The purpose of our study is to broaden the national-level construct of managerial discretion and to investigate the effect of cultural practices on executive discretion.
Based on a sample of six Arabian countries and using a panel of prominent cross-cultural scholars who provided 262 discretion scores for the sample countries, we replicate and extend the national framework of Crossland and Hambrick (2011) in a new cultural context. The cultural dimensions were measured using survey responses of middle-managers based on House et al. (2004) cultural practices scale.
We extend the national-level framework of managerial discretion and find that an encompassing array of cultural practices play a crucial role in shaping the degree of discretion provided to CEOs. We empirically demonstrate that power distance, future and performance orientation along with gender egalitarianism and assertiveness has positive relationships with managerial discretion. However, institutional collectivism, uncertainty avoidance and humane orientation negatively affect the degree of discretion provided to CEOs.
Our study fills a gap in the literature regarding the national-level framework of managerial discretion. Our results indicate that executives can take idiosyncratic and bold actions to the extent to which the cultural environment allows them to do so. Also, we discover new national-level antecedents of managerial discretion that haven’t been considered in earlier studies and confirm the context dependency of this concept.