The Crafting of CEO Discretion in Practice

The traditional literature on managerial discretion has chiefly focused on identifying the relevance of factors outside of managers themselves, such as effects of industry and firm context, or on managers’ perception. Far less attention has been paid to executives’ actions, that is to what they do in relation to their own discretion as an evolving phenomenon. In our paper, we thus outline how, to productively cope with an increasingly constraining environment, chief executives craft discretionary spaces to act in accordance with own priorities. Our argument is that rather than being a given, discretion is constantly worked at, through what we can discretion work. To this end, building on a shadowing-based study of healthcare chief executives in England, we identify three specific practices (role framing, legitimating and boundary crafting), which CEOs engage in three orientations (anticipatory, maintenance and reactive), resulting in three distinctive modes (expansive, protective and sustaining). This represents a conceptual view of discretion as not merely contextual and relational, but also purposeful: akin to a constantly shifting territory, delineated by sources of constraint (seeking, or having the potential to, reduce space for CEOs to act) and strategies engaged in response (as CEOs anticipate, maintain or push back against distinct constraints in certain ways).