Chapter 10 The Dark Side of Discretion: Leader Personality and Organizational Decline

We review the literature to determine how discretion, defined as the freedom to make decisions, moderates the relationship between leader personality and organizational performance. Discretion increases with level in organizations so that top executives have the most discretion and the greatest opportunity to impact organizational performance. We describe how personality drives executive actions and decision making, which then impacts organizational performance; the more discretion a leader has, the more leeway there is for his or her personality to operate. Finally, using research and contemporary business examples, we illustrate the dynamics linking personality, discretionary freedom, and destructive leadership in and of organizations.