Competitiveness and managerial discretion: an empirical investigation at the national-level

• Published in: Competitiveness review Vol. 29; no. 2; pp. 181 - 203
• Main Authors: Haj Youssef, Moustafa Salman, Hussein, Hiba Maher, Christodoulou, Ioannis
• Format: Journal Article
• Language: English
• Published: Bingley Emerald Publishing Limited 18.03.2019; Emerald Group Publishing Limited
• Subjects: Accountability; Competition; Competitive advantage; Cultural values; Decision making; Economic models; Executive compensation; Labor law; Market entry; Strategic management; CEOs; National level; Managerial discretion; Competitiveness
• ISSN: 1059-5422; 2051-3143
• DOI: 10.1108/CR-01-2017-0011

Purpose The purpose of this paper is to examine the national-level predictors of country competitiveness using the concept of managerial discretion. The objective is to empirically link the strategic management discipline particularly the upper echelon theory to the concept of country performance measured by competitiveness. Design/methodology/approach This paper tests the proposed relationship between managerial discretion and country competitiveness using a sample of 18 countries from 6 different regional clusters. Discretion scores are generated from survey responses of prominent senior management consultants, while country competitiveness is measured via the Global Competitiveness Index developed by the World Economic Forum. A multi-level regression analysis on the panel data set spanning 10 years of national competitiveness levels is used to empirically demonstrate the association between managerial discretion and country competitiveness. Findings The authors show that managerial discretion is a direct predictor of national competitiveness through its ability to provide CEOs with a wider array of actions to innovate and enhance firm performance which will ultimately contribute to country competitiveness. Practical implications The positive influence of managerial discretion on country competitiveness provide an interesting framework to examine the influence of firms over public policy-making. Additionally, with businesses becoming increasingly globalized, the profile of countries becomes of a great importance and can become a tool for corporate strategic decisions, such as: market entry strategies. Originality/value By linking the well-known term of competitiveness to the concept of managerial discretion, the authors provide a totally new approach to assess country performance. Additionally, this paper contributes to the growing literature of managerial discretion by discovering new national-level consequences.