The organizational slack and performance relationship: a configurational approach

Purpose – The purpose of this paper is to contribute to the organizational literature and improve the understanding of the slack and performance link by: examining the slack and performance relationship using a configurational approach and by considering equifinality and its possible effects on this relationship. Design/methodology/approach – Using cluster analysis, ANCOVA, and means comparisons this study identifies different configurations of slack and their associated performance implications. Findings – The results show that configurations with higher levels of slack outperform those with lower levels of slack suggesting a positive relationship between slack and firm performance. The findings also demonstrate that alternative configurations of slack can result in similar levels of performance suggesting the existence of equifinality in this relationship. Research limitations/implications – This study contributes to prior research by moving beyond traditional linear and contingency views of slack and considering a configurational approach. An important contribution of this study is that while level of slack may be important it appears that how the various types of slack are bundled also serves as an important factor in firm outcomes and should be examined by future researchers. Practical implications – The results indicate that managerial attention should be paid to not only identifying appropriate levels and types of slack for the organization but also to appropriate ways to bundle theses resources. Originality/value – This study provides an important contribution to the literature by determining if certain slack bundles result in higher levels of performance and if there are multiple ways of bundling slack resources that result in similar performance outcomes.