When Close Relationships Get in the Way: Managers’ Social Proximity to Followers and Managerial Discretion in Allocation Decisions



Organizational theories highlight the importance of managerial discretion in decision making situations, and the benefits accrued to managers, employees, and overall organizational functioning when managers use discretionary judgment. However, we argue that managers are often reluctant to use discretion when allocating resources to employees. In particular, we theorize that managers who are more socially close to their employees experience increased concerns about the quality of their relationships with employees, which in turn lead them to rely on rules (rather than discretion) when making resource allocation decisions. We test our mediated theoretical model across a small-scale field study, three experimental studies, and a second larger-scale field study. The studies support our model using different construct operationalization, study design, and samples. We discuss implications for literature on managerial discretion and social relationships at the workplace.