The relation between leadership, psychopathy and hormones
Master thesis Economics and Business
8th of August 2012
Name student: Ricardo Westendorp
Student number: 294819rw
Supervisor: Wouter van den Berg
Around October, 2011, I started looking for a subject to graduate on, when a neuro-economical subject, involving the connection of leadership to psychopathy and hormones, crossed my path. I had to jump into it, because this subject matched the field I am interested in. Now, 8 months later, I present you my final work and I have enjoyed working on it. I have to be honest, this product would not have been able to be written if it wasn’t for the help of certain people. Therefore, I would like to use this section, to show my gratitude to some people, that helped me along the way.
First of all, I thank the Erasmus School of Economics, for providing the financial support for this research. This research would definitely not have been possible, without the financial support of the ESE. Secondly, I would like to thank my supervisor, Wouter van den Berg, who has supported me, guided me and who has contributed intellectually. I would also like to thank Kashin Hau, who has made great contributions to the construction of the leadership questionnaire. Also, I would like to thank Sarstedt, who provided 500 saliva tubes. I am very thankful for the help of my parents. A great contribution has been made by my parents, Wim Westendorp and Linda Westendorp, who put in much effort to contact their network to find respondents. It would have been impossible to finish my thesis within this time schedule, if it wasn’t for their help. Last, but not least, I would like to thank all respondents that have participated in my research.
I hope you read this thesis with the same pleasure I had writing it.
7th of August, 2012
The relations between leadership, psychopathy and hormone levels are examined. A sample of 86 males is used to examine these relations. This research is based on a leadership questionnaire, a psychopathy questionnaire and saliva samples. The leadership questionnaire consists of 9 factors: Intelligence, creative thinking, empathy, charm, agreeableness, risk taking, need for achievement, need for affiliation and taking charge. The psychopathy questionnaire consists of the factors boldness, disinhibition and meanness. T-test analyses show that leaders score significantly different on most leadership factors compared to the control group. Bivariate correlation analyses show correlations between all leadership factors and psychopathy (with the exception of the leadership factor intelligence), which indicates that leadership and psychopathy are related. Additionally, leaders score significantly higher on the psychopathy factor boldness. The literature indicates that leaders should have higher testosterone levels and lower cortisol levels compared to the control group. The results of the saliva study suggests the exact opposite, leaders have a significantly higher cortisol level. This finding is probably the result of high stress levels. There are little significant results for testosterone, which is probably caused by high stress levels.
Table of contents
1. Introduction 6
2. Literature review 8
2.1 Leadership 8
2.1.1 Development of leadership research 8
2.2 Psychopathy 19
2.2.1 What is psychopathy? 19
2.2.2 The corporate psychopath 22
2.2.4 Psychopathy and biology 27
3. Methodology 29
4. Results 34
5. Discussion 46
6. Conclusion 49
7. Limitations 50
Appendix 1: Questionnaire 56
Galton (1869) described leadership as an unique property of extraordinary individuals, who are capable of changing the history. Today, we define leadership more broadly. Trait based research still sees leadership as a set of unique characteristics, possessed by a certain part of the population (Lord et al., 1984). Central in the definition of leadership is that an individual possesses certain characteristics which cause people following a leader and improved group effectiveness. Leadership consists of leadership performance, leadership emergence and leadership development (Zaccaro, 2004). Throughout the history, numerous leaders have done great things and have changed the lives of many followers, for example in war, politics or culture. Bass (1990) reports that leadership is one of the oldest preoccupations known. There are many stories of great leaders that have done marvellous things for society. On the other hand, there are also numerous stories of leaders that have done immoral or unethical deeds. Individuals tend to follow great leaders, even when led into immoral or unethical directions.
In business, leaders give direction, innovate, take risks, manage and lead organizations, companies or departments. Therefore leaders have a crucial position within a company and leaders are responsible for a great deal of the successes of companies. One of the most popular approaches of leadership is the trait based approach, which is an approach of leadership research that tries to find the leadership characteristics that are responsible for leadership emergence, leadership effectiveness and leadership development.
Lately, the ethics of business have been discussed to a great extent, as a result of events during the credit crisis. Business commentators have noted that the amount of business scandals have grown to an epidemic proportion and that well performing companies have been brought down singlehandedly by immoral behaviour of specific leaders (Singh, 2008). This raises some questions. Firstly, what drives these leaders to act the way they act and secondly, how can these individuals reach positions in companies, where they have the power to influence the company and third parties involved in such a negative way. Allio (2007) states that the modern society is suffering from poor leadership in both the public and private sector. To answer these questions and find an explanation for Allio’s statement, the focus has to be on the core of leadership, on the leadership characteristics or traits.
Hare is one of the leading researches in the subject of corporate psychopaths. Hare and Babiak (2006) argue in their book “Snakes in Suits: When psychopaths go to work” that a significantly higher percentage of psychopaths is to be found in top management positions of companies. Both Hare and Babiak (2006) and Boddy (2009) report that a great deal of the traits related to psychopathy are also related to leadership emergence and leadership development and related to negative leadership effectiveness. When rationally analyzing the events prior to the 08’s credit crisis and the events during the credit crisis, similarities between psychopathy and the behaviour of top management can be found. Examples of that psychopathic behaviour are extreme optimism and risk taking in for example the situation of Lehman Brothers. Another example, is the reaction of Goldman Sachs’s CFO, David Viniar, on the internal emails about the Timberwolf I transaction. Timberwolf I is a transaction between Goldman Sachs and investors of which employees internally communicated that the transaction was “A shitty deal”. The investors were greatly disadvantaged by the transaction, the e-mails show that Goldman Sachs was aware of the fact that the transaction was unethical and immoral. David Viniar reacted, that it is very unfortunate to have such statements of employees on e-mail. This reaction shows callousness and lack of empathy. This is just one example, out of many. Therefore it is interesting to scrutinize the relation between leadership traits and psychopathy traits.
Recent research has shown a relation between several psychopathic personality traits and hormones (Terburg, 2009), but also between hormone levels and the job performance of salesmen (Coates, 2008). Terburg describes a relation between psychopathy, cortisol and testosterone. Terburg reports that psychopaths have a significantly lower cortisol to testosterone level than non-psychopaths. Coates, on the other hand, relates job performance of salesmen and personality traits to the cortisol to testosterone ratio. The finding of Hare, Babiak and Boddy combined with the finding of Terburg and Coates, suggest that there could be a relation between leadership and the cortisol to testosterone ratio.
The sketched situation raises several questions. Firstly, what are the main leadership traits, what traits are more present in leaders in comparison to followers? Secondly, are there relations between psychopathy and leadership, are psychopathy traits more present in leaders, than in followers? Thirdly, is there a biological difference between leaders and followers, do leaders have different hormone levels compared to followers. These questions will be answered during this thesis. This thesis will discuss the most influential trait based research and the most influential traits will be tested. Secondly, the relation between leadership and psychopathy will be shown by comparing scores on both leadership traits and psychopathy traits. Thirdly, the relationship between psychopathy, leadership, cortisol and testosterone will be examined. This leaves us with four research questions:
What are the main leadership traits?
Do leaders show more psychopathic traits than non leaders?
Are there correlations between leadership traits and psychopathy traits?
Is leadership influenced by hormones and what is the role of psychopathy in this influence?
The relevance of this thesis is, that it provides a better insight in how leadership works, on a psychological level and on a biological level. This thesis provides a better insight in the differences between leaders and followers on a trait level, which can be used for recruitment, promotions within companies or the training of future or current leaders. The information about corporate psychopathy can serve to make corporate recruitment more aware of the corporate psychopaths that are applying and it can make employees in any level of an organization more aware of psychopathic co-workers. This insight can serve to identify corporate psychopaths and could bring up ideas of how to deal with corporate psychopaths. A significant relation between hormones and leadership will probably not be used for recruitment, due to ethical boundaries. The information could very well be used to give insight in one’s own leadership skills and to develop itself on that level.
This thesis will first discuss the leadership traits, as found in the literature, the work of some the leading researchers in this particular field will be used (Stogdill, 1948; Kirckpatrick et al., 1991, Judge et al., 2002). Secondly, psychopathy will be explained, both the clinical version of psychopathy and the corporate version of psychopathy, including the suggestion of certain similarities between psychopathy and leadership. This section will be based on the work of Hare et al. (1991, 2006), the American Psychiatric Association (2000) and Boddy (2010). Additionally to the psychopathy section, the biology of psychopathy will be discussed (Johnson, 1992; Terburg, 2011; Coates, 2008). A quantitative research will be done based on the theories of psychopathy, hormones and leadership. This quantitative research includes a measurement of leadership traits, psychopathy traits, cortisol levels and testosterone levels. Following, the methodology of the research will be discussed in detail, followed by the result of the research. The interpretation and the possible underlying theory will be discussed in the discussion.