Purpose: This paper investigates how a firm's status moderates the performance of its investment portfolio diversification strategy. We combine the investment diversification literature with the organizational status theory, arguing that status would weaken the benefits of a specialist strategy in their niche industry of investments while strengthening the positive consequences of a generalist strategy across various industries.Design/methodology/approach: We collected our data using the Securities Data Company (SDC) Platinum VentureXpert database. A fixed-effects spline regression analysis for 2,201 US venture capital firms between 1969 and 2016 was used to test for a nonlinear relationship between the level of portfolio diversification and firm performance.Findings: We found that status differences exist in the performance of a specialist strategy but not in that of a generalist strategy. Our results indicate that portfolio specialization in fewer number of industries has little impact on low-status firms, whereas high-status firms suffer significantly lower IPO success rates. In contrast, above-median portfolio diversification was found to be beneficial to both high- and low-status firms.Originality/value: We specifically identify the impact of status on the performance of investment diversification strategies, an area of research which has received little attention. Further, our findings provide some practical implications for managers making investment decisions between specialist and generalist investment strategies, given their status within the market. Implications for understanding the roles of firm status in portfolio diversification strategies are discussed.

Prior studies have shown mixed findings on the role of financial slack. This study examines how environmental factors such as munificence, dynamism, and complexity moderate the relationship between financial slack and innovation activity. Using data from Compustat and the Center for Research in Security Prices (CRSP) database on 578 computer-processing firms in innovation-intensive industries in the United States, our results reaffirm that financial slack is a strategic asset that enhances R&D investment. Further, we find that the positive consequences of financially abundant firms pursuing innovation are attenuated in munificent environments where firms increasingly rely on external resources. Similarly, in dynamic environments, unpredictable market changes divert slack resources from long-term R&D investments, further weakening the effect. However, there is no significant difference in complex environments. Our study contributes to the existing literature by integrating different environments and highlighting the importance of balancing internal resources with external environments in shaping innovation strategies. For managers, these findings provide practical guidance for resource allocation strategies to effectively support innovation in varying external environments.

Drawing on the Behavioral Theory of the Firm (BTOF) and an open-systems perspective, this study investigates how variations in performance feedback and environmental dynamism are related to the setting of future organizational performance targets. A fixed-effects regression model was estimated using a longitudinal panel of 2127 firm-year observations covering 402 U.S. computer services firms (SIC 737) over the period 2000 to 2025, a technologically dynamic setting. The results reveal an asymmetric pattern. Negative performance feedback is positively associated with aggressive target setting, whereas positive performance feedback shows no significant association. In addition, environmental dynamism significantly weakens the relationship between negative performance feedback and aggressive target setting, whereas no significant moderating effect is observed for positive performance feedback. These findings identify management target setting as an important behavioral outcome of performance feedback and indicate that environmental dynamism operates as a condition on organizational adaptation. The implications of these findings for theory and future research are discussed.