Assessing the Generalizability of Managerial Discretion: An Empirical Investigation in the Arab World

Abstract

The purpose of this paper is to examine the generalizability of national-level managerial discretion and to assess whether the national context play a role in changing mainstream research findings. Based on a sample of three Arabian countries and using a panel of prominent cross-cultural scholars who provided 138 discretion scores for the sampled countries, we replicate the national framework of Crossland and Hambrick (2011) in a new cultural context. The cultural dimensions were measured via survey responses of 375 middle-managers based on House et al. (2004) cultural practices scale. Consistent with Crossland and Hambrick (2011), we demonstrate that individualism and uncertainty tolerance have the same positive effect on CEOs discretion even in a different cultural setting. In contrast, we show that power distance has a positive and significant effect on 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. Accordingly, we contribute by showing the importance of the national setting in affecting the generalizability of discretion findings.