Organizational slack: is more or less better?

Purpose – The purpose of this paper is to attempt to reconcile previous views of the relationship between organizational slack and performance by examining the influences of heterogeneous corporate strategy and different slack resources. Differences in performance resulting from variations in slack can also be moderated by strategy.Design/methodology/approach – The proposed model was tested by examining operating and financial information from 529 Taiwan high‐tech companies during the period 1997‐2005. Owing to the study, data were both cross‐sectional (across firms) and time series (over years), a panel data approach were applied for hypothesis testing.Findings – The results broadly demonstrate that relationships differ based on strategy and organizational slack. Additionally, this study is the first to empirically identify a U‐shaped relationship between slack and performance, indicating that, in certain circumstances, either more or less slack is better for performance.Originality/value – The results s...

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