Exploring the Influence of Slack Resources and Absorptive Capacity on Strategic Flexibility Using the Miles and Snow Taxonomy: A Review and Future Research Agenda

Abstract

Small business strategy making and development have not been the top priority of discussion in the small business and entrepreneurial literature. Strategy making in a general sense has been axiomatically viewed from a perspective of planning, whereby an unplanned strategy is deemed to be causative enough of the successes or failures of a firm’s strategy and performance outcomes. Simply, there is a lack of studies explicating the effects of slack resources and absorptive capacity (ACAP) on small business-level strategy transitions. The current research approaches small business strategy from a resource-based view of the firm (J. B. Barney, 1986; Feurer & Chaharbaghi, 1994; Robins & Wiersema, 1995) using the theoretical basis of strategic flexibility, which suggests that when business owners are flexible with internal resources (i.e., assets, human capital, information, knowledge, and technology), they are better able to create dynamic strategies that allow tactical changes in its environmental positions and adaptiveness (Matthyssens, Pauwels, & Vandenbempt, 2005; Srour, Baird, & Schoch, 2016; Zhou & Wu, 2010). This study provides three propositions for future research to confirm the impact of slack resources and ACAP on firm strategy flexibility in tumultuous business landscapes.