Organizational Slack and Environmental Performance
|Type:||Articles in Refereed Journals (International)|
In this paper, we investigate the role different kinds of organizational slack play as drivers of environmental performance. Drawing on organizational slack literature, we investigate the impact that two kinds of slack, absorbed and unabsorbed slack have on the environmental performance of the firm. We hypothesize that unabsorbed slack, being uncommitted and relatively easy to redeploy will have a positive impact on the firm's environmental performance up to a certain point, its impact becoming negative after that. Whereas, absorbed slack, which includes excess resources tied to current operations we expect to be negatively related with environmental performance. Moreover, given the importance that prior financial performance has been found to play in subsequent environmental performance we develop and test a number of hypotheses about the interactions between the firm’s financial performance and absorbed and unabsorbed slacks.