From stigma to strategy: unpacking the roles of narcissism and humility in entrepreneurs’ responses to failure and CSR engagement

Why failure in business still matters

When a new business collapses, the damage is not just financial. Entrepreneurs must also face judgment from others and doubts about themselves. This study explores how that social stain after failure affects whether business owners later invest in helping workers, communities, and the environment. It also asks a surprising question: can traits like narcissism and humility change how entrepreneurs learn from failure and, in turn, how socially responsible their next ventures become?

How society’s judgment follows failed founders

After a company shuts down, entrepreneurs often carry a mark of failure in the eyes of banks, partners, and even friends. The authors call this the stigma of entrepreneurial failure. It works at two levels. Public opinion forms harsh stereotypes, while individuals internalize these views, feeling shame and anxiety. That stigma can make it harder to raise money, rebuild networks, and try again. It can also push entrepreneurs to lie low, avoid attention, and focus narrowly on survival instead of long-term contributions to society.

Why social responsibility becomes a low priority

Corporate social responsibility, or CSR, includes actions like protecting the environment, treating employees fairly, and supporting local communities. These activities can repair reputation and build trust, but they are also very visible. For an entrepreneur already under scrutiny, such visibility can feel risky. The study argues that stigma drains emotional energy and shifts values away from caring for others toward self-protection. It also weakens social networks and access to resources. Together, these forces reduce both the desire and the perceived ability to invest in CSR, even though, in theory, CSR could help rebuild trust.

Learning from failure as the missing bridge

The researchers tested their ideas using multi-wave survey data from 277 Chinese entrepreneurs who had experienced business failure. They found that stigma harms CSR mainly by cutting off learning from failure. When failure is seen as a mark of disgrace, entrepreneurs are less confident, more emotionally exhausted, and less willing to reflect on what went wrong. Those who do learn from failure, by contrast, develop a sharper sense of market needs and social expectations. They become better at spotting new opportunities that align profit with social good and are more likely to choose CSR activities in their next ventures.

When self-focus helps and modesty hurts

One of the most striking findings concerns personality. Narcissistic entrepreneurs, who see themselves as special and capable, usually struggle to learn from mistakes. Yet under heavy stigma, their strong self-belief can protect them from crippling shame. Because they feel less crushed by others’ judgment, they stay engaged, process what happened, and may even strengthen their commitment to visible, socially responsible actions that can restore status. Humble entrepreneurs, on the other hand, tend to take others’ criticism very seriously. In a stigmatizing environment, their honesty and willingness to admit fault can slide into harsh self-blame, lower confidence, and weaker learning. This, in turn, reduces their likelihood of leading ventures that actively pursue CSR.

Turning stigma into a stepping stone

To a lay reader, the core message is that what happens inside an entrepreneur’s mind after failure can shape how responsibly their next company behaves. Stigma makes CSR less likely by choking off learning, but strong self-belief can sometimes blunt that effect, while excessive self-criticism can worsen it. The authors suggest that societies, investors, and support programs should treat failure less as a permanent stain and more as a learning stage. Doing so would not only help entrepreneurs recover but could also encourage future businesses that care more about workers, communities, and the planet.

Citation: Zhou, Q., Liu, C., Li, Z. et al. From stigma to strategy: unpacking the roles of narcissism and humility in entrepreneurs’ responses to failure and CSR engagement. Humanit Soc Sci Commun 13, 744 (2026). https://doi.org/10.1057/s41599-026-07078-2

Keywords: entrepreneurial failure, social stigma, corporate social responsibility, narcissism, humility