Decision-Making Autonomy of Managers and Financial Performance

Considering the influence of supervision's power and managers' decision-making authority, the aim of the study is to investigate the relationship between the managers' ability and the firms' performances. The method of the study is operational on the base of purpose and is naturally correlative. Financial information of 163 firms listed in Tehran Stock Exchange was extracted as a statistical sample using Systematic Elimination and then it was investigated in the period of 2007-2017 (1386-1396). Statistical analysis of data was done by using Eviews with confidence level of 95%; and in order to test the hypothesis, the statistical method of Panel Data and Multi-Variable Linear Regression were used. The findings show that there is a direct significant relationship between management ability and the firms' financial performance (Returns on Assets, Tobin's Q ratio). Also, the authority power of the directors is correlated with managers' ability, it increases firms' Tobin's Q ratio and ROA. Moreover, according to the third hypothesis, the level of supervision has a positive relationship between management ability and Returns on Assets and Tobin's Q ratio.