Lyons Therapy - How A Company's Actions May Reflect Narcissistic Behaviors.

How A Company's Actions May Reflect Narcissistic Behaviors.

What Business Can Learn from Organizational Psychology.

By Dr. Gregory Lyons, PsyD, LCPC.
8/24/2025.

Narcissism has become one of the most talked-about words in therapy and in everyday conversation. People use it to describe toxic relationships, leadership gone wrong, or even cultural trends that feel self-absorbed and detached from empathy. But narcissism can be interpreted as not only an individual negative behavioral practice — it can also be understood at the organizational level. Entire organizations can develop patterns that mirror the traits of narcissism: grandiosity, craving admiration, lack of empathy, and exploitation of relationships. When we step back and use this lens to evaluate how businesses operate, this perspective can help us interpret some of these same patterns that could cause dysfunction in organizations, just as they do in people and families.

From the outside, organizations may present as being strong, successful, and enviable. They may dominate markets, win awards, and attract attention with flashy branding. But like the individual who carefully curates a polished exterior while struggling internally, “narcissistic” organizations could have “cracks” beneath the surface of their everyday operations and corporate structure. Some of these symptoms can resemble employee burnout, which can cause rapid turnover, resulting in time-consuming personnel acquisition and extra costs for retraining. Decision-making could become muddied and wasteful, which could cause the internal structure of the business operating dynamic to grow fragile. Encouraging organizations to investigate themselves through this lens could help them develop the ability to critique unhealthy practices objectively, and potentially lead to substantial long-term changes that would be identifiable as beneficial in the long run.

A Narcissistic Company Profile.

A narcissistic organization could be imagined as one that puts image, power, and admiration above authentic functioning. This can be represented as a set of tendencies and behaviors that can be found across industries and at different scales of business.

Grandiosity: An organization becomes obsessed with growth, dominance, and external validation. Expansion is celebrated for its own sake, even when it could outpace the capacity of production, and ignores sustainability. Branding campaigns and surface-level marketing could take precedence over the deeper structures that are established within the standard operating practices, to keep a company healthy. This mirrors the psychotherapeutic behavioral practices of an individual who has been diagnosed with narcissism and their pursuits where their personified expectations of image and accolades are more important than considering their own inner well-being and maintaining strong social and community ties.
Need for Admiration: These organizations feed on applause. Public relations victories, awards, and recognition matter more than long-term stability. Success is measured not by the satisfaction of employees or the strength of internal systems but by how others perceive the brand. Just as a family member may crave constant validation to prop up a fragile sense of self, the company becomes addicted to praise and external affirmation rather than the sustainability of its organizational infrastructure.
Lack of Empathy: For individuals diagnosed with narcissism, empathy fades, and people inside and outside the system begin to suffer. Within organizations, this could be seen as workers experiencing burnout, customers feeling unheard, and business partners and supply chains feeling used or unappreciated. Instead of relationships being reciprocal, they become secondary to the pursuit of prestige. Some organizations may forget that usually healthy business practices exist through the delicate network of human productivity, willingness to perform departmental and personal needs, rather than focusing on public perception of how they are viewed as individuals, rather than an organizational whole. In systemic terms, it disregards its relational bonds, turning inward to serve only the self.
Exploitation: Partnerships are often seen and treated as disposable. Employees may be driven hard with little recognition, consumers may be seen only as revenue streams, and even collaborative partners may be discarded once their usefulness has passed. Relationships become transactional and utilitarian, rather than genuine or sustained. This mirrors exploitative interpersonal dynamics of an individual who has been diagnosed with narcissism and their possible personal practices, where others are valued only for what they provide in the moment.

Therapy for Business.

If we borrow from psychology, we can find frameworks that help us make sense of these organizational tendencies. The point is not to literally diagnose organizations, but to use therapeutic metaphors to understand why specific patterns persist — and what might help to change them.

Family Therapy Lens: In dysfunctional families, boundaries blur, roles are confused, and hierarchies become distorted. This concept can be seen as the same in organizations where leadership holds power, middle managers are disempowered, and departments compete rather than collaborate. Structural family therapy teaches us that systems thrive when boundaries are respected, roles are clear, and hierarchy is balanced. Organizations, like families, need order, clarity, and mutual respect.
Strategic Therapy Lens: Families sometimes repeat cycles that keep them stuck: arguments that never resolve, roles that never shift, strategies that keep producing the same negative outcomes. Organizations do the same. An example of this is the practice of throwing money into endless image campaigns or restructuring repeatedly without addressing root causes. Strategic therapy emphasizes breaking these patterns, reframing the story, and creating new interactional sequences. Businesses can apply this lens by identifying the cycles that waste capital and demoralize staff, then actively interrupting them.

Why It Matters.

It would be easy to dismiss all of this as an abstract metaphor, but the consequences of organizational narcissism are very real.

These issues can be identified as rare organizational business practices. They can exist across industries, from tech startups to legacy corporations. This article was presented to promote the discussion, acknowledging that business culture, like family culture, can fall into maladaptive cycles that cause harm. As in psychotherapeutic approaches, recognizing the signs of narcissism in organizations allows us to address them.