Theoretical Analysis Of The Impact Of Slacks On Organisational Resilience And Profitability In Ghana

Abstract

Purpose—The study aims to investigate the effects of organisational slacks on the financial performance or profitability of state and privately owned enterprises in Ghana during crises.

Design/Methodology/ Approach—Drawing from behavioural and resource-based theories in crisis management, three hypotheses focused on the correlation and impact of organisational slacks on financial performance.

Findings—The results show that deploying organisational slacks in state-owned enterprises is more efficient and leads to higher profit margins than those in the private sector. The result also affirms that organisational slacks in state and privately owned enterprises have a strong positive correlation and a significant impact on financial performance, thereby making enterprises more profitable when slacks are strategically deployed. 

Research Limitations/Implications- The study has limitations that may affect its generalisability. First, the sample size of 100 Enterprises is just a fraction of enterprises in Ghana. This implies that the generalisation of the results beyond this context may be scientifically flawed. Second, using only a quantitative approach may also limit the in-depth insight into the subject.

Practical implications- Based on cost and benefit analyses, enterprises should strategically deploy internal and external slacks to increase financial performance during crises and ensure value for money. Enterprises must collaborate and learn from best practices that promote mutual financial benefit.

Originality/value—This study could contribute to the literature on organisational slacks and performance by reinforcing the relevance of organisational slacks during crises to propel organisational resilience in the Ghanaian context.