Unravelling the Relationship between Dark Triad Traits and Effectuation and Causation within Small- and Medium-sized Enterprises

Abstract

Prior studies have examined effectuation and causation as alternative behavioural logics used by entrepreneurs to manage uncertainty, noting a number of antecedents of the tendency to rely on a given logic at different levels of analysis. This study aims to broaden the understanding of individual-level antecedents by examining the role of the so-called dark side of the CEO personality on decision-making processes within small- and medium-sized enterprises (SMEs). Using the lens of upper echelons theory and trait-activation theory, we focus on three personality characteristics: narcissism, psychopathy, and Machiavellianism. The impact of dark triad traits on the behavioural logic employed by the CEO is argued to be moderated by the perceived level of uncertainty experienced by the firm. A set of hypotheses regarding these relationships are tested with a random sample of CEOs of Russian SMEs. The findings suggest that CEOs scoring higher in psychopathy tend to adopt a causal logic, while Machiavellians rely on an effectual logic. The level of uncertainty shapes these relationships by weakening the links between dark triad traits and behavioural logics.