Empirical Analysis on the Performance of Pharmaceutical and Chemical Firms

Abstract

This paper examines how organizational slack influences the performance of pharmaceutical and chemical firms by using empirical analysis based on the data get from 47 real firms. The result shows that the relationship between organizational slack and the performance of pharmaceutical and chemical firms is inverse N-shaped, and task orientation moderates this relationship in the same direction. The results broadly demonstrate that relationships differ based on industry circumstances and organizational slack. Additionally, this study is the first to empirically identify an inverse N-shaped relationship between slack and performance, indicating that, in certain industry circumstances, little and much slack is bad for performance. Moreover, this paper also studies the moderating effects of firm management style on the relationship between organizational slack and performance for the first time. Overall, results highlight the importance of additional research into intervening factors impacting the slack–performance relationship