Strategic intent and performance: The role of resource allocation decisions

The notion that a firm's strategic intent can affect its performance through managerial actions has become prominent in the organization literature. In this research, we propose that strategic aggressive firms will foster decisions that favor holding low levels of slack and low levels of R&...

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Bibliographic Details
Published in:Journal of business research 2014-11, Vol.67 (11), p.2393-2402
Main Authors: Mariadoss, Babu John, Johnson, Jean L., Martin, Kelly D.
Format: Article
Language:English
Subjects:
Decision analysis
Financial performance
Management science
Organizational effectiveness
R&D
R&D investment
Research & development
Research and development
Resource allocation
Risk aversion
Risk preference
Slack
Strategic behaviour
Strategic intent
Strategic management
Studies
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Summary:The notion that a firm's strategic intent can affect its performance through managerial actions has become prominent in the organization literature. In this research, we propose that strategic aggressive firms will foster decisions that favor holding low levels of slack and low levels of R&D investments, resulting in increased firm ROI, and that a firm's risk preference will moderate the indirect effect of strategic intent on performance. Findings from moderated mediation analyses on data from 130 firms in manufacturing industries support our hypotheses. Specifically, the indirect effect of a firm's strategic intent on a firm's performance is moderated by its risk aversion, such that when risk aversion is high, the indirect effect of strategic intent on performance through slack is strengthened. Similarly, the indirect effect of strategic intent on firm performance through R&D investments is strengthened, when risk aversion is high.
ISSN:0148-2963
1873-7978
DOI:10.1016/j.jbusres.2014.02.006