A study on the relationship between organizational slack and technology innovation

Since 1980s, most research regarding firm competitive advantage strategy focuses on the relationship between organizational factors and firm performance, either using resource-based view or capability-based view. The findings with resource-based view and capability-based view cannot illustrate the essential characteristics of forming and maintaining firm competitive advantages when the environmental changing greatly. The present dissertation proposes an integrated resource &capability-based view, which expounds the basic principles and forming paths to achieve firm competitive advantage under super-competitive environment. In order to expound the rationality and effectiveness of the integrated resource &capability-based view, this dissertation proposes a structural equation model which consists of organizational slack, absorptive capabilities and technology innovation factors, and empirically tests the model with data from a questionnaire. 800 firms in Gangdong, Sandong, Sichuan, Liaoning, Shaanxi, Shanxi, Henan and Shanghai participated in this questionnaire. The study of which leads to such a conclusion: the exploitation of the slack assimilated into firm productive system not only produces certain product innovation which enhances differential competitive advantage, but also produces process innovation to enhance cost advantage for firms.