While it may seem intuitive to assume that power-hungry bosses are primarily motivated by power, but research from UNSW Business School suggests the matter is a bit more complex than that, and power-hungry bosses often have multiple motivations.

“There is one group of people who might have some kind of narcissistic personality disorder, and we can all probably think of examples of that. And there are other people who have ‘rules of thumb’ that got them where they are in order to be successful,” the researchers explain.

“And then some people just don’t trust others and like to do things themselves; there’s nothing that’s necessarily or deeply profoundly psychologically problematic about that—it’s just the way some people are.”

Harmful bosses

The paper highlights the harm that power-hungry bosses can do, not least due to their tendency to hoard decision-making capabilities. Such desires tend to be especially common at the top of organizations, which can have significant commercial implications for firms.

Foremost among these is that leaders who strive to hang onto power are generally happy to sacrifice the wellbeing of their organization in order to retain that control. These power-hungry leaders are also often quite centralized within their structure, so their presence can result in a flattening of the hierarchy.

“If you can think back to a time when banks had branches with local managers, it has been very well-documented that they are much better at assessing credit risks than people back in head office, for example,” the authors explain.

“Similarly, people in an academic department at a university probably know more about who the best people are in their particular field (such as a certain branch of anthropology or a certain branch of mathematical number theory) than people in the central administration of the university. This principle is roughly true in almost every organization throughout the economy.”

Companies at risk

The study found that larger organizations, such as multinationals, are at the highest risk of this problem. Indeed, the larger and more dispersed the organization is, the more likely they are to suffer from leaders who want to hog decision-making powers.

The researchers believe that boards hold the key to ensuring that power-hungry leaders don’t take hold in their organization, with the recruitment of the CEO a key first step.

“Is the candidate they have in mind a ‘power-hungry decision-rights hoarder’? That could be bad news for the organization. When it comes to making decisions, are they a hoarder or not? Are they a good delegator or not? And since there’s an underappreciated downside or drawback to having a hoarder in charge, you may want to think carefully about that dimension of who you’re choosing,” they explain.

They could also consider introducing explicit rewards for delegating tasks and decision making to others. These could include various benefits that come from structuring the organization in a particular way.

“At the board level, they need to be quite explicit about the kind of formal authority that is delegated to say, divisional managers, or the amount of authority that is delegated below the CEO,” the researchers conclude. “Obviously, the CEO has to be in charge and you can’t undercut their authority.”