on ethics and social responsibility compared to finance, F&M and management students.

4.2 Research question 2

4.2.1 Males vs. Females The independent-sample t-test was conducted in order to compare the mean scores of men and women with regard to their NPI and PRESOR scores.
Gender N 64 69 64 69 Mean 12.77 17.74 5.50 5.12 StdDev 5.21 -4.59 Male Female Male 7.07 0.90 2.20 1.05 131 .030 124 .000 t Degree Free Sig (2 tailed)

NPI PRESOR

Female

On average, the difference between the NPI scores for males and females showed that males (M=17.74, SD=7.07) scored higher compared to women (M=12.77, SD=5.21). Furthermore, the difference in mean scores of the NPI was statistically significant t (124) = -4.59, p (.000) < 0.10. With regard to male and female students PRESOR scores, a difference was found between men (M=5.12, SD=1.05) and women (M=5.49, SD=.89). Furthermore, the difference in mean scores was statistically significant t (131) = 2.20, p (.030) < 0.10. In all, these results suggest that male students were significantly more narcissistic than female students, and that male students perceive ethics and social responsibility to be less important compared to female students
30

Women
25

Men
6

5
20

PRESOR SCORE
37

NPI Score

15

10

2
5

4.2.2 Individual vs. Collective The independent-sample t-test was conducted in order to compare the mean scores of individualistic cultures and collective cultures with regard to their NPI and PRESOR scores.
Gender N 42 91 42 91 Mean 20.43 13 4.87 5.50 StdDev 6.61 5.32 1.14 0.85 t 6.39 Degree Free 66.47 Sig (2 tailed) .000

NPI PRESOR

Individual Collective Individual Collective

-3.19

62.91

.002

On average, the difference between the NPI scores for individualistic and collective cultures showed that individualistic cultures (M=20.43, SD=6.61) scored higher compared to collective cultures (M=13.76, SD=5.32). Furthermore, the difference in mean scores of the NPI was statistically significant t (66.47) = 6.37, p (.000) < 0.10. With regard to PRESOR scores, a difference was found between individualistic cultures (M=4.87, SD=1.14) and collective cultures (M=5.50, SD=.85). Furthermore, the difference in mean scores is statistically significant t (62.91) = -3.19, p (.002) < 0.10. In all, these results suggest that individualistic cultures were significantly more narcissistic than collective cultures, and that individualistic cultures perceive ethics and social responsibility to be less important compared to collective cultures.
Individualistic
25

Collective
7 6

20 5 15

PRESOR SCORE
38

NPI

4 3 2

10

5 1 0 0

4.3 Research question 3

4.3.1 Economics vs. Finance An independent-sample t-test was conducted in order to compare the mean scores of students of Economics and students of Finance with regard to their NPI and PRESOR scores.
Study N 18 41 18 41 Mean 21.44 15.85 4.29 5.04 StdDev 7.76 6.34 0.90 0.82 t 2.91 -3.13 Degree Free 27.41 29.95 Sig (2 tailed) .004 .003

NPI PRESOR

Economics Finance Economics Finance

On average, the difference between the NPI scores for Economics students and Finance students showed that Economics students (M=21.44, SD=7.76) scored higher compared to Finance students (M=15.85, SD=6.34). Although the difference in the NPI scores is rather high (21.4-15.85=5.55), the difference in mean scores of the NPI were not statistically significant t (27.41) = 2.91, p (.005) < 0.10. With regard to Economics and Finance students PRESOR scores, a small difference was found between Economics students (M=4.29, SD=0.90) and Finance students (M=5.04, SD=0.82). Furthermore, the difference in mean scores was statistically significant t (29.95) = -3.13, p (.003) < 0.10. In all, these results suggest that Economics students are significantly more narcissistic than students of Finance, and that Economics students perceive ethics and social responsibility to be less important compared to Finance students.
25 20 PRESOR
Finance Economics

7 6 5

NPI

15 10 5

4 3 2 1

0
Finance Economics

39

4.3.2 Economics vs. F&M An independent-sample t-test was conducted in order to compare the mean scores of students of Economics and students of Finance and Management with regard to their NPI and PRESOR scores.
Gender N
18 35 18 35

Mean
21.44 13.63 4.29 5.54

StdDev
7.76 6.10 0.90

t
4.45

Degree Free
51

Sig (2 tailed)
.000

NPI PRESOR

Economics F&M Economics F&M

-5.98 0.85

131

.000

On average, the difference between the NPI scores for Economics students and F&M students showed that Economics students (M=21.44, SD=7.76) scored higher compared to Finance and Management students (M=13.63, SD=6.10). Furthermore, the difference in mean scores of the NPI was statistically significant t (51) = 4.45, p (.000) < 0.10. With regard to Economics and Finance and Management students PRESOR scores, a difference was found between Economics students (M=4.29, SD=0.90) and Finance and Management (M=5.54, SD=0.85). Furthermore, the difference in mean scores is statistically significant t (131) = -5.98, p (.000) < 0.10. In all, these results suggest that Economics students were significantly more narcissistic than students of Finance and Management, and that that Economics students perceive ethics and social responsibility to be less important compared to Finance and Management students.
7 6 20 5 PRESOR NPI 10 5 0
F&M Economics 40 F&M Economics

25

4 3 2 1 0

15

4.3.3 Economics vs. Management An independent-sample t-test was conducted in order to compare the mean scores of students of Economics and students of Management with regard to their NPI and PRESOR scores.
Study N
18 39 18 39

Mean
21.44 13.54 4.29 5.84

StdDev
7.76 5.42 0.90

t
-5.98

Degree Free
55

Sig (2 tailed)
.001

NPI PRESOR

Economics Management Economics Management

3.90 0.91

33.6

.000

On average, the difference between the NPI scores for Economics students and Management students showed that Economics students (M=21.44, SD=7.76) scored higher compared to Management students (M=13.54, SD=5.42). Furthermore, the difference in mean scores of the NPI was statistically significant t (55) = -5.98, p (.001) < 0.10. With regard to Economics and Management students PRESOR scores, a difference found between Economics students (M=4.29, SD=0.89) and Management students (M=5.84, SD=0.91). Furthermore, the difference in mean scores is statistically significant t (33.6) = 3.90, p (.000) < 0.10. In all, these results suggest that Economics students are significantly more narcissistic than students of Management, and that Economics students perceive ethics and social responsibility to be less important compared to Management students.
7 6 5 NPI 4 3 2 1 0 Management Economics 5 0 Management Economics PRESOR
41

25 20 15 10

4.3.4 Finance vs. F&M An independent-sample t-test was conducted in order to compare the mean scores of students of Finance and students of Finance and Management with regard to their NPI and PRESOR scores.
Study N 41 35 41 35 Mean 15.85 13.63 5.04 5.54 StdDev 6.34 6.10 0.82 0.85 t 1.55 Degree Free 74 Sig (2 tailed) .125

NPI PRESOR

Finance F&M Finance F&M

-2.65

74

.010

On average, the difference between the NPI scores for Finance students and F&M students showed that Finance students (M=15.85, SD=6.34) scored higher compared to Finance and Management students (M=13.63, SD=6.10). Although there is a difference between the NPI scores of Finance students and F&M students, the difference in mean scores of the NPI are not statistically significant t (74) = 1.55, p (.125) > 0.10. With regard to Finance and F&M students PRESOR scores, a difference is apparent between Finance students (M=5.04, SD=0.82) and F&M students (M=5.54, SD=0.85), and the difference in mean scores was statistically significant t (74) = -2.65, p (.010) < 0.10. In all, these results suggest that Finance students are not significantly more/less narcissistic than students of F&M, and that Finance students do not perceive ethics and social responsibility to be more or less important compared to F&M students.
25 20 5 PRESOR
Finance F&M

7 6

15 NPI 10 5

4 3 2 1

0
Finance F&M

42

4.3.5 Finance vs. Management An independent-sample t-test was conducted in order to compare the mean scores of students of Finance and students of Management with regard to their NPI and PRESOR scores.
Study N 41 39 41 39 Mean 15.85 13.54 5.04 5.84 StdDev 6.34 5.42 0.82 0.91 t 1.76 Degree Free 77 Sig (2 tailed) .083

NPI PRESOR

Finance Management Finance Management

-4.13

76

.000

On average, the difference between the NPI scores for Finance students and Management students showed that Finance students (M=15.85, SD=6.34) scored higher compared to Management students (M=13.54, SD=5.42). Furthermore, the difference in mean scores of the NPI was statistically significant t (77) = 1.76, p (.083) < 0.10. With regard to Finance and Management students PRESOR scores, a difference found between Finance students (M=5.04, SD=0.82) and Management students (M=5.83, SD=0.91). Furthermore, the difference in mean scores is statistically significant t (76) = -4.13, p (.000) < 0.10. In all, these results suggest that Finance students are significantly more narcissistic than students of Management, and that Finance students perceive ethics and social responsibility to be less important compared to Management students.
20 18 16 14 PRESOR
Management Finance 43

7 6 5 4 3 2 1 0
Management F&M

12 NPI 10 8 6 4 2 0

4.3.6 F&M vs. Management

An independent-samples t-test was conducted in order to compare the mean scores of students of F&M and students of Management with regard to their NPI and PRESOR scores.
Study N 35 39 35 39 Mean 13.63 13.54 5.54 5.84 StdDev 6.10 5.42 0.85 0.91 t .067 Degree Free 72 Sig (2 tailed) .947

NPI PRESOR

F&M Management F&M Management

-1.42

72

.159

On average, the difference between the NPI scores for F&M students and Management students showed that Finance and Management students (M=13.63, SD=6.10) scored higher compared to Management students (M=13.54, SD=5.42). Although there is a difference between the NPI scores of Finance and Management students and Management students, the difference in mean scores of the NPI are not statistically significant t (72) = .067, p (.947) > 0.10. With regard to F&M and Management students PRESOR scores, a difference is apparent between F&M students (M=5.04, SD=0.82) and Management students (M=5.54, SD=0.85), yet the difference in mean scores is not statistically significant t (72) = -1.42, p (.159) > 0.10. In all, these results suggest that Finance students are not significantly more narcissistic than students of Finance and Management, and that Finance students do not perceive ethics and social responsibility to be less important compared to Finance and Management students.
20 18 16 14 PRESOR
Management F&M 44

7 6 5 4 3 2 1 0
Management F&M

12 NPI 10 8 6 4 2 0

4.4 Research question 4

4.4.1 Do students who are more narcissistic perceive business ethics to be less important?
Mean NPI Score Ethics Score 16.115 5.3040 StdDev 6.70034 .99575 N 133 133

Pearson Correlation (standardized coefficient) R squared Sig (P value)

-.567** .332 .000

**. Correlation is significant at the 0.01 level (1 tailed).

The purpose of this analysis was to seek a relationship between NPI scores and PRESOR scores. In other words, this analysis attempts to see if an increase/decrease in narcissism leads to an increase/decrease in the perceived role of ethics and social responsibility of students. This was accomplished by running a correlation analysis to test the degree of similarity or difference between two variables (i.e. NPI and PRESOR). The output of the analysis indicated a correlation coefficient of -0.567, which shows that narcissism has a strong inverse relationship with ethics and social responsibility. This does not indicate a causal relationship but rather demonstrates the degree of similarity (or difference). To test whether there is a casual relationship a regression was performed. This showed that R = 0.332, thus indicating that 33.2% of the variability in the NPI score is

45

accounted for by the PRESOR survey. Moreover, the p value that determines the goodness of fir was 0.000, which is less than 0.01 indicating a statistical significance and verifying the hypothesis.

46

5.

Chapter 5 - DISCUSSION

5.1 A disturbing relationship

This aim of this study was to find a relationship between narcissism and the perceived role of ethics and social responsibility in students of business-related subjects. The results illustrated in the previous chapter indicate that there is a significant inverse relationship between narcissism and ethics/social responsibility for students studying business related subjects at St Andrews (r=-.567) in other words, students with higher narcissism scores reported lower scores in terms of the importance they place on ethics and social responsibility. A high narcissism score may therefore predict a low ethics and social responsibility score amongst students at the University of St Andrews. Thus, narcissism seems to restrict the capability of business students, surveyed in this study, to place importance on ethics. It should, though, be noted that these results do not necessarily mean that students with high NPI scores engage, or will engage, in unethical activity. Rather, the results only infer that students studying business related subjects at St Andrews with higher NPI scores may believe that there are higher priorities in business than social and ethical responsibilities.

5.2 Economics students NPI and PRESOR scores

These findings indicate that Economics students at the University of St Andrews are more narcissistic and perceive ethics and social responsibility to play a less important role compared to their counterparts. Moreover, their average NPI score of 21.4 is substantially higher than the average NPI scores of MBA students (17.4), the general American population (15.4) and even celebrities (17.84) (Young and Pinsky, 2006). Unfortunately, given the lack of literature investigating NPI scores of economics students, and due to the relatively small sample size of economics students, it is not possible to compare NPI scores produced in this study with other studies. But because narcissism, as a construct, considers self-interested behaviour as a predominant factor, the NPI findings of economics students do indirectly support previous research indicating the self-interested nature of economics students (Carter and Irons, 1997; Marwell & Ames, 1981; Frank, Gilovich & Regan, 1993).

47

Furthermore, economics students, according the PRESOR score of 4.29, perceived ethics and social responsibility to play the least important role, compared to the other students survey. Considering that the average PRESOR score for marketing professionals in the UK is 5.84 (Vitelland & Paolillo, 2003), economics students PRESOR scores are quite low. Economics students appear to be substantially more narcissistic and less ethical compared to other business-related students surveyed in this study; thus, an important segment to consider separately. Considering the words of Franklin Roosevelt that self-interest is the enemy of all true affection, the findings, both in terms of narcissism and ethics are seemingly alarming. The results do although not definitively mean that economists are selfish, narcissistic, unethical individuals. As stated above, these results only tell us that economics students at the University of St Andrews have significantly higher NPI scores, and place a lesser importance on ethics and social responsibility compared to their other business-related students.

5.3 Whats the deal with finance?

Interestingly, the difference in NPI scores of finance students and F&M students was substantial (2.22). This seems surprising, considering that these students study similar, if not identical, subject material. The core difference, in terms of education, between the two programmes lies in the type of training students receive, according to the students. Where finance students are taught from abstract point of view, F&M students are not required to, as rigorously, discuss financial theory from an academic stance, but are rather trained from a practical perspective with some theory. A discussion with three F&M students and two finance students left me with the general conclusion that finance students focus more on the epistemology of finance combined with practical implication of certain financial models/theory, whereas F&M students focus more on the practical uses of financial theory and models. Furthermore, admissions for F&M does not require students to have previously studied finance as a major in their bachelor degree compared to finance being a prerequisite for admittance to the MSc Finance programme. Although there is a difference in the two programmes, does this account for the difference in NPI scores? Probably not the results only indicate that finance students were more narcissistic compared to F&M

48

students. Although these results cannot definitively explain or infer, one could speculate that the relatively large difference in NPI scores is because of the theoretical underpinning of Finance training at the School of Finance and Economics compared to the more practical (i.e. managerial), and less traditional training F&M students receive this was though not the purpose of this study and therefore only a speculation.

5.4 Low NPI scores?

Students of management and F&M scored relatively low, in terms of their NPI (management = 13.54/F&M = 13.63) scores, compared to students of economics (NPI = 21.44) and finance (NPI = 15.85). The results are therefore worthy of discussion. A probable reason for this might be due to the relatively large difference in cultural composition found in these two study programmes in terms of individual (management = 13, F&M = 5) and collective cultures (management = 26, F&M = 30). If one would exclude collective cultures from the sample, the NPI scores would change considerably as management students would score 16.69 (difference of 3.15) and F&M would score 22.40 (difference of 8.77). Similarly, if one were to also exclude collectivist cultures from the economics sample NPI scores would also increase, yet not as significantly: economics students would score 23.77 instead of 21.44 (difference of 2.33). Furthermore, if one were to exclude collectivist cultures from the finance student sample, NPI scores would increase significantly from 15.85 to 20.00 (difference of 4.15). This indicates that culture had an impact on NPI scores of all the study programmes included in the sample, particularly the scores of F&M and management students, who without collectivist cultures would have scored significantly higher on the NPI. The same case is apparent with F&M but with one noteworthy difference: F&M only had 5 participants from individualistic cultures, of which 3 participants scored over 25 on the NPI.

5.5 Culture and gender differences

When examining cultural differences in NPI scores, I found that individual cultures (20.43) scored higher than collective cultures (13). These scores validate previous research illustrating the same findings. Furthermore, the findings demonstrated that male students

49

(17.77) are more narcissistic than female students (12.74). Again, the results support previous research indicating males to be more narcissistic than females (Foster, Campbell & Twenge, 2003), given that males are more independent and less interdependent than women (Cross and Madson, 1997). In terms of students perceived role of ethics and social responsibility, females exhibited lower scores than their male counterparts, which correspond with Singhapakdi et als (1995) findings.

5.6 Limitations and Future Research

There are some general limitations to this study that should be addressed. Firstly, these results cannot be generalized due to a diverse and rather small sample size. This study drew 133 participants from a population of 316 students; though each segment had a significantly smaller sample size (Economics only had 18 participants). Generalizing these results in terms of individual study programmes is therefore not possible; however, the correlation of these results as a whole with other studies lends to its credibility and generalizability. Furthermore, participants were from different cultural, academic and professional backgrounds, which results in a diverse data set. For example, some students have no work experience whereas others might have been working in industry for some time before commencing their study programme. One therefore cannot say that, because students study a certain subject, they are more narcissistic and less ethical the data is too diverse to make such statements. Cultural backgrounds will also limit the generalizability in a similar manner as, for example, some study programmes are dominated by students from collectivist cultures (F&M) compared to others which have mainly students from individualistic cultures (Economics). Unfortunately, due to the relatively small number of Masters students in the School of Management and School of Finance and Economics, and due to the diversity of the student population, finding a representative sample proved to be difficult. Admittedly, the small and diverse sample used in this study proved to be a great limitation of this dissertation. Secondly, how respondents interpreted the ethics and social responsibility questionnaire could be seen as a limitation. This is mainly because different people have different ideas of what it means to be ethical (consequentialist/deontological) and socially

50

responsible (Friedman/Freeman). Depending on their interpretation of what is ethical and socially responsible, they might be inclined to provide divergent results. For example, some students might believe that the sole responsibility of a firm is to create shareholder wealth, which for them would be the only ethical imperative/social responsibility (Friedmanite philosophy). On the other hand, a student might believe that ethics and social responsibility refers to corporate philanthropy or firms helping the environment. Moreover, collectivist/individualist students may interpret ethics differently. In all, the PRESOR questionnaire provides researchers with a good indication of the importance that students place on ethics and social responsibility. It is just unclear whether a questionnaire composed of 16 Likert-scale questions is able to accurately evaluate an individuals perception of ethics and social responsibility. In all, ethics is a complex subject to evaluate quantitatively. This research, although not particularly generalizable, could provide researchers with a starting point to further investigate the idea that narcissism results in a decline in ethical consideration amongst students of business-related studies. For example, researchers could consider conducting longitudinal studies to test whether economics, and other business-related study programmes, really indoctrinates students into becoming narcissistic. Furthermore, qualitative measures could then be utilized to explore why business-related students demonstrate narcissistic/unethical behaviour. This research also unravelled interesting results regarding different NPI and PRESOR scores due to cultural differences that could be subject to future research. Provided researchers have larger sample sizes and a more appropriate method of evaluating ethics in business (possibly incorporating the notion of CSR), more valuable data can be collected which will further improve generalizability.

5.7 Implications
Despite the limitations, the findings have wide implications. Firstly, the students surveyed in this study will soon be entering the business environment. Moreover, students, especially economics students, had high NPI scores, which effectively means that companies will be employing several highly narcissistic individuals. Although the NPI is a

51

sub-clinical indicator of narcissism, research shows that that these individuals, during the progression of their career, are more likely to turn into pathological narcissists compared to people with low NPI scores. As demonstrated in the literature review, pathological narcissists often exploit people and processes without remorse for their own benefit, and are more prone to engaging in unethical behaviour such as rogue trading and even white collar crime. What is also distressing is that companies will not just be employing St Andrews students but graduates from all over the world, such as the US, where narcissism has been on the rise amongst students since 1979 (Westerman et al, 2010). St Andrews students, who scored an average of 16.2 on the NPI, are though notably less narcissistic compared to business students at Appalachian State University who scored 17.7 (Westerman et al, 2010). Rising NPI scores and business students narcissistic tendencies is alarming (in terms of having a bunch self-admiring crazies running around) but may be welcomed by many companies seeking, risk-taking, highly-confident and ego-driven individuals. Businesses will therefore induct an increasing amount of narcissists whether these individuals end up being charismatic CEOs like Richard Branson or rogue-traders like Jerome Kerviel remains to be seen. Secondly, this study also has implications for society in general. As previously mentioned, with a rise in overemphasis placed on the I am special dogma comes a rise in narcissism. With more narcissists in business, we are also likely to expect more pathological narcissists in positions of power, which could ultimately result in an increase in unethical behaviour. Moreover, the financial crisis has proven to be destructive to the lives of many people. If we were to assume that the crisis was partly due to the materialistic indulgence of Americans and, probably coupled with, self-interested nature of a select group of bankers we can also assume that the likelihood of more financial turbulence is imminent. Although such statements are speculative, it is frightening to realize that business students are increasingly becoming more narcissistic, probably because the neoclassical worldview preaches self-interest as an imperative for growth. Lastly, there is also an implication for business educators. Although it is not necessarily the responsibility of universities to teach students to be ethical, universities do provide students with a foundation of business practice and build on students cognitive reasoning capabilities, thus shaping a mind-set. If business schools remain focused on
52

indoctrinating students with traditional pecuniary values there is the possibility of furthering narcissism. Furthermore, if ethics is disregarded completely, then business students will have no ability to improve on their ethical business savvy. Because there is a difference regarding a persons ethical stance within society compared to a business setting, business schools are afforded the opportunity to distinctly focus on business ethics. Furthermore, when considering the rise in the importance placed on CSR, academic institutions are given the opportunity to teach ethics, yet also attach a business case. Lastly, considering the increased societal scepticism of our financial system combined with the possibility of increases in corporate fraud, people could turn to those who educate future business leaders and start to pose questions such as why do you only teach these students to maximize profits?

53

6.

Chapter 6 - CONCULSION

Business has not always been regarded as the most ethical of institutions. Especially during the last few decades, business has provided us with numerous examples of what many would consider unethical activity i.e. Enron, Worldcom, Tyco, amongst many others. Furthermore, events such as the Financial Crisis of 2008 and 2009, along with a looming double-dip recession, cast doubt on the effectiveness of a capitalist system. But what is the consequence of having a modern zeitgeist dominated by ideas of profit, competition, self-interest and efficiency? Some argue that our dependence and belief in capitalism has resulted in society becoming increasingly narcissistic. Neo-classical economics has ultimately created a society that lives for the moment, cares only about individual and places such an overwhelming emphasis on material wealth and selfadmiration, turning reality into a grandiose fantasy (Lasch, 1979). Loving yourself and not caring about others has also crept into the business realm, often with divergent effects. On the one hand, healthy narcissists can be self-confident, outgoing, charismatic individuals who often experience a successful development. On the other hand, healthy narcissism can easily turn ugly giving rise to the corporate psychopath; a charming, cunning and powerhungry master of manipulation and corporate politics with little regard for anything except the furthering of his/her own agenda. This study reinforced the relationship narcissism has with business ethics by concluding that high levels of narcissism predicts low levels of ethics and social responsibility. Furthermore, those students who study economics were found to be the most narcissistic, followed by finance students, F&M students and lastly, management students. The inverse relationship is apparent with students perception of ethics and social responsibility management students placing the most importance on ethics and social responsibility and economics students the least. This study also found individualistic cultures to be significantly more narcissistic, and place less importance on ethics than collectivist cultures. Moreover, men were found to be more narcissistic compared to women and also place less importance on ethics and social responsibility than women.

54

These results bring us closer to the realization that being narcissistic can blind us from what is considered to be ethical and socially responsible. Furthermore, the fact that students of economics have such high narcissism scores and place little importance on business ethics, compared to other business related subjects, could be perceived as alarming. In all, if business schools continue to preach capitalist principles of efficiency, competition and wealth maximization, it is likely that narcissism will continue to rise and students will continue to place importance on aspects of business life other than ethics and social responsibility. The self-fulfilling prophecy therefore comes full circle - if one studies that which requires self-interested thinking he or she might just become self-interested. The irony is further emphasised as one walks through the corridors of School of Finance and Economics at the University of St Andrews and stumbles upon a newspaper article entitled: Fund manager wanted: must be functioning psychopath by Bill Jamieson (The Scotsman) stuck to a notice-board adjacent to the school heads office (Appendix 3). The article, with a sarcastic undertone, does not condone psychopathy in the corporate world but argues that it is a necessary facet of any successful banker. The picture accompanying the article is that of Patrick Bateman, Hollywoods version of a narcissist-turned-corporate psychopathturned-murderer, holding an axe in his hand. Although students studying business-related subjects at the University of St Andrews will probably not take an axe to the head of their bosses as Bateman did, this study does show that the more narcissistic you are, the more likely you are to take an axe to head of business ethics and social responsibility.

55

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APPENDIX 1 NPI Questionnaire 8. 9. Age:____ 10. Nationality:__________________________________________________ 11.

Name:______________________________________________________ Gender: M / F
A. I have a natural talent for influencing people. A. Modesty doesn't become me. A. I would do almost anything on a dare. B. I am not good at influencing people. B. I am essentially a modest person. You are kindly requested to complete the following questionnaire. Please indicate which statement (A or B) you prefer. You can only choose one of the two statements in each row. Please return this form to the researcher (George Ferns jf56@standrews.ac.uk) after completion. Thank you for your time

12.

Name of Study Programme:____________________________________ B. I tend to be a fairly cautious person.

B. I know that I am good because everybody keeps telling me so. B. If I ruled the world it would be a better place. B. I try to accept the consequences of my behavior. B. I like to be the center of attention B. I am not too concerned about success. B. I think I am a special person. B. I see myself as a good leader. B. I wish I were more assertive. B. I don't mind following orders. B. I don't like it when I find myself manipulating people. B. I usually get the respect that I deserve. B. I like to show off my body. B. People are sometimes hard to understand. B. I like to take responsibility for making decisions. B. I want to amount to something in the eyes of the world. B. I like to look at my body. B. I will usually show off if I get the chance. B. Sometimes I am not sure of what I am doing. B. I rarely depend on anyone else to get things done. B. Everybody likes to hear my stories. B. I like to do things for other people. B. I take my satisfactions as they come. B. I like to be complimented. B. Power for its own sake doesn't interest me. B. I like to start new fads and fashions. B. I am not particularly interested in looking at myself in the mirror. B. It makes me uncomfortable to be the center of attention. B. People can't always live their lives in terms of what they want. B. People always seem to recognize my authority. B. It makes little difference to me whether I am a leader or not. B. I hope I am going to be successful. B. I can make anybody believe anything I want them to. B. Leadership is a quality that takes a long time to develop. B. I don't like people to pry into my life for any reason. B. I don't mind blending into the crowd when I go out in public. B. There is a lot that I can learn from other people. B. I am an extraordinary person.

A. When people compliment me I sometimes get embarrassed A. The thought of ruling the world frightens the hell out of me. A. I can usually talk my way out of anything. A. I prefer to blend in with the crowd. A. I will be a success. A. I am no better or worse than most people. A. I am not sure if I would make a good leader. A. I am assertive. 12. A. I like to have authority over other people. A. I find it easy to manipulate people. A. I insist upon getting the respect that is due me. A. I don't particularly like to show off my body. A. I can read people like a book. A. If I feel competent I am willing to take responsibility for making decisions. A. I just want to be reasonably happy. A. My body is nothing special. A. I try not to be a show off. A. I always know what I am doing. A. I sometimes depend on people to get things done. A. Sometimes I tell good stories. A. I expect a great deal from other people. A. I will never be satisfied until I get all that I deserve A. Compliments embarrass me. A. I have a strong will to power. A. I don't care about new fads and fashions. A. I like to look at myself in the mirror. A. I really like to be the center of attention. A. I can live my life in any way I want to. A. Being an authority doesn't mean that much to me. A. I would prefer to be a leader. A. I am going to be a great person. A. People sometimes believe what I tell them. A. I am a born leader. A. I wish somebody would someday write my biography A. I get upset when people don't notice how I look when I go out in public. A. I am more capable than other people. A. I am much like everybody else.

APPENDIX 2 PRESOR Questionnaire

Name:______________________________________________________ Age:____ Nationality:__________________________________________________ Gender: M / F Name of Study Programme:____________________________________

You are kindly requested to complete the following questionnaire. Please indicate (by circling a number) your level of disagreement or agreement with the following 16 statements (left). Please return this 2 page form to the researcher (George Ferns jf56@st-andrews.ac.uk) after completion. Thank you for your time

Very Strongly Disagree

Strongly disagree

Disagree

Disagree somewhat

Neural

Agree somewhat

Agree

Strongly agree

Very Strongly agree

1.

Being ethical and socially responsible is the most important thing a firm can do. Whilst output quality is essential to corporate success, ethics and social responsibility is not. Communication is more important to the overall effectiveness of an organisation than whether or not it is concerned with ethics and social responsibility. Corporate planning and goal setting sessions should include discussions of ethics and social responsibility. The most important concern for a firm is making a profit, even if it means bending or breaking the rules. The ethics and social responsibility of a firm is essential to its long-term profitability. The overall effectiveness of a business can be determined to a great extent by the degree to which it is ethical and socially responsible. To remain competitive in a global environment, business firms will have to disregard ethics and social responsibility. Social responsibility and profitability can be compatible.

2.

3.

4.

5.

6.

7.

8.

9.

10. Business ethics and social responsibility are critical to the survival of a business enterprise 11. A firms first priority should be employee morale. 12. Business has a social responsibility beyond making a profit. 13. If survival of a business enterprise is at stake, then you must forget about ethics and social responsibility. 14. Efficiency is much more important to a firm than whether or not the firm is seen as ethical or socially responsible. 15. Good ethics is often good business. 16. If the stockholders are unhappy, nothing else matters.

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APPENDIX 3 The Scotsman Article