[Pachystima]

I am writing an article on the character of those who run some of our largest corporations. My thesis is that some pretty ruthless behavior is required to rise to the top of a corporation and often this ruthlessness is reflected in the way the corporation does business. I am looking mainly at executives in banking, insurance, brokerage and real estate corporations.

I recall reading an article around 1997 about a study done looking at personality disorders and their distribution in the corporate food chain. The article asserted that the incidence of sociopathic and narcisistic personality disorders increased markedly the higher the rank of an individual in a corporation. In the view of the authors, there was a greater proportion of sociopaths among the CEO population they studied than in the general population in the average state prison. And, they also noted that the same phenomenon could be observed in almost any type of hierarchical organization including the military, universities and civil service. They hypothesized than because of the intense competition for the top spots, individuals who are not encumbered with a conscience or concern for their fellow workers are at a distinct advantage in climbing the executive ladder.

In my article, I plan to use the above observations as a possible explanation of the recent extraordinarily egregious behavior of numerous high-ranking corporate executives and the way they directed the behavior of their corporations.

Now, with that as a preamble, I am asking for your help. I can't find my copy of that article nor do I remember enough about it (title, authors, journal) to locate it in the literature. Since the findings are rather central to my article, you can understand that I would like to locate it. If you know of this article, please let me know and provide a reference.

Also, since I suspect there might be a few opinionated individuals on this forum, any [tactful] comments on the thrust of my potential article would also be appreciated.

[daydreamer]

i think this is a common pattern throughout history, and will continue to be.

the pattern you're describing as applies to recent financial industries issues and the current fallout also occurred in the 90s with regard to the computer industry and the dot.com bubble. during the 90s most large businesses and public sectors relied upon the growing computer industry to automate them - give them the computer infrastructures that they have today. in many cases the product was oversold or completely virtual (proprietary software, esp.) and the sellers disappeared overnight with the cash. many of the same types of personalities who still are involved at high levels of the computer industry today, reflect the same personality types that are involved in today's financial crisis.

i wouldn't call them all sociopaths lol. but they seem to tend toward creative ethics.

[Thinker]

I have been a CEO in the finance field.

I have come across sociopathic behaviour at senior levels in many industries, although I wouldn't say it is common.

I like the term "creative ethics". I think this describes the type well.

I think much of what lead to the "global financial crisis" was founded in questionable or creative ethics. Trust is what keeps the financial markets running and liquid. The global financial crisis was created through a lack of trust.

[Chilibean13]

If you are looking for a good read on the subject check out the book "The Sociopath Next Door." by Martha Stout. It goes into details about the sociopath without a bloodlust.

Sociopathy and narcissism are closely linked. Some of the CEO behavior could be narcissistic. Politicians have to be just as ruthless. Just look at our "humble" president who reacts irrationally when not being adored.

[Delarge]

Psychopaths can be useful, at least in the realm of efficiency.

[Aronnax]

	Originally Posted by Thinker To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	I think much of what lead to the "global financial crisis" was founded in questionable or creative ethics. Trust is what keeps the financial markets running and liquid. The global financial crisis was created through a lack of trust.

Really? I thought it was caused by making risky loans then repackaging and selling those loans in a manner than hid the associated risk.

Maybe I just don't understand, could you explain it to me?

[Delarge]

Originally Posted by Thinker To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

I have been a CEO in the finance field. I have come across sociopathic behaviour at senior levels in many industries, although I wouldn't say it is common. I like the term "creative ethics". I think this describes the type well. I think much of what lead to the "global financial crisis" was founded in questionable or creative ethics. Trust is what keeps the financial markets running and liquid. The global financial crisis was created through a lack of trust.

Hopefully those fools have learned a lesson and dispense with trust and embrace Machiavellianism instead.

[Roxie]

We could go back another two decades and talk about the greed of people. Gordon Gecko comes to mind as an individual / CEO character and what about the shareholders that want to make a profit at any price and follow the shareholdes don't ask and don't tell mantra?

[Thoth]

A lot of high-ranking executives are probably narcissistic or psychopathic, but not all executives are. Most that I have interacted with on a regular basis are pretty ethical individuals and rose to their positions by consistently performing well and demonstrating merit.

It's the merit that's really key. You can run into psychopaths throughout the corporate food chain, but how high they rise depends first and foremost upon how well they perform. Something that seems to go along with being a psychopath, though, is an almost OCD preoccupation with "beating" a problem, which can make these types pretty effective problem solvers when they're geared that way.

I will say, however, that damn near all of them have an extremely twisted sense of humor, but that might just be an oil industry personality thing.

[Mader]

Repackaging the loans was creative financing.

As you move up the food chain, you are rewarded for success. Folks who are career obsessed use this success/reward as their grounding rod. When you spend 60 hours a week with these people, and everyone's goal is to make money, make deals, make an impression on the big boss, you begin to believe that the goal of maximizing dollars is good and all is fair in love and finance. You are rewarded for being clever and slick and being the first guy who thought of "this". You are rewarded for being the "can-do" guy. You get to go on the nice "business trip" to Fiji and you get great tickets to the baseball game and you go golfing with the top people in the company - all of this reinforces your actions as good.

Many folks on this site do not understand why some financial folks need to make so much money. And yes, I also think some of the salaries and bonuses are obscene, but that is not the point I am trying to make. While some think so much money is immoral or obscene, the financial guys feel exactly the same way about the non-money-types. Money IS the reason, money is how you keep score, money establishes your place in the pack, etc. Money is the way you keep track of success. The financial guys just don't get you, either. Doctors work with bodies, plumbers work with pipes, financial guys work with money. And when you are good at something, it is fun. Playing with money can be fun, and quite a rush.

Yes, it goes to their head, yes, they get cocky and probably do have the above mentioned twisted sense of humor, but if you made $20 million dollars a year, you would too. Yes, you would. The personality goes with the money.

A disclaimer: Please don't attack me for the above. I didn't say they were right, I didn't say that such great incomes are reasonable, just sharing my experience.

[Shauru]

I think Mader makes a good point.

I wouldn't want to call these people sociopaths, but when most people are surrounded by a group that thinks in a certain way, they may lose sight of...lets say ethics.

When you're the guy on top surrounded by luxury and people immediately below you are telling you everything you want to hear hoping they will get a leg up, you're bound to find yourself disconnected from those people at the bottom of the food chain.

I think more often then not the CEOs are just victim to simple human lack of understanding and foresight.

[Roxie]

I also think the iceberg principle comes into play: the theory that only 10% of the information moves up the ladder. Not only does information not work its way up but checks and balances stop too. I work in a big box company, mid level management and I have seen some Sr. execs do some unbelievable things because they think it is funny. No one dares to say anything to them or to HR because we would pay the price by the SR execs aned that HR is about protecting the company and those same execs. You can do alot of stupid things and get away with it if everyone is everyone is afraid of you.

Guess in a round about way, I agree with your inital thoughts. Good luck with the article.

[Smacknrat]

I've heard of the article and ran it across it as well. If you pay attention, it's mostly Fe manipulation done for self-benefit (anti-thesis of Fe). It was a great article and most CEOs are in fact diagnosed with some sort of pathology. I even have a couple of doctor friends who can back me on this (as well as a few lawyers).

Edited: 79

[Pachystima]

I thought it might be appropriate to add a note of clarification here. I do not believe that all, or even most, upper echelon corporate executives are sociopaths or have personality disorders. A lot of them got where they are through hard work, intelligence and competence. What I do think is that there are more sociopaths in high level corporate (and government, military, higher education et al) than there are in the population at large. I have read the book "The Sociopath Next Door" whose author claimed that as many as one out of seven people may be sociopathic. I have no basis to either agree or disagree with the authors numbers but, if the proportion is even greater in executive ranks then conceivably over 14% of the executive class may have sociopathic tendencies.

A profile of a sociopath can be found here
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There are several components to sociopathic behavior that could help one climb the corporate ladder. Among these are:

a) Glibness and Superficial Charm

b) Manipulative and Cunning
They never recognize the rights of others and see their self-serving behaviors as permissible. They appear to be charming, yet are covertly hostile and domineering, seeing their victim as merely an instrument to be used. They may dominate and humiliate their victims.

c) Grandiose Sense of Self
Feels entitled to certain things as "their right."

d) Callousness/Lack of Empathy
Unable to empathize with the pain of their victims, having only contempt for others' feelings of distress and readily taking advantage of them.

e) Irresponsibility/Unreliability
Not concerned about wrecking others' lives and dreams. Oblivious or indifferent to the devastation they cause. Does not accept blame themselves, but blames others, even for acts they obviously committed.

Bear in mind that there are smart sociopaths and dumb sociopaths. The smart ones have learned to hide their disorder and may exhibit few outward signs of their pathology. The dumb ones tend to wind up in the slammer, the bright ones can be quite successful.

My primary point is that there may be enough sociopaths at higher corporate levels to "poison the pool" so to speak. Their ruthlessness and lack of conscience may force others who lack the pathology to behave the same way or be left behind in the corporate dust.

My purpose in writing the article is not to paint corporate people with the brush of social pathology nor to imply that anyone who makes it to the top is a sociopath. I am mainly interested in examining an element of corporate life than has heretofore been little examined.

[daydreamer]

do you have stats for the percentages of sociopaths in other sectors?

the only people i know that i would truly classify as sociopathic were doctors, and to me there seems to be an alarmingly high rate in that field.
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[Nightsun]

I think that an ethic guy hardly can became an high executive. I don't say it's impossible, I just say "it's hard", simply because big societies aren't "ethics".

[gestalt]

A fine link, I like the ideas but the writing is very dense: Sociopaths and The Office

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[Slacker]

It sounds like you're writing your article backwards, beginning with the conclusion and finding evidence to support it. Then again, maybe that's the way most articles are written.

I'm not so sure the financial meltdown is the best example of sociopathic behaviour coming to fruition. The ethical lapses seem to have occurred mostly on the way down, but cya types of behaviour aren't sociopathic. In fact, you could argue that attempts to hide a mess while it unfolds betrays a very un-sociopathic concern about reputation. Most of these people had guaranteed pay packages in excess of their needs no matter when the shit hit the fan.

The more serious ethical collapse seems to me to have occurred after the fact, during the mad dash for government money. But here I also wonder if this is a good example of sociopathic behaviour. Stealing from the government, especially if done legally, is so impersonal an act that only the most squeamish would lose any sleep over it. Them and outside observers.

Enron type schemes would seem to be better examples, but how common are they?

[Thinker]

	Originally Posted by Aronnax To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
	Really? I thought it was caused by making risky loans then repackaging and selling those loans in a manner than hid the associated risk. Maybe I just don't understand, could you explain it to me?

I think some of the other posters probably got close to answering your question.

I would clarify by saying that when a corporation develops a new product, it should go through a filtering mechanism.
One of the very important filtering mechanisms are the senior executives (incl CEO), who should be looking over the new products and accepting or rejecting them on the basis of ethical corporate behaviour.
This is one way in which senior executives have a direct impact on the culture of an organisation.

Giving loans to borrowers who do not have repayment capacity on the basis that the underlying mortgaged asset will increase in value is both faulty financial logic and unethical behaviour.
When someone suggested this was a great new market, they should have been told about the risks (of real estate going down in value), and about ethical behaviour by someone in the organisation. It seems everyone was silent right through to the CEO's.

The other side of the equation is obviously the bundling of these loans into non-transparent securities with AAA+ ratings. Firstly the ratings agencies failed in their duty of care when they were first asked to provide a rating for such an investment. Someone did not do their job to apply a "reasonable person" test. Secondly, they mispriced risk into the rating. Someone should have picked that up.

The culture of an organisation starts with the CEO. It is up to her/him to ensure that the organisation deals with it's markets and stakeholders ethically. If the CEO has "creative ethics", this will permeate the organisation and lead to unethical behaviour and the types of products which lead to the "global financial crisis".

[Smacknrat]

I'm of the distinct opinion that higher unemployment will result in a social order that reacts (like a living thing in a macro-level).

For example, at (essentially) 20% underemployment people are willing to travel to work for menial jobs. However, I work and play near where I live so I try to make sure that no garbage wanders in. As an unfortunate consequence, from time to time, I get ejected from the very place I live by people that don't own their society.

It's just that technology has outpaced society (in this case transportation... car efficiency, gas prices, CELL PHONE COMMUNICATION.. "I'm late for work, but...", cheap electricity and the list goes on)

On the plus side, it seems cell phone etiquette has finally caught up. It's just that ETIQUETTE IN GENERAL is lacking. In losing our experience in being human, we've lost dealing with social "problems" on a macro-level and are quick to blame individuals. Though I think the current "correction" is making amends for that...

A 100 years ago, if we were stuck together in such close proximity and all bear the social anxiety, lies, and mistrusts that we put on each other, we'd detect them with ease (projection is no genetic accident. It's an adaptation that ensured our survival.. DUH!)

[Aronnax]

It seems like I did understand the root cause. You were saying the financial crisis was caused by a lack of trust, that was the statement that I didn't understand.

If anything the financial crisis was caused by too much trust, everyone assumed the previous group in the chain would do their job correctly and behave ethically. If suspicion would have been higher less loans would have been made and securities would have been rated differently.

The reflex of banks trying to horde liquid assets to protect themselves after it all started to tumble down could be seen as an absence of trust but the horse was already out of the barn at that point.

[Nightsun]

I think that the trust things is only the iceberg. The real problem of crisis is the extreme USA capitalistic approach. In Italy for example we had far few problem for crisis (I know we are not USA but still the 6th world more industrialized country) and you can sum-up all 27 country of Europe commerce to reach a mass greater than USA. The reason is wellfare, we have a more "socialistic" capitalism. For istance in Italy you need to give the bank a full-time life-long work certificate to be elegibel to rent money, the society is different and more stable due to the state intervention. More stability lead to an overall less economical grow, higher taxation and so on but also to less severe crisis when something goes wrong.

[Seducer]

I know there are some malicious businessmen that the News Media loves to publicize, but Brian Tracy says that you have to be honest and act with great integrity to become a successful businessman. Otherwise, people won't do business with you. That makes sense to me.

[Austin018]

Yes, I believe that much of the corporate world, politics are riddled with sociopaths and like behavior. I read the book also, The sociopath next Door which outlines how common they really are, the "sucessful, non-violent kind" that are highly proficient at escaping detection by either their victimes, friends, family, etc.

There are two types of sociopaths...the "unsucessful type" and the "sucessful". The Corporate world has the ones that are sucessful, that is they manage to avoid notice and do not commit acts that are likely to either get them in jail, killed or socialy disgraced.
The "unsucessful" kind, however, is more common, as they are not as adept at staying unnoticed...a huge number of them eventually wind up in jails and prisons, killed or executed or shunned by society.

[RedIrish]

for some perspective, I recommend reading some of the works of Peter Drucker