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Drawing on the behavioral theory of the firm (BTF), this study aims to understand the role of organizational slack in the manufacturing industry during the COVID-19 pandemic.

Using panel data of publicly traded manufacturing firms in the USA over a 12-quarter time period, this study uses generalized least squares modeling to test the hypothesized relationships.

Results show that the COVID-19 pandemic has a negative impact on manufacturing firms’ performance and organizational slack weakens the negative relationship between the COVID-19 pandemic and firm performance. In addition, when a positive performance aspirational gap (PAG) exists, the negative relationship between COVID-19 pandemic and firm performance in firms with high levels of organizational slack is further weakened.

This study contributes to organizational studies by investigating the contingent impact of organizational slack in the setting of COVID-19 pandemic. This study also contributes to the BTF by investigating how firm PAG, combined with the abundance of organizational slack, moderates the impact of COVID-19 pandemic on firm performance.

The purpose of this study is to investigate the relationship between unexpected financial slack and small- and medium-sized enterprises’ (SMEs) diversification and growth performance.

Using the phenomenon of IPO over-financed in China as the empirical context, the authors constructed a firm-level measure of unexpected financial slack based on over-financed capital resources and extended the nascent inquiry on unexpected slack.

The authors proposed and tested that, with unexpected slack obtained from IPO over-financed, SMEs did not engage in diversification until slack was extraordinarily high (a curvilinear relationship). And in such cases, SMEs preferred geographic diversification rather than industry diversification. Moreover, SMEs were able to sustain growth performance both in the short term and in the long term.

This study had important implications for regulators and managers. The findings of this study suggested that proper regulations on usage of over-financed capital helped SMEs’ sustain their growth performance. Regulatory policies could curb managers from cognitive biases to behave more prudently and deploy the resources more consciously. However, with sufficient resources, managers should also consider more explorative growth drivers such as diversification.

This study joined the efforts of extending the antecedents of slack formation from internal managerial behaviors to external uncertain factors. As the first study to explore the role of unexpected slack at firm level, the results of this study shed more light on the effects of unexpected slack resources.

The present article draws from the behavioral theory of the firm, and it explores whether various dimensions of organization slack can be employed as variables to measure organizations’ antifragility during times of uncertainty such as the Covid-19 pandemic. Furthermore, considering the limitations and regulations put into place during the most recent pandemic, the present study seeks to explore the moderating effect that collaborative networks might have on the relationship between various dimensions of organizational slack and firms performance.

The present study retrieves data from Thomson Reuters Data Stream, and it gathers observations from manufacturing companies located in Europe. The dataset is composed of observations spanning from the fiscal year 2019–2022. Consequently, through the use of a balanced panel data, the authors conduct multiple regression analysis.

The obtained empirical findings reveal that high discretion slack has a positive effect on companies performance whereas low discretion slack has a negative effect on their performance. Additionally, the obtained findings indicate that low levels of reliance on collaborative networks positively moderates the relationship between organizational slack and firms’ performance. On the other hand, high levels of reliance on collaborative networks negatively moderate the relationship between organizational slack and firms performance.

This manuscript carries several original contributions. It expands the literature stream concerning antifragility and collaborative networks. Additionally, it postulates an operational measure which can be used to indicate firms’ antifragility.

This paper undertakes an empirical analysis of the impact of absorbed and unabsorbed slack, employing three different measures for each slack type, on firm profitability. We find that unabsorbed slack has a more favorable influence on future firm profitability than absorbed slack. While all the absorbed slack indicators have a significant negative influence on future profitability, the three unabsorbed slack indicators present positive, negative, and non-significant influences, respectively. The fewer constraints of unabsorbed slack on the redeployment to exploit new opportunities point to its comparative advantage over absorbed slack. We find evidence for the differential impact of absorbed versus unabsorbed slack on profitability in firms with lower levels of slack, which suggests firms prefer to withdraw resources from current business and redeploy them to develop new and more favorable business opportunities.

While previous research has developed unclear positions about the role of organizational resources on alliance formation, the purpose of this paper is to focus on financial slack resources to clarify the conditions that facilitate the formation of strategic alliances. Building on the behavioral theory of the firm, this paper theorizes that internal and external financial slack resources, measured as cash holdings and financial leverage, incentivize managers to form alliances, because they protect them against the risk of alliance failure.

Complete data were collected from 400 biotech public companies for the period from 2000 to 2015. The data set considered alliances among over 2,200 public and private companies. Hypothesis testing relied on generalized estimating equations.

Cash holdings positively impact alliance formation; financial leverage negatively impacts alliance formation; cash holdings and financial leverage interact in the prediction of alliance formation.

While research in financial slack resources shows equivocal results, this study illustrates that they exercise a significant effect when it comes to the choice of forming strategic alliances. Limitations include the focus on multiple forms of alliances, possible restrictions in the external validity of the findings, and a lack of measurement of explanatory mechanisms.

Findings help managers understand the financial conditions in which they should choose to form or avoid alliances; findings help managers select alliance partners.

The study contributes by proposing a new outlook on alliances; identifying financial resources as alliance predictors when previous research focused on intangible resources; offering new insights into the often equivocal outcomes of financial slack; building an uncharted bridge between the finance and alliance literatures.

Companies vary in their attitudes toward regulatory (ethics) risk. The purpose of this study is to assess how regulatory risk‐averse, risk neutral and risk seeking companies employ distinct managerial risk and slack accumulation strategies and differ in their auditor scores and bankruptcy risk.

The authors test their hypotheses using the GAO‐assembled database of financial restatements that allows contrasting voluntary restaters (firms that restated without being prompted either by external auditors or the SEC) and forced restaters (firms requested to restate by the SEC or external auditors). The paper uses logistic regression for comparing different groups of firms to test the hypotheses.

The results of the data analysis mostly supported the hypotheses. The findings suggest that a firm's attitude towards regulatory risk is associated with organizational slack (available and potential), risk (managerial and organizational), and auditor's rating.

Some limitations of the study are: use of cross sectional data does not allow testing causal effects, relying on GAO office for categorizing firms in different regulatory category introduces the possibility of bias in analysis, and use of only North American firms in the sample limits the generalizability of the findings.

Firms' attitudes toward regulatory risk and their respective risk and slack management strategies could be used to detect fraud early on before such firms transgress from the realm of legality to borderline legality and illegality.

Some contributions of the study are: it shows that a firm's fraud tendency or regulatory risk behavior is associated with the type of slack accumulated and available in the firm, regulatory risk‐averse companies take less managerial and bankruptcy risks, and earn higher evaluations from auditors, it demonstrates that regulatory risk‐averse companies differ from regulatory risk neutral companies.

While previous strategy research has provided significant attention to resource slack and its important roles in firm performance, particularly through strategic agility and flexibility in responding to environmental conditions, the majority of such theory and empirical work was developed for large business contexts. Therefore, the understanding of the relative contributions of absorbed and potential slack, particularly for resource-constrained small businesses, remains largely under theorized and unexamined. As many small businesses often face internal resource limitations, the ability to access external resources, in addition to internal resources, is likely significant, for firm performance, especially when small firms face high economic uncertainty. The paper aims to discuss these issues.

In this paper the authors utilize a data set from National Federation of Independent Business on small business economic trends. The sample consists of approximately 13,000 US-based small and medium businesses.

The findings highlight the importance of resource slack in firm performance offering general support for the applicability of classic management theories to the small business context. Environmental hostility and competitive intensity appear to positively moderate the observed relationship between both absorbed and potential resource slack and performance, but in different ways. Environmental hostility positively moderates the relationship between potential slack and firm performance, while competitive intensity positively moderates the relationship between absorbed slack and firm performance.

Because most classic theories in strategic management were only theorized for, and examined through, large organizations, entrepreneurship research should consider these potential limitations and carefully consider factors differing between large and small firms.

Business owners and managers should be aware that not all types of slack have equal performance implications. Absorbed slack is extremely valuable in highly competitive situation. Therefore, business owners should develop plans to recover absorbed slack during highly competitive situations as a defensive strategy. One the other hand, potential slack forces more accountability, which lowers the possibility of small firms using it to engage in price wars, but it is extremely valuable during worsening economic conditions.

In this paper the authors separate absorbed slack from potential slack conceptually and then test their individual effects on firm performance. Through this study, the authors establish boundary conditions for the important role of resource slack on performance through the moderating roles of environmental hostility and competitive intensity.

The purpose of this paper is to examine the relationship between available slack and firm performance in Italian family-controlled public firms (FCPFs) from 2006 to 2010. In addition the authors analyze the moderating effects of specific board structure variables on the relationship between slack resources and firms’ performance.

A pooled cross-section of family and non-family publicly traded firms was drawn from COMPUSTAT global and matched with corporate governance and family firm variables hand-collected from companies’ standard profiles from Italy's primary stock exchange, Borsa Italiana. The hypotheses were tested using the feasible generalized least square method in order to analyze the data from 583 firms-observations, controlling for self-selection bias and reverse causality.

The study shows that FCPFs with available slack experience less than proportionate increases in performance, suggesting a concave curvilinear slack-performance relationship. However, the slack-performance relationship is contingent on board independence and board size: greater board independence and larger boards in FCPFs relate to higher performance when the firm lacks or has too much slack available. The findings suggest that a balanced approach of oversight and stewardship helps families to make better resources allocation, to the benefit of outside shareholders as well.

The slack measure was restricted to available slack. Future studies can expand this research inquiry with other forms of slack, including potential and recoverable slack. The sample included only publicly traded family and non-family firms, thereby limiting the generalizability of the findings to other types of family enterprises. Lastly, the results only attend to the slack-performance relationship by controlling whether the firm's performance is below or above the industry average.

Policy makers and non-family stakeholders may rely on the findings better understand the factors that can alter the family's propensity for risks and its related strategic decisions in the Italian context. Procedures to fully monitor family management's decision making or, at the other extreme, to give the family free reign are likely to disadvantage families, their business, and their outside stakeholders.

The study reconciles the debate on the role of slack on firms’ performance by proposing a curvilinear relationship. The study is one of only a handful of research inquiries centrally addressing the role of slack in family-owned businesses, and the only analysis focussed on Italian FCPFs.

This paper seeks to give consideration to the family imprint on governance in the context of firms experiencing economic recession. It aims to rely on agency and stewardship theories to empirically examine the relationship between CEO duality and slack resources on family firm performance during economic recession.

Trend analyses were used employing hierarchical linear modeling (HLM) to evaluate the influence of duality and slack resources on the performance of 75 family‐controlled public firms (FCPFs) during the 2001‐2002 US economic recession and recovery.

The results indicate that duality and slack by themselves do not influence firm performance. However, family firms with a combined CEO‐chair and ample slack resources experience enhanced performance both at the onset of recession and at its conclusion. The findings suggest that a unified leadership and access to slack provide the family with the means to weather economic hardship. The paper makes the case that the stewardship afforded by this combination provides clear benefits to outside shareholders.

The absolute leadership and decision‐making control afforded to a CEO‐chair who also holds the reins over firm resources helps to favorably position the business and ease its course through difficult times. The results of this paper suggest that what is good for the family may also be good for other stakeholders in the firm, in this case non‐family shareholders.

With this study, attention is drawn to the governance of family businesses during times of economic duress. To the authors' knowledge, this study represents the only empirical investigation into family firm governance within this unique, albeit prevalent context.

Over the last two decades, corporations have increasingly adopted green innovation to lessen the unsuitable impact on the environment and gain competitive advantage at the same time. However, researchers have paid more attention to green product innovation and the firm's financial risk (FFR) relationship than green process innovation. Such neglect of green process innovation has failed to produce an elusive understanding of green process innovation and FFR relationship, and this relationship is necessary to understand for the ongoing debate on “does it pay to be green?” Thus, the purpose of this research is to investigate the relationship between green process innovation performance (GPRIP) and FFR, and it also examines the moderating role of slack resources and competitive intensity in facilitating this relationship.

The authors collected 202 publicly listed Thai manufacturing firms' data using questionnaire survey and firms' financial statements, and this research employed hierarchical moderating regression analyses to test hypotheses.

Results demonstrate that GPRIP negatively influences the FFR. Competitive intensity reinforces the negative relationship between GPRIP and FFR, whereas organizational slack has an unfavorable moderating effect, i.e. firms with ample organizational slack are less likely to reduce their financial risk from higher GPRIP.

The research model contributes to an ongoing debate on “does it pay to be green?” by providing a thorough understanding of GPRIP and FFR relationship, as to the authors' best knowledge, no work to date has examined this relationship. This research also sets out the boundary conditions of the GRPIP and FFR relationship and highlights the critical role of firm-specific condition, i.e. slack resource and market condition, i.e. competitive intensity to reap higher financial benefits from GPRIP.