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Introduction
Organizational resources and firm performance are critical variables in the strategic management literature. While performance has been the dominant outcome variable studied in the field, the topic of organizational slack resources has received significant attention (Alessandri et al. , 2014; Cheng and Kesner, 1997; Chiu and Liaw, 1999; Daniel et al. , 2004; Greenley and Oktemgil, 1998; Mousa et al. , 2013; Palmer and Wiseman, 1999). Slack is considered a benefit because it can buffer organizations from shortages of funds and it is argued to increase the potential for firm innovation (Bourgeois, 1981; Cyert and March, 1963). However, the literature also suggests that organizational slack is inefficient and accrues because of self-serving managers (Jensen and Meckling, 1976; Nohria and Gulati, 1996; Simon, 1957). In aggregate, research on the slack and performance relationship still remains largely equivocal (for a comprehensive review and meta-analysis see Daniel et al. , 2004).
Consistent with the study of many other organizational variables, most research examining the slack and performance relationship has tested for linear or contingency relationships. For example, many prior studies have hypothesized direct positive or negative links between slack and performance (Bromiley, 1991; Greenley and Oktemgil, 1998). Embedded in these propositions is the assumption that slack is either good or bad for the firm. Other studies have examined slack from a contingency perspective (Miller et al. , 1996; Sharfman et al. , 1988) and expand beyond the good or bad arguments by examining potential moderators of the slack and performance relationship. However, each of these approaches have weaknesses and to date have failed to lead to an agreed upon relationship between slack and performance.
We believe that this ambiguity can be reduced in two ways. First, given that prior research has recognized the multidimensional nature of slack (e.g. Bourgeois, 1981; Bourgeois and Singh, 1983; Bromiley, 1991; Singh, 1986; Voss et al. , 2008) we believe that much can be learned by examining the slack and performance relationship using a configurational approach. Configurational approaches allow researchers to examine sets of firms that share common profiles across a variety of important variables (Fiss, 2007; Gruber et al. , 2010; Meyer et al. , 1993; Short et al. , 2008). Configurational approaches can also be used to demonstrate differences...