Managerial Discretion Essay Example | Topics and Well Written Essays - 2250 words

Managerial Discretion - Essay Example er, managers need to be able to exercise their own judgment in hiring decisions, strategic planning, effective administration and resource allocation decisions. The consequence of not allowing such discretion would be a lumbering organization that is unable to take nimble actions that can keep it competitive in a global marketplace. Absence of managerial discretion would lead to a heavily bureaucratized company that takes much more time to make and implement strategic decisions than its competitors and thus would fall by the wayside. At the same time, allowing managers to run amok with their own preferences can be equally dangerous by setting up a situation in which conflicting decisions are made at different levels of an organization that end up stalling progress. The effective organization strikes just the right balance by allowing a high degree of managerial discretion while instituting appropriate constraints to keep the business functioning effectively. Defining Discretion Key (1997) defines discretion as "a belief that individuals can influence their environment. The concept of discretion, originally borrowed from the judiciary, involves decision making that is guided by individual principles and beliefs unfettered by external control" (par. 13). Thus, discretion is necessarily a subjective determination that a particular manager has a range of options available to him/herself. Key (2002) further maintains that "Discretion is based on the belief that one has responses available with which to influence the environment. Individual perception influences whether or not an individual believes there are actions available to him or her" (par. 2). This subjective determination has been described as "perceived latitude of action." The concept of managerial discretion... The importance of managerial discretion to modern companies is substantial, and has long been recognized as such. Discretionary behavior by mangers is essential to the strategic operation of a company; but at the same time allowing unfettered discretion can be hugely detrimental to the well-being of a corporation, as evidenced by the scandals that have taken place in recent years in the United States and elsewhere. While managers must have the ability to analyze a situation and determine and appropriate course of action, there must be some guidelines – or constraints as it were – placed on that discretion in order to protect the company from these types of damaging developments. Several studies on the scope and limits of managerial discretion have found that there are several variables influencing and limiting the exercise of discretion in modern business. These include such factors as age, length of tenure, educational attainment, gender, locus of control, and organiza tional culture. Each of these factors has a direct impact on the extent to which managers feel free to exercise discretion, or not; and consequently they affect the success or failure of a business. Ultimately, managerial discretion is a critical balancing act for any business that seeks to compete successfully in today’s global business environment.