Flexibility-Efficiency Tradeoff and Performance Implications Among Chinese SOEs
York University - Schulich School of Business; University of Bath - School of Management
York University - Schulich School of Business
Journal of Business Research, Vol. 63, No. 4, pp. 356-362, 2010
This paper examines performance implications of the flexibility-efficiency tradeoff in the turbulent environment. We test the relationship between resource utilization and firm performance among the Chinese state owned enterprises (SOEs) during China’s economic transformation. The study finds that (1) overall efficiency enhances performance; (2) different measures of efficiency all exhibit curvilinear relationship with performance; (3) differences exist between high-efficiency and low-efficiency subgroups of firms. The results reveal that efficiency as well as flexibility has a positive impact on firm performance only within a certain range. Beyond a certain point, the cost of maintaining flexibility overwhelms the benefit, causing performance to decline.
Number of Pages in PDF File: 7
Keywords: China, flexibility-efficiency tradeoff, resource-based view, dynamic capabilities, state owned enterprises
Date posted: March 28, 2010