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Managerial Discretion

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The Palgrave Encyclopedia of Strategic Management

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Abstract

Managerial discretion is the latitude that executives have to affect the activities of the companies they run, as opposed to merely accepting internal and external influences. There are two distinct streams of literature. In one, agency theory, managers are assumed to be opportunistic and likely to misallocate firm resources to their own use unless restrained by well-designed incentives, weighty governance or heavy debt burdens that limit the availability of discretionary capital. The other stream is sanguine about managerial motivation and measures discretion by the financial latitude that management has to allocate or reallocate resources to high-yield purposes. Empirical research is ongoing in both streams.

This entry was originally published on Palgrave Connect under ISBN 978-1-137-49190-9. The content has not been changed.

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Authors and Affiliations

  1. Berkeley Research Group, LLC, 2200 Powell Street, Suite 1200, Emeryville, CA, 94608, USA

    Greg Linden & David J. Teece

Authors
  1. Greg Linden
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  2. David J. Teece
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Correspondence to Greg Linden .

Editor information

Editors and Affiliations

  1. Stanford University , Stanford, California, USA

    Mie Augier

  2. Tusher Ctr Intellectual Capital, University of California Tusher Ctr Intellectual Capital, Berkeley, California, USA

    David J. Teece

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© 2016 The Author(s)

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Linden, G., Teece, D.J. (2016). Managerial Discretion. In: Augier, M., Teece, D. (eds) The Palgrave Encyclopedia of Strategic Management. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-94848-2_738-1

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  • DOI: https://doi.org/10.1057/978-1-349-94848-2_738-1

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  • Publisher Name: Palgrave Macmillan, London

  • Online ISBN: 978-1-349-94848-2

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