QUT ePrints

Organisational slack and industry level executive discretion

Niven, Anthony Miles (2008) Organisational slack and industry level executive discretion. Masters by Research thesis, Queensland University of Technology.

Abstract

This thesis examines the associations between organisational slack, that pool of actual or potential cushion of resources of an organisation, and executive discretion - the executives’ latitude for strategic action.

Bourgeois and Singh (1983), George (2005), Sharfman et al. (1988) and Sharma (2000) have referred to slack as having a discretionary dimension because its ‘ease of recovery’ varies depending on where it is gained from. For the obverse of this association, slack contributes to resource availability in the task environment and therefore executive discretion (Hambrick & Finkelstein, 1987). However until now, this bi-direction association has been largely unexplored empirically. This thesis contributes to both fields by bringing them together to examine and measure aspects of these interactions.

These constructs are applied to the annual reports of U.S. firms by measuring industry level discretion using content analysis of presidents’ letters to shareholders and industry average slack using financial ratios. Correlations show that industries with higher levels of slack enjoy greater industry level discretion. However the associations between slack types and industry level discretion are not uniform suggesting that the discretionary dimension of slack is influenced by the task environment and industry context. The present study replicated Keegan and Kabanoff’s (2007) method to examine slack within industries but could not extend their results to available and recoverable slack, which suggest a curvilinear relationship between potential slack and executive discretion.

The limited sub-industry results offer opportunity for further research as does the idea of applying the same research question to the organisational and individual level studies of different cohorts of firms and industries. Future efforts should also improve the measurement of the slack construct.

Impact and interest:

Citation countsare sourced monthly from Scopus and Web of Science® citation databases.

These databases contain citations from different subsets of available publications and different time periods and thus the citation count from each is usually different. Some works are not in either database and no count is displayed. Scopus includes citations from articles published in 1996 onwards, and Web of Science® generally from 1980 onwards.

Citations counts from the Google Scholar™ indexing service can be viewed at the linked Google Scholar™ search.

Full-text downloads:

1,018 since deposited on 27 Feb 2009
232 in the past twelve months

Full-text downloadsdisplays the total number of times this work’s files (e.g., a PDF) have been downloaded from QUT ePrints as well as the number of downloads in the previous 365 days. The count includes downloads for all files if a work has more than one.

ID Code: 18367
Item Type: QUT Thesis (Masters by Research)
Supervisor: Kabanoff, Boris& Keegan, John
Keywords: organisational slack, executive discretion, industry level discretion
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Management
Institution: Queensland University of Technology
Deposited On: 27 Feb 2009 13:14
Last Modified: 29 Oct 2011 05:52

Export: EndNote | Dublin Core | BibTeX

Repository Staff Only: item control page