Types Of Slack Research Articles

Organizational slack and firm performance: do supply chain resilience and organizational ambidexterity matter?

PurposeThis study aims to distinguish how unabsorbed and absorbed slack affects market and financial performance via proactive and reactive supply chain resilience (SCRES), particularly under varying conditions of organizational ambidexterity.Design/methodology/approachBy collecting survey data from 277 Chinese manufacturers, we verify the conceptual model applying structural equation modeling.FindingsProactive SCRES mediates the positive impacts of both unabsorbed and absorbed slack on market and financial performance, whereas reactive SCRES mediates only their positive effects on financial performance. High levels of organizational ambidexterity strengthen the indirect effects of both types of slack on market and financial performance via proactive SCRES, but not when mediated by reactive SCRES.Originality/valueWe introduce a new theoretical perspective to view fits (as mediation) between the use of unabsorbed/absorbed slack in different ways when switching attentions to proactive or reactive SCRES, both of which can be improved through organizational ambidexterity. This study offers novel insights into how managers can switch attentions between proactive and reactive SCRES knowing when to appropriately use unabsorbed/absorbed slack for which purposes, and the use of different learning modes (explorative vs exploitative).

What affects parent companies’ innovation more in joint venture relationships?

Forming joint ventures with potential partners in acquiring the needed resources and technology provides benefits and creates competitive advantage and innovation for multinational enterprises. While cooperative partners can provide JVs with various resources and technologies, allocation of the position of organizational resources remains unclear and needs to be further addressed. The main purpose of the current paper is to emphasize organizational slack resources (e.g., available slack and potential slack) to illuminate the settings that facilitate the effects of investment attractiveness and employee involvement on JV innovation performance. To demonstrate the real industry of JVs and examine the research purpose, we used various databases, including the National Bureau of Economic Research U.S. patent data file, Harvard DVN patent database, Compustat database and SDC global joint ventures databank to examine the hypotheses. The results show the positive and significant direct effects of investment attractiveness and employee involvement on JV innovation performance. Additionally, the findings demonstrated that the above direct effects are more pronounced when there is higher available slack and potential slack. The current study contributes by offering new viewpoints on JV, offering new understandings of organizational slack and developing an uncharted bridge between the types of slack and JV innovation studies.

Institutional distance, slack resources, and foreign market entry

AbstractTraditional theories from the international business and strategy literatures have posited that institutional distance constrains firm internationalization and that slack financial and managerial resources can be redeployed to help overcome this distance and facilitate growth. However, are slack resources equally effective when entering host markets of different institutional quality? Combining an institutional economics’ view of distance with a Penrosean perspective on resources, we argue that financial slack allows firms “to pay their way” into more institutionally developed markets, whereas managerial slack allows firms “to work their way” into less institutionally developed markets. From data on the internationalization of 307 Indian computer software companies over 16 years, we find support for our hypotheses when considering formal institutional distance. We also find that managerial slack mitigates informal institutional distance, irrespective of the direction of internationalization. Additional robustness tests, using propensity score matching, and an alternative sample of 3600 manufacturing firms from 49 countries, support our main results. Our findings suggest that slack is not a generic panacea for overcoming institutional distance, in that the effectiveness of each type of slack is dependent on both the direction of entry and the type of institutional distance to be overcome, formal or informal.

Experimental Study on the Hydrodynamic Influence of Marine Data Buoy with Different Mooring Systems in Northern Part of Weihai

The hydrodynamic of marine data buoy and its mooring system has an important impact on its reliability, viability and adaptability at sea. In this paper, the physical model test verification, is adopted for studying hydrodynamic of data buoy, by using the measured data in the northern sea area of Chu Island, Weihai, Shandong Province, China. The hydrodynamic performance of three different mooring systems, i.e. slack type, inverted S type and tension type, under the action of wind and waves coupling is studied. The model test of the buoy was carried out at the Environmental Laboratory in the National Ocean Technology Center of the Ministry of Natural Resources of China, and the scale of the model is determined to be 1:5, according to the laboratory test capacity and buoy prototype size. The results show that the inverted S type mooring system has higher reliability, while the tension type mooring system can obtain more accurate observation data, and the performance of the slack mooring system is between the two, among the three types of mooring systems. The research results can provide a reference for the design of other marine buoys and their mooring systems, and the validated numerical simulation method can be applied to the study of the survival performance of the buoy in long-term and extreme sea condition.

Organizational slack, entrepreneurial orientation, and corporate political activity: From the behavioral theory of the firm

As a popular non-market strategy, corporate political activity (CPA) benefits a firm’s risk management and competitive advantage. However, the mechanism of promoting firms to engage in corporate political activity remains obscure. Based on the behavioral theory of the firm, this research develops a mediation model containing organization slack, entrepreneurial orientation, and corporate political activity to investigate the prediction effect of different types of slack, as well as the mediation effect of different dimensions of entrepreneurial orientation. Based on the multiple informant data from 303 firms in China, this research conducted ordinary least-squares estimation with SPSS and post hoc analysis with PROCESS. The results support the main and key hypotheses. First, entrepreneurial orientation plays a mediation effect between slack and corporate political activity. Second, financial slack provides stronger support to develop certain capabilities than operational slack. Third, two sub-dimensions of entrepreneurial orientation play heterogeneous mediation effects according to their different emphasis. Managerial attitude also mediates the effect of entrepreneurial behavior effect toward CPA. This research enriches the antecedent research of CPA, deepens our understanding of the CPA engagement mechanism, and extends the behavioral theory of the firm.

Slack resources and firm performance: evidence from GCC countries

PurposeManagement research has emphasized the effects of slack resources on the decision-makers’ strategic choices. Behavioral theorists have argued for a positive effect of slack through encouraging search and innovation while agency theorists have emphasized that slack can accentuate the principal–agent problem, which negatively affects firm performance. This paper aims to extend this argument and empirically investigate the separate effects of three types of slack resources (i.e. available, recoverable and potential) on firm performance in an important emerging market, namely, the Gulf Cooperation Council (GCC).Design/methodology/approachThe two-step system generalized method of moments (Sys-GMM) is applied to a panel of 360 firms in the six GCC countries, namely, Kuwait, Saudi Arabia, UAE, Qatar, Oman and Bahrain, over the period between 1999 and 2019.FindingsThe authors find that available and potential slack are both negatively associated with firm performance. The relationship between recoverable slack and performance is quadratic (inverse U-shaped) where recoverable slack improves performance only up to a specific point, but after that level, recoverable slack starts to negatively affect the performance of the firm.Originality/valueThis paper contributes to the literature in three important ways. First, this paper advances a first attempt to differentiate between three separate types of slack on firm performance in the context of the GCC market. Second, this paper empirically investigates the presence of the principal–agent problem in the GCC market and relates it to the ongoing debate on the agency effects of slack resources. Finally, this paper underlines the effects of institutional frameworks and environments on the relationship between slack resources and firm performance.

In times of plenty: Slack resources, R&D investment, and entrepreneurial firms in challenging institutional environments

We address the puzzle of why in times of plenty, entrepreneurial firms do not uniformly invest their slack resources in R&D to sustain growth and competitiveness over time. We argue that understanding the slack-R&D investment relationship is incomplete without accounting for different types of slack, their trajectories (accumulation trendlines and change over time), and the institutional instability of firms’ operating contexts. Depending on internal and external uncertainties, slack can buffer defensively against these threats or be deployed proactively to support R&D. We test our hypotheses in the world’s largest emerging market by using a sample of 106 Chinese entrepreneurial firms operating from 2010 to 2015. By developing new theoretical perspectives regarding the dynamic nature of slack trajectories and institutional contexts in which slack-based investments are made, our results help reconcile mixed findings reported in prior research and illustrate the challenges firms confront when they commit slack to long-term, risky R&D investments.

Does Performance Breed Slack? Ownership as a Contingency to the Performance Feedback and Slack Relationship

Although organizational slack is a prominent construct in strategic management, it is often treated as an antecedent or enabler of other organizational outcomes, and thus our understanding of where slack comes from is underdeveloped. We draw on the behavioral theory of the firm to develop a better understanding about the antecedents of organizational slack. In so doing, we address a gap in the literature on the antecedents of slack by developing base models showing how and why performance feedback influences the three most common types of slack studied in the literature. Moreover, we contend that ownership is an important contingency that influences these relationships because different types of owners are motivated by different norms. Within a “communitarian” culture such as Japan, domestic owners generally have a multifaceted relationship with the firm and hence are motivated by norms of reciprocity and embeddedness, thereby allowing managers to adopt a stakeholder perspective. In contrast, foreign investors typically have only an arm’s-length relationship with the firm and are thus motivated by stock price, thereby putting “contractarian” pressures on managers to adopt a shareholder perspective. This domestic/foreign ownership distinction influences how resources are allocated and therefore the relationship between performance feedback and different types of slack in the firm. We further emphasize that these relationships will vary in accordance to where the slack resides: internal or external to the firm. We find general support for our hypotheses.

Saving for the bad times: slack resources during an economic downturn

PurposeThis paper aims to examine what firms in Spanish industrial sectors redeployed their resources, depending on their organisational slack (resource excess), when faced with the global economic crisis of 2008.Design/methodology/approachVarious financial measures for slack resources and performance have been analysed from more than 400 Spanish firms from 2006 (pre-crisis) to 2017 (recovery).FindingsThe first finding is that every slack is useful against an economic downturn. The results show how industrial companies use their slack resources when faced with a generalised crisis according to the level of slack possessed. The key role of the available slack against this environmental threatens is remarked.Research limitations/implicationsNot every resource is useful against an economic downturn. The results show how industrial companies use their slack resources when faced with a generalised crisis in accordance with the types and levels of slack. The key role of the liquid resources, in particular cash, against this environmental threat is discussed. However, we also observe the behaviour of firms with only a few excess resources and find very similar resource consumption patterns.Originality/valueAlthough organisational slack is a well-known concept in management, few studies deal with how companies consume or use other types of resources when confronting a crisis. This paper not only addresses this question but also offers insights for a detailed evaluation of various types of slack during and after a crisis.

Environmental complexity, slack, and firm performance

Firms hold excess resources, known as slack, that could be valuable as the environment becomes more complex. This article provides evidence on how higher environmental complexity alters the slack-performance relationship in the long run by introducing three types of effects: the efficiency effect, the profitability effect, and the incentives effect. After measuring those effects on a panel of Colombian firms, we show that firms implement multiple and simultaneous purposeful actions on organizational slack to compete in more complex environments. Depending on the slack type, complexity can encourage the efficient use of slack, it can alter the incentives to hold slack, and it can change the profitability of slack. Those results could be used to answer how efficient or profitable are firms’ levels of slack, and if they have higher incentives to accumulate more slack.

Slack and Crash Risk

We examine how a firm’s operational slack is associated with current income and future stock price crash risk. By doing so, we test the validity of a firm’s alternative motivations for holding operational slack. We show that Supply Chain Slack, which is based on excess working capital, is associated with higher current profits and higher future crash risk. This evidence is consistent with the firm hoarding bad news. In contrast, SG&A Slack, which is based on excess selling, general, and administrative expenses, is associated with lower current income and lower future crash risk. This evidence is consistent with the firm insuring against rare and adverse events. Furthermore, a firm’s stock price crash risk is lower when a slack type is more costly, consistent with both motivations. Overall, our findings suggest a stronger profit-crash risk tradeoff when firms hold more operational slack.

Slack And Crash Risk

We examine how a firm’s operational slack is associated with current income and future stock price crash risk. By doing so, we test the validity of a firm’s alternative motivations for holding operational slack. We show that Supply Chain Slack, which is based on excess working capital, is associated with higher current profits and higher future crash risk. This evidence is consistent with the firm hoarding bad news. In contrast, SG&A Slack, which is based on excess selling, general, and administrative expenses, is associated with lower current income and lower future crash risk. This evidence is consistent with the firm insuring against rare and adverse events. Furthermore, a firm’s stock price crash risk is lower when a slack type is more costly, consistent with both motivations. Overall, our findings suggest a stronger profit-crash risk tradeoff when firms hold more operational slack.

Relationship between slack resources and performance: temporal symmetry and duration of effects

PurposeAlthough slack resources and their relationship to performance have been widely studied in the literature, the temporal symmetry of this relationship, and the duration of its effects, are still unknown aspects and are the objective of this paper.Design/methodology/approachTo evaluate this effect, an exploratory study has been designed on a sample of 449 Spanish industrial companies over a period of 12 years, assessing the impact of idle resources on economic and financial profitability. By means of hierarchical regressions, the short- term, medium- term and long-term effects of slack resources have been evaluated.FindingsThe results show that the impact on performance depends on the type of resource considered. Available slack has a consistent and positive effect on economic profitability in the short term. Other types of slack show persistent effects on performance, but, in the case of the recoverable slack, with a negative sign that contradicts the benefits provided by these resources. Finally, potential slack only has a permanent effect on financial profitability, but the sign changes depending on the economic context under consideration. There are also differences in the duration of the effects according to the type of resources.Originality/valueThis paper advances the knowledge about the slack-performance relationship over time that has been scarcely studied.

Attainment Discrepancy Level, Firm Resources Slack, and Sticky Cost

The aim of this study is to further develop the behavioral theory of the firm into the context of sticky cost research. The company’s actions in managing resources can be explained through the concept of attainment discrepancy level and resource slack in the behavioral theory of the firm explaining the company’s sticky costs. This study also examines the effect of attainment discrepancy levels, both historical and social, on cost behavior between slack dimensions and overall slack. To examine it, this study used 2,416 observations data from 302 companies listed on the Indonesian Stock Exchange during 2009-2017. Using Eviews 10, the estimation results of the regression model based on HAC find that the attainment of discrepancy level and resource slack affects sticky costs. Specifically, this study found that historical attainment discrepancy level causes sticky cost behavior to decrease, whereas social attainment discrepancy level increases cost behavior to become more sticky cost. The effect of resource slack on sticky cost behavior is reduced, both for each slack dimension and for the overall slack. Furthermore, the results show that the existence of certain types of slack, namely unabsorbed slack, increases the company’s sticky cost behavior when it is associated with historical attainment discrepancy levels. To sum up, these results indicate that the firm makes internal business processes as the focus of attention in managing the company’s resources. As a consequence, this situation can be used as an alternative explanation for the company’s asymmetric cost behavior.

Internationalization, Strategic Slack Resources, and Firm Performance: The Case Study of Vietnamese Enterprises

The study attempted to fill a gap in the research on international business by providing fresh evidence of the effect of the degree of internationalization on firm performance and the influence of organizational slack on this relationship. By applying a fixed-effects model to data from 569,767 Vietnamese enterprises from 2007 to 2015, a significant W-shaped linkage between internationalization and firm performance was revealed. Importantly, the results also emphasized the importance of three types of slack in the first stage of the internationalization process: absorbed slack human resources, other absorbed slack resources, and unabsorbed slack resources.

Robotic-cell scheduling with pick-up constraints and uncertain processing times

Technological developments have propelled the deployment of robots in many applications, which has led to the trend to integrate an increasing number of uncertain processes into robotic and automated equipment. We contribute to this domain by considering the scheduling of a dual-gripper robotic cell. For systems with one potential bottleneck, we determine conditions under which the widely used swap sequence does not guarantee optimality or even feasibility and prove that optimal schedules can be derived under certain conditions when building on two types of slack we introduce. With the addition of a third type of slack and the concept of fixed partial schedules, we develop an offline-online scheduling approach that, in contrast with previous work, is able to deal with uncertainty in all process steps and robot handling tasks, even under pick-up constraints. The approach can deal with single- or multiple-bottleneck systems, and is the first approach that is not restricted to a single predefined sequence such as the swap sequence. Our approach is well suited for real-world applications, since it generates cyclic schedules and allows integration into commonly-used frameworks for robotic-cell scheduling and control.We demonstrate the applicability of our approach to cluster tools in semiconductor manufacturing, showing that our approach generates feasible results for all tested levels of uncertainty and optimal or near-optimal results for low levels of uncertainty. With additional symmetry-breaking constraints, the model can be efficiently applied to industrial-scale test instances. We show that reducing uncertainty to below 10% of the processing time would yield significantly improved cycle lengths and throughput. We also demonstrate that the widely used swap sequence only finds solutions for less than 1% of the instances when strict pick-up constraints are enforced and processing times are heterogeneous. As our approach finds feasible solutions to all of these instances, it enables the application of robotic cells to a significantly broader application environment.

THE IMPACT OF ORGANISATIONAL SLACK ON INNOVATIVE WORK BEHAVIOUR: HOW DO TOP MANAGERS AND EMPLOYEES DIFFER?

In this paper, we advance our understanding of the relationship between slack and innovation in two ways. We distinguish between different slack types on the organisational level, and hypothesise and empirically test how they influence innovative work behaviour (IWB) of both employees and top managers on the individual level. Applying a multigroup analysis in PLS-SEM, we test our model with a sample of 403 individuals, 155 top managers and 248 employees, from the German real estate industry. We find support for our central argument that the influence of organisational slack on individuals’ IWB differs according to the type of slack and the organisational role of the individual.

Slack and performance in the hospital industry: a configurational approach

PurposeThe purpose of this paper is to contribute to the healthcare management literature and improve the understanding of the slack and performance link by examining the hospital slack and performance relationship using a sample of 148 US hospitals.Design/methodology/approachUsing cluster analysis, ANCOVA and means comparisons, this study identifies different hospital slack configurations and their associated performance implications.FindingsThe results demonstrate that different configurations of slack resources result in different levels of hospital performance. The findings also demonstrate equifinality in this relationship suggesting that some configurations of slack can result in similar levels of performance.Practical implicationsThe results indicate that managerial attention should be paid to not only identifying appropriate levels and types of slack for hospitals but also to appropriate ways to bundle these resources. The findings also suggest there may be multiple ways for hospitals’ administrators to effectively manage and bundle slack resources.Originality/valueOrganizational slack and its impact on organizational performance is an important area of research within the management literature. Unfortunately, no known studies have examined how different types of slack resources are configured or bundled together in healthcare organizations and how this impacts firm performance. This study provides a significant contribution to the literature by providing a first step in understanding the slack and performance relationship in the hospital industry.

Nudging persistence after failure through emergency reserves

Along the path of struggling to reach their personal and organizational long-term goals, the experience of an initial subgoal failure can lead individuals to feel less committed to their overall goal and even to give up entirely on reaching it. In one field study and four lab studies, we examine the ability of a cost-free nudge to decrease the detrimental impact of subgoal failure on goal attainment. More specifically, we demonstrate that framing goals with emergency reserves, a type of slack, can motivate individuals to persist after subgoal failures, leading to better performance on long-term goals, compared to objectively equivalent goals without slack. After failing to reach a subgoal, we found that individuals with goals framed with emergency reserves felt a greater sense of perceived progress, causing them to feel more committed to their goal, and thus increasing their likelihood of persisting at their goals.

Innovative austerity management

PurposeThe purpose of this paper is to uncover the right type of organizational slack for innovation. It examines how city managers conceive slack, and how they create slack to facilitate innovation while dealing with fiscal stress.Design/methodology/approachThe study is built around a comparative case study approach to uncover contrasts, similarities and patterns of slack-building for innovation in austere times. It relies on the experiences of 12 experienced city managers. Data are sought from elite interviews and one focus group.FindingsThe main finding is that innovation in the public sector does not benefit from slack in general, but from a specific type of slack. The evidence shows that useful slack for innovation is not so much about financial slack or HR slack, but about psychological slack.Research limitations/implicationsThis study adds to the literature that the key questions of slack research should not only focus on identifying the “right amount” of slack but also on identifying of the “right type” of slack.Practical implicationsPublic managers who want to deal with (fiscal) crises more innovatively might reconsider their perceptions of slack and its value. Rather than operating on a pure cost effectiveness paradigm, they should balance the costs of slack and its innovative abilities.Originality/valueThis paper highlights the social/psychological side of austerity management. It concludes that increasing the ability of public organizations to innovatively cope with fiscal stress is not so much about increasing predictive capacity or financial buffers, but about increasing the mental leeway of coworkers.