Department of Management


Date of this Version



Organizational Dynamics 37:4 (October–December 2008), pp. 354–364; doi:10.1016/j.orgdyn.2008.07.004


Copyright © 2008 Elsevier Inc. Used by permission.


In order to protect their identities, organizations can become self-obsessed and display extreme narcissistic behaviors, which will, in the long run, lead to decline. Extreme narcissism can take two forms. The high self-esteem narcissistic organization institutionalizes an exalted sense of self-worth and becomes blind to its weaknesses. The low self-esteem narcissistic organization institutionalizes a profound sense of unworthiness and becomes blind to its own strengths. In between the extremes an organization can remain reality-based and institutionalize a healthy sense of self-worth and value. Enron exhibited many characteristics of the high self-esteem narcissistic organization, while Salomon Brothers exhibited characteristics of the low self-esteem narcissistic organization. Both organizations failed. Liz Claiborne has prospered because it demonstrates characteristics of the reality-based, healthy narcissist.