Organzational Slack and the Productive Opportunity of Growing Technology Firms

Heidi M. Neck, Christopher P. Neck

Abstract


This research focuses on the growth of entrepreneurial firms, specifically young, high technology IPO firms.  We seek to empirically support Edith Penrose’s (1959) theory that the growth of the firm is a function of its changing productive opportunity. Understanding the factors that can expand the productive opportunity of the firm will enhance our understanding of firm growth. We posit that organizational slack is
a change agent that will affect the relationship between the productive opportunity of a firm and its subsequent growth. Findings show support for the hypothesized moderating role of slack in the productive opportunity to firm growth relationship; however, the moderating effect is consistently negative.

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