Do Banks Provide Financial Slack?

Enterprise slack, defined as undistributed profit and earned surplus, is a key factor to consider when developing enterprise strategy based on opportunity and risk management. Slack also provides an unrestricted, but indispensable, financial resource for firms to carry out improvement and innovation, exploitation and exploration, and financial activities according to their strategy. In the comprehensive opportunity and lost opportunity control model previously developed by the author (Nishimura, 2015; 2016), slack fulfills its function effectively. Therefore, to make the model more practicable and functional, this paper will examine the substance and functions of slack more definitely by analyzing financial slack and its relationship with business strategy in five innovative manufacturing companies in Japan.

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Application of Corporate Social Responsibility -- Taking Chinese Listed Companies in the COVID-19 as an Example

10.20944/preprints202109.0259.v1 ◽

2021 ◽

Author(s):

Chih-Yi Hsiao ◽

Hao-Wei Chen

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Financial Performance ◽

Financial Constraints ◽

Listed Companies ◽

Factors Affecting ◽

Financial Slack ◽

Revenue Growth ◽

Chinese Listed Companies ◽

Corporate Social

This study focuses on a sample of Chinese listed companies from 2019 to 2020 to explore the relationships among corporate social responsibility, financial constraints, and financial performance. In addition, we discuss five factors affecting financial constraints. We also analyze the types of enterprises that can improve their financial performance by implementing corporate social responsibility keeping in mind the factors that lead to a high degree of financial constraint. The results indicate that: 1. The degree of financial constraints has a negative and significant impact on financial performance; 2. There is a reverse relationship between the degree of financial constraints and the effectiveness of corporate social responsibility measures; 3. Enterprises with high financial constraints (due to lower financial slack and revenue growth rates) can significantly improve their financial performance through the implementation of effective corporate social responsibility programs. 4. Enterprises with high financial constraints, caused by financial slack and revenue growth rate, can significantly improve their financial performance by implementing corporate social responsibility programs.

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Can Workplace Financial Counseling Help Lower-Income Workers Improve Credit Outcomes?

Journal of Financial Counseling and Planning ◽

10.1891/jfcp-19-00081 ◽

2021 ◽

pp. JFCP-19-00081

Author(s):

Mathieu R. Despard ◽

Yingying Zeng ◽

Sophia Fox-Dichter ◽

Ellen Frank-Miller ◽

Michal Grinstein-Weiss

Keyword(s):

New York ◽

New York City ◽

York City ◽

Lower Income ◽

Counseling Program ◽

Frontline Workers ◽

Financial Slack ◽

Financial Counseling ◽

Promising Strategy ◽

Credit Scores

Financial counseling has been found to be effective in improving consumers' credit outcomes and could be expanded through the workplace to reach lower-income workers who struggle with various financial challenges. We examine engagement and credit outcomes associated with a workplace financial counseling program offered to 2,849 frontline workers in New York City. Age and credit scores helped explain variation in types of engagement in services. Credit outcomes were modest on average, but greater among workers who received three or more counseling sessions, had low and no baseline credit scores, and reduced the number of delinquent and collections accounts on their credit reports. Workplace financial counseling is a promising strategy to proactively promote credit outcomes among frontline workers, though counselors should be flexible in offering services and help workers access affordable credit products available to those with subprime credit scores and increase financial slack to lessen dependence on credit.

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Financial slack, method of payment and acquirer performance: The case of cross-border acquisitions into Africa

Investment Analysts Journal ◽

10.1080/10293523.2020.1755817 ◽

2020 ◽

Vol 49 (2) ◽

pp. 92-104

Author(s):

Chimwemwe Chipeta ◽

Prince Nkiwane

Keyword(s):

Financial Slack ◽

Cross Border ◽

Method Of Payment

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Strategic choices of exploration and exploitation alliances under market uncertainty

Management Decision ◽

10.1108/md-01-2017-0073 ◽

2019 ◽

Vol 57 (11) ◽

pp. 3112-3133 ◽

Cited By ~ 4

Author(s):

Wan Li ◽

Liang Wang

Keyword(s):

Strategic Choice ◽

Poisson Model ◽

Environmental Turbulence ◽

Organizational Slack ◽

Market Uncertainty ◽

Strategic Choices ◽

Content Type ◽

Financial Slack ◽

Biotechnology Firms ◽

The Impact

Purpose The purpose of this paper is to provide a better understanding of what drives firms’ choice between exploration alliances and exploitation alliances by examining the role of organizational slack and its interaction with market uncertainty. Design/methodology/approach An empirical study is conducted based on 1,614 alliances formed by 581 US biotechnology firms, and the hypotheses are tested using a zero-inflated multilevel Poisson model. Findings The results indicate that firms’ strategic choice to pursue exploration or exploitation alliances is a reflection of organizational intention and adaptation to environmental turbulence. More specifically, firms with more financial slack tend to form more exploration alliances and fewer exploitation alliances. However, under high market uncertainty, firms with financial slack tend to establish more exploitative partnerships and avoid exploration collaborations. Originality/value This paper contributes to the literature on exploration–exploitation alliances, which tends to fall short of providing an understanding of why organizations pursue such alliances. By identifying the impact of organizational slack and its interaction with market uncertainty, this study shows that organizations are able to respond to environmental change, and those with capabilities are likely to craft their strategic choice configurations based on their own characteristics.

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