Search results
1 – 10 of 114Josep M. Argilés-Bosch, Josep Garcia-Blandon and Mónica Martinez-Blasco
This paper undertakes an empirical analysis of the impact of absorbed and unabsorbed slack, employing three different measures for each slack type, on firm profitability. We find…
Abstract
This paper undertakes an empirical analysis of the impact of absorbed and unabsorbed slack, employing three different measures for each slack type, on firm profitability. We find that unabsorbed slack has a more favorable influence on future firm profitability than absorbed slack. While all the absorbed slack indicators have a significant negative influence on future profitability, the three unabsorbed slack indicators present positive, negative, and non-significant influences, respectively. The fewer constraints of unabsorbed slack on the redeployment to exploit new opportunities point to its comparative advantage over absorbed slack. We find evidence for the differential impact of absorbed versus unabsorbed slack on profitability in firms with lower levels of slack, which suggests firms prefer to withdraw resources from current business and redeploy them to develop new and more favorable business opportunities.
Details
Keywords
Hong Hu, Qiang Wang and Jixiang Chen
Why do some small and medium-sized enterprises (SMEs) explore more while others exploit further? What are the driving forces of their exploratory and exploitative innovation…
Abstract
Purpose
Why do some small and medium-sized enterprises (SMEs) explore more while others exploit further? What are the driving forces of their exploratory and exploitative innovation? These are intriguing questions worthy of in-depth research. The purpose of this paper is to crack these problems from both objective (i.e. organizational slack) and subjective (i.e. market orientation) perspectives. Specifically, the paper examines the effects of unabsorbed and absorbed slack on exploratory and exploitative innovation and the mediating roles played by proactive and responsive market orientation.
Design/methodology/approach
The authors collected data from 214 SMEs in several industries of China. These businesses were located in the city of Shanghai and the provinces of Jiangsu and Zhejiang in the southeastern part of China. The survey method was used to test the hypotheses.
Findings
Results reveal that unabsorbed and absorbed slack could affect exploratory and exploitative innovation. Proactive and responsive market orientation are related to unabsorbed and absorbed slack, exploratory and exploitative innovation, and they play the roles of mediators in two sets of the relationships.
Research limitations/implications
This research presents several profound insights for venture capitalists regarding to making investment decisions and for the entrepreneurs of SMEs in terms of how much resource slack they should gain and retain to reach intended level of exploratory and exploitative innovation. Some of the limitations of this study relate to the single respondent in each firm, lack of examination on relevant contextual factors and potential moderators.
Originality/value
This study addresses the gaps in the literature by exploring the mechanisms underlying the effects of different kinds of organizational slack on the two elements of ambidextrous innovation in non-large-scale businesses in a non-Western cultural setting.
Details
Keywords
Changwei Pang, Hao Shen and Yuan Li
The purpose of this paper is to investigate the relationships between organizational slack, environmental characteristics, and new venture performance in China. The paper focuses…
Abstract
Purpose
The purpose of this paper is to investigate the relationships between organizational slack, environmental characteristics, and new venture performance in China. The paper focuses on how different types of organizational slack, such as absorbed slack and unabsorbed slack, impact Chinese new venture performance. And it also examines the moderating effects of environmental characteristics, such as munificence and dynamism, on the slack‐performance linkage in Chinese transitional context.
Design/methodology/approach
A literature review on organizational slack and institutional environment characteristics provides the model and hypothesis. Using a sample of 91 Chinese new ventures, the authors conduct the examination on the theoretical model and hypotheses.
Findings
The results show that the relationship between absorbed slack and new venture performance is negative and unabsorbed slack has an inverse U‐shaped effect on new venture performance. Furthermore, the institutional environments, such as munificence and dynamism in transitional economies have different moderating effects on the relationship between organizational slack and new venture performance.
Research limitations/implications
This study focuses on the new ventures of China, which is context specific. It is necessary to replicate this research in other transitional economies because of some specific differences between China and other transitional economies.
Practical implications
The results of the study suggest that new ventures should strengthen the management of resources and decrease absorbed slack in order to reduce the managerial cost, and then raise the level of resource utilization. In addition, how the new ventures make better utilization of organizational slack to deal with institutional environment uncertainty would be a core task in future business operations.
Originality/value
The paper is original in its investigation of the effect of organizational slack on new venture performance in contingent transitional environments. The paper explains the relationship between different types of organizational slack and new venture performance from a contingent perspective, thus extending the extant research.
Details
Keywords
Xingxin Zhao, Jiafu Su, Taewoo Roh, Jeoung Yul Lee and Xinrui Zhan
The purpose of this study is to examine the impact of technological diversification (TD) on enterprise innovation performance, meanwhile focusing on the moderating effects of…
Abstract
Purpose
The purpose of this study is to examine the impact of technological diversification (TD) on enterprise innovation performance, meanwhile focusing on the moderating effects of various organizational slack (i.e. absorbed and unabsorbed slack) and ownership types (i.e. state-owned or privately-owned) in the context of Chinese listed firms.
Design/methodology/approach
This study formulates five hypotheses based on organization and agency theories. Our empirical analysis employs a fixed-effect regression estimator with a unique panel dataset of Chinese-listed manufacturing firms and 13,566 firm-year observations over 9 years from 2012 to 2020.
Findings
Our findings show that an inverted U-shaped relationship exists between TD and innovation performance, varying with different types of organizational slack and ownership. In state-owned enterprises (SOEs), unabsorbed slack negatively moderates the inverted U-shaped relationship; however, in privately-owned enterprises (POEs), this relationship is positively moderated. Although absorbed slack has negative moderating effects in both SOEs and POEs, its impact is only significant for POEs.
Practical implications
Our results imply that organizational slack has a contrasting impact on the relationship between TD and innovation performance when the type of ownership varies. Therefore, the managers that intend to achieve optimal innovation performance through TD should understand how organizational slack can be leveraged.
Originality/value
This study contributes to the existing literature by applying the relationship between TD and innovative performance to the transition economy, as well as examining the double-edged sword impact of state ownership on firm innovation performance.
Details
Keywords
This study aims to examine what types of interfirm linkages a firm enters in relation to its manufacturing strategy. The authors further aim to determine whether heterogeneous…
Abstract
Purpose
This study aims to examine what types of interfirm linkages a firm enters in relation to its manufacturing strategy. The authors further aim to determine whether heterogeneous resources have different moderating effects on the relationship between a firm’s manufacturing strategy and interfirm linkages.
Design/methodology/approach
The sample consists of survey and archival data on 80 publicly listed electronics firms from the semiconductor and optoelectronics industries in Taiwan. Because the dependent variable, interfirm linkage, is a binary term, the authors apply logistic regression in our study.
Findings
This paper provides empirical insight into how a firm’s manufacturing strategy affects its probability to engage in specific types of interfirm linkages. The authors find that when a firm pursues an efficiency (flexibility) strategy, it will tend to engage in marketing (technical) interfirm linkages. In addition, absorbed slack strengthens the fit between manufacturing strategy and interfirm linkage type more than unabsorbed slack does.
Research limitations/implications
Because the sample is drawn from the Taiwanese semiconductor and optoelectronic industries, the authors encourage scholars to examine the generalizability of the findings. Future studies can furthermore adopt in-depth interviews to facilitate a better understanding of decision-makers’ considerations when entering interfirm linkages.
Originality/value
This study extends resource dependence theory across a firm’s boundary and applies the resource-based view to resource heterogeneity. The findings advance the understanding of the relationships between strategic orientation, slack resources and interfirm linkage choices. The authors show that it is important that firms consider strategic fit when they create linkages outside their existing boundaries.
Details
Keywords
Yueqi Wang, Bin Guo and Yanjie Yin
The purpose of this study is to explore organizational factors that act as antecedents of open innovation search. The authors aim to empirically examine whether the extent to…
Abstract
Purpose
The purpose of this study is to explore organizational factors that act as antecedents of open innovation search. The authors aim to empirically examine whether the extent to which the organizational slack is absorbed determines its influence on firms’ openness in innovation search. In addition, the authors also examine the moderating effect of absorptive capacity on the relationship between slack and open innovation search.
Design/methodology/approach
This study adopted secondary data from multiple sources (NBER, Compustat and US census) and then constructed a ten-year balanced panel dataset of 298 manufacturers. The generalized least square method was used to explore the determinants of open innovation search among manufacturing firms.
Findings
The results of this study reveal that the absorption level of organizational slack indeed determines the openness in innovation search. Specifically, absorbed slack negatively affects a firm’s openness in innovation search, whereas unabsorbed slack promotes open innovation search. Additionally, the relationship between absorbed slack and open innovation search will be less negative with the increase of absorptive capacity.
Originality/value
Different from most previous studies that have examined the performance effect of open search among high-tech and large enterprises, this study focuses on the antecedents of open search strategy in both high- and low-tech, large and small firms. The findings reveal that different forms of organizational slack divergently influence a firm’s open search strategy, contributing to the understanding of the relationship between organizational slack and knowledge search behavior in a broader context, as well as the understanding of the moderating effect of absorptive capacity.
Details
Keywords
Tien Dung Luu, Lan Anh Trinh, Thanh Phuong Binh Nguyen, Ngoc Linh Chi Ngo, Nguyen Phuong Nhi Le and Nhat Vi Vu
This study aims to analyse the impact of the degree of internationalisation (DOI) on firm performance (FP), with the moderating role of organisational slack resources, namely…
Abstract
Purpose
This study aims to analyse the impact of the degree of internationalisation (DOI) on firm performance (FP), with the moderating role of organisational slack resources, namely, absorbed slack human resources, absorbed financial slack resources and unabsorbed slack resources, in the context of Asian emerging markets.
Design/methodology/approach
Data includes 45 companies and 225 observations in 2014–2018. The authors adopted the generalised least squares method to test their hypotheses.
Findings
DOI negatively influences FP, indicating that the link between DOI and FP is not U-shaped but relatively linear. Absorbed human resources and absorbed slack financial resources significantly enhance FP, absorbing resources associated with DOI and FP. Unabsorbed slack resources play a minor role in mitigating the deleterious impact of DOIs on FP.
Practical implications
Firms in an emerging market should begin exploring and expanding into overseas markets with characteristics similar to the domestic market. The firm should optimise the benefits of slack resources by appropriately allocating resources to strategic operations.
Originality/value
This study reveals the beneficial effect of organisational slack resources on the DOI-FP relationship via the lens of the resource-based view.
Details
Keywords
This study investigates the behaviour of family firms, family management and family ownership regarding their socioemotional wealth (Corporate Social Responsibility (CSR)) during…
Abstract
Purpose
This study investigates the behaviour of family firms, family management and family ownership regarding their socioemotional wealth (Corporate Social Responsibility (CSR)) during the COVID-19 pandemic and according to their slack resources availability.
Design/methodology/approach
This study employs a multiple regression analysis to analyse 245 firm-year observations from 2020 to 2021.
Findings
Family firms have a negative effect on CSR, as do family management and family ownership. Slack resources (both absorbed and unabsorbed) reduce the negative effect of family firms (and family ownership) on CSR. Unabsorbed slack resources reduce the negative effect of family management on CSR and absorbed slack resources increase the negative effect of family management on CSR. The results are robust with various measurements of slack resources. Extra analyses reveal that family commissioner has no effect on CSR.
Originality/value
To the best of the author’s knowledge, this is the first empirical study to analyse the impact of COVID-19 on the preservation of socioemotional wealth in family firms. This study proves the theoretical argument of prior studies that the preservation of socioemotional wealth in family firms during the COVID-19 pandemic depends on their financial condition. The study also proves that there are different attitudes among family ownership, family management and family firms concerning the use of slack resources for socioemotional wealth preservation that have not been analysed by previous research.
Details
Keywords
Chengyuan Wang, Biao Luo, Yong Liu and Zhengyun Wei
The paper aims to study the relationship between executives’ perceptions of environmental threats and innovation strategies and investigate the moderating effect of contextual…
Abstract
Purpose
The paper aims to study the relationship between executives’ perceptions of environmental threats and innovation strategies and investigate the moderating effect of contextual factor (i.e. organizational slack) on such relations. It proposes a dualistic relationship between executives’ perceptions of environmental threats and innovation strategies, in which different perceptions of environmental threats will lead to corresponding innovation strategies, and dyadic organizational slack can promote such processes.
Design/methodology/approach
The paper is based on a survey with 163 valid questionnaires, which were all completed by executives. Hierarchical ordinary least-squares regression analysis is used to test the hypotheses proposed in this paper.
Findings
The paper provides empirical insights about that executives tend to choose exploratory innovation when they perceive environmental changes as likely loss threats, yet adopt exploitative innovation when perceiving control-reducing threats. Furthermore, unabsorbed slack (e.g. financial redundancy) positively moderates both relationships, while absorbed slack (e.g. operational redundancy) merely positively influences the relationship between the perception of control-reducing threats and exploitative innovation.
Originality/value
The paper bridges the gap between organizational innovation and cognitive theory by proposing a dualistic relationship between executives’ perceptions of environmental threats and innovation strategies. The paper further enriches innovation studies by jointly considering both subjective and objective influence factors of innovation and argues that organizational slack can moderate such dualistic relationship.
Details
Keywords
Devaki Rau, Luis Flores and Aditya Simha
Planning is a perennially popular management tool with an ambiguous relationship to learning and performance. The purpose of this study attempts to resolve this ambiguity. The…
Abstract
Purpose
Planning is a perennially popular management tool with an ambiguous relationship to learning and performance. The purpose of this study attempts to resolve this ambiguity. The authors suggest that the critical question is not whether firms need learning for planning to influence performance, but when different firms experience different performance outcomes. The authors propose firms will benefit from strategic planning only when they learn from planning and have the resources to act on their learning.
Design/methodology/approach
The authors collected data from a survey of 293 individuals from 191 publicly listed US firms.
Findings
Organizational learning mediates the relations between strategic planning and organizational performance. This mediated relationship is positively moderated by high levels of human resource slack and moderate to high levels of financial slack.
Research limitations/implications
The study provides evidence for previous theoretical arguments on the planning–learning relationship while extending this research by finding a complicated moderating effect of slack. The study also adds to the existing debate on optimal slack levels by suggesting that having bundles of slack resources may matter more than having uniformly high or low levels of slack. A cross-sectional study means the authors cannot infer causation.
Practical implications
While strategic planning is a common practice, companies may vary in their planning methodologies, influencing the outcomes of planning. Firms seeking to benefit from planning need to have both the mechanisms to learn from planning and slack to deploy these mechanisms.
Originality/value
These findings clarify the planning–learning–performance relationship while challenging the assumption of an average effect of planning on performance across firms.
Details