Slack Resources and the Performance of Privately Held Firms

• Main Author: GEORGE, Gerard
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2005
• Subjects: Public companies; Financial performance; Private companies; Performance competency-based education; Resource management; Entrepreneurship; Resource allocation; Resource-based theory of the firm; Organizational behavior; Business; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/4615; https://ink.library.smu.edu.sg/context/lkcsb_research/article/5614/viewcontent/Slack_Resources_pv.pdf
• Institution: Singapore Management University

Empirical findings from publicly traded firms and behavioral arguments suggest a positive influence of resource slack on financial performance. While this area has remained unexplored in privately held firms, conceptual arguments indicate that resource constraints may enhance performance. Longitudinal data on 900 privately held firms confirm the differing influences of forms of slack on performance. Results indicate that a combination of behavioral and resource constraints arguments are necessary to explain the slack-performance relationship in privately held firms. The implications of these findings for theories of resources and entrepreneurship are discussed.