Bad leaders: how they get that way and what to do about them

Abstract

ver the past few years, the media has chronicled the misadventures of a mugbook full of corporate scoundrels. Some of the notables making lurid headlines were Kenneth Lay and Jeffrey Skilling, former Enron executives, Dennis Kozlowski, former CEO of Tyco, and convicted WorldCom chief executive Bernard J. Ebbers. But should these scandals make us reflect on the wider problems of corporate leadership? True, such convicted malefactors total just a small percentage of the Fortune 500. But there are also many CEOs who have been forced to resign in recent years because they failed leadership 101, and a scandal involving the backdating of options has raised questions about the judgment of even remarkable leaders like Steve Jobs of Apple. As one indication of the widespread climate of disenchantment with leadership, Business Week now publishes a feature on the year's ''worst leaders.''[1] So it's not clear whether we're witnessing an epidemic of misbehavior, or merely watching corporate leadership under more intensive scrutiny in the post Sarbanes-Oxley environment. But in either case, several fundamental questions need to be answered. They include: Why aren't bad leaders recognized long before they bring woe to shareholders? Why isn't the process of anticipating who will be a good leader failsafe? And how can organizations deal with a brilliant candidate who obviously lacks important leadership skills but seems to be capable of delivering impressive results?

The Corporate Psychopaths Theory of the Global Financial Crisis

“…Commentators are no longer willing to assume that all managers are working selflessly and entirely for the benefit of the organization that employees them, and the study of dark, dysfunctional, or bad leadership has emerged as a theme in management research (Allio, 2007;Batra, 2007;Boddy, 2006;Clements and Washbrush, 1999). The onset of the Global Financial Crisis has thus led management researchers to be increasingly interested in researching various aspects of dark leadership in an attempt to explain the current financial and organizational turmoil around the world.…”

“…These commentators raise the fascinating question of how these resourceful and historic organizations end up with impostors as leaders in the first place (Singh, 2008). One writer on leadership even goes as far as to say that modern society is suffering from a epidemic of poor leadership in both the private and the public sectors of the economy (Allio, 2007).…”

The Influence of Corporate Psychopaths on Corporate Social Responsibility and Organizational Commitment to Employees

“…The subject of poor corporate management and governance through bad leadership has become a topic of academic research and interest because it is increasingly recognized that inept, dysfunctional, or immoral leaders can damage the welfare of corporate stakeholders (Allio, 2007;Ferrari, 2006;Lubit, 2002). Management psychologists have written about the negative effects that leaders with personality disorders can have on corporations both through their own behavior and as influencers on the behavior of others in the organization (Goldman, recognized that senior executive behavior can often walk a fine line between what some may consider charismatic leadership and others as autocratic bullying (Pepper, 2005).…”

Extreme managers, extreme workplaces: Capitalism, organizations and corporate psychopaths

“…It is notable here that commentators have noted that single bad leaders can have a disproportionately negative effect on the whole organization (Allio, 2007;Ferrari, 2006).…”