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Dynamics of Managerial Discretion in Transition Economies
Linnaeus University, School of Business and Economics, Department of Management Accounting and Logistics. (Corporate Governance Research Group)ORCID iD: 0000-0002-8009-9949
2013 (English)In: Asian Journal of Business Research, ISSN 1178-8933, E-ISSN 1178-8933, 1-14 p.Article in journal (Refereed) Published
Abstract [en]

This conceptual paper is focusing on the dynamic nature of managerial discretion within the context of economic transition. The concept of managerial discretion is discussed in two diverse streams of literature. From the perspective of strategic management research, managerial discretion refers to the locus of managerial control, while the corporate governance research emphasizes control over corporation focusing on minimizing the discretionary power of the management team. This research attempts to highlight the complementarity of the two diverging perspectives. The paradox between managerial decision-making freedom and control is analyzed using example of economic transition. It is being argued that the presence of a dynamic institutional change characterizing the early stages of economic transition may assume the presence of higher degree of managerial freedom while the later stages of economic transition require more formalized mechanisms of control thereby limiting the degree of management discretionary power. As the level of environmental uncertainly is gradually decreasing during the process of economic transition the as institutional environment becomes more stable which, in turn, can lead to the establishment and formalization of control mechanisms. The methodological approach utilized in this study is a conceptual analysis of the previous research on managerial discretion applying institutional, corporate governance and strategic management research perspectives. A theoretical model uniting both corporate governance and strategic management perspectives on managerial discretion was developed. The institutional theory was applied to explain the complementarily of the two main perspectives, particularly within the context of institutional transition. Suggested directions for future research include empirical testing of changes in the level of the TMT discretion along the multiple stages of transition process and further development of interaction effects between different levels of the TMT discretion. 

Place, publisher, year, edition, pages
Malaysia: Asia Business Research Corporation , 2013. 1-14 p.
Keyword [en]
Corporate governance, transition economies, managerial discretion
National Category
Business Administration
Research subject
Economy, Business administration
Identifiers
URN: urn:nbn:se:lnu:diva-29973OAI: oai:DiVA.org:lnu-29973DiVA: diva2:659420
Available from: 2013-10-25 Created: 2013-10-25 Last updated: 2017-12-06Bibliographically approved
In thesis
1. Costs and Benefits of Delegation: Managerial Discretion as a Bridge between Strategic Management and Corporate Governance
Open this publication in new window or tab >>Costs and Benefits of Delegation: Managerial Discretion as a Bridge between Strategic Management and Corporate Governance
2016 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This dissertation addresses the question of effective delegation, exploring it through the concept of managerial discretion (i.e., a latitude of managerial actions, which lie in the zone of shareholders’ acceptance). While the corporate governance perspective on managerial discretion focuses mainly on the costs associated with delegation, the strategic management perspective emphasizes its benefits in creating value for the firm. Building on research in corporate governance and strategic management, this dissertation develops and empirically tests a theoretical framework that explains how the two distinct dimensions of managerial discretion jointly influence organizational outcomes. The proposed framework illuminates the importance of balance between the restraining and enabling decisions undertaken by professional managers. This dissertation makes a two-fold contribution to the field of corporate governance. First, it identifies and explains organizational and environmental forces that jointly shape strategic and governance dimensions of managerial discretion, redefining the concept. Second, it conceptually and empirically explores an integrative model of managerial discretion within the broader corporate governance framework, providing evidence of the joint effects of governance and strategic dimensions of discretion on organizational outcomes. The results suggest that the effect of governance dimension of managerial discretion on a firm’s performance is contingent on the strategic dimension of discretion. This draws attention to potential strategic implications of board monitoring over managerial decision making. While the majority of studies emphasize the benefits of increased control over managerial decision making, particularly stressing board monitoring, this dissertation also considers the benefits of delegation for firms’ strategic development. By reversing the polarity of the current emphasis on disciplining managers, this dissertation provides a more balanced view of the notion of corporate governance. The value of this approach derives from the integrated model, which highlights the benefits and the costs of delegation. 

Place, publisher, year, edition, pages
Växjö: Linnaeus University Press, 2016. 122 p.
Series
Linnaeus University Dissertations, 246/2016
Keyword
Managerial discretion, board of directors, agency theory, delegation, control, transition economy, Sweden
National Category
Business Administration
Research subject
Economy, Ekonomistyrning
Identifiers
urn:nbn:se:lnu:diva-52162 (URN)978-91-88357-09-0 (ISBN)
Public defence
2016-05-09, Wicksell, Hus K, Växjö, 10:00 (English)
Opponent
Supervisors
Available from: 2016-04-27 Created: 2016-04-20 Last updated: 2017-02-17Bibliographically approved

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Ponomareva, Yuliya

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Output format
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