A rejoinder on managerial discretion: Andersen (2017) vs Haj Youssef and Teng (2019)

Abstract

Purpose This paper aims to demonstrate the efforts of Hay Youssef and Tang (2019) to reaffirm the importance of managerial discretion is unsuccessful. Design/methodology/approach Theoretical frameworks from traditional and recent literature on the concept of managerial discretion are related to corporate governance scholarship. Findings There are in fact no studies on managerial discretion based on explicit theoretical and empirical definitions and thus no studies published which have measured the degrees of managers’ discretion. The conclusion is that the inability to define the notion of managerial discretion is tantamount to the inability to research it. Practical implications Research on managerial discretion does not provide any advice to owners and directors of boards on granting top executives a high or a low degree of discretion. Originality/value This paper reaffirms the conclusion of Andersen (2017) that corporate governance scholarship will improve if it abandons the concept of managerial discretion.

Myths and ceremonies among the corporate governance institutions: introducing the concept of corporate governance culture

“…The range of managers' discretion that may hinder or permit executives to exercise their strategic agenda (Haj Youssef and Teng, 2019). Andersen (2020) assumes that the discretion emerges from the individual, organisational, industry and institutional environments, as well as organisational and national culture.…”

“…They highlighted the importance of researching intervention processes that affect team and, ultimately, company performance. The range of managers’ discretion that may hinder or permit executives to exercise their strategic agenda (Haj Youssef and Teng, 2019). Andersen (2020) assumes that the discretion emerges from the individual, organisational, industry and institutional environments, as well as organisational and national culture. The weaknesses of quantitative studies and the need to use qualitative methods to consider the influence of organisation–environment interdependencies on the effectiveness of corporate governance (Cucari, 2019). Nordberg and Booth (2019) allude to this, warning of the limitations of relying on structures to understand the effectiveness of boards Psychological challenges of managers and other staff that are ignored by codes of conduct (Eriksson and Svensson, 2018).…”