Intra-Cultural Variation, Zone of Acceptance and Managerial Discretion: A Theoretical Discussion

Abstract

This paper examines the theoretical relationship between intra-cultural variation and managerial discretion. Research into the degree of discretion, or latitude of actions, has primarily focused on the individual-, organizational-, and industry-level factors, which either allow or constrain executives to take strategic actions. Despite, the recent attempt to discover the impact of national culture, mainly values, on managerial discretion, culture has been studied on an aggregate level by assuming spatial homogeneity within a country. However, recent evidences have shown that intra-cultural variation could be as salient as or sometimes even more than inter-country variation, yet there has been no discussion on its potential association with managerial discretion. As such, we address this gap and investigate the relationship of this cultural aspect with managerial discretion. Using institutional, stakeholder and upper echelons theories, our study proposes a strong relationship between intra-cultural variation and managerial discretion. Therefore, our study contributes to the strategic management and culture literature by providing a more nuanced understanding of such relationship and most importantly by introducing a new national construct that could play an important role in the strategic decision making of business executives.