Philippe Schaus, the former CEO of Moët Hennessy, led the company through several high-profile acquisitions of prestige brands, including Armand de Brignac in 2021 and Château Minuty in 2023. The deals were widely covered by the media and strengthened Moët Hennessy’s symbolic presence in the luxury market. They may also serve as an example of new insight this recently published article in the Strategic Management Journal.
“While there is no direct evidence about Schaus’s personality, the pattern of bold, high-visibility acquisitions illustrates how executive ambition and image considerations can shape major strategic moves,” says study author Korcan Kavusan of Erasmus University.
Kavusan and his coauthors — Daniel Z. Mack of Singapore Management University, Matthew P. Mount of Deakin University, and Gokhan Ertug of Singapore Management University — explored whether CEO narcissism compels a firm to make major moves, such as acquisitions, even when their performance exceeds expectations.
The study adds a missing piece of the puzzle to existing scholarly literature, which offers conflicting views about what happens when firm performance is strong. Some studies argue that a company’s above-aspiration performance curbs change because of a lack of organizational motivation, while other research suggests that it enables change by expanding managerial discretion.
But management research has also suggested that firm actions are often shaped by managers’ personal goals — and narcissism in particular is often linked to strong personal ambitions. With this in mind, the team chose to study whether narcissistic leaders are especially inclined to pursue acquisitions, especially when firm performance is strong and they have the discretion to act.
Using data from publicly listed U.S. manufacturing firms in the S&P 1500, the team explored whether high-performing firms make more acquisitions when led by narcissistic CEOs and fewer when led by less narcissistic executives. In addition to data on acquisition activity, they also collected indicators of CEO narcissism established in prior research, along with firms’ performance relative to their aspirations over time.
Their analysis showed that firms led by more narcissistic CEOs tend to pursue more acquisitions when performance is high, and firms led by CEOs without strong narcissistic tendencies make fewer acquisitions.
“While acquisitions are often pursued to gain new resources, expand capabilities, and accelerate growth, many fail to achieve their intended goals and instead erode shareholder value,” Kavusan says. “Our findings show that these decisions are not always guided purely by organizational motives, as they should be in an ideal world, but can also be influenced by the personal ambitions of top executives.”
Kavusan goes on to explain that the new SMJ research carries important implications for boards, investors, and managers: “It highlights the need to examine not only the strategic logic behind an acquisition but also the personal drivers of those advocating for it,” he says. “By ensuring that acquisition decisions are aligned with a firm’s real needs and capabilities rather than individual ambitions, stakeholders can increase the chances that acquisitions create, rather than destroy, value.”
