© 2013

Managerial Discretion and Performance in China

Towards Resolving the Discretion Puzzle for Chinese Companies and Multinationals


Part of the Contributions to Management Science book series (MANAGEMENT SC.)

Table of contents

  1. Front Matter
    Pages i-xxiii
  2. Hagen Wülferth
    Pages 1-22
  3. Hagen Wülferth
    Pages 23-142
  4. Hagen Wülferth
    Pages 143-171
  5. Hagen Wülferth
    Pages 173-255
  6. Hagen Wülferth
    Pages 369-430
  7. Hagen Wülferth
    Pages 431-508
  8. Back Matter
    Pages 509-534

About this book


​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 organisational 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

Authors and affiliations

  1. 1.McKinsey & Company, Inc.BeijingChina, People's Republic

About the authors

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.

Bibliographic information

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