Organizational Slack and Firm Performance During Economic Transitions : Two Studies From An Emerging Economy  

Oleh:

Tan, Justin ; Peng, Mike W.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Strategic Management Journal vol. 24 no. 13 (2003), page 1249-1264.
Topik: firm performance; transition economies; china; SOE; organizational slack; performance

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: SS30.13 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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How does organizational slack affect firm performance ? Organization theory posits that slack, despite its costs, has a positive impact on firm performance. In contrast, agency theory suggest that slack breeds inefficiency and inhibits performance. The empirical evidence, largely from developed economies, has been inconclusive. Moreover, little effort has been made to empirically test whether such an impact (positive or negative) is linear or curvilinear. This article joins the debate by extending empirical work to the largely unexplored context of economic transitions. Specifically, two studies, based on survey and archival data (N = 57 and 1532 firms, respectively), are undertaken in china's emerging economy. Our result suggets : 1. that organization theory generates stronger predictions when dealing with unabsorbed slack, and 2. that agency theory yields stronger validity when focusing on absorbed slack. Furthermore, we also find that the impact of slack on performance is curvilinear, which resembles inverse U - shaped curves. Overall, our findings call for a contingency perspective to specify the nature of slack when discussing its impact on firm performance.

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