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Abstract

This article reports on qualitative research carried out in England in 2013. Participants were five organizational directors and two senior managers who had worked with six corporate psychopaths, as determined by a management psychopathy measure. The corporate psychopaths reported on displayed consistency in their approach to management. This approach was marked by high levels of abusive control. The corporate psychopaths were seen as being organizational stars and as deserving of awards by those above them, while they simultaneously subjected those below them to extreme behaviour, including bullying, intimidation and coercion. The corporate psychopaths also engaged in extreme forms of mismanagement characterized by poor personnel management, directionless leadership, mismanagement of resources and fraud.

Keywords

abusive management corporate psychopaths extreme managers extreme workplaces neoliberal capitalism organizations

Introduction

In the current era of ‘casino capitalism’ (Sinn, 2010; Strange, 1997), where managers are reported to be experiencing increasing, significant, progressively intense work pressures (McCann et al., 2008), including work overload and bullying (Boyle et al., 2013), research into the role of corporate psychopaths provides valuable insights. Corporate psychopathy theory has provided one means of understanding the increasing rise of psychopathic managers as toxic and bullying leaders (Lipman-Blumen, 2004, 2005) within organizations in western capitalist societies (Boddy, 2011a, 2012; Wexler, 2008).

With their conscience-free approach to life (Hare, 1999) and willingness to lie to present themselves in the best possible light, corporate psychopaths are to some extent products of modern business. In particular, the increasing pace of business and fast turnover of personnel combined with the relatively shallow appointment procedures, which do not uncover their personality flaws, has allowed them to advance (Boddy, 2011a). Furthermore, western business has promoted psychopathic managers because of their ruthless willingness to ‘get the job done’. However, as they attain senior positions, corporate psychopaths have become architects of ruthlessness as they create a culture of extremes.

Their characteristics of being ultra-rational, financially oriented managers with no emotional concern for or empathy with other employees (Boddy et al., 2009), marks them as apparently useful to the style of capitalism (Friedman, 1970) that is merely profit oriented. This may be illustrated by a brief examination of one CEO who has been nominated as possessing some psychopathic traits, Albert Dunlap.

A number of potential candidates for the title of corporate psychopath (or its synonyms) have been nominated. In an article about sociopaths—a term commonly synonymous with that of psychopaths (but arguably of different meaning see (Pemment, 2013)—Bernard Ebbers was mentioned in relation to his role in the US$11 billion fraud at Worldcom. Similarly, Ken Lay, Jeff Skilling and Andy Fastow were also mentioned in relation to the Enron scandal (Ferrari, 2006). Enron’s Skilling was mentioned as possessing the traits of a corporate psychopath being manipulative, glib, lying, bullying, egocentric and lacking in remorse (Perri, 2013). Fastow has also been described as displaying many of the traits of a corporate psychopath (Jarirdar, 2010). Bernard Madoff, the ex-Chairman of Nasdaq, a competitor to the New York Stock Exchange, has been called a sociopath (Henriques, 2012) as well as a potential psychopath (Winarick, 2010).

Albert Dunlap was mentioned as a possible psychopath (Deutschman, 2005) as well as being discussed by Hare as a possible corporate psychopath (Ronson, 2011). Dunlap was the CEO of Scott Paper and then Sunbeam Corporation in the United States. Dunlap was at first lauded by analysts on Wall Street and known as ‘Chainsaw Al Dunlap’ because of his ruthless and bullying approach to cutting costs and callous indifference to firing employees (Long, 2002). Callousness is a key trait of psychopaths and Dunlap has been described as being outrageously callous (Kellerman, 2005). Furthermore, the more people he fired, the more the share price increased.

At Scott Paper, Dunlap started in 1994 and soon shed about US$2 billion of assets and laid-off a third of the global workforce. To many analysts, such a strategy suggested a move to make Scott Paper an attractive acquisition target (rather than a successful growing organization), and indeed by the end of 1995, Dunlap had organized the sale of the corporation to its competitor, Kimberley Clark. This caused more layoffs at both companies, whereas Dunlap’s severance package was activated, and he left with a reported US$100 m. Scott Paper’s headquarters was closed, and in total, about 11,000 people lost their jobs during Dunlap’s management. At Sunbeam, the share price initially increased 50% after Dunlap’s appointment as Wall Street looked forward to a repeat performance of factory closures and mass redundancies.

This possible role as the lauded agents of capitalism marks corporate psychopaths as worthy of further investigation. As a part of such an investigation, this article qualitatively examines the experience of organizational managers who reported working with individual psychopathic managers. The article examines the extreme nature of the workplace that is created by these psychopathic managers and reports on some of the outcomes of attempting to work with them. Of the six corporate psychopaths investigated in these seven interviews, only one has been brought to account for his actions and jailed.

This research is important because there is deemed to be a lack of research into psychopaths within corporations and what the implications of this presence may be, and several calls for further research in this area have been made (Babiak et al., 2010; Boddy, 2006; Smith and Lilienfeld, 2013).

Also, corporate psychopathy theory posits that changes in the speed of personnel turnover within corporations are making it easier for psychopaths to advance because there is not enough time for colleagues to recognize their destructive character traits (Boddy, 2011a). Psychologists imply that corporations, by using less structured and longitudinal methods of personnel assessment, facilitate the rise of corporate psychopaths, as these possible barriers to their advancement are removed (Babiak et al., 2010). In such an environment, the superficial charm of the corporate psychopath, together with their willingness to lie and ability to present a false persona of competence and commitment, makes them appear to be ideal leaders. This is particularly the case with those above the corporate psychopaths who do not interact with them on a day-to-day basis and so do not know them well. This implies that there is a need to understand the effects of the presence of corporate psychopaths in organizations. The current research helps in furthering this understanding. First, there is a brief introduction to corporate psychopaths.

Corporate psychopaths

Psychopaths are people with a constellation of behavioural traits that marks them as uniquely ruthless in their parasitic, care-free, predatory approach to life (Boddy, 2006; Connelly et al., 2006; Hare, 1994). Psychologists have not reached a conclusion as to the causes of psychopathy. However, patterns of similar brain dysfunction have been associated with the personality, with particular impairment in the orbital-frontal cortex being evident (Blair, 2001, 2008; Perez, 2012). Causality is implied but not established, and, for example, physical damage to this area of the brain can result in the onset of psychopathic behaviour (Blair and Cipolotti, 2000).

Some psychopaths are prone to instrumental violence, which is violence with a further purpose, such as robbery (Blair, 2001), in order to get what they want, and these violent criminal psychopaths tend to end up in prison (Hare, 1994). More successful psychopaths have been less frequently studied. However, they may have better cognitive levels of executive functioning, for example, in the orbital-frontal cortex of the brain and may retain the ability to control their impulses, enabling them to seek corporate rather than criminal careers (Mullins-Sweatt et al., 2010). Such psychopaths have been called ‘Industrial’, ‘Executive’, ‘Organizational’ or ‘Corporate’ psychopaths, to differentiate them from their more commonly known criminal peers (Babiak, 1995; Babiak and O’Toole, 2012; Boddy, 2006; Morse, 2004). The term ‘corporate psychopath’ has been adopted as the usual term for such people (Babiak and O’Toole, 2012; Boddy, 2011d; Hare, 1999). Corporate psychopaths may cross the line into criminal activity, and fraud is theoretically considered to be common among corporate psychopaths. However, as yet, there remains little empirical evidence concerning corporate psychopaths as white-collar criminals (Lesha and Lesha, 2012). Perri (2013) makes a persuasive argument that psychopathy is a risk factor for fraud. Furthermore, Perri (2013) states that several frauds have involved CEOs and chief financial officers (CFOs) with psychopathic traits. In terms of the estimated incidence of psychopathy in the population, a UK study found a 0.6% incidence with a statistical confidence level of 95%, indicating that the true figure may be somewhere between 0.2% and 1.6% (Coid et al., 2009a). This corresponds with the figure of 1% that psychology researchers have quoted for the incidence level of psychopathy (Babiak and Hare, 2006: 18).

Research method

One approach to studying psychopaths is to ask people whether they have come across such personalities, confirming this with the use of a psychopathy measure. This approach entails asking participants how those psychopathic managers behaved and how others reacted. This was the approach adopted in a study by Mullins-Sweatt et al. (2010) which identified successful psychopaths, defined as being those psychopaths who succeed in their exploitative approach to life. Boddy et al. (2010a) have also used this approach successfully. Following this approach, current research adopted a qualitative methodology. Instead of asking respondents to complete a questionnaire, they were questioned in-depth using semi-structured interviews to solicit information about workplace psychopaths they had known.

A series of 1-hour interviews was conducted with four human resources (HR) directors and three other managers in the United Kingdom from April to September 2013. Academic researchers conducted the interviews, which were voice-recorded (with permission) and transcribed. The HR directors were a part of a HR group who had seen a presentation on corporate psychopaths. All but one said they had worked with such people. Usually in such presentations, around 35% of people claim to have worked with a corporate psychopath, and similar figures have been found in quantitative research (Boddy, 2010a, 2014). Presumably, the higher incidence of having come across corporate psychopaths among HR directors reflects the nature of their role in recruiting and managing senior managers and in dealing with problematic employees.

Research participants were shown a 10-item psychopathy measure called the ‘Psychopathy Measure—Management Research Version 2’ (PM-MRV2) (see Appendix 1) and asked which items on the measure applied to the potentially psychopathic manager they were referring to. In this qualitative research, a score of at least 8 out of 10 was used to identify subjects as corporate psychopaths. This is an abbreviated and statistically untested measure of psychopathy. However, it corresponds with other measures of psychopathy in use.

For example, an examination of the distribution of psychopathy among a representative sample of 638 UK adults, using the screening version of the Psychopathy Checklist Revised, was conducted. This research found an exponential rise in behavioural problems at a cut-off score of 11.8 on the psychopathy measure, which is in line with the recommended cut-off score (12 out of 16 or 75%) for that measure (Coid and Yang, 2008). They concluded that psychopathy can usefully be categorically defined because individuals become an exceptional risk at this score and above in terms of social and behavioural problems (Coid and Yang, 2008).

Psychopaths share some characteristics with narcissists and Machiavellians, and psychologists often research them as the so called dark triad of personalities (Paulhus and Williams, 2002). Some psychologists suggest that the ‘dark triad’ consists of three overlapping but distinct personality variables: narcissism, Machiavellianism and psychopathy (Jones and Figueredo, 2013). Others suggest that Machiavellians and psychopaths are so similar that they are essentially the same (McHoskey et al., 1998).

Narcissists can be exploitative and destructive leaders (Godkin and Allcorn, 2011; Maccoby, 2000; Nevicka et al., 2011; Rosenthal and Pittinsky, 2006; Stein, 2013). However, research is arguably moving towards a consensus that narcissism is the ‘lightest’ of the triad and that while Machiavellianism and psychopathy are very similar, psychopaths are the ‘darkest’ of the three personalities (Jones and Figueredo, 2013; Rauthmann and Kolar, 2012). For a view of the characteristics of the three personalities, see the following articles for a description of the ‘dark triad’, ‘dirty dozen’ measure (Jonason and Webster, 2010) and of an abbreviated measure of the original ‘dark triad’ measure (Jones and Paulhus, 2013).

The ‘dark triad’ literature is extensive and growing, and a discussion is beyond the scope of this article (see Furnham et al. (2013) for a recent review). From an examination of ‘dark triad’ measures, it could be argued that the measure used in the current research may have been capturing Machiavellians rather than psychopaths. However, the extreme nature of the behaviour reported on appears to imply a lack of conscience which is characteristic of psychopaths but not necessarily of Machiavellians.

The main findings from the current research are included in this article. However, because of the sensitivity of the material and the potential danger to interviewees, the names of exact industries involved and job titles have been disguised or changed. Participants in the research—the interviewees—were particularly and understandably concerned about maintaining anonymity.

Findings

In terms of whether there is likely to be a psychopath in every organization, there is an ongoing debate. However, in simple terms, if psychopaths are 1% of the population, then, assuming a normal distribution, it is statistically likely that every organization of over 100 people will have a psychopath in it. The current research supports this view because nearly all the HR directors involved reported that they had worked with a corporate psychopath. Furthermore, all of the six managers nominated by interviewees as possible psychopaths did score highly enough on the management psychopathy measure to be called corporate psychopaths.

A recent article raised issues concerning workplace psychopaths, their incidence and the relative importance of studying their behaviour (Caponecchia et al., 2011). It suggests that because of the low incidence rate of psychopaths in the population then, not many employees will be affected by psychopaths. The authors expressed surprise at their finding that 13.4% of respondents reported, via a behavioural scale, that they worked with a psychopathic colleague. However, the incidence of employees who work with a corporate psychopath is a multiple of the incidence of corporate psychopaths. Therefore, if 1% of employees are corporate psychopaths, and assuming that people can accurately report on 5–15 other employees whom they know well, then expected incidence rates of working with corporate psychopaths should vary between 5% and 15%. The 2011 finding that 13.4% of research participants rated someone in their corporation as psychopathic then falls within expected levels. Caponecchia et al. also note that there are ethical issues involved in labelling people as psychopaths, and these are discussed elsewhere (Boddy et al., 2010a).

The corporate psychopaths investigated in the current research reportedly created a variety of extreme and dysfunctional workplaces. For example, the HR director involved in managing the psychopathic manager identified in interview 2 described the workplace as being extreme; first, in terms of staff withdrawal behaviour. Departmental staff turnover at about 40% per year was twice the average for the industry sector involved, and the reasons given for leaving were marked by fear. One employee, in tears, reported, ‘it’s horrible, I cannot say how, but it’s all horrible’ when giving in her resignation. In this case, the departmental head (the corporate psychopath) handled most resignations personally, without involving HR, and reported that a high turnover was because of the stress of working in such a highly efficient department:

He (the corporate psychopath) …, would say, ‘oh they’ve lost their drive … (He’d say) I don’t think ‘x’ is performing very well; I am going to persuade them to go’. Then of course his superiors would think, gosh he’s being proactive. He is really on top of his team. (HR director, interview 2)

This was an explanation that was accepted by the highly educated and professionally qualified principals of the professional services company involved.

Second, in the department headed by the corporate psychopath, the department’s level of cooperation with other departments, notably with finance and HR, was extremely low. Post-crisis examination (the presence of the corporate psychopath precipitated an organizational crisis) revealed that staff in the corporate psychopath’s department had been warned not to deal with HR and finance other than through their departmental head (the psychopathic manager). This was to minimize the possibility of his fraudulent scheme coming to light. However, this lack of communication was what first alerted the suspicions of the HR director:

I had suspicions about the Head of (named department) from when I first joined because of the way that he interacted with people because of the way that he preferred to do things quietly on a one-to-one. How lots of people at a senior level in the firm sang his praises but there seemed to be a slight atmosphere where people in his department were clearly quite intimidated and had been specifically told not to communicate with people in other departments. (HR director, interview 2)

Third, the department was managed via a culture of fear, involving the bullying and intimidation of junior staff and the coerced resignations of those unwilling to unquestioningly obey the psychopathic manager.

Another key manager was coerced, threatened with murder, and then blackmailed by the psychopath into cooperation with his fraud, and because of this had a nervous breakdown. Perri and Brody warn that psychopathy is a risk factor for fraud and further, that if a psychopath’s fraud is thwarted, then violence and murder may result from this (Perri, 2010, 2011; Perri and Brody, 2011, 2012). Such links between psychopathy and white-collar criminal behaviour have been noted (Ragatz et al., 2012), and in the current research, a link between fraud and the threat of murder was evident:

The man was vile but very clever, extremely good at managing upwards, so got promoted because everybody thought he was doing such a fantastic job and saving everybody so much money and he was crooked to the core and ruthless. (HR director, interview 2)

The manager embroiled by the corporate psychopath into the fraud believed that the lives of her family and herself were in danger if she disobeyed the psychopath. He had threatened to kill members of her family if she did not cooperate. That manager finally became a witness in the eventual prosecution and imprisonment of the psychopath. Other departmental members also reported that they had been in fear of their lives.

Fourth, and counter-intuitively to those unaware of the modus operandi of corporate psychopaths, prior to exposure, the workplace was marked by high levels of top management support for the corporate psychopath who perpetrated the fraud. The top managers of the business regarded him as being an extremely able manager who was highly efficient at running his department and at saving money for the firm. This expertise at cost cutting was actually from another manager—the manager who had been coerced into the fraud. Such claiming of the good work of others is thought to be typical of corporate psychopaths:

He managed the relationship in a charming fashion entirely and pretty much every one thought he was a star until you hit that middle management layer who were having to provide a service to him and they hated him. (HR director, interview 2)

This good reputation among superiors was so positive that when the HR director first made the allegations, they were met with disbelief and denial by the main board members and accusations that the HR director was acting out of jealousy. Only when presented with specific evidence did the directors bring in fraud accountants.

This latter experience is in line with the expectations raised in the literature on toxic leadership and corporate psychopaths. Corporate psychopaths are described as being people who flatter those above them while manipulating their peers and abusing those under them (Babiak, 1995; Boddy, 2011c). Reed describes toxic leaders as being malicious, malevolent and self-aggrandizing. People who manage by controlling, bullying and instilling fear rather than uplifting their followers while simultaneously appearing to their superiors to be enthusiastic, impressive and articulate managers (Reed, 2004). Similarly, Clarke and other psychology researchers describe corporate psychopaths as typically recognized as toxic leaders by their followers but not by their superiors (Boddy, 2011c; Boddy, et al., 2010b; Babiak, 1995; Babiak and Hare, 2006; Clarke, 2005, 2007). This is how psychopathic managers were regarded in the current research.

An extreme level of top management support for the corporate psychopath in interview 1 was evident. Those under the corporate psychopath judged him to be destroying the company from within by losing good staff, premises and clients and by eroding the reputation of the company, resulting in what was judged to be an unsustainable business. However, the main board (based overseas) gave him a financial excellence award.

Similarly for the psychopath discussed in interview 2, who was described as being charming and manipulative, which is in line with expectations from corporate psychopathy theory (Boddy, 2011a). Here, the directors of this global professional services organization were fooled by the apparent charm of the psychopath, while his bullying and fraudulent activities went unnoticed by them:

(He had) … Lots of superficial charm, lots of apparent intelligence, a smooth talker … everybody thought, gosh, hasn’t he done well … the fact that he managed to get an MBA despite having next to no other qualifications and of course the MBA was completely fabricated! … Extremely charming to superiors. The senior (directors) thought he was wonderful particularly as he was a rough diamond because most of them were public school educated or American Ivy League …, I think they liked the fact that he was more of a contrast and yet clearly had skills they didn’t have. (HR director, interview 2)

Staff withdrawal and turnover

In terms of staff turnover through resignations and firings, this aspect of the influence of having a psychopathic manager was a notable finding. This was evident from the discussion of interview 2 given above as well as those discussed below. This finding represents a useful contribution to knowledge. Corporate psychopaths have been theoretically expected to influence turnover, but there has been little empirical evidence to support this expectation. In the presence of corporate psychopaths, employees are significantly more likely to withdraw in terms of leaving work early, taking longer breaks, coming to work late and claiming to be sick than they are under normal managers (Boddy, 2011c), but there are no known quantitative findings on actual staff turnover. In the current research, high employee turnover was a commonly reported consequence of the presence of a corporate psychopath.

For example, in interview 3, one HR director reported the firing of employees who would be relatively unproductive in the short term (e.g. the training manager), as the principals of the company concerned concentrated on short-term profitability before a stock-market floatation. The HR director also reported that he decided to seek alternative employment from the first day in that job when he realized the way in which employees were treated. This corresponds with expectations from social exchange theory (Emerson, 1976; Nord, 1969) which are that employees engage in exchanges of reciprocal (Gouldner, 1960) positive or negative (Biron, 2010) behaviour. In the current research, this HR director came across negative supervisory behaviour towards employees in the form of the dismissal of employees who would have been of long-term benefit. This alerted the HR director to the probability that his own future with the organization would not include a mutual exchange of benefits and commitment, and therefore, he would be better off working elsewhere.

In other words, there was going to be no positive psychological contract between the organization and its employee over and above the legal contract, and so, no compelling reason to stay with the organization. This corresponds with Turnley and Feldman’s (1999) finding that psychological contract violations result in increased levels of employee withdrawal. They also found decreased levels of loyalty to the organization where such psychological contract violations existed (Turnley and Feldman, 1999).

In the current research, the HR director reported that he left in about 2 years, reporting that he stayed that long so that his employment with that organization did not look too short:

I mean quite honestly as soon as that first incident with the apprenticeship issues came to light I suddenly thought well I ought to be planning my career move out of this establishment at the earliest opportunity which is what I set about doing. (HR director, interview 3)

This HR director also reported that the organization had a high turnover rate because good employees in that area at that time had other opportunities to be employed and would not tolerate poor-quality working environments. This aligns with theories of conversion, brand switching and organizational attrition which hold that other things being equal, the presence of attractive alternatives influences people to move their loyalty or commitment to these alternatives, be they religions, brands or organizations (Boddy, 2010c; Tinto, 1988):

Well certainly in the factory managers’ context turnover was high. … We did have high turnover because we had regular redundancies and it was an area of high employment which meant that people didn’t have to hang around. If they didn’t like what they had in terms of the work experience they moved on to other organizations. (HR director, interview 3)

This shows that the ruthless, money-oriented culture engendered by the presence of a corporate psychopath does affect individual turnover decisions. Firings for the sole purpose of short-term profitability do not go unnoticed by other employees who take note of the values and priorities displayed by top management.

Another interviewee reported that a psychopathic manager would get rid of any employees who he thought may prove to be a threat:

If he didn’t think he had complete, 100% loyalty within the juniors in his team, then he would basically lean on them to make them want to leave and hand in their resignation. (HR director, interview 2)

The HR director in interview 3 also mentioned that the presence of a psychopathic manager jeopardized the discretionary extra effort that employees can put into a business. Therefore, it is not just physical withdrawal that is influenced by the presence of corporate psychopaths but also emotional withdrawal:

His selfish nature, his negativity around things that didn’t suit his own particular agenda, his whimsical way in which he made decisions and people had to live with the consequences, the uncertainties of it all. All of that militated against a constructive business. (HR director, interview 3)

A rapid turnover of personnel in the department headed by a corporate psychopath in interview 4 was also reported. The research participant reported that he found out that his predecessors had all lasted about 18 months, whereas he lasted 14 months before resigning. This research participant also reported physically withdrawing from the particular environment as often as he could by working in other parts of the plant.

In interview 1, the corporate psychopath’s actions reportedly destroyed the morale and commitment of the advertising department. At the time of the interview, those who had not yet left were all planning to do so. This is in line with theoretical expectations because in the employee withdrawal literature, there is a clear link between commitment and intention to leave (Falkenburg and Schyns, 2007; Tett and Meyer, 1993). The psychopath had also reportedly divided the main (UK) board, and one board member had resigned in disgust, leaving the corporate psychopath even more in control.

Another example of an extreme form of staff turnover resulted from on-the-spot firings marked by an emotionless and uncaring attitude towards long serving staff. Corporate psychopaths are theorized to indulge in this kind of activity, and this was evident in this research. In interview 1, an ‘on-the-spot’ firing orchestrated by the corporate psychopath was reported to have had a poor influence on morale:

So basically it was ‘your face no longer fits, you are gone’. That has never been the culture of this company. This company prides itself on its integrity. The one thing this company has is integrity. Then suddenly for people to be … disappearing like that is a big concern. (Advertising manager, interview 1)

The research participant in interview 6 reported on the influence of a newly appointed corporate psychopath CEO in a not-for-profit organization. With less than 50 employees, absenteeism was reported to have gone from a monthly occurrence to a daily one. Senior staff were reported to be absent for weeks due to stress, and junior employees were reported to take regular days off sick. In terms of turnover, 86% of the staff employed at the time of the CEO’s appointment had left, with the remaining staff planning to leave:

The thirtieth person handed her notice in two weeks ago … He made her life like a living hell … she left with no job to go to. (Middle manager, interview 6)

Morale in this organization was described as being at an all-time low. The research participant was reportedly planning to leave as soon as his final attempt to warn the board of governors of what was happening with the CEO was complete. Success in this endeavour was not anticipated by the interviewee as the psychopathic CEO had reportedly ingratiated himself with the head of the board of governors who had come to regard the psychopath as a friend.

Reports of extreme work environments

In interview 3, the HR director reported that there was high turnover, lack of long-term planning and of any attempt to engender employee engagement in the business. When asked to place the company with the corporate psychopath in it on a scale from one (normal) to ten (extreme), this HR director reported it as an eight or nine and as the worst organization he had ever worked for:

I’ve never come across a company worse than that one and therefore I don’t know how bad bad would have to be but it would be in the lower reaches of eight or nine. Yeah. It was not the good experience that I was looking for, not the constructive, positive proactive type of role that I was hoping for. (HR director, interview 3)

Regressive work practices such as whimsical decision making and abusive management were also reported when there was a corporate psychopath present. There was reportedly an emphasis in these environments on increasing short-term profits by cost cutting rather than by increasing longer term profits through investment in new production techniques and training:

The whole culture, well from my perspective it was very much what you would say was traditional British, ‘them and us’ type of manufacturing. Everything was about cost reduction, … high volume, it was about quality but the investment really wasn’t being put in to get the high volumes and the quality because they wanted to keep the costs down. … My own view is it was almost a stereotype of some of the worst films of management/worker relationships. (HR director, interview 4)

Similarly in interview 3, the HR director reported that other senior managers were doing a good job and making progress with exports and advertising but that the corporate psychopath was like a cancer in the UK business.

Commentators have reported that single bad leaders can have a disproportionately negative effect on the whole organization (Allio, 2007; Ferrari, 2006). In this research, it was found that the extent of the bad influence of the corporate psychopath depended on his position. At main board director or CEO level, the malignant influence was organizational, whereas at departmental level, the influence was more specifically located but with wider repercussions:

So it was a fascinating business with some very much larger-than-life characters who were doing an excellent job in their own part but you had this cancer, if you like, in this guy who was doing everything he could to screw what essentially was the operational side of the UK business. (HR director, interview 3)

Interview 4 was the discussion about a HR director by another HR practitioner (now a director himself) for whom the practitioner used to work in a large manufacturing plant. The plant was reportedly under pressure to improve its financial performance, but this pressure did not manifest as psychopathic behaviour in other managers apart from the corporate psychopath. The atmosphere generated by the corporate psychopath in the HR department was described as hostile, unpleasant and nasty:

So much of my life had been wasted there which was just miserable or unpleasant, it’s not even miserable, it was nasty. I think that is some of the difference. I think if something is unpleasant you can put up with it if you need to. If it feels just nasty and vicious then why stay, so I didn’t. (HR director, interview 4)

A strength of qualitative research is that it gives a more in-depth and profound understanding of a phenomenon than quantifications supply. For example, it is known from the literature that employees are significantly more likely to withdraw from an organization when corporate psychopaths are present (Boddy, 2011c). However, comments that research participants ‘hate’ these ‘vicious’ and terrible situations ‘with a passion’ give a greater depth of understanding as the comments below demonstrate:

Well me, personally, I hated the place with a passion. I started finding opportunities to get out as much from in the office and on to the production floor in to manufacturing just to hide from what was going on, to some extent. … I was miserable. I didn’t enjoy the time there. (HR director, interview 4)

I would liken the (working environment) to the reign of terror in the French revolution. (HR director, interview 3)

The sense from the participants in this research was that the experience of working with a psychopath was a harrowing one, remembered long after the event and considered unique. One participant reported dreaming about it for 10 years afterwards and that his resignation from that company was the only fond memory of working there. Another participant found that they could not continue to talk about the experience at all because it was too painful:

Actually I will be honest, for quite a few years afterwards … I would dream about being back there … which that would have been for a good ten years or more afterwards I think … It was really unpleasant working there … I’ve worked in quite a lot of different sectors. I’ve worked in construction which is a really hard-nosed industry … I never saw anybody like him (the corporate psychopath) before or after. (HR director, interview 4)

Corporate psychopaths are reported to be excellent manipulators of people, good at organizational politics and skilled at causing divisions in order to make people disunited and easier to control (Babiak and Hare, 2006; Boddy, 2006; Clarke, 2005). This was evident in one manufacturing plant where the unions were reported to be divided and where a multiplicity of different work practice agreements were reported to exist:

He took a lot of pride that there wasn’t a plant wide union agreement. There was something like about 30 and each of your operating lines had a separate arrangement and a separate deal negotiated and for me I think it was a divide and rule kind of strategy. (HR director, interview 4)

The literature on corporate psychopaths characterizes them as bullies (Boddy, 2011b), and this was evident in the current research where fear was endemic and public humiliations were reportedly both frequent and regular. Orders were issued via shouts or screams, and normal everyday pleasantries were reportedly absent. The atmosphere could be reasonably described as being extremely hostile to such as extent that one employee just walked out and never came back after one humiliation. Similarly, in interview 7, the psychopathic manager created an atmosphere of fear:

Amongst a very senior population there was a huge amount of fear around dealing with the individual. So everybody was trying to develop strategies to cope with what might come their way. It was never balanced and reasonable. … It was provocative, it was undermining people, it was making a fool of them in public. (HR director, interview 7)

This behaviour is again in line with the expectations from the bullying literature, where there is a clear correlation between bullying and employee withdrawal (Lewis and Orford, 2005; Sliter et al., 2012):

He would never come in and ask somebody to come and see him … just sit there and scream and you had to get up and respond when shouted at. Typically … three or four times a day, everybody went through … a humiliating dressing down to an extent which was quite public … The whole atmosphere was very hostile and unpleasant … When he left.. he never said goodbye. You knew he had gone because the door slammed. (HR director, interview 4)

Bullying was also evident in the other interviews and was reportedly used as a tactic to instil fear, obedience and confusion as illustrated by the comment below. Similarly, the corporate psychopath who had resorted to fraud used bullying to intimidate his staff and keep them from questioning him:

I think his bullying tactic was the bit about him that was so unpredictable … you never knew what he was going to do. (Advertising manager, interview 1)

Corporate psychopaths fail to provide training and information needs for employees working under them (Boddy, 2010a). The current research extended this finding to uncover that research participants thought that they were being undermined in their jobs as part of, for example, organizational power plays by the psychopath involved. This is illustrated by the following comment:

Because people didn’t trust people … It was unpleasant. You were undermined quite regularly as a young professional which I would have been in my mid 20’s I suppose. There was no support … He said ‘I am a hard manager’. A hard manager is fine … hard and fair is OK but hard and completely contradictory and unpleasant and undermining is not OK. (HR director, interview 4)

A characteristic of psychopaths is their ability to lie convincingly because they do not get emotionally flustered (Porter et al., 2011). This was evident in interview 1 where the psychopathic board director denied to the other members of the UK board that he had been advised of a business plan that was about to be implemented. This resulted in the plan being abandoned, after months of careful planning, on the day it was supposed to start, and this engendered organizational confusion and personal upset. This can best be understood in the words of the participant concerned in the incident:

An awful amount of work went into this (business plan) involving lots of people. We … briefed this (psychopathic) guy on what was going to happen … He went through it in detail with us and he said, ‘yes, I am very happy’. … He was very supportive of it … So anyway (the day of implementation) came around and the Board sat down for a final meeting … He said ‘I know nothing about what you are talking about’ … Other people … were saying, ‘… you talked to us about it’. He was just adamant that … he knew nothing about it and he said you have to stop the whole thing. … So huge trauma in the Board room … people in tears and all sorts … it really got very angry and feisty in this conversation with people saying ‘but you know!’. He was adamant he didn’t know anything. So they had to stop the whole thing … Straightaway you could see he … would just lie blatantly. (Advertising manager, interview 1)

This interviewee also commented that the corporate psychopath was untrustworthy in that he would undermine other people’s work, lie about his involvement or knowledge, and sit through presentations and criticize them but then later represent the same presentations and ideas as his own work. Trust, when given to someone who does not deserve it or abuses it, can become like a poisoned chalice (Skinner et al., 2014), and this was the case in the current research. The psychopath would also make promises and business predictions to head office that he knew were impossible to meet. The interviewee reported that the corporate psychopath did not have the ability to do the job he was hired for and had, for example, no grasp of strategy. Instead, he stole the ideas of other people or got management consultants in to do his work. This reported behaviour was so typical of textbook descriptions that during the interview the researcher asked the participant whether he had read any books on corporate psychopaths; he had not.

Interview 5 was scheduled to be with another advertising manager who was a colleague of interviewee 1 and concerned the same psychopathic manager. However, after starting the interview and hearing the questions the research covered, the participant reported that talking about the experience was bringing painful memories back and was too upsetting to continue. The participant reported forgetting how horrible the experience was and not wanting to go through the experience again by recalling it. Worries about confidentiality and about the psychopath discovering about the interview were also mentioned. This interview thus ended within minutes of it starting.

Organizational destruction

In the literature on corporate psychopaths, it has been theorized that their presence and influence will ultimately lead to organizational destruction and that an ethically bankrupt organization will become financially bankrupt (Boddy, 2010b, 2011c). However, this theorized link between psychopathy and performance has not been established empirically. The current research was not designed to establish this but nevertheless provides some evidence. In one case, the fraudulent activities of a corporate psychopath cost the company over a million pounds but did not lead to organizational destruction because of its overall size and profitability.

In another case (interview 1), the corporate psychopath was reported to be in the process of destroying the company from within by causing good people to leave, needlessly abandoning good business plans and by destroying its ethical reputation. Service and product quality were reported to be deteriorating, and clients were said to be leaving as they noticed the decline. However, at the time of this research that company was still reporting profits.

The research participant in interview 1 was an advertising manager in the company he was talking about with reference to a corporate psychopath who occupied a main board position. This psychopath reportedly had a devastating effect on the advertising department and advertising practices of the company because with no real experience he took over advertising within the company:

The first challenges started to come when my old boss, (the advertising director) who was a great creative, found that she was being put out of place by this guy coming in and saying he could do advertising and yet … had no real experience. His experience was very shallow compared to the broad depth experience that she had and he was basically telling her that she was wrong in everything she was doing. (Advertising manager, interview 1)

This interference was so great that it caused the highly regarded advertising director to resign with no job to go to. The corporate psychopath then proceeded to disregard or replace the plans, initiatives and advertising staff associated with the ex-advertising director until nothing of the original and previously highly successful department was left. This included the product development team whose presence was considered by other employees to be central to the future success of the business. This new product development process, representing the innovativeness underlying the core competency of the organization, was then outsourced. In the literature on strategy, it is usually considered advisable to maintain the core competencies within the business and only to outsource non-essential elements of it. Therefore, outsourcing a key element, as happened here, demonstrates the lack of competence of the corporate psychopath involved. This left other staff demoralized and disheartened.

Corporate psychopaths are theorized to be promoted beyond their true abilities because of their capacity to present themselves well, manipulate others, lie about their abilities and claim the good work of other people as their own (Boddy et al., 2010b). Another example of this is that in interview 2, the claimed MBA from a world-class university turned out to be bogus in the case of the psychopath involved in the organizational fraud.

With the psychopathic CEO discussed in interview 6, the CEO would not permit any discussion at board meetings which were convened to pass his policy papers, distributed before the meetings. This was said to create a totally different tone at the top than was evident under the previous CEO. The previous tone was reported to be marked by openness, creativity, innovation and communication. The psychopathic CEO was reported to cut-off any discussion and thus to deny potentially valuable contributions to the organization from experienced staff. In the organization discussed in interview 6, employees were described as having changed from being motivated, happy and innovative to being directionless, unmotivated and uncommitted after the appointment of a new, psychopathic CEO:

Staff morale is just at an absolute low. When the guy walks in the office falls silent and it is worse than a morgue, I imagine, in our place. (Middle manager, interview 6)

In interview 4, the research participant was of the opinion that the corporate psychopath was instrumental in the eventual closure of the business:

If you look at that plant, the plant was sold and within about two to three years was closed down and flattened and it is now a housing estate. So, did he do a great job? In my opinion it was an appalling job otherwise that place wouldn’t have failed. (HR director, interview 4)

In interview 1, the research participant reported that the corporate psychopath closed down one office merely because it was associated with being a success and initiative of the advertising director who had resigned. The particular office was described as being in a convenient central location at a remarkably cheap rent. Closing it down led to extra costs and lost clients and was reported to have been a poor business decision, so could be classed as a partial destruction of the company concerned.

Similarly, the research participant in interview 6 was of the opinion that the organization was being effectively destroyed from within. This destruction was reported to be through the influence of the psychopathic CEO involved in this not-for-profit organization:

We’ve got this situation where the finances are plummeting downwards; the staff are leaving on almost a fortnightly basis now. (Middle manager, interview 6)

The work ethic, involvement and commitment of the employees were reported to have been largely destroyed with staff taking days off, undertaking large amounts of non-organizational related activities in the workplace and lacking drive and purpose:

Well I think there were lots of issues … grievances, people off sick, people having to move on to new roles very, very quickly, people getting damaged along the way, performance not being great, not positive behaviours permeating down the organization, lack of willingness to tackle what was becoming quite evident. (HR director, interview 7)

The research participant in interview 7 also described a variety of ways in which the presence of a psychopathic manager affected the performance of the organization and of the employees within it. These included staff withdrawal and a lack of commitment towards tackling the problems facing the organization.

Discussion

Writers engaged in the study of organizations have called for a multiplicity of approaches, diffusing disciplinary boundaries to enrich our analysis of organizations whereby ideas from other disciplines are integrated into a viewpoint encompassing the real world in order to converge on and further the prospect of a better world (Burrell et al., 2003).

In line with this viewpoint, Winchester (2012) comments that sociologists adopt a systems appraisal which is valuable but which does not sufficiently account for individual greed, fraud, theft and mismanagement. He reports that more individually oriented analyses do account for this and so deserve consideration (Winchester, 2012). Winchester reports that sociology is uniquely capable of considering both systematic and individual aspects of events and thus of bridging a divide in the approach to studying organizations and society, that between the sociological or situational view and the psychological or personality-based view (Hogan and Kaiser, 2005).

In what may be seen as a different approach relative to sociological orthodoxy (Parker and Thomas, 2011), this article attempts to bridge the sociological and individual by demonstrating how individual managers can influence the work environment around them towards an extreme environment marked by poor practices and conflict. The stance taken is not critical in Rowlinson and Hassard’s (2011) sense. Rather, a critical stance is adopted in the sense of being critical of how these unethical psychopathic leaders have been allowed to prosper in the high risk, unethical, casino capitalism that has become emblematic of neoliberal society (Rowlinson and Hassard, 2011).

What neoliberal organizations and managerial psychopaths apparently share is abusive control and an unethical lack of care (Baines, 2004; Yates et al., 2001) for employees. Ethics has long informed and guided the approach taken to management studies (Rhodes and Wray-Bliss, 2013), and this ethical viewpoint is of relevance to the study of corporate psychopaths as managers. Such unethical management has been expected of corporate psychopaths, as noted in the speculations of psychology researchers (Clarke, 2005) and as uncovered through research (Boddy, 2011b; Babiak, 1995; Babiak and Hare, 2006) as well as in this study.

From the body of research into psychopaths at work, theories have arisen which attempt to explain how modern business has facilitated the emergence of the psychopathic manager who has in turn influenced capitalism in an extreme direction (Boddy, 2011a; Cohan, 2012; Spencer and Wargo, 2010). The findings in his research illustrate a profane side of organizational leadership, one that is neither heroic nor in any way self-sacrificing (S’liwa et al., 2013). Furthermore, there was a perceived lack of credibility and of competence in the abilities of the corporate psychopaths discussed in the current research. Such competence uncertainty has been associated with workplace deviance and leader mistreatment (Mayer et al., 2012), and this corresponds with the current findings.

Counter to current findings, some psychology researchers claim psychopathic traits such as the ability to remain calm and unemotional in pressured circumstances may be factors of success in business (Crawford, 2013; Lilienfeld et al., 2012). However, psychology researchers usually define success in individual terms (e.g. Do traits help the individual get promoted?). Broader measures of success could include whether psychopathic managers are good for other employees, society or corporate social responsibility (Boddy et al., 2010a) or are likely to indulge in the illegal dumping of toxic waste (Ray and Jones, 2011).

Psychology researchers and management writers differ in their views on whether there is enough known about psychopaths at work to screen for them in employment decisions. Some say that not enough is known (Smith and Lilienfeld, 2013); others are sufficiently convinced to offer psychopathy screening services such as the BS360 to employers (Babiak et al., 2010). The current research throws some light on this discussion because it shows how damaging this type of personality can be in management.

Limitations and suggestions for further research

The research was conducted in England, mainly in London, and findings may be subject to cultural influences that do not operate elsewhere. For example, Stout (2005) suggests that collectivist cultures may present psychopaths with a more constraining influence than that imposed by individualistic countries such as the United Kingdom and the United States. This may influence how their behaviour manifests itself and could be a subject for further research. The current research adopted a qualitative approach utilizing a small sample size to gain essentially constructivist insights into how corporate psychopaths act. As such the research makes no claims towards positivist statistical validity.

Conclusion

This research makes a contribution to the literature on extreme workplaces by demonstrating that ruthless managers in the form of corporate psychopaths have an influence in generating such workplaces. The research makes a contribution to corporate psychopathy theory because it shows that corresponding with expectations, employees seek to leave or emotionally withdraw from the organizations or parts of organizations that are managed by corporate psychopaths. Furthermore, that as expected, turnover is higher in such organizations.

The psychopathy measure used demonstrated good face validity; findings from using it were as would be expected of the behaviour of corporate psychopaths. Employees are mistreated, loyal employees are fired or resign, resources are misallocated or stolen, business plans are capriciously rejected, management consultants are hired needlessly and internal intellectual resources are abused or unused. Employee well-being decreases, organizational confusion replaces a sense of direction, organizational ethics decline and corporate reputation suffers. Corporate psychopaths rely on the good work of others claiming their ideas, presentations and plans as their own or else rely on management consultants to do their work. Employees report that they hate to work in these environments and withdraw from these extreme workplaces via claiming high levels of sick leave, leave due to stress and via seeking alternative employment. A minority even withdraw from the workforce with no other jobs to go to.

Although often regarded as stars and given awards for their short-term or apparent financial performance by those above them, these research findings illustrate that the behaviour of corporate psychopaths is not aligned with the longer term success of the organizations that employ them.

Corresponding with theoretical expectations, the current research found that corporate psychopaths will engage in fraud and are unconcerned with the organizational destruction that they create.

The commonalities in these reports concerning the behaviour of corporate psychopaths were notable, and they appear to have a modus operandi involving bullying, fear, control and manipulation. The current research supports earlier findings from quantitative studies because yelling, shouting and the undermining of employees via public humiliations were all evident. Insights gained go beyond what has been established quantitatively because reports of employees living in fear of their lives were recorded.

The current research also supports the view that corporate psychopaths over-state their qualifications and abilities, claiming degrees from prestigious universities and management competencies that they do not possess. Furthermore, corporate psychopaths use divide-and-conquer tactics to maintain control of employees, unions and boards, while jeopardizing client service quality and organizational outcomes through their erratic and fickle management plans.

Footnotes

Appendix 1 Author biographies

Clive Boddy is Professor of Leadership and Organization Behaviour at Middlesex University. He was previously a Professor of Marketing at Middlesex. Prior to working in academia he co-founded a multi-national marketing research company in Asia-Pacific.

Derek Miles is Emeritus Professor of Human Resource Development at Middlesex University and a Chartered Companion of the Chartered Institute of Personnel Development (CIPD). Before a 14-year career as an academic, and after leadership roles in the private and public sectors, he worked as Director of Global Learning for an Non-Governmental Organisation (NGO) working across 100 countries.

Chandana Sanyal is a Senior Lecturer in Human Resource Management and Development at Middlesex University Business School. She has over 17 years of experience of working as a human resource development practitioner and a senior manager in the public sector. She joined Middlesex University in 2009 as a practitioner academic. Her specialist areas include individual and organizational learning, leadership development, coaching, mentoring and action learning.

Mary Hartog is the Director for Organization and Leadership Practice at Middlesex University Business School. She has a background in Management Learning and has worked both in the private and public sectors. Mary is both a National and Principal Teaching Fellow (2006, 2014, respectively) of the Higher Education Academy. She was awarded her PhD from the Center for Action Research in Professional Practice, University of Bath in 2004.

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

Abstract

Keywords

Introduction

Corporate psychopaths

Research method

Findings

Staff withdrawal and turnover

Reports of extreme work environments

Organizational destruction

Discussion

Limitations and suggestions for further research

Conclusion

Footnotes

Appendix 1

Author biographies

References