Organizational Slack Research Articles

A preemptive power to offensive patent litigation strategy: Value creation, transaction costs and organizational slack

Offensive patent litigation is an increasingly important part of the firm's corporate strategy to protect the values of its intellectual property rights. Building on the value creation and transaction costs perspectives, this study explores how the preemptive power is most important to a firm's offensive patent litigation strategy through two key mechanisms. By applying an experimental design method to develop scenarios for top executives of publicly-traded companies and small- and medium-sized enterprises, the results show that both the patents' value creation based on their transaction costs and market positions influence the propensity of preemptive power separately through perceived benefits and organizational slack, and accordingly affect the offensive patent litigation strategy. These findings not only broaden the resource-based, transaction cost and value creation explanations of offensive patent litigation decisions, but also facilitate the formulation of the codes of conduct for the managerial capability in the contexts of offensive patent litigation.

The Moderating Effect of Social Capital between Organizational Slack and Managerial Practices for Open Innovation in Venture SMEs

This research is designed to analyze the moderating effect of social capital between organizational slack and managerial practices for open innovation. After controlling the firm size, firm age, and environmental uncertainty, we test two hypotheses. First, we test the hypothesis that organizational slack has a positive effect on managerial practices for open innovation. Especially we focus on the managerial innovation and open innovation because recently managerial innovation and open innovation are more and more important. Second, we test the moderating role of social capital between organizational slack and managerial practices for open innovation. Because social capital is a kind of networking activity, we assume that social capital can contribute to managerial practices for open innovation through the networking activity. For this research, we administered the questionnaire surveys, and got the 250 effective data(companies) in Korea. Then we used the validity, reliability, correlation and multiple regression analysis by means of SPSS 18.0. As a result, we can find the two meaningful results. First, organizational slack, especially not absorbed slack but unabsorbed slack, has positive effect on managerial practices for open innovation. It is because absorbed slack such as excessive facilities, machines, or employees is not useful in managerial practices for open innovation. On the other hand, unabsorbed slack is useful in managerial practices for open innovation because unabsorbed slack such as excessive money or securities is very flexible and active. Taken together, the relationship between managerial practices for open innovation and unabsorbed slack is proven in terms of flexibility. Second, social capital has a moderating effect positively between organizational slack, especially not absorbed slack but unabsorbed slack, and managerial practices for open innovation. A prior study related to the relationship between managerial practices for open innovation and social capital doesn’t exist yet, so this analysis result is very meaningful in academic respect. But this research has some limitations. First, this research is analyzed by limited region (Korea) and samples (250 companies), so more global regions and samples are recommended in the future. Second, we focus on managerial practices for open innovation in this paper, so the studies about technological practices for open innovation are recommended in the future.

Munificence, Dynamism, and Complexity: How Industry Context Drives Corporate Sustainability

AbstractDoes external industry context exert an influence on the development of corporate sustainable development? In keeping with the view that environmental responsibility generates new and competitive resources for firms, we posit that three distinct industry contextual characteristics, namely munificence, dynamism, and complexity, can influence corporate environmentally responsible behaviors. Our conceptual framework is supported by empirical evidence that draws on a sample of 746 Chinese listed firms in manufacturing sectors. Our findings suggest that dynamism increases the likelihood of firms behaving in environmentally responsible ways, whereas complexity decreases this likelihood. The relationships between dynamism and environmental responsibility are stronger in firms with low levels of organizational slack. Moreover, we find that resource‐abundant firms are more likely to behave responsibly toward the natural environment in a high‐munificence industry context. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment

Internationalization process, impact of slack resources, and role of the CEO: The duality of structure and agency in evolution of cross-border acquisition decisions

This paper examines how the internationalization process evolves. We do so by examining the cross-border acquisition (CBA) decisions of multinationals under the contingent impact of slack resources and CEO power and influence. Grounding our arguments in Giddens’ (1984) structuration theory, we identify how and why path-dependencies associated with CBA decisions give way to strategic change, demonstrating the duality of structure and agency in this evolutionary process. Further, we show that organizational slack and CEO overconfidence affect this relationship, albeit in dramatically different ways. Our hypotheses are tested on a large sample of 4812 CBAs of U.S. firms during 2000–2010, across 41 industries and in 44 target countries. The results hold for acquisition trajectories of multinationals in both categories of CBA decisions: majority as well as minority-owned.

Antecedents and Consequences of Early Adoption of Emergent Technologies: The IT Revolution

ABSTRACT Researchers have lamented the lack of productivity gains during the third technological revolution. Initially, these concerns centered on the productivity paradox—the failure of emerging technology implementations to lead to productivity gains. More recently, researchers have suggested that our impatience has fueled such concerns; perhaps a protracted productivity paradox naturally occurs with significant technological revolutions and delays productivity gains for decades. This study focuses on theorizations of a protracted productivity paradox and investigates the antecedents and consequences of early adoption of emerging technology in the third technological revolution. The exploration considers whether characteristics of the third technological revolution follow a pattern consistent with the protracted productivity paradox set forth in the Model of Technology Diffusion in light of arguments that cycle time in the third technological revolution will be shorter given the rapid evolution of technology as reflected in Moore's law—microprocessor capability doubles every 24 months. The results do not support the shortened cycle expected, as firms that adopt technology early do not exhibit productivity gains in either the short term or long term despite experiencing performance gains throughout. However, results do support the theorized nature of early adopters in that both organizational slack and available slack are strong antecedents to a firm's early adoption of technology, and that early adoption leads to increased performance in both the short and long term.

A reexamination of the organizational slack and innovation relationship

In this study a configurational approach was used to examine the organizational slack and innovation relationship. Utilizing a sample of 437 manufacturing firms and multiple measures of firm innovation we identified distinct configurations of slack and found significant innovation differences between them. The results from our analyses demonstrate that configurations with moderately high combined levels of internal slack (available and recoverable slack) and moderately high levels of potential slack produced higher levels of innovation. Conversely, configurations with low to moderately low levels of each type of slack produced the lowest levels of innovation. Our findings also indicate that alternative configurations of slack can result in similar levels of innovation suggesting the existence of equifinality in this relationship. Overall, our findings suggest that the slack and innovation relationship is more complex than has been accounted for in previous research. The implications of these findings are discussed.

The Influence of Organizational Context on Best Practice Use by Care Aides in Residential Long-Term Care Settings

ObjectiveThis study assessed individual and organizational context (work environment) factors that influence use of best practices by care aides (nursing assistants) in nursing homes. Little scientific attention has been focused on understanding best practice use in nursing homes and almost none on care aides. Setting and participantsA total of 1262 care aides in 25 nursing homes in the 3 Canadian prairie provinces. Care aides are unregulated workers who provide 80% of direct care to residents in Canadian nursing homes. MethodWe used hierarchical linear modeling to (1) assess the amount of variance in use of best practices, as reported by care aides, that could be attributed to individual or organizational factors, and (2) identify predictors of best practices use by care aides. ResultsAt the individual level, statistically significant predictors of instrumental use of best practices included sex, age, shift worked, job efficacy, and belief suspension. At the unit level, significant predictors were social capital, organizational slack (staffing and time), number of informal interactions, and unit type. At the facility level, ownership model and province were significant. Significant predictors of conceptual use of best practices at the individual level included English as a first language, job efficacy, belief suspension, intent to use research, adequate knowledge, and number of information sources used. At the unit level, significant predictors were evaluation (feedback mechanisms), structural resources, and organizational slack (time). At the facility level, province was significant. The R2 was 18.3% for instrumental use of best practices and 43.4% for conceptual use. Unit level factors added a substantial amount of explained variance whereas facility level factors added relatively little explained variance. ConclusionsOur study suggests that context plays an important role in care aides' use of best practices in nursing homes. Individual characteristics played a more prominent role than contextual factors in predicting conceptual use of best practices.

The Mediating Effect of Corporate Reputation between the Organizational Slack and Corporate Performance in Venture SMEs

The Mediating Effect of Corporate Reputation between the Organizational Slack and Corporate Performance in Venture SMEs

Business Strategy for Climate Change: An ASEAN Perspective

AbstractBusiness operations have been severely impacted by the increasing frequency and intensity of extreme weather conditions affecting economic development. Consequently, public pressure has been directed at businesses to build resilient and sustainable operations, especially in ASEAN countries, whose fragile natural environments make them among the most vulnerable to climate change. To better understand organisational responses, this study investigated the influence of internal resources and geographical regional effects on climate change business strategy. It provided empirical evidence from ASEAN countries based on the combined views of institutional and resource‐based theories. Generally, ASEAN businesses were aware of climate change, and focused on strategies of fuel efficiency and greenhouse gas emissions reduction. Even though few businesses integrated climate change into their business strategy, there are several factors (board of directors with international experience, organisational slack, and country effect) that influence ASEAN climate change business strategy. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment

Financial marketization and corporate venturing in China

Purpose– The paper aims to empirically examine the role of intra-national institutions in business performance. In particular, the article develops hypotheses regarding financial marketization and business venturing with organizational slack and political connections as moderating variables.Design/methodology/approach– The authors choose listed firms from the pharmaceutical industry in China and focus on the period of 2001-2009. Results from the Hausman specification test indicate that the random effects model is appropriate for data. Because the dependent variable is dichotomous, the random effects logistic regression technique in Stata is used. To check the robustness of the estimation, the random-effects Tobit regression technique in Stata is also used. Overall, models are robust and statistically significant.Findings– It was found that the level of regional financial sector marketization is positively associated with the likelihood of engaging in corporate venturing by firms within the region. Moreover, it was found that organizational slack significantly decreases the institutional influence on corporate venturing.Originality/value– This study is one of the first to theorize and empirically test the impact of intra-national institutions on corporate venturing in China’s pharmaceutical industry. Institutions matter more when organizational slack is low. Firms in the pharmaceutical industry in China do not seem completely dependent on political connections for business venturing and use organizational slack to buffer against (adverse) institutional change.

Slack and innovation: Investigating the relationship in Korea

This study investigates how organizational slack affects innovation by using a panel data set consisting of Korean firms over the 1999–2008 period. Especially, the relationship between financial slack and R&D investment is of concern. We extend previous work on slack and innovation by using dynamic GMM estimation, split-sample method, and other econometric techniques. The empirical analysis shows that the relationship between slack and innovation is weak in Korea, and small firms and young firms create a favorable environment for managers to use slack resources to invest in innovation. The results imply that the relationship between slack and innovation depends on the distinct social and institutional settings in which firms operate and on the organizational characteristics of the firm.

Effects of internationalisation on performance of BRICS multinationals moderated by organisational slack and R&D intensity

The internationalisation-performance relationship has been widely studied, however most previous researches focused on companies from developed countries. To contribute to this theory, this study examined the moderating effects of organisational slack and RD 2) managers must view organisational slack as a strategic tool for action in the international context.

When Too Many Are Not Enough: Performance Implications of "Imposed" Diversity at the VOC

Scholarship on organizational diversity increasingly recognizes the need to examine contextual factors and capture processes over time. This motivated a historical study establishing longitudinal effects of diversity, their moderation by contextual factors and the organizational response. The context is the Dutch East India Company (VOC) – a pioneer of Europe-Asia trade and the earliest case of massive internationalization of the workforce. Using data for the 18th century, a time-series analysis documents a negative effect of ethnic diversity on performance, based on the inexperience of foreign-born sailors. Skill shortages are most detrimental for performance in conditions of imposed diversity, marked by limited supply of qualified labor. The adverse effects of diversity were mitigated by means of slack human resources – adding sailors. Connecting research on diversity, skill shortages and organizational slack, we highlight a key trade-off in the management of diversity – increasing redundancy en...

"Alliance Experience,Organizational Slack &Acquisition Likelihood–A Case of Industry Convergence"

A study of how firms choose between forging alliances and making acquisitions is presented using industry convergence as an environmental contingency. Using the empirical setting of the digital cam...

Luz organizacyjny jako potencjał odnowy organizacyjnej

This paper makes an attempt to anchor a phenomenon of organizational renewal in the context of organizational slack within Resource Based View perspective. In this vein we formulated four propositions concerning organizational renewal in specific, and resource configuration, that creates organizational slack in general. The article also reconcile the construct of organizational renewal with organizational effectiveness. It is logically concluded with implications for both, theory and practice of management.

HCHRM System and Firm Performance: Moderating Roles of Organizational Slack and Industry Instability

This study investigates the moderating roles of firms' internal and external conditions on the relationship between high-commitment human resource management (HCHRM) system and firm performance. In...

Knowledge creation through joint venture investments¡Xthe contingent role of organizational slack

This study examines the effects of joint venture investments on knowledge creation. This study suggests that there is an inverse U-shaped relationship between the number of joint venture investment...

Organizational slack and corporate social performance: Empirical evidence from China’s public firms

This study investigates how organizational slack affects corporate social performance (CSP). Based on a sample of 1,299 Chinese listed firms, our results show that only unabsorbed slack contributes to CSP and the positive relationship between unabsorbed slack and CSP is consistent with the relationship between unabsorbed slack and corporate financial performance (CFP). Our results also show that absorbed slack generates a negative impact on CSP. Furthermore, our findings indicate that state ownership has a negative impact on the relationship between unabsorbed slack and CSP. This finding illustrates that state ownership weakens unabsorbed slack’s contribution to CSP.

The relationship of slack resources with subjective wellbeing at work: empirical study of sugar mills from Pakistan

This study is designed to observe relationship between organizational slack resources with subjective wellbeing at work. Words subjective wellbeing at work (SWB at work) and job satisfactions are used interchangeably in this study. This study found positive relationship with slack resources and financial performance of the organization which leads to job satisfaction at work. Organization size, age, high, medium and low slack resources are employed as control and independent variables. Data reliability, Composite reliability, Common method bias was checked to avoid issues for self-reported data. The construct developed in this study were measured on established measurement items with strong basis in the literature which amended only to extent that suits the regional context. Results support the constructs developed in this study and we found positive and significant relationship between employee wellbeing at work and better financial performance with slack resources.

Can companies buy legitimacy? Using corporate political strategies to offset negative corporate social responsibility records

Purpose– Organizational legitimacy is greatly influenced by firm corporate social responsibility (CSR) records. An organization with a poor CSR record can either try to improve its practices or attempt to manipulate institutional norms and belief systems in order to convince the society that its practices are acceptable. The authors argue that firms’ corporate political strategies (CPS) – attempts by firms to influence public policy outcomes in a favorable way – can be very effective in shaping legitimacy norms and offsetting negative public image. The purpose of this paper is to draw on institutional theory and propose that firms with negative CSR records consider investing in political strategies necessary in order to construct new legitimate standards in line with their strategies.Design/methodology/approach– The authors test the hypotheses on 348 manufacturing firms using data from “The Center for Responsive Politics.” MSCI (formerly known as KLD) and COMPUSTAT. Research methodology used to test hypotheses is hierarchical ordinary least square regression analysis.Findings– The authors find that firms with high CSR concerns invest more in CPSs. In addition, the results indicate that organizational visibility and organizational slack positively moderate this relationship. In other words, visible firms and firms with high organizational slack invest more in CPSs if they are facing CSR concerns compared to firms that are less visible and with less organizational slack.Research limitations/implications– In this paper, the authors focus on the corporate governance dimension of CSR. Although focussing on the negative corporate governance practices gives us an opportunity to have a more focused approach, there are other important aspects of CSR such as environmental practices, employment issues, and accounting practices that are not addressed in this study.Practical implications– This paper can serve as a testament to the value of investing in political strategies to the practitioners. The results indicate that firms can manage their image and reputation through political spending and this is especially true for firms that are more visible and have more organizational slack.Originality/value– Much of the previous literature explores the relationship between market factors such as financial status of the firm and political strategies. This paper contributes to the literature by showing that other non-market forces such as poor social standing can also motivate companies to invest in political strategies.