Do managers matter? The role of managerial discretion in corporate social responsibility decision

Individual discretionary choices directly influence corporate outcomes (Berle and Means, 1932; Wood, 1991). What affects individual discretion? Do managers' perceptions matter or do organizational factors have primary influence on discretion? The present research responds to the need for a theoretical understanding and empirical exploration of discretionary social responsibility at the individual level. Its goal is to enhance understanding of managerial discretion in the area of corporate social responsibility.;The concept of managerial discretion in existing management literature is reviewed, and a model for studying discretion in corporate social responsibility decisions is presented. The model defines discretion as a perceptual process which is influenced by factors that are "internal" to the individual and by factors that are "external.".;The internal factor measured was individual perception regarding mastery of the environment (operationalized as locus of control). The external factor measured was individual perception of organizational ethical culture (operationalized as an adaptation of Trevino, Butterfield and McCabe's Ethical Culture measure, 1995). The criterion variable of interest was individual managerial discretion in corporate social responsibility scenarios in which discretion was defined as perceived latitude for action, that is actions that managers would consider taking.;A sample of 200 managers from Pittsburgh area organizations completed a battery of metrics which assessed the three variables of interest: locus of control, organizational ethical culture, and individual managerial discretion. Hierarchical regression analysis revealed that both the internal factor, locus of control, and the external factor, organizational ethical culture, contributed significantly to the prediction of individual managerial discretion. It also revealed that select demographic variables, specifically age, gender, education, job tenure, organizational size and organizational type, did not significantly predict discretion.;These results provide preliminary support for the role of individual personality characteristics and aspects of organizational culture in determining individual discretion. Knowledge about discretion could enhance the ability of organizations to control and direct individual discretion in the area of corporate social performance and will provide a step in the construction of a testable theory of corporate social performance. Suggestions are made regarding further development of metrics to assess discretion and the ethical culture of organizations.