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 ...

and

management Management (or managing) is the administration of organizations, whether businesses, nonprofit organizations, or a Government agency, government bodies through business administration, Nonprofit studies, nonprofit management, or the political s ...

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 ...

of a

resource ''Resource'' refers to all the materials available in our environment which are Technology, technologically accessible, Economics, economically feasible and Culture, culturally Sustainability, sustainable and help us to satisfy our needs and want ...

. Resource slack can be considered as the

opposite In lexical semantics, opposites are words lying in an inherently incompatible binary relationship. For example, something that is ''even'' entails that it is not ''odd''. It is referred to as a 'binary' relationship because there are two members i ...

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. 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 legal people, whether Natural person, natural, Juridical person, juridical or a mixture of both, with a specific objective. Company members ...

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 refers to monetary resources and to the study and Academic discipline, discipline of money, currency, assets and Liability (financial accounting), liabilities. As a subject of study, is a field of Business administration, Business Admin ...

performance A performance is an act or process 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. Performance has evolved glo ...

, 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 shape A shape is a graphics, graphical representation of an object's form or its external boundary, outline, or external Surface (mathematics), surface. It is distinc ...

relationship and context-dependent 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 in ways that generally entail beyond the minimal amount of risk (assumed by a traditional business), and potentially involving values besides simply economic ones. An entreprene ...

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

demand In economics, demand is the quantity of a goods, good that consumers are willing and able to purchase at various prices during a given time. In economics "demand" for a commodity is not the same thing as "desire" for it. It refers to both the desi ...

s at any given moment.

References

{{reflist Strategic management

See also

References