The study investigated the personality traits of 3200 candidates applying for leadership training in the armed forces. Those who scored highly for narcissistic traits did better at admission interviews and were more likely to be accepted.
Only after they were hired did their arrogance, selfishness and inability to accept responsibility became apparent.
It seems those doing the hiring are often convinced by the self-confidence, charm and dynamic personalities of narcissists.
US politician Anthony Weiner who was publicly shamed twice after sharing sexual images with women over the internet is a good example.
According to the New York Times Weiner was charismatic, quick to anger, intense and demanding. He had an extremely high rate of staff turnover, was known to throw chairs when frustrated and stridently denied any wrongdoing immediately after the revelations were made.
Stewart Forsyth is an industrial psychologist and the managing director of FX Consultants. He says that inability to accept mistakes and anger when confronted or questioned are common in narcissistic personalities.
"Narcissists are into self promotion of their worth, but often have a fragile sense of their value, and if challenged the reaction can be aggressive.
"They see themselves as 'special' and are good at attracting attention to how wonderful they are. These are people for whom it really is 'all about me'."
Narcissists are great at hiding their true natures; their charm and charisma can make a favourable impression. But once they are established in leadership roles their true colours will emerge.
"Narcissists don't do 'nice'. This might be hard to see initially, because they are superb at acting. But what you will see if you watch them in action, rather than listen to the spin, is ruthlessness.
"The well-performing new start on the trainer wage is gone after 89 days to be replaced by another low-paid starter; having promised the senior exec that the project can be done in half the time, the boss tells the team they will have to forget taking weekends for the next three months."
The inflated self-belief and excessive pride shown by some narcissists can be defined as "hubris". Leaders displaying this trait (such as Madoff and Weiner) are more likely to be defensive against critical feedback.
Tago Mharapara of the University of Auckland conducts organisational research within the discipline of psychology. He says leaders who display hubristic behaviour are likely to feel immune to negative feedback.
When subordinates or peers disagree with hubristic leaders, they tend to deny the credibility and value of the negative evaluations made about them, and discount any information that is in conflict with their inflated self-views, he says.
This can lead to the type of bad decision-making in the public cases outlined earlier.
Mharapara points to research around the decision-making of CEOs with hubristic tendencies.
"Because they so strongly believe in their own ability to inspire performance and achieve extraordinary economic success, CEOs with high levels of hubris are prone to pay higher than justified premiums in corporate acquisitions."
"These acquiring CEOs believe that they can accomplish what other less skilled CEOs could not - an attitude that clouds rational decision-making and often translates into reduced corporate valuations and below-market stock performance."
While narcissism in and of itself doesn't doom a leader to hubris, it can develop given the right circumstances.
"Success at work and fawning praise by colleagues who never challenge the person may combine with narcissistic personality tocreate hubris. Not only does the person think highly of themselves, they are obtaining feedback from the environment to say that they are indeed justified in feeling superior/confident because of all this 'success'."
Forsyth says while narcissistic personality types tend to be destructive, given the right management they can be of some use in the workplace.
"Some of those narcissistic tendencies can be useful to a leader. I don't mean axe-murderer qualities, but their political awareness, charm and ruthless calculation can be what make the difference between a good idea and the launch of a new product."
The key to managing a narcissist is to catch them early in their career. By helping them to see the benefits of listening to other and reviewing their own mistakes to find learning opportunities, they can be taught to lift their effectiveness and encourage sustained contributions from their followers, he says.
It's also useful to work out a workplace niche where they can make the most of their self-assurance, charisma and charm.
"Generally this will involve taking them out of people management, but they could do very well in areas such as business development or government relations where impression management is critical."
When dealing with a narcissistic boss, he has different (and somewhat chilling) advice.
"If you are working under a narcissist don't challenge them. They are likely to become aggrieved, and this can be detrimental to your career path."
Those working for narcissists should cultivate their own networks of support, he suggests, and look to their human resources team for ways to address the issues raised by such managers.
"It is worthwhile suggesting the company take on 360-degree feedback and anonymous staffsurveys.
"This isn't always successful, but it can provide a forum whereby people can express their concerns about the leadership that's in place in the work environment."
