scholarly journals The Role of Sunk Cost and Slack Resources in Innovation: A Conceptual Reading in an Entrepreneurial Perspective

2015 ◽  
Vol 5 (3) ◽  
Author(s):  
Salvatore Esposito De Falco ◽  
Antonio Renzi
Keyword(s):  
Friction Factor ◽  
Sunk Costs ◽  
Innovative Activity ◽  
Sunk Cost ◽  
Slack Resources ◽  
The Relationship ◽  
Absorbed Slack

AbstractThis paper proposes a conceptual reading of the interplay between sunk costs and slack resources in innovation, adopting an entrepreneurial perspective. Antecedent literature mostly depicts the relationship between slack and innovation as an inverse u-shaped curve. However, this approach is way too unrealistic and it does not take in account both the different impact of heterogeneous types of slack and of sunk costs. We argue that not all slacks positively contribute to innovation and, hence, the u-shaped relationship is merely verified in case of highly flexible slack resources. In addition, the presence of sunk costs is a friction factor, which makes the first part of the curve less steep. Therefore, entrepreneurs are solicited to innovation by the presence of some easy recoverable slack types, as financial or knowledge ones. On the converse, a consistent level of sunk cost may discourage their innovative activity. In this setting, absorbed slack resources increase the level of sunk costs.

The Role of Unabsorbed Slack in Internal and Collaborative Innovation Processes — A Resource-Based Framework

2016 ◽  
Vol 13 (03) ◽  
pp. 1640007 ◽  
Author(s):  
Ulrich Lichtenthaler
Keyword(s):  
Critical Role ◽  
Slack Resources ◽  
Fine Grained ◽  
Collaborative Innovation ◽  
Relationship Of ◽  
The Impact ◽  
The Relationship ◽  
Unabsorbed Slack ◽  
Innovation Processes

Extant research has highlighted the critical role of unabsorbed slack resources in internal innovation processes. In recent years, many firms have continued to open up their innovation processes to actively collaborate with external partners. In light of a limited understanding of the determinants of collaborative innovation, we provide new theoretical arguments about the relationship of unabsorbed slack resources with internal and collaborative innovation processes. Specifically, we draw on resource-based and competence-based logic and develop a conceptual framework for intraorganizational and interorganizational innovation with propositions for the impact of unabsorbed slack resources on internal and external knowledge acquisition and commercialization processes. The arguments underscore the critical role of excess resources in collaborative innovation, and they highlight the need for a fine-grained examination of the impact of unabsorbed slack resources in innovation processes. The arguments are particularly important in light of a renewed interest in essential enablers and barriers to collaborative innovation processes.

The mediating role of the extensiveness of strategic planning on the relationship between slack resources and organizational performance

2015 ◽  
Vol 53 (5) ◽  
pp. 1023-1044 ◽  
Author(s):  
Yasir Fadol ◽  
Belal Barhem ◽  
Said Elbanna
Keyword(s):  
Health Care ◽  
Strategic Planning ◽  
Organizational Performance ◽  
Health Care Sector ◽  
Public Hospitals ◽  
Slack Resources ◽  
Content Type ◽  
Mediating Role ◽  
The Relationship

Purpose – The purpose of this paper is to improve the understanding of the mediating role of the extensiveness of strategic planning on the relationship between slack resources and organizational performance. Design/methodology/approach – The study uses empirical data gathered from 102 usable replies from private and also public hospitals in the United Arab Emirates (UAE). Findings – The findings indicate the existence of a positive relationship between slack resources and organizational performance and show that the extensiveness of strategic planning plays a mediating role in this relationship. Research limitations/implications – The authors highlight the exploratory nature of the study considering its unusual setting, namely, the UAE’s health care sector. Practical implications – Several implications of the findings for managerial and policy practices in the UAE health care sector are discussed. Originality/value – This study contributes to the existing literature on management, health care, and developing countries by examining the role of the extensiveness of strategic planning in mediating the relationship between slack resources and organizational performance in the health care industry of a developing country.

Role of resource slack in rapid international expansion of restaurant companies

2019 ◽  
Vol 31 (1) ◽  
pp. 2-20
Author(s):  
Yue Vaughan ◽  
Yoon Koh
Keyword(s):  
Firm Value ◽  
Fixed Effects ◽  
Firm Growth ◽  
Negative Impact ◽  
Hierarchical Regression ◽  
International Expansion ◽  
Slack Resources ◽  
Content Type ◽  
The Relationship

PurposeThe purpose of this study is to investigate the relationship between rapid internationalization and firm value in US restaurant companies. This study also identified the moderating role of available slack, potential slack and recoverable slack on the relationship of rapid internationalization and the firm’s value.Design/methodology/approachA hierarchical regression analysis with panel fixed effects was used in this study. Samples were drawn from publicly traded US restaurant companies, and span from 1993 to 2016 with 264 firm-year observations was used for the study’s analysis.FindingsDrawing on Penrose’s seminal theory of firm-growth that a firm needs excess resources to grow and that the amount of slack resources directly influences a firm’s international growth, this study found that available slack alleviates the negative impact of rapid international expansion in achieving higher firm value.Originality/valueThis study is one of the few analyses that examined thespeedof rapid international expansion in the service context. In addition, this study contributes to existing literature by examining three different slack resources with regards to the speed of international expansion. The findings of this study shed light on restaurant companies whose financial resources are critical for value-adding international expansion.

scholarly journals Mindfulness and decision-making: Sunk-costs or escalation of commitment?

2018 ◽  
Author(s):  
Neil Schmitzer-Torbert
Keyword(s):  
Decision Making ◽  
Sunk Costs ◽  
Escalation Of Commitment ◽  
Trait Mindfulness ◽  
Sunk Cost ◽  
Positive Health ◽  
Course Of Action ◽  
Cognitive Benefits ◽  
Positive Health Outcomes ◽  
The Relationship

Mindfulness is related to a number of positive health outcomes, such as decreased stress, anxiety and improved physical functioning. Recent studies have also identified a range cognitive benefits of mindfulness, including recent studies demonstrating that higher trait mindfulness and brief mindfulness inductions are associated with improved decision-making, and specifically to resistance to the influence of sunk-costs, where higher mindfulness is associated with increased willingness to discontinue a costly, but disadvantageous, course of action. However, some previous studies examining mindfulness and the sunk-cost bias have methodological limitations which make it difficult to determine if mindfulness is specifically related to sensitivity to the sunk-cost bias, or rather than to a general willingness to continue an unprofitable course of action (independent of the level of prior investment). The present study extends previous work by replicating the finding that trait mindfulness is positively related to resistance to the effects of sunk-costs, and also demonstrates that mindfulness is related to reduced escalation of commitment, an individual’s willingness to continue their commitment to a unprofitable course of action through the further investment of resources or time. Overall, trait mindfulness was most consistently related to reduced escalation of commitment, whereas the relationship between trait mindfulness and resistance to the effects of sunk-costs were less consistently observed

scholarly journals The Relationship between Slack Resources, Resource Bricolage, and Entrepreneurial Opportunity Identification—Based on Resource Opportunity Perspective

2020 ◽  
Vol 12 (3) ◽  
pp. 1199
Author(s):  
Yongbo Sun ◽  
Shuang Du ◽  
Yixin Ding
Keyword(s):  
Opportunity Identification ◽  
Network Ties ◽  
Entrepreneurial Opportunity ◽  
Slack Resources ◽  
Mediating Role ◽  
Resource Bricolage ◽  
The Relationship ◽  
Absorbed Slack ◽  
Unabsorbed Slack ◽  
Business Ties

There are a lot of slack resources in a company. It is vitally important for an enterprise to use slack resources to identify entrepreneurial opportunities to establish company sustainable development. On the basis of the resource orchestration theory and from resource-opportunity perspective, this paper constructs a framework of slack resources and entrepreneurial opportunity identification, exploring the mediating of resource bricolage, the moderating of network ties, and the moderated mediation of network ties. In our analyses, we used data from companies in eastern China, and statistical hypotheses were validated through a structural equation model with data using the statistical software Amos version 20, SPSS version 22. The research results show that: (1) Absorbed slack resources and unabsorbed slack resources have a positive impact on entrepreneurial opportunity identification. (2) Slack resources indirectly affect the opportunity identification through the mediating role of resource bricolage. Among them, resource bricolage has a fully mediating role between absorbed slack resources and entrepreneurial opportunity identification, and it has a partial mediating role between unabsorbed slack resources and entrepreneurial opportunity identification. (3) Business ties positively moderate the relationship between two types of slack resources and entrepreneurial opportunity identification, and business ties moderate the mediation effect of resource bricolage. The resource-opportunity perspective answers how decisions are made, and the entire model process answers how to create sustainable value (entrepreneurship opportunities). The study guides managers on how to integrate and use external and internal resources, coordinate resource elements, and identify profitable business opportunities.

The influence of sunk costs, personal responsibility and culture on the tendency of accountants to facilitate escalation of commitment

2014 ◽  
Vol 26 (3) ◽  
pp. 374-391 ◽  
Author(s):  
Peni Fukofuka ◽  
Neil Fargher ◽  
Zhe Wang
Keyword(s):  
Decision Making ◽  
Developing Economies ◽  
Personal Responsibility ◽  
Sunk Costs ◽  
Escalation Of Commitment ◽  
Sunk Cost ◽  
Content Type ◽  
Supportive Role ◽  
The Impact

Purpose – This purpose of this study is to further the study of escalation of commitment by considering the supportive role of accountants in providing reports that favour continuation of unprofitable projects and whether this role is influenced by culture. Research on the escalation of commitment suggests that the decision to commit resources to a failing project is due to several factors that include sunk costs, personal responsibility and culture. Design/methodology/approach – This study employs a between-subjects design to examine accountants’ willingness to provide a report that facilitates continuation of an unprofitable project. The manipulated independent variables are sunk cost (present or absent), the level of reporting responsibility (high or low) and culture (Pacific Islands or Australia). Findings – Our results show that the presence of sunk cost is a motivation for accountants to provide reports that favour continuation of an unprofitable project. The results on cultural difference are also consistent with the contention that culture is influential in decision-making with respect to providing reports that favour continuation of an unprofitable project. We do not, however, find evidence consistent with a personal responsibility affect using the manipulation defined in this study. Research limitations/implications – Consistent with this type of research, the results must be interpreted with respect to the specific design choices used in the experiment. Practical implications – Continued research is needed to examine the impact of sunk costs and specific attributes of culture, such as the willingness to follow superiors, on the escalation of commitment to unprofitable projects. The mitigation of such effects through education of accountants to provide reports that do not favour continuation of unprofitable projects would, for example, be of interest to aid agencies and others investing in projects in developing economies in particular. Originality/value – While previous research generally examines the decision-making role of managers in escalation of commitment to unprofitable projects, this study examines the supportive role that accountants play in facilitating managers’ escalation decisions. This issue is studied within a context examining the potential cultural impact of respect for authority.

scholarly journals Sunk Costs Fallacy in Subprime Bubble (Falacia de costos en burbuja de alto riesgo)

2020 ◽  
Vol 17 (33) ◽  
Author(s):  
Eduardo Velázquez Juárez
Keyword(s):  
Social Economic ◽  
Sunk Costs ◽  
Point Of View ◽  
Credit Policy ◽  
Sunk Cost ◽  
Financial Bubbles ◽  
Unethical Practices ◽  
Financial Bubble ◽  
Academic Area

Financial Bubbles have been interest of many people, especially in the academic area. It is necessary to understand them with the seriousness that they deserve, due to their potential to cause social, economic and political disruptions. In this paper I talk about the subprime bubble and its general conditions but it is enriched with the contributions of the behavioral finances, specifically with the role of sunk costs fallacy in the behavior of housing mortgagers instead of the stock investors, as it is usual to talk about them in several researches. It is suggested that sunk cost fallacy may provide an additional and important point of view to understand this financial bubble from a parallel market point of view, because this fallacy could be the reason of holding mortgages that eventually became impossible to get paid, which is supported with the fact of relaxation in credit policy and unethical practices of the banks. Finally, they are discussed, the main consequences and chances experienced after the bubble, putting into consideration to explore this behavior with further researches in housing investors.

Choosing a Markov blanket

2020 ◽  
Vol 43 ◽  
Author(s):  
Thomas Parr
Keyword(s):  
Markov Blanket ◽  
Target Article ◽  
The Relationship

Abstract This commentary focuses upon the relationship between two themes in the target article: the ways in which a Markov blanket may be defined and the role of precision and salience in mediating the interactions between what is internal and external to a system. These each rest upon the different perspectives we might take while “choosing” a Markov blanket.

Staring Down Death

Crisis ◽  
2016 ◽  
Vol 37 (3) ◽  
pp. 212-217 ◽  
Author(s):  
Thomas E. Joiner ◽  
Melanie A. Hom ◽  
Megan L. Rogers ◽  
Carol Chu ◽  
Ian H. Stanley ◽  
...  
Keyword(s):  
Suicide Risk ◽  
Clinical Utility ◽  
Blink Rate ◽  
Specific Task ◽  
Careful Planning ◽  
Eye Blink ◽  
Eye Blinks ◽  
Potential Clinical Utility ◽  
The Relationship

Abstract. Background: Lowered eye blink rate may be a clinically useful indicator of acute, imminent, and severe suicide risk. Diminished eye blink rates are often seen among individuals engaged in heightened concentration on a specific task that requires careful planning and attention. Indeed, overcoming one’s biological instinct for survival through suicide necessitates premeditation and concentration; thus, a diminished eye blink rate may signal imminent suicidality. Aims: This article aims to spur research and clinical inquiry into the role of eye blinks as an indicator of acute suicide risk. Method: Literature relevant to the potential connection between eye blink rate and suicidality was reviewed and synthesized. Results: Anecdotal, cognitive, neurological, and conceptual support for the relationship between decreased blink rate and suicide risk is outlined. Conclusion: Given that eye blinks are a highly observable behavior, the potential clinical utility of using eye blink rate as a marker of suicide risk is immense. Research is warranted to explore the association between eye blink rate and acute suicide risk.

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