This is one of those dangerous personality types; dangerous, because they aren't likely to change. When hiring (or being hired yourself), stay away.

The reality is people aren't likely to change anything. People learn, but they don't change their personality. If a person is not open to learning by nature, there isn't much you can do.

But is the choice really, "deal with them the way they are" or "dictate new terms/fire them if they don't comply"? Maybe, but the second isn't really an option at all — successful teams are built on trust and rules/ultimatums don't get you very far with trust. I would go for a third option, if you have the power to make this happen:

Make it clear that what makes an individual successful is making the team successful.

Prima donnas have no place in such an environment. A person gets to be a prima donna by being rewarded (in some way) for being the smartest person.* Make sure that doesn't happen and that everyone else is aligned in making the team succeed, and the prima donna will either need to follow or they will stand out for not helping accomplish (or even impeding) the team's goals.

* Some people are rewarded by their own personal feeling of superiority when they put others down. These people are the most unlikely to change. They will probably need to go.

This is one of those dangerous personality types; dangerous, because they aren't likely to change. When hiring (or being hired yourself), stay away.

The reality is people aren't likely to change anything. People learn, but they don't change their personality. If a person is not open to learning by nature, there isn't much you can do.

But is the choice really, "deal with them the way they are" or "dictate new terms/fire them if they don't comply"? Maybe, but the second isn't really an option at all — successful teams are built on trust and rules/ultimatums don't get you very far with trust. I would go for a third option, if you have the power to make this happen:

Make it clear that what makes an individual successful is making the team successful.

Prima donnas have no place in such an environment. A person gets to be a prima donna by being rewarded (in some way) for being the smartest person.* Make sure that doesn't happen and that everyone else is aligned in making the team succeed, and the prima donna will either need to follow or they will stand out for not helping accomplish (or even impeding) the team's goals.

Likewise, the team's goal is to make the company successful. If not, the team itself is a prima donna. If lack of alignment around company mission/vision (or lack of company vision altogether) is a problem for you, I recommend the Entreleadership podcast series, particularly episode 2 (interview with Tony Hsieh of Zappos), 10 (team unity with Tony Dungy) and the Jim Collins episodes. I'd copy down some of the advice but the topic is too big and I could not do the interviews themselves justice.

* Some people are rewarded by their own personal feeling of superiority when they put others down. These people are the most unlikely to change. They will probably need to go.