Research on The Relationship Between Managerial Discretion And MonitoringIntensity: The Case in China

摘要

There are rather few scholars who have discussedthe role of monitoring intensity both in the western countriesand in China when managerial discretion is discussed.However, this paper proposes that managerial discretion andmonitoring intensity are the two associated mechanisms andthey are also relatively independent with each other, and thetwo mechanisms simultaneously determine the rationality andvalidity of the power allocation system inside the corporation.According to this paper, there is significant difference incorporate governance between the western countries andChina, and the absence of monitoring is the sticking pointduring the reform of the State-owned Enterprises in China andthe validity of the power allocation system inside thecorporation is codetermined by managerial discretion andmonitoring intensity. In China, the investigation on managerialdiscretion, monitoring intensity should not be ignored.