Dynamic resource management and slack resources

Abstract

Purpose – Organisational slack has been widely considered in strategic management, but there is a gap in understanding the process of accumulation and application of slack resources. From a dynamic perspective and over an extended period of time, this paper analyses the management of slack resources and evaluates whether the different behaviours, in relation to the accumulation and consumption of slack resources, have any effect on performance. Design/methodology/approach – The resource-based view and the dynamic extension of this theory, i.e. resource management and resource orchestration, were analysed in order to evaluate how slack resources can be managed and generate value. Assuming a configurational approach, the analysis was structured into two stages to answer the proposed hypothesis. The first stage studied whether there were different patterns of management of slack resources over time using the DistatisR package. The second stage evaluated which behaviours had the greatest impact in terms of profitability by using a dynamic panel data regression. Findings – Three different types of slack resource management were found in companies: efficient, effective and erratic. Different types do not have the same impact on performance. Originality/value – The dynamic management of slack resources has scarcely been considered, even during periods of crisis and economic expansion. This research advances the understanding of how firms transform slack resources into performance from a dynamic perspective.