Executive Ego: Juggling a Double-Edged Sword
When the Boss is a Bully: Employee Responses to Abusive Supervisors
2024 Guangdong-Hong Kong-Macao Greater Bay Area Pay and Benefits Survey Reveals that Hong Kong’s Salary Increase Rate Once Again Exceeds that of Guangdong and Macao
Dr. Liyao WANG Awarded Young Scientists Fund from National Natural Science Foundation of China (NSFC)
HKBU School of Business Hosted “MBA HUB x BUX RESEARCH: Global Connection | Unlock Opportunities” Forum in Shenzhen
EFrom Enron’s downfall to the collapse of crypto exchange FTX, we are well aware of the risks posed by CEOs blinded by their ego. Yet, many larger-than-life CEOs like Elon Musk and Steve Jobs, not known for their modesty, have built highly successful businesses that revolutionised entire industries. Is being led by a CEO with a big ego good for business? A new paper examines the impact of executive hubris on attracting and retaining customers.
Executive hubris—the tendency of executives to overestimate their abilities—is a psychological trait commonly observed among corporate leaders. Unsurprisingly, it has been shown to significantly impact firm performance and strategic decisions, whether overpaying for acquisitions or engaging in socially irresponsible activities. Nevertheless, flamboyant corporate leaders can also drive innovation, boost sales, and turn around businesses. Since a firm cannot survive without generating revenues, assessing the impact of executive hubris on how firms acquire and retain customers is crucial.
Acquiring new customers and keeping old ones happy both hinge on the effective use of information and data. Attracting new customers is costlier, requiring external information and significant marketing efforts. In contrast, retaining customers tends to be cheaper as firms can leverage internal data to create relatively inexpensive and low-risk initiatives such as loyalty programmes.
Applying insights from upper echelons theory—which suggests senior executives view situations through lenses shaped by their unique experiences, values and personalities—researchers surveyed executives from 196 distributor firms in China’s Guangdong province and conducted a series of experiments using business students from Hong Kong. The results? Executive hubris does markedly influence customer acquisition and retention strategies. Specifically, executives with higher levels of hubris are more inclined to take bold strategic actions, launch aggressive marketing campaigns, and embrace risk-taking behaviours to
attract new customers, but often neglect the more mundane task of improving customer satisfaction.
Interestingly, this tendency is amplified when executives face higher market uncertainties, as the thrill of conquering new markets proves irresistible to managers convinced of their superior abilities. Conversely, a firm’s experience in a specific market helps moderate the ambitions of more hubristic managers. Additionally, findings suggest that a strategy balancing customer acquisition and retention improves overall firm performance.
While hubristic leaders’ audacious approaches may capture the attention of new prospects, they can also breed overconfidence. There is a negative relationship between executive hubris and a firm’s ability to retain its customers. By overlooking customer needs, disregarding feedback, and making decisions that erode customer loyalty, hubristic leaders may come across as arrogant, especially in highly competitive markets.
What should firms do? While start-ups in new industries may benefit from more hubristic leadership, firms in more mature markets should seek to harness the ego of their leaders if their objective is to up-sell or cross-sell to existing customers. In addition to implementing robust checks and balances, firms should encourage open
communication channels while fostering a customer centric culture. Supporting humble executives with additional marketing resources may also be necessary when they are tasked with attracting new customers.
As for budding CEOs, try to keep your ego in check, especially if you don’t want to end up like the many disgraced executives who once thought they were the smartest people in the room!
Dr. Danny WANG Associate Professor Department of Management, Marketing and Information Systems
Huang, L., Paterson, T. A., & Wang, S. (2022). Identity-Consistent Self-Image maintenance following leader abuse: Integrating SelfPresentation and Self-Concept orientation perspectives. Journal of Management, 50(4), 1361–1392. https://doi.org/10.1177/01492063221132794
From Meryl Streep in The Devil Wears Prada to Kevin Spacey in Horrible Bosses, fictional depictions of abusive bosses are plentiful. Unfortunately, these portrayals mirror a harsh reality, where too many toxic leaders still wield unchecked power. But beyond financial worries, why do employees tolerate this behavior? A recent paper sheds light on how some employees, in their efforts to maintain a positive selfimage, end up engaging in socially beneficial behaviours towards both co-workers and even the toxic leader.
As employees, we often juggle two main concerns: managing our image with the boss and shaping how colleagues perceive us. This challenge becomes even more critical when dealing with an abusive supervisor, since toxic leadership fuels dysfunction and drags down productivity. In such hostile environments, employees adapt by using various tactics to appease an overbearing manager and maintain the acceptance of peers who witness this dynamic. Thus, many mistreated workers end up staying in toxic environments, blaming themselves instead of pushing back. Some go even further, doing all they can to regain the boss’s favour. While factors like how that same supervisor treats co-workers, office dynamics, and perceived intentions matter, the bigger question remains: how do some employees thrive despite abusive supervision while others crumble?
After surveying 525 employees and their supervisors in two field studies conducted across a major convenience store chain and a large automobile manufacturing company in China, one conclusion stands out: employees adapt to toxic bosses in ways that shape both their successes and setbacks. Findings show that workers with a strong “relational self-concept”—those who define themselves through their relationships— are more likely to cope with abuse by strategically “managing around” their peers and “managing up” to gain favour with an abusive boss. While they may achieve positive outcomes for both colleagues and
the organisation in their efforts to please all parties, these strategies can take a significant psychological toll. This is especially true for those focused on preserving their social standing amidst the reputational fallout from a toxic relationship with their supervisor. Meanwhile, others fare even worse: melting under the glare of peers and their boss’s abuse, they may resort to unproductive behaviours, from gossiping at the coffee machine to skiving off work on Fridays.
should consider proactive steps—whether it’s escalating the issue to senior management, filing a complaint with HR, seeking a reassignment or, if possible, quitting.
Meanwhile, let’s face it: life is not always Emily in Paris, so remember to be a good boss once you make it to the top!
In their attempts to protect their reputation with colleagues while trying to win over an abusive boss, victims of abusive supervisors often end up blaming themselves, creating an unsustainable situation in the long term. While concerns over job security and financial pressures are understandable, mistreated employees Dr. Siting WANG
The Centre for Human Resources Strategy and Development (CHRSD) of the HKBU School of Business released the results of the “2024 Guangdong-Hong Kong-Macao Greater Bay Area Pay and Benefits Survey” on 24th October 2024 at Hong Kong Baptist University. According to the results, the average salary increase rate for Hong Kong employees in 2024 is 3.5%, which is the second consecutive year that the figure exceeded that of cities in Guangdong and Macao. These are the only two years in the past three decades that Hong Kong’s salary increase rate has surpassed that of Guangdong cities.
Despite the unfavourable economic environment in recent years, employers in Guangdong, Hong Kong and Macao forecast a relatively optimistic salary increase rate of 3.8% to 3.9% for the coming year. The survey also found that the average starting salaries for fresh university graduates in Hong Kong across various industries have accrued an increase of 27.8% to 45.3% (an average of 33.9%) since 2019. For further details, please refer to the link: http://bit.ly/4hjWFb2
The School of Business is proud to announce that Dr. Liyao WANG, Assistant Professor, Department of Accountancy, Economics and Finance, has been awarded the prestigious Young Scientists Fund from the National Natural Science Foundation of China (NSFC). This recognition highlights Dr. WANG’s exceptional research in the field of factor investing in China’s A-share market.
Her research, titled “Lottery Preference for Factor Investing in China’s A-Share Market”, found that high-return investment factors with very high daily returns tend to perform better in the future. This consistent pattern, known as the “factor MAX premium”, helps explain many stock market anomalies. These findings highlight investors’ preference for high-return factors, shedding light on investment behaviours in China’s A-share market.
Dr. WANG is among five scholars from the Hong Kong Baptist University (HKBU) to receive this honour in 2024. While Dr. WANG is from the School of Business, the other four awardees are from the Faculty of Science. Each recipient of the Young Scientists Fund will receive RMB 300,000 to support their research initiatives for three years. This fund aims to empower young scholars to conduct fundamental research in their disciplines, enhancing their skills and creativity, enabling them to undertake innovative projects independently, and advancing the next generation of scientists.
On 30th November, 2024, the HKBU School of Business held the “MBA HUB x BUS RESEARCH: Global Connection | Unlock Opportunities” Forum at Park Hyatt Shenzhen. The event, which also featured the official launch ceremony of the MBA Hub, attracted around 120 business leaders, alumni, and industry experts for an afternoon of insightful discussions and networking.
Dr. Monique Shui-ki WAN, Associate Dean (Taught Postgraduate Studies) and Director of the MBA Programme, opened the event with an impactful welcome address. She noted that the world is navigating a turbulent economic landscape marked by rapid changes driven by the rise of AI and tense international relations. While these factors contribute to global uncertainties and complex challenges, they also present new opportunities. Dr. WAN stated, “In the face of these challenges, we must adopt strategic thinking and take proactive steps forward.” She explained that the establishment of the MBA Hub is a timely initiative aimed at providing a platform for alumni and students to share experiences and foster mutual growth toward a more sustainable future. Additionally, she highlighted HKBU’s commitment to promoting transdisciplinary initiatives that encourage collaboration and leverage diverse talents to address future social and business challenges.
Following her address, the MBA Hub was officially launched in a ceremony officiated by Dr. Monique Shui-ki WAN, Ms. Jenny LI, Director of the University Engagement Office (UEO), Dr. Zi WANG, Associate Professor of the Department of Accountancy, Economics and Finance (AEF), Mr. Jiaqi FAN (MBA 2014), Co-Chairman of the HKBU MBA (China) Alumni Association, and Dr. Yingdan XIAO (MBA 2011), Executive Chairman of the HKBU MBA (China) Alumni Association. This launch marked a significant milestone in the School’s commitment to fostering professional growth and further strengthening its closeknit community.
Dr. Zi WANG then delivered a keynote presentation exploring the complexities of the ongoing trade tensions between China and the U.S. He noted a significant global shift from hyperglobalisation to interventionist globalisation, particularly since Mr. Donald TRUMP took office in 2016. Dr. WANG argued that the trade sanctions initiated by the TRUMP administration are rooted in industrial policy rather than mere trade disputes. Following China’s entry into the WTO, U.S. concerns over job losses and unfair practices led to the 2018 tariffs, specifically targeting China’s “Made in China 2025” initiative, revealing that what appears to be a trade war is, in fact, an underlying technology war. With TRUMP returning to the White House, Dr. WANG pointed out that his new approach emphasises systematic interventionism and a focus on comprehensive security over efficiency. He concluded that the end of the hyperglobalisation era necessitates a fundamental rethinking of the global economy. As interventions become more common, the need for resilient “glocalisation” infrastructure increases. Although international expansion faces increased barriers, it presents significant growth potential.
The event also featured inspiring alumni sharing sessions. Mr. Meifa WANG (MBA 2009), Vice General Manager of the R&D Center at Shenzhen FRD Science & Tech Co. Ltd., Legal Representative at FRD Tech (Vietnam) Ltd., and CEO of FRD Tech (USA) Inc., shared his experiences in developing and expanding markets in Vietnam, offering a detailed, step-by-step guide on registering a company there. Mr. WANG highlighted key pitfalls to avoid, emphasising the importance of understanding local regulations and policies, as well as international trade rules.
Mr. Shijie YAN (MBA 2014), Director of Brand & Marketing Department, Global Business Group at CVTE, discussed effective strategies and case studies for expanding brands internationally, stressing the vital role of localised communication. He explained that brand localisation strategies must consider the target market’s culture, language, consumer behaviour, and competitive landscape, underscoring the importance of thorough market research. Mr. YAN also recommended developing original content that reflects local culture and festivals, along with organising both online and offline events to engage local consumers and strengthen brand affinity.
The forum concluded with an engaging panel discussion and Q&A session, moderated by Dr. Yingdan XIAO. The panel included all the event speakers: Dr. Zi WANG, Mr. Meifa WANG, and Mr. Shijie YAN. They actively engaged with the audience, delving deeper into their presentations and exploring the challenges of cross-cultural brand expansion in greater detail.
Dr. Jian ZHANG
Assistant Professor Department of Accountancy, Economics and Finance
Superstition, Risk Aversion, and Audit Quality: Evidence from China
Auditing: A Journal of Practice & Theory
https://doi.org/10.2308/AJPT-2022-140
Prof. Christy M. K. CHEUNG
Chair Professor Department of Management, Marketing and Information Systems
Pursuing Social Justice through Doxing on Social Media: Implications of the 2019 Hong Kong Protests MIS Quarterly
https://doi.org/10.17605/OSF.IO/MSPDY
Date
Speaker
19 Feb 2025
09:00-10:30 Zoom
Topic
Centre for Business Analytics and the Digital Economy
Co-hosted with CEIBS, NTU, and NUS
6 Jan 2025
10:30-12:00 WLB 601
Prof. Rory TRUEX Princeton University
Under Pressure: Attitudes Towards China Among American Foreign Policy Professionals
Department of Accountancy, Economics and Finance
Prof. Po-Hsuan HSU National Tsing Hua University Green Products
The Research Espresso, a bimonthly e-publication covering everything you need to know about the latest research developments at the HKBU School of Business, focuses on four key areas: Research Insights (the main research topic of the month), Research Excellence (recognition of faculty members’ research achievements), News (research-related updates), and Seminars (sharing research skills and knowledge).
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