Slack Resources and the Performance of Privately Held Firms

2005/08/01 by Gerard George · 17 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Corporate Finance and Governance #Firm Innovation and Growth #Capital Investment and Risk Analysis

paper · doi:10.5465/amj.2005.17843944

Abstract

Empirical findings from publicly traded firms and behavioral arguments suggest a positive influence of resource slack on financial performance. While this area has remained unexplored in privately held firms, conceptual arguments indicate that resource constraints may enhance performance. Longitudinal data on 900 privately held firms confirm the differing influences of forms of slack on performance. Results indicate that a combination of behavioral and resource constraints arguments are necessary to explain the slack-performance relationship in privately held firms. The implications of these findings for theories of resources and entrepreneurship are discussed.

Cited by

• Impact of Organizational Support and Social Capital on University Faculties' Working Performance. [europepmc]
• COVID-19 impact on the hospitality industry: Exploratory study of financial-slack-driven risk preparedness. [europepmc]
• Slack Resources, Corporate Performance, and COVID-19 Pandemic: Evidence from China. [europepmc]
• A CEO's Future Temporal Depth and Organizational Resilience. [europepmc]
• The consequences of face-threatening feedback on innovators' psychological safety, affect, and willingness to engage in future innovation projects. [europepmc]
• What's inside the Mind of a CEO? The Effects of Discretionary Slack Resources on R&D Investment. [europepmc]
• Content and process: organizational conflict and decision making. [europepmc]
• Drivers of fragility in the ventures of poverty entrepreneurs. [europepmc]
• Responding to unexpected crises: The roles of slack resources and entrepreneurial attitude to build resilience. [europepmc]
• Digitization path to improve ESG performance: A study on organizational perspectives. [europepmc]
• Digital transformation and the choice of management control modes in enterprise groups. [europepmc]
• How does the absorbed slack impact corporate social responsibility? Exploring the nonlinear effect and condition in China. [europepmc]
• Nonlinear relationship between innovation input and intelligent manufacturing from an absorptive capacity perspective. [europepmc]
• A classification of structural inertia: Variations in structural response [europepmc]
• Economic policy uncertainty and corporate donation: evidence from private firms in Korea [europepmc]
• Human resources slack and profitability: SMEs, large firms, and the role of business group affiliation [europepmc]
• Is Corporate Social Responsibility a Stock Price Stabilizer During the COVID-19 Crisis in China? An Integrated View of Government Response [europepmc]

Related

• Give Them Some Slack—They’re Trying to Change! The Benefits of Excess Cash, Excess Employees, and Increased Human Capital in the Strategic Change Context
• PERFORMANCE, SLACK, AND RISK TAKING IN ORGANIZATIONAL DECISION MAKING.
• The impact of dynamic managerial capabilities on firm performance : A moderated mediation analysis of German DAX firms
• The Evolution of Resource-Based Inquiry: A Review and Meta-Analytic Integration of the Strategic Resources–Actions–Performance Pathway
• The Combined Effects of Free Cash Flow and Financial Slack on Bidder and Target Stock Returns