Title: Organisational Slack and Profitability of Listed Consumer Goods Firms in Nigeria
Authors: Theresa Nkechi Ofor (Ph.D.), Ezechineyere Peter Odoemelam, Angela Ngozi Okolo (Ph.D)
Volume: 9
Issue: 12
Pages: 151-164
Publication Date: 2025/12/28
Abstract:
: The study examined the effect of organizational slack on the profitability of listed consumer goods firms in Nigeria. Specifically, the study determined the effect of available slack, recoverable slack, and potential slack on the return on equity of these firms. An ex-post facto research design was adopted, with a population of twenty (20) consumer goods firms listed on the Nigerian Exchange Group, out of which fifteen (15) firms were purposively sampled based on data availability. Secondary data were collected from the audited annual reports and financial statements of the sampled firms for the ten-year period between 2015 and 2024. Panel random effect regression analysis was employed to test the hypotheses at a 5% level of significance. The findings revealed that: available slack had a negative but non-significant effect on return on equity of listed consumer goods firms in Nigeria (? = -0.134655; p = 0.3702); recoverable slack had a positive and significant effect on return on equity of listed consumer goods firms in Nigeria (? = 2.008160; p = 0.0025); potential slack had a negative and significant effect on return on equity of listed consumer goods firms in Nigeria (? = -0.212416; p = 0.0000). Thus, it was concluded that organizational slack plays a mixed role in shaping the profitability of listed consumer goods firms in Nigeria. The study recommended that management teams of consumer goods firms should strengthen their cost control measures by adopting lean operational practices, investing in efficient supply chain systems, and improving oversight of overhead costs.