The Space of Slack Interaction. The Corden Pharma Case

Context: In today's knowledge economies, investments in intangible assets make up an increasing proportion than those for tangible assets. However, the knowledge economy has not supplanted the real economy; tangible resources are still/always complementary of the intangible resources: the synergies arising from their interaction point out interesting research questions at different levels (macro, meso, micro) of analysis. At firm level of analysis, the paper focuses on the relationship between tangible and intangible resources that are in excess of the minimum necessary to produce a given level of organizational output: the so called slack resources. Literature gap: Scholars dedicated many contributions to organizational slack. In particular, they underline the ambivalent and oscillating role of slack: now a resource that amplifies the choice of strategic options, as well as being the factor for inefficiency. They also clearly illustrated that it is not uniform in size or indistinct, but a phenomenon that is specifically composed and marked, that includes elements with an heterogeneous nature – that could be financially, relations, human, informative, cognitive or operative and that each of these elements has its own value strategically and implies specific risks. However, managerial and organizational literature paid just a few attention to investigate the reciprocal interaction between heterogeneous slack resources. From the point of view of a single organization it’s important to appreciate the interaction between tangible and intangible slack: indeed, following Penrose (1959: 40), the same resource, if used in combination with different types and amounts of other resources, gives rise to a service or a stream of different services. So, all kinds of slack should be analyzed in a systemic perspective, taking into account its interaction with the redundant and heterogeneous resources endowment. Trying to full fill this literature gap, the paper starts/formulates from the following research questions: how can we analyze the interaction between tangible and intangible slack? How do the interaction between tangible and intangible slacks influence corporate innovation? Purpose: To shed light on these issues, the first part of the paper frames a theoretical model – the “space of slacks interaction” – that investigates the complex interactions between two different forms of slack resources - operational slack and knowledge slack – on innovation process success/failure. Methodology: In the theoretical part, redundant resources are not treated as a portfolio of independent assets, but, on the contrary, according to a systematic vision of the overall budget for slack in a company. Reading the relation between slacks in terms of alignment/misalignment helps the setup of development plans in the company because it calls attention to the interdependent relations between resources and its diachronic aspects. In the second part, the model “space of slacks interaction” is applied to a pharmaceutical firm. The case study is based on deep “face to face” interview to top managers, rooted on a questionnaire made by quali-quantitative questions. Results: As the case study shows, the model allows for a reading in filigree of the “non neutrality” of alignment/misalignment of different kind of organizational slack on corporate innovation effort and performance.