Strategizing in a focused context: managerial discretion in the Arab world

Abstract

Purpose The purpose of this paper is to broaden the national-level construct of managerial discretion and to investigate the effect of cultural practices on executive discretion. Design/methodology/approach 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, the authors 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.’s (2004) cultural practices scale. Findings The authors extend the national-level framework of managerial discretion and find that an encompassing array of cultural practices plays a crucial role in shaping the degree of discretion provided to CEOs. The authors empirically demonstrate that power distance, future and performance orientation, along with gender egalitarianism and assertiveness have positive relationships with managerial discretion. However, institutional collectivism, uncertainty avoidance and humane orientation negatively affect the degree of discretion provided to CEOs. Originality/value The study fills a gap in the literature regarding the national-level framework of managerial discretion. The results indicate that executives can take idiosyncratic and bold actions to the extent to which the cultural environment allows them to do so. Also, the authors discover new national-level antecedents of managerial discretion that have not been considered in earlier studies and confirm the context dependency of this concept.

Exploring cultural heterogeneity

“…Executives' discretion in this case is a function of both the holder-specific discretion, particularly to each stakeholder group, and the aggregate discretion (the shared behaviour), which is common across all stakeholder groups. In the cultural realm, managerial discretion has been considered from the latter dimension onlythe aggregation of stakeholders' zones of acceptance using cultural values or practices (Crossland and Hambrick, 2011;Haj Youssef and Christodoulou, 2017b). However, the particularity of each stakeholder group's zone of acceptance is of great importance.…”

“…Individualism, the cultural practice that relates to autonomous as opposed to consensus-based behaviours and actions is arguably the most prominent (Gelfand et al, 2011). Societies with a general tendency to act in an individualistic manner, will provide larger zone of acceptance for executives' decision-making (Crossland and Hambrick, 2007;Haj Youssef and Christodoulou, 2017b). Bold, idiosyncratic and unilateral actions are acceptable.…”

“…Another cultural dimension that, if shared among all societal members, has shown positive relationship with managerial discretion is uncertainty tolerance (Crossland and Hambrick, 2011;Haj Youssef and Christodoulou, 2017b). This dimension refers to the tolerance for unpredictable, means-ends ambiguity and quantum actions.…”

“…Recent works (e.g. Crossland and Hambrick, 2011;Haj Youssef and Christodoulou, 2017b) suggest that culture, as the central tendency, is directly related to managerial discretion. However, despite opening a new horizon in the discretion literature and adding an important antecedent, such research often uniformly ignores the heterogeneity/homogeneity that exists in each culture.…”

“…In the same vein, other authors ignored the importance of intra-cultural variation. Haj Youssef and Christodoulou (2017b) extended the national level dimension of managerial discretion by discovering new antecedents, but they also assumed greater homogeneity within the Arab countries. Although, they open a new horizon in the discretion research and show the importance of context – namely cultural practices – while studying managerial discretion, they ignored the heterogeneity in behaviour within countries and only looked at the central tendency of the society.…”