What question did this study set out to answer?

To examine how absorbed and unabsorbed organizational slack influence firm performance during economic transitions, testing linear versus curvilinear dynamics under organization and agency theories.

November 4, 2003Strategic Management JournalOpen Access

Organizational slack and firm performance during economic transitions: two studies from an emerging economy

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Authors

JTJustin TanCreighton University MPMike W. PengThe University of Texas at Dallas

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Implication

Empirical study reveals an inverted U-shaped relationship between organizational slack and firm performance in Chinese enterprises, indicating that slack effects depend on resource type.

Key Points

To examine how absorbed and unabsorbed organizational slack influence firm performance during economic transitions, testing linear versus curvilinear dynamics under organization and agency theories.
Conducted two empirical investigations in China's transition economy using survey data (N = 57 firms) and archival data (N = 1532 firms).
Assessed performance effects by distinguishing between unabsorbed slack and absorbed slack, testing for nonlinear relationships.
The relationship between organizational slack and firm performance is curvilinear, exhibiting an inverted U-shaped pattern.
Organization theory provides stronger explanatory power for unabsorbed slack, whereas agency theory is more accurate when evaluating absorbed slack.

Cite This Study

Tan et al. (2003) studied this question.

synapsesocial.com/papers/69dff5d06ea3fbd8f9e9c021 https://doi.org/10.1002/smj.351

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Implication

Empirical study reveals an inverted U-shaped relationship between organizational slack and firm performance in Chinese enterprises, indicating that slack effects depend on resource type.

Organizational slack and firm performance during economic transitions: two studies from an emerging economy

Discussion

Member takes

Implication

Key Points

Cite This Study

Organizational slack and firm performance during economic transitions: two studies from an emerging economy

Discussion

Member takes

Implication

Key Points

Cite This Study

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