Managerial Discretion and Performance in China

1. Front Matter

   Pages i-xxiii

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2. Introduction

   • Hagen Wülferth

   Pages 1-22

3. Literature Review and Hypotheses

   • Hagen Wülferth

   Pages 23-142

4. Unit of Analysis

   • Hagen Wülferth

   Pages 143-171

5. Model Specification

   • Hagen Wülferth

   Pages 173-255

6. Validity and Reliability of Empirical Discretion Model

   • Hagen Wülferth

   Pages 257-368

7. Empirical Results of Model

   • Hagen Wülferth

   Pages 369-430

8. Conclusion

   • Hagen Wülferth

   Pages 431-508

9. Back Matter

   Pages 509-534

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​The theoretical and empirical literature to date has fallen short of reaching a consensus as to whether granting more managerial discretion to managers tends to enhance, not alter or diminish organizational performance (the discretion puzzle). This book aims to build a bridge between these contradictory results by synthesising principal-agent theory, stewardship theory, and managerial discretion theory into a new empirically-validated model. Using a representative sample of 'double-blind' interviews with managers of 467 firms in China and applying partial least squares path modelling (PLS), the study identifies a potential cause of the discretion puzzle: the failure of the extant literature to account for granularity in the way that managers use their discretion. This generates far-reaching implications for theoretical and empirical research as well as practical recommendations for managing managers in multinationals and Chinese companies.  

• China
• Managerial Discretion
• Partial Least Squares Path Modelling (PLS)
• Principal-Agent Theory
• Stewardship Theory

• McKinsey & Company, Inc., Beijing, China, People's Republic

  Hagen Wülferth

Dr. Hagen Wülferth is a management consultant with McKinsey & Company in China. Fluent in Mandarin Chinese, his main expertise and research interests are strategic management and key success factors of multinationals and Chinese companies. Dr. Wülferth studied economics and management on a scholarship from the University of Oxford, where he won numerous awards and prizes.

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