Matching slack resources and investment strategies to achieve long-term performance: New perspectives on corporate adaptability

Abol Jalilvand and Sung Min Kim

The Journal of Economic Asymmetries, 2013, vol. 10, issue 1, 38-52

Abstract: Managers are continually challenged to balance the tradeoffs between adapting to rapidly changing market environments and focusing on existing core efficiencies. In this paper, we advance new perspectives on corporate adaptability by departing from the premise of the previous research that treats a firmʼs investment strategies and management of its slack resources in isolation. We contend that firms with adaptive capabilities attempt to match the type of slack resources (i.e., absorbed/specific or unabsorbed/flexible) with the nature of their investment strategies (i.e., exploration vs. efficiencies in existing assets). We further advance that the dynamics of strategy and performance relationship is moderated by the market turbulence level.

Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joecas:v:10:y:2013:i:1:p:38-52

DOI: 10.1016/j.jeca.2013.10.001

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