Narcissism in the workplace is a serious issue and may have a major detrimental impact on an entire organization. Narcissistic individuals in the workplace are more likely to engage in counterproductive work behavior, especially when their self-esteem is threatened. Narcissism is both a personality trait and a personality disorder, generally assessed with the Narcissistic Personality Inventory.
Oliver James identifies narcissism as one of the dark triadic personality traits in the workplace, with the others being psychopathy and Machiavellianism. These three traits have been found to correlate moderately to strongly with one another. Dark triad traits also share strong negative correlations with Honesty-Humility traits. Narcissism is distinguished from the other dark triad traits by its positive correlations with openness and extroversion.
Narcissists typically perform well at job interviews; they receive more favorable hiring ratings from interviewers than individuals who are not narcissists. Even more experienced and trained raters evaluate narcissists more favorably. This is perhaps because interviews are one of the few social situations where narcissistic behaviors, such as boasting, actually create a positive impression; however, favorable impressions of narcissists are often short-lived. Interviewers' initial impressions of narcissistic applicants are formed primarily on the basis of highly visible cues, which makes them susceptible to biases.
Narcissists are more skilled at displaying likable cues, which lead to more positive first impressions, regardless of their long-term likability or job performance. Upon first meeting narcissists, people often rate them as more agreeable, competent, open, entertaining, and well-adjusted. Narcissists also tend to be neater and flashier dressers, display friendlier facial expressions, and exhibit more self-assured body movements. Importantly, while narcissistic individuals may rate their own job performance more favorably, studies show that narcissism is not related to job performance. Thus, while narcissists may seem to perform better and even be rated as performing better in interviews, these more favorable interview ratings are not predictive of favorable job performance, as narcissists do not actually perform better in their jobs than non-narcissists.
There tends to be a higher level of stress with people who work with or interact with a narcissist. While there are a variety of reasons for this to be the case, an important one is the relationship between narcissism and aggression. Penney and Spector found narcissism to be positively related to counterproductive workplace behaviors, such as interpersonal aggression, sabotaging the work of others, finding excuses to waste other peoples' time and resources, and spreading rumors. These aggressive acts can raise the stress of other employees, which in turn increases absenteeism and staff turnover.
The narcissistic manager will have two main sources of narcissistic supply: inanimate (status symbols like cars, gadgets or office views); and animate (flattery and attention from colleagues and subordinates). Teammates may find everyday offers of support swiftly turn them into enabling sources of permanent supply, unless they are very careful to maintain proper boundaries. The narcissistic manager's need to protect such supply networks will prevent objective decision-making. Such a manager will evaluate long-term strategies according to their potential for gaining personal attention instead of to benefit the organization.
Narcissists like hierarchical organisations because they think they will rise to high ranks and reap status and power. They take special interest in acquiring leadership positions and may be better at procuring them. Narcissists are less interested in hierarchies where there is little opportunity for upward mobility. A classic narcissist is more concerned with getting praised and how they are perceived than doing what benefits all of the "stakeholders".  Some narcissistic attributes may infer benefits, but the negative and positive outcomes of narcissistic leadership are not yet fully understood.
According to Alan Downs, corporate narcissism occurs when a narcissist becomes the chief executive officer (CEO) (or another leadership role) within the senior management team and gathers an adequate mix of codependents around him or her to support the narcissistic behavior. Narcissists profess company loyalty but are only really committed to their own agendas; thus, organizational decisions are founded on the narcissist's own interests rather than the interests of the organization as a whole, the various stakeholders, or the society in which the organization operates. As a result, a certain kind of charismatic leader can run a financially successful company on thoroughly unhealthy principles (at least for a time).
Neville Symington has suggested that one of the ways of differentiating a good-enough organisation from one that is pathological is through its ability to exclude narcissistic characters from key posts.
DuBrin suggests the following coping strategies:
Another method for dealing with narcissism is the gray rock method. This practice includes responding to the narcissist in monotone, emotionally void speaking patterns; avoiding addressing either party's personal life; and not engaging in stories or information designed to draw attention. For greatest effect, the user of the gray rock technique cannot allow the narcissist to know that it is in use. If they become aware of being manipulated, particularly volatile individuals may react explosively to try to get the user of the technique to break.
In 2007, researchers Catherine Mattice and Brian Spitzberg at San Diego State University, USA, found that narcissism revealed a positive relationship with bullying. Narcissists were found to prefer indirect bullying tactics (such as withholding information that affects others' performance, ignoring others, spreading gossip, constantly reminding others of mistakes, ordering others to do work below their competence level, and excessively monitoring others' work) rather than direct tactics (such as making threats, shouting, persistently criticizing, or making false allegations). Studies of adolescents using self-reports and teacher evaluation also indicated that narcissists are more likely to integrate aggressive and confrontational behaviors due to low self-esteem.
The research also revealed that narcissists are highly motivated to bully, and that to some extent, they are left with feelings of satisfaction after a bullying incident occurs. Despite the fact that many narcissist will avoid work, they can be eager to steal the work of others. In-line with other dark triad traits, many narcissists will manipulate others and their environment so that they can claim responsibility for company accomplishments that they had little or nothing to do with.
Strong links between narcissism and sexual harassment, associated with ego centrism and willingness to exploit others. Additional research has also been done that directly correlates narcissism with a proclivity to engage in sexual harassment. Relevant correlates include sociosexuality, unrestricted sexuality, and extroversion.
Crompton has distinguished what he calls productive narcissists from unproductive narcissists.Maccoby acknowledged that productive narcissists still tend to be over-sensitive to criticism, over-competitive, isolated, and grandiose, but considered that what draws them out is that they have a sense of freedom to do whatever they want rather than feeling constantly constrained by circumstances, and that through their charisma they are able to draw people into their vision, and produce a cohort of disciples who will pursue the dream for all it's worth.
Others have questioned the concept, considering that the dramatic collapse of Wall Street and the financial system in 2009 must give us pause. Is the collapse due to business leaders who have developed narcissistic styles--even if ostensibly productive? Certainly one may conclude that at best there can be quite a fine line between narcissists who perform badly in the workplace because of their traits, and those who achieve outrageous success because of them.