Resource slack, in the

business Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for pr ...

and

management Management (or managing) is the administration of an organization, whether it is a business, a nonprofit organization, or a government body. It is the art and science of managing resources of the business. Management includes the activities o ...

literature, is the level of

availability In reliability engineering, the term availability has the following meanings: * The degree to which a system, subsystem or equipment is in a specified operable and committable state at the start of a mission, when the mission is called for at a ...

of a

resource Resource refers to all the materials available in our environment which are technologically accessible, economically feasible and culturally sustainable and help us to satisfy our needs and wants. Resources can broadly be classified upon their ...

. Resource slack can be considered as the opposite of resource

scarcity In economics, scarcity "refers to the basic fact of life that there exists only a finite amount of human and nonhuman resources which the best technical knowledge is capable of using to produce only limited maximum amounts of each economic good. ...

or resource constraints. The availability of resources can therefore be defined in terms of resource slack versus constraints, as two ends of a

continuum Continuum may refer to: * Continuum (measurement), theories or models that explain gradual transitions from one condition to another without abrupt changes Mathematics * Continuum (set theory), the real line or the corresponding cardinal number ...

. Resource slack then refers to the relative abundance of the resource, and resource constraints refer to its limited availability. However, the effects of both resource slack and resource constraints are ambiguous, as both can have both negative and positive consequences. Both new and established

firm A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal or a mixture of both, with a specific objective. Company members share a common p ...

s need resources for their survival, growth and sustainable competitive advantage. On the other hand, severe resource constraints hinder the growth of firms and lower the probability of their survival. However, resource constraints have also been observed to foster creativity and force firms to deal with problems promptly. Moreover, slack resources tend to improve firms’

financial Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fina ...

performance A performance is an act of staging or presenting a play, concert, or other form of entertainment. It is also defined as the action or process of carrying out or accomplishing an action, task, or function. Management science In the work place ...

, serve to buffer environmental shocks and allow for more discretion and flexibility in responding to competitors. However, large amounts of resources could also hinder the entrepreneurial process by impairing the firm's ability to identify new business opportunities. These contradictory potential outcomes of resource slack/constraints on creativity and performance have been explained in terms of an inverse

U-shaped Many shapes have metaphorical names, i.e., their names are metaphors: these shapes are named after a most common object that has it. For example, "U-shape" is a shape that resembles the letter U, a bell-shaped curve has the shape of the vertical ...

relationship and

context-dependent In formal language theory, a context-sensitive language is a language that can be defined by a context-sensitive grammar (and equivalently by a noncontracting grammar). Context-sensitive is one of the four types of grammars in the Chomsky hierarc ...

effects, as well as the underlying dynamics of resource constraints and slack. The latter dynamic perspective implies that, for example,

entrepreneurs Entrepreneurship is the creation or extraction of economic value. With this definition, entrepreneurship is viewed as change, generally entailing risk beyond what is normally encountered in starting a business, which may include other values th ...

perceive resource constraints/slack as transient positions relative to their start-up’s own resource

demand In economics, demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given time. The relationship between price and quantity demand is also called the demand curve. Demand for a specific item ...

s at any given moment.

References

{{reflist Strategic management

See also

References