The Influence of CEO Narcissism on Management and Operational Cost Effectiveness in Digital-Based Startups
Ade Kurniawan,Rasmi Nur Anggraeni,Rajindra,Burhanuddin

Palu Muhammadiyah University

Abstract

Digital startups in Indonesia face a major challenge in managing operational costs efficiently amidst intense market competition. Startup success is often influenced by CEO leadership characteristics, including narcissism, which can play a dual role. CEO narcissism, characterized by ambition, high self-confidence, and a tendency to take risks, can have a significant impact on corporate financial policies. This study aims to analyze the influence of CEO narcissism on the management and effectiveness of operational costs in digital startups.

This study uses a quantitative approach with a survey method involving CEOs from various digital startups in Indonesia. The narcissism scale was used to measure the level of CEO narcissism, while data related to operational costs were collected from startup financial reports. Regression analysis was conducted to examine the relationship between CEO narcissism and operational cost effectiveness, with control variables such as company age and startup size.

The results show that CEO narcissism has a significant influence on operational cost management. CEOs with high levels of narcissism tend to make less prudent decisions in budget allocation, potentially increasing operating costs inefficiently. This impact is more prominent in startups that are still in the early stages of development, where cash flow stability is essential.

These findings provide important insights for investors and stakeholders in assessing the risks associated with leadership characteristics in startups. This study recommends that shareholders and startup boards consider CEO narcissistic traits in leadership evaluation to create more optimal cost management. The results of this study are expected to contribute to the development of literature on the relationship between CEO characteristics and financial performance in the context of digital-based startups.

Keywords: CEO Narcissism-Digital Startup-Operating Expenses-Financial Management-Leadership

Topic: Financial Management