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

Tan, Justin; Peng, Mike W.

doi:10.1002/smj.351

Cited by 842 publications

(798 citation statements)

References 51 publications

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“…However, other research suggests that when the focus of the items is on more objective characteristics, reliability of single-item scores is often acceptable (Wanous, Reichers, & Hudy, 1997). Further, when managers are within the same firm, prior research suggests it is possible for them to agree and produce ratings with acceptable levels of reliability (Takeuchi et al, 2009). In this study, managers only reported the selection ratio and proportion of employees internally trained.…”

Section: Limitations and Directions For Future Researchmentioning

confidence: 95%

“…The referent for these items was the firm. Although the staffing or training items were completed by a single rater, there is evidence that managers from within the same firm can reasonably agree and produce ratings of reasonable reliability (Takeuchi, Chen, & Lepak, 2009). The survey for managers asked them to respond to the items in reference to 2004, and thus the survey items were designed to capture (retrospectively) all of 2004.…”

Section: Sample and Proceduresmentioning

confidence: 99%

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The effects of staffing and training on firm productivity and profit growth before, during, and after the Great Recession.

Kim

Ployhart

2014

Journal of Applied Psychology

230

216

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This study integrates research from strategy, economics, and applied psychology to examine how organizations may leverage their human resources to enhance firm performance and competitive advantage. Staffing and training are key human resource management practices used to achieve firm performance through acquiring and developing human capital resources. However, little research has examined whether and why staffing and training influence firm-level financial performance (profit) growth under different environmental (economic) conditions. Using 359 firms with over 12 years of longitudinal firm-level profit data, we suggest that selective staffing and internal training directly and interactively influence firm profit growth through their effects on firm labor productivity, implying that staffing and training contribute to the generation of slack resources that help buffer and then recover from the effects of the Great Recession. Further, internal training that creates specific human capital resources is more beneficial for prerecession profitability, but staffing is more beneficial for postrecession recovery, apparently because staffing creates generic human capital resources that enable firm flexibility and adaptation. Thus, the theory and findings presented in this article have implications for the way staffing and training may be used strategically to weather economic uncertainty (recession effects). They also have important practical implications by demonstrating that firms that more effectively staff and train will outperform competitors throughout all pre- and postrecessionary periods, even after controlling for prior profitability.

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Section: Limitations and Directions For Future Researchmentioning

confidence: 95%

Section: Sample and Proceduresmentioning

confidence: 99%

The effects of staffing and training on firm productivity and profit growth before, during, and after the Great Recession.

Kim

Ployhart

2014

Journal of Applied Psychology

230

216

View full text Add to dashboard Cite

show abstract

“…Slack resources are needed since they can help firms buffer from internal uncertainty and environmental turbulences contestability (Bourgeois 1981;Tan, Peng 2003, Thompson 1967Jansen et al, 2012). Depending on the degree of flexibility, slack resources can be categorized as unabsorbed slack and absorbed slack.…”

Section: Organizational Slack and Its Moderating Effect On Ambidextermentioning

confidence: 99%

“…Organizational slack is measured following prior studies by Nohria and Gulati (1996) and Tan and Peng (2003). The Cronbach"s alpha for the organizational slack measure is 0.696.…”

Section: Exploration and Exploitationmentioning

confidence: 99%

Ambidextrous Strategy and Firm Performance: The Moderating Effects of Organizational Slack and Organizational Life Cycle

Luo¹,

Zhang²,

Luo³

et al. 2017

BMS

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The relationship between ambidexterity and firm performance holds a prominent place in the literature. However, studies that examine the conditions under which ambidexterity leads to success are relatively scarce. Based on a sample of 226 firms in China, this study examines the moderating effects of organizational slack and organizational life cycle on the relationship between balance dimension of ambidexterity and combined dimension of ambidexterity and firm performance. The empirical results reveal that pursuing a high level of combined dimension of organizational ambidexterity is only beneficial to firms with a high level of organizational slack or firms in maturity stage, while pursuing a high level of balance dimension of organizational ambidexterity is only beneficial to firms in growth stage, but not to firms in maturity stage.

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“…Examples include excessive production capacity (Greve, 2003). The latter are resources which are currently not committed to any business activities and thus can be redeployed readily within organizations (Sharfman et al, 1988;Tan & Peng, 2003 Vol. 7, No.…”

Section: The Distinctions Between Human Resource and Financial Slackmentioning

confidence: 99%

How are Different Slack Resources Translated into Firm Growth? Evidence from China

Dai¹,

Kittilaksanawong²

2014

IBR

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This paper aims to clarify types of slack resources and mechanisms through which these resources are translated into the growth of transition economy firms. It compares human resource slack and financial slack in terms of their 'proactivity' to unveil their differing effects on firm growth. This paper further highlights firm-level entrepreneurial activities as a mechanism through which these resources are translated into firm growth. Data was collected from senior managers through a questionnaire survey from manufacturing firms in China's Zhejiang province. This paper demonstrates that not all slack resources are readily turned into firm growth as argued in most of prior studies. In particular, only proactive HR slack is directly related to firm growth, while financial slack fuels firm growth via HR slack. Besides, HR slack also propels firm growth partially through various corporate entrepreneurial activities. This paper proposes and demonstrates that 'proactivitity' is a crucial dimension that explains the differing effects of slack resources on firm growth. In addition, corporate entrepreneurial activities are an underlying mechanism through which HR slack is translated into firm growth.

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

Cited by 842 publications

References 51 publications

The effects of staffing and training on firm productivity and profit growth before, during, and after the Great Recession.

The effects of staffing and training on firm productivity and profit growth before, during, and after the Great Recession.

Ambidextrous Strategy and Firm Performance: The Moderating Effects of Organizational Slack and Organizational Life Cycle

How are Different Slack Resources Translated into Firm Growth? Evidence from China

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