Abstract
Investment in production assets is a strategic decision that results from organizational search and risk taking. The behavioral theory of the firm predicts that performance below the aspiration level and slack resources initiate organizational search. Risk theory predicts that performance below the aspiration level increases risk tolerance. This paper integrates these theories to form a theory of problem- and slack-driven strategic change and applies it to the growth of production assets. The predictions are tested by analyzing the growth of production assets in the Japanese shipbuilding industry, yielding clear evidence that high performance causes low asset growth, but no effect of slack. Copyright 2003, Oxford University Press.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
