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ABSTRACT
Companies typically prefer to remove slack. This study investigates the contribution of organizational slack to innovative performance because slack can lead to innovation. It tested the presence of organizational slack using MMI Company as a case study and by looking at the company's absorbed and unabsorbed slack. It then measured the extent to which various types of innovation were adopted by the company. A correlational analysis between slack and innovation was performed to test the hypothesis. The result shows that both absorbed and unabsorbed slack may influence various types of innovation; some types of innovation are not influenced by slack, and; absorbed slack has a stronger effect on a company's innovation.
Keywords: Management Information Systems, Innovation, Organizational Slack, Absorbed and Unabsorbed Slack.
1. INTRODUCTION
Upon assessing the strengths and weaknesses of using MIS, organizational slack proved to be one of the weaknesses. Most companies aim to reduce organizational slack as much as possible. It is defined by Zinn and Flood (2009) as resources that are over the minimum necessary to produce a certain level of organizational output. Slack is something that has been avoided, especially by the companies that practice total quality management, six sigma, and the just-in-time method because they aim to keep the "excess" to a minimum so that costs are reduced, and profits maximized.
Despite its negative connotations, organizational slack can have a positive effect on companies. Some researchers have shown that slack in organizations has proven to be beneficial. Tan and Peng (2003) have pointed out that an inverse-U relationship exists between slack and innovation performance. Google and 3 M are also some of the few companies that promote the use of slack in the workplace by encouraging their employees to take 20% of their workweek off to be creative and do what they want as projects. This unconventional strategy boosted their number of ideas as well as their company's overall morale and thus began the slow but sure popularity of using slack as a beneficial tool. Tan and Peng (2003) also mentioned that even though slack is generally viewed as a negative factor, it may be used as something to be relied upon in cases of emergencies, such as the need for repairing equipment, sudden changes in supply...