Slack-performance relationship before, during and after a financial crisis: empirical evidence from European manufacturing firms

This thesis studied the slack - performance relationship under different external environments by taking advantage of the financial crisis of 2008-09, which provides a natural experiment opportunity for the study. Besides the management of slack, adaptation profiles are also examined by building the two-stage adaptation process model in concordance with different period of financial crisis. Based on empirical analysis and theoretical research, this thesis finds that slack management impacts the firms' performance as well as firms' adaptation to respond to financial crisis. Another novelty of this thesis is to examine ambidexterity in detail by employing constructs of alignment and adaptability from the perspective of organizational slack. Thesis tries to evidence that European manufacturing firms have various adaptation processes, profiles and risk-taking behaviors with varying performance implications based on their slack management in response to financial crisis. To that end, this study investigates empirically, publicly-held 671 western European manufacturing firms, by comparatively examining their organizational slack management and performance characteristics before, during and after the recent financial crisis period 2007-8 . This research employs longitudinal panel data. The data was drawn from Thomson one banker database for the period of2004-2013