We show that firms with more Machiavellian CEOs will have lower costs than other firms in the market, one reason why a personal characteristic that is usually seen as problematic for organizations is rather common in their upper ranks

Bargaining your way to success: The effect of Machiavellian chief executive officers on firm costs. Tessa Recendes, Federico Aime, Aaron D. Hill, Oleg V. Petrenko. Strategic Management Journal, March 27 2022. https://doi.org/10.1002/smj.3402

Research Summary: This study builds on insights from the upper echelons tradition in strategy to examine the effects of chief executive officer (CEO) Machiavellianism on relevant firm costs. While Machiavellianism has been usually construed as a purely negative trait, we argue that the pragmatic focus on the outcomes of exchanges and psychological obsession with winning in transactions that Machiavellian CEOs infuse in their organizations can have important effects on firm cost, a fundamental but frequently understudied driver of financial performance in strategic management research. In line with our arguments, we find that CEO Machiavellianism has negative effects on production costs, financing costs, and acquisition premiums. We find support for our ideas with a sample of S&P 500 CEOs, operationalizing CEO Machiavellianism using a videometric approach.

Managerial Summary: In this study, we investigate the effect of CEO Machiavellianism on firms’ costs. We show that firms with more Machiavellian CEOs will have lower costs than other firms in the market. Rather counterintuitively, this study suggests an explanation for why a personal characteristic that is usually seen as problematic for organizations is rather common in their upper ranks. Ultimately, the study demonstrates the value of the bargaining attitude that Machiavellian CEOs bring to their organizations and suggests this value should be weighed against their risks or acknowledged to manage the risks this common personal characteristic implies.