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Need help creating a virtual birthday party? This Houston company does the hard work for you

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Searching for ideas on how to make your child’s birthday party special while social distancing? You’re not alone! Insert POP: a virtual party planner founded by Rice MBA Mercede Barnes.

Pop Place of Play
Katie Meyers
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Understanding How Culture Operates in Crisis for Small Business Leaders

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In The Media

In this Q&A with Dr. Brent Smith, find insights on leading during times of disruption and how decisions have lasting impacts on company culture. Dr. Smith is the Senior Associate Dean of the Jesse H. Jones Graduate School of Business and a Professor of Management and Psychological Sciences at Rice University.  

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Kelsey Seeker
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New And Improved

After A Scandal, Where Do Clients Go Next?
General Management
General Management
General Management
Peer-Reviewed Research
Reputation Management

After a scandal, where do clients go next?

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Based on research by Alessandro Piazza and Julien Jourdan

After A Scandal, Where Do Clients Go Next?

  • Scandals typically hurt organizations only if they receive broad publicity.
  • Competing organizations sometimes benefit when a rival is embroiled in a scandal.
  • The organizations most likely to benefit from a competitor’s scandal are ones that offer similar services, but are seen as having stricter ethical policies.

When scandal tears through an institution, it can hurt innocents in the same field. But even the darkest scandal can sometimes benefit a similar organization ⁠— if, that is, the public sees it as far more ethical, says Rice Business professor Alessandro Piazza.

In a recent paper, Piazza collaborated with Julien Jourdan of the Université Paris-Dauphine, PSL Research University, to study the effects of the sex crimes scandal that embroiled Catholic priests and other clergy on membership in not just the Catholic Church itself, but also 16 other U.S. Christian denominations. The researchers analyzed the 16 denominations between 1971 and 2000 in an attempt to track any flight of Catholics to other churches. The findings offer insights for secular organizations in scandal-stricken fields.

To reach their conclusions, Piazza and Jourdan studied data sets from the Religious Congregations and Membership Study and the Churches and Church Membership Study, maintained by the Association of Religion Data Archives. The data included county-level statistics on congregations of 149 religious bodies.

Using this data, Piazza and his coauthor first tallied county by county church membership, coding for variables such as ethnicity and economic status. Next, they created a model to rate churches on issues such as strictness, mandatory commitment and evangelism. Finally, they compared the changes in membership figures for non-Catholic churches to explore whether former Catholics might have joined other churches as a result of the clergy scandal, and if so, which ones.

Scandal, broadly defined as publicized transgressions of established norms, can indelibly mark the collective imagination. Media amplify the effect with their investigations of the disgraced organizations, whether it be the Catholic Church, Enron, WorldCom or the British Parliament. Research shows that a scandal can tarnish individuals, organizations and, by indirect association, even entire industries.

At the same time, it’s possible for members of a scandal-plagued group to prosper. When, for instance, Nike was accused of using slave labor in the developing world to make their products, rival companies that could showcase better labor practices benefited. Past studies, however, have not shown how these consequences occur, or how they affect people on the inside of the implicated organizations.

Piazza and Jourdan found that scandals can improve business for rival organizations under key conditions, the most important one being if they offer close alternatives to the services once supplied by the disgraced organizations. This kind of swap is most likely to happen when a service is still needed. After the Enron scandal, for instance, clients of its disgraced auditor, Arthur Andersen, still required auditing services, so took their business to rival auditing firms.

The researchers also analyzed the responses of people within an organization disrupted by scandal. Unlike investors, who may react to a scandal quickly and coldly, an organization’s members are more likely to reflect on options before leaving.

In the case of the Catholic Church, disillusioned members gravitated to denominations that shared certain traits with Catholicism, but were perceived to enforce stricter norms. For these Catholics, religious participation and commitment to religious activity were the most compelling aspects when choosing a new church. Theology mattered less.

Most of the disillusioned Catholics, in fact, moved to Protestant denominations seen as strict and ethically austere, such as the Missouri Synod Lutheran and Southern Baptists. Far fewer turned to more liberal mainline churches such as the Presbyterian or Episcopalian churches, even though the latter is theologically close to Catholicism.

The stricter churches were more likely to draw ex-Catholics who were poorer and less educated, had contributed more money and attended more services, held stronger beliefs and belonged to more church-related groups.

Though the Catholic Church scandals unleashed enormous spiritual anguish, the practical effects also apply to secular organizations, Piazza and Jourdan write. Certain firms, like certain denominations, can gain tangibly from a rival’s disgrace. The caveat: They must offer similar services, and appear to be more virtuous. 

Surprising as it may sound, in other words, an industry-wide scandal can sometimes mean opportunity. When a large institution falls to rubble, its survivors resolve not to make the same mistake twice. Looking for similar services, they’ll choose the most austere organizational culture they can find.


Alessandro Piazza is an assistant professor of strategic management at Jones Graduate School of Business at Rice University.

To learn more, please see: Piazza, A. & Jourdan, J. (2018). When the dust settles: The consequences of scandals for organizational competition. Academy of Management Journal, 61(1), 165-190.

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After a scandal, where do clients go next?

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The State Hit Hardest By The Oil Crash

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In The Media

“We probably have to let go of energy as being the No. 1 industry in the long run,” Peter Rodriguez, dean of the Jesse H. Jones Graduate School of Business at Rice University, told the Texas Tribune in a recent interview. “That primacy is no longer in the cards for Texas.”

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Nick Cunningham
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Finding Joy at Work During These Uncertain Times

In the Media
In The Media

Scott Sonenshein is the co-author of Joy at Work: Organizing Your Professional Life with Marie Kondo. Scott recently hosted a Twitter Q&A answering readers’ questions on how to best adjust to a new work routine during the coronavirus pandemic.

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Jessica Chun
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Hurricane season coming: Experts available from Rice

Sub Title
School Updates
School Updates

With the Atlantic hurricane season beginning June 1, during the global coronavirus pandemic, Rice University experts are available to discuss a wide variety of storm-related topics with reporters. Terry Hemeyer, adjunct professor in Rice’s Jones Graduate School of Business, can discuss crisis management and communication challenges that communities, the public, corporations and government entities face in times of disaster.

Hurricane Harvey Updates for Rice Business
News
Jeff Falk

With the Atlantic hurricane season beginning June 1, during the global coronavirus pandemic, Rice University experts are available to discuss a wide variety of storm-related topics with reporters.

Credit: 123RF.com/Rice University

The first advisory has already been issued by the National Hurricane Center, which notes an area of low pressure is expected to develop a couple of hundred miles northeast of the Bahamas by this weekend.

Rice’s hurricane experts, by topic area, include:

Hurricane and flooding risks and impact

Phil Bedient, Rice’s Herman Brown Professor of Engineering and director of the Severe Storm Prediction, Education and Evacuation from Disasters (SSPEED) Center, can discuss flooding issues that arise from tropical depressions, hurricanes and other severe storms. Bedient has studied Hurricane Harvey’s unprecedented flooding and massive 2015 and 2016 floods in Houston and Louisiana. He can speak to the effects of urban development practices on these and other floods.

Jim Blackburn is co-director of Rice’s SSPEED Center, director of Rice’s undergraduate minor in energy and water sustainability and a professor in the practice of environmental law in Rice’s Department of Civil and Environmental Engineering. He can speak about how widespread property development has impacted storm and flood risks. Blackburn can also address the environmental and economic sustainability of regional hurricane protection proposals, including structural options such as dikes, levees and gates in and around Galveston Bay and nonstructural alternatives that aim to use coastal wetlands and prairies as natural storm barriers.

Energy industry 

Ken Medlock, director of the Center for Energy Studies at Rice’s Baker Institute for Public Policy, can address the potential impact on gasoline prices and exports of oil, refined products and liquefied natural gas (LNG) when infrastructure is affected for an extended time.

Rachel Meidl, fellow in energy and environment at the Baker Institute, can discuss how to ensure energy infrastructure resilience when dealing with catastrophic weather events like hurricanes.

Mark Finley, fellow in energy and global oil at the Baker Institute, can discuss the intersections of energy, economics and public policy during times of severe weather.

Houston, Texas and urban issues

Stephen Klineberg, founding director of Rice’s Kinder Institute for Urban Research and professor emeritus of sociology, can discuss Kinder Houston Area Survey data on the persistence of concerns about flooding among area residents, even 2 1/2 years after Harvey.

Katherine Ensor, the Noah Harding Professor of Statistics in Rice’s Brown School of Engineering, can discuss the Texas Flood Registry (formerly known as the Hurricane Harvey Registry), which is committed to better understanding the health and housing effects of major natural disasters, and the recently launched COVID-19 Registry, which provides real-time information on the spread of COVID-19 in the region, who is being affected and how.

Corporate response and leadership

Tom Kolditz, director of Rice’s Doerr Institute for New Leaders, can discuss crisis leadership strategies with examples taken from hurricanes Katrina and Sandy; he uses the two events in his presentations, and they are included in his book “In Extremis Leadership: Leading as If Your Life Depended on It.” The Doerr Institute is the most comprehensive leader-development initiative at any top 20 university.

Terry Hemeyer, adjunct professor in Rice’s Jones Graduate School of Business, can discuss crisis management and communication challenges that communities, the public, corporations and government entities face in times of disaster. Pierpont, a communications firm where Hemeyer serves as executive counsel, featured him in a post titled “Crisis Management: Controlling the Chaos.”

Politics

Mark Jonesprofessor of political science and fellow in political science at Rice’s Baker Institute for Public Policy, can discuss government reactions to storms and the politics in play as well as public opinion on policies related to hurricanes and flooding.

Bob Steinthe Lena Gohlman Fox Professor of Political Science, can talk about local government reaction to storms and the politics involved in decision-making.

Psychology

Danielle King, an assistant professor of industrial and organizational psychology in Rice’s School of Social Sciences, is an expert in the study of employee and organizational resilience. She can discuss resilience in the face of catastrophic events such as hurricanes. A New Orleans native who lost but subsequently helped to adapt her family business after Hurricane Katrina, she seeks ways to create resilience in individuals and groups at work.

To schedule an interview with one of the experts or for more information, contact Jeff Falk, director of national media relations at Rice, at jfalk@rice.edu or 713-348-6775.


Follow Rice News and Media Relations via Twitter @RiceUNews.

This news release can be found online at www.news.rice.edu.

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Houston’s Economy Is Diversified Enough To Handle The Latest Oil Bust…Right?

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In The Media

Peter Rodriguez, dean of Rice University’s Jones Graduate School of Business, does not believe that Houston is facing the end of the oil economy. But he does agree that this latest bust is different from previous cycles.

Brenda Valdivia
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Uncharted Territory

Should You Co-Create A Product With Your Supplier?
Marketing
Marketing
Marketing and Media
Peer-Reviewed Research
Innovation

Should you co-create a product with your supplier?

Person in a space suit walking in a desert
Person in a space suit walking in a desert

Based on research by Amit Pazgal, Dinah Cohen-Vernik and Niladri B. Syam

Should You Co-Create A Product With Your Supplier?

  • When upstream suppliers and downstream firms create products together, the result can be better suited for consumer needs.
  • Downsteam firms often worry that their innovations may be copied by competitors at a lower price if those competitors work with the same upstream supplier.
  • New research shows that in many cases, both upstream and downstream members make higher profits when they co-create.

There’s a special cachet to being an innovator ⁠— but there are also serious costs. Say you’re the owner of a camping supply store, and you’ve come up with a carpet-soft, totally waterproof flooring for tents. Your instinct is to build it together with your favorite tent supplier, a family-run company that makes the best shelters in your store. The problem: They also supply your arch-rival. Do you collaborate, knowing the supplier may sell the luxurious new tents to your nemesis? Or do you leave your idea unused?

Rice Business professor Amit Pazgal joined colleagues Dinah Cohen-Vernik, who conducted her research while at Rice but is currently a professor at the University of Houston Downtown, and Niladri B. Syam of the University of Missouri, to sort out the risks and benefits. In past work about co-creation, researchers focused on the supplier-side of the equation. Cohen-Vernik, Pazgal and Syam’s innovation was to study co-creation from the downstream firm’s point of view, carefully sorting the competitive issues involved.

On its face, it might seem logical to keep your idea off the market rather than share it. What’s the point of your R&D if the competition profits from it? Even worse, they could actually undercut your price, since they didn’t have to sink resources into developing anything.

These concerns are legitimate, Cohen-Vernik, Pazgal and Syam advise. Surprisingly, though, the researchers discovered that in many cases, everyone involved enjoyed higher profits when co-creating together. That’s a striking contrast to situations in which upstream firms design products alone.

Using a variety of models, Cohen-Vernik, Pazgal and Syam first examined a “base case scenario” where one top-level supplier developed a new product and sold it to two downstream resale firms. Next they looked at scenarios in which those downstream firms engaged with the upstream supplier in three different ways: neither firm working with the supplier, both firms working together and also with the supplier and one firm working with the supplier while the other firm simply reaps the benefits of selling the upgraded product.

Through this analysis, the researchers were able to model the effort expended by both the supplier and the downstream firms, as well as product fit and profit. Their conclusion: As with any business decision, a rigorous competitive analysis is critical before leaping into a co-creating project. Above all, if you and your competitor are in an extremely price-sensitive market, co-creating might not do you much good. Your work might indeed give your rival a newly improved product ⁠— at a lower price.

If you’re the supplier, meanwhile, it’s important that the downstream firm approaching you with a plan is only low or moderately price-sensitive. Otherwise, if your collaborator senses its rival gaining on them, your firm could end up doing most of the work in the race to stay ahead. One of the best ways to dodge such surprises, the researchers say, is to limit the number of firms that you co-create with.

So, to share or not to share your discovery for the perfect glamping upgrade? Like for any adventurer, the key is to scan the horizon before setting out. If your idea is unique; your business is not overly price-sensitive; or you’re confident your rival isn’t courting the same supplier, pooling intellectual and economic resources can be lucrative.

Dare to innovate, in other words. Run with the resources that only collaboration can bring. Just check weather conditions ⁠— not only your own, but those of the competition ­before you head for uncharted territory.


Amit Pazgal is Friedkin Chair in Management and Professor of Marketing and Operations Management at Jones Graduate School of Business at Rice University.

To learn more, please see: Cohen-Vernik, D., Pazgal, A. & Syam, N. (2019). Competing with co-created products. International Journal of Research in Marketing, 36(1), 63-82.

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Marketing | Features

More Effective Marketing Could Convince The Vaccine Hesitant To Change Their Ways

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Meet The ‘MomBAs’ Of The Covid Class Of 2020

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In The Media

If anyone could be pardoned for not having the time or energy to do more — to “go the extra mile” — it’s Mercede Barnes. The mother of a middle-schooler and an entrepreneur with her own business, Barnes is also a graduating MBA student at Rice University’s Jones Graduate School of Business. 

Marc Ethier
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Business has reopened in Texas, but the economy won’t be back anytime soon, experts say

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In The Media

“We probably have to let go of energy as being the No. 1 industry in the long run,” Peter Rodriguez, dean of the Jesse H. Jones Graduate School of Business at Rice University, said in an interview. “That primacy is no longer in the cards for Texas.”

Mitchell Ferman and Anna Novak
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