How do managers decide on internationalization processes? The role of organizational slack and performance feedback

• Published in: Journal of world business : JWB Vol. 49; no. 3; pp. 396 - 408
• Main Author: Lin, Wen-Ting
• Format: Journal Article
• Language: English
• Published: Greenwich Elsevier Inc 01-07-2014; Elsevier Science Ltd
• Subjects: Behavioral theory of the firm (BOTF); Behavioural economics; Decision analysis; Economic behaviour; Feedback; Globalization; Internationalization; Internationalization processes; Longitudinal studies; Managers; Organizational behavior; Organizational slack; Performance feedback; Studies; Taiwan; Taiwan; Performance feedback; Organizational slack; Internationalization processes; Behavioral theory of the firm (BOTF)
• ISSN: 1090-9516; 1878-5573
• DOI: 10.1016/j.jwb.2013.08.001

This study draws on the behavioral theory of the firm to the postulate relationships between organizational slack and performance aspirations, and internationalization processes. Based on longitudinal data (2000–2008) from 772 publicly listed firms in Taiwan, the findings indicate that organizational slack significantly influences the internationalization processes. Specifically, firms with high organizational slack that have performance that falls below aspirations managers are more likely to exhibit (1) a rapid pace, (2) a wider scope, and (3) an irregular rhythm in their internationalization processes. In addition, we observed an interaction effect between performance feedback and different levels of slack on the internationalization processes.