Based on research by Anastasiya Zavyalova, Brent Goldfarb and Sandeep Pillai 

• A 1994 study examined whether participating in certification contests affected the survival of automobile companies during the industry’s inception.
• Recently, researchers replicated the study and found that cumulative contest victories had a legitimizing effect on automobile firms, leading to increased chances of firm survival.
• Even when firms didn’t win, simply participating in contests had a positive impact on firm survival.

If customers don’t trust it, companies can’t sell it.

Fear of the unknown is an issue for anyone peddling new technology — and at the turn of the 20th century, the automobile industry was struggling to assuage consumer concerns. The “horseless carriage” represented a complete departure from the past, and people then were as wary of it as many of us today are of driverless cars. Then and now, firms have had to prove that a new technology is safe and reliable before they can hope to make a sale.

The future of the automobile was uncertain until 1906, when sales began to take off. Before that, the industry’s survival depended, in part, on its ability to demonstrate the technology was reliable. One way automakers did so was to hold organized races — think NASCAR meets pre-Model T’s — where spectators could see the safety and efficiency of these state-of-the-art machines. Popular magazines of the day reported the results.

In 1994, Hayagreeva Rao, a Stanford University professor of organizational behavior, studied the impact these contests had on the survival of different auto companies. He found that companies whose cars won the races had a higher likelihood of survival overall, thanks to the resulting reputation boost. Rao’s research is frequently cited as a defining study of the relationship between social approval and actual firm performance.

Given the study’s ongoing popularity and influence, Rice Business management professor Anastasiya Zavyalova, along with Brent Goldfarb and Sandeep Pillai of the Robert H. Smith School of Business at the University of Maryland, recently replicated it using the same sources as the 1994 study. They also included additional contemporary sources, studying a total of 1,176 car manufacturers over the years 1895-1912.

Rao’s original study hypothesized that cumulative contest victories contributed to an increasingly better reputation, and could serve as a predictor of automobile firm survival. This hypothesis held true both in his study and the replication. However, Zavyalova and her team discovered something more – that it wasn’t just victories in the races that predicted firm survival. In fact, firms that placed second or third, or even farther behind, were more likely to survive than firms that didn’t enter the contests at all. This supports the concept of “loose coupling,” in which firms that simply participate in a race are viewed more favorably by the public, leading to better business outcomes.

In fact, firms that placed second or third, or even farther behind, were more likely to survive than firms that didn’t enter the contests at all.

Another contribution of the second study was to control for the variables related to the quality of the firms in the dataset. After all, one could argue that the more successful firms produced better automobiles, leading to increased chances of race victories and firm survival alike. To address this, the researchers used several proxies for firm quality to level the playing field. Even with these controls in place, however, the hypothesis held.

Rao’s original study also included a second hypothesis: that companies facing greater uncertainty, such as start-ups, should benefit the most from contest victories. However, neither study’s outcome supported this hypothesis. While start-ups and more established manufacturers both benefited from competing in races, there was no difference in firm survival between the two groups.

So it looks like participating in contests is a fairly clear path to success. But is that always the case?

Zavyalova and her team point out that there’s still room for further research — for example, examining whether contest participation has the same positive effect on firms that make products such as luxury goods or art, where the criteria for “good quality” are far more subjective.

And despite the clear connection between contest participation and firm survival among automobile manufacturers, neither study controlled for two other variables that may have driven both participation and survival: the quality of the cars being raced and the effectiveness of the managers running the firms.  

As modern-day organizations think about whether to enter similar contests, however, these findings suggest that they’re better off at least throwing a hat in the ring. The replication study shows that, win or lose, just showing up at a race counts as a victory.

Anastasiya Zavyalova is an associate professor of strategic management at Jones Graduate School of Business at Rice University.

To learn more, please see: Goldfarb, B., Zavyalova, A. & Pillai, S. (2018). Did victories in certification contests affect the survival of organizations in the American automobile industry during 1895–1912? A replication study. Strategic Management Journal, 39(8), 2335-2361.

Based on research by Scott Sonenshein

• Scholars have long regarded creativity and routines as opposites.
• New research shows that the relationship between creativity and routines is more complementary than previously imagined.
• Employers who encourage workers to put a piece of themselves into routine tasks can yield creative results.

Think of a routine: your morning workout, walking the dog, making your bed. It’s hard to imagine these as creative pursuits. After all, Leonardo da Vinci may have made his bed every morning, but it’s probably not what inspired him to paint the Mona Lisa.

So it’s no surprise that workplace analysts have long considered routines to be the antithesis of creativity. But it turns out that the relationship between the two is more complementary than previously believed. Scott Sonenshein, a management professor at Rice Business, studied just how this relationship works. What Sonenshein wanted to know was, how can an organization achieve creative outcomes through routine?

For the answer, think of da Vinci again. Certain repetitive aspects of style make his work recognizably his. It’s how we can instantly see that The Last Supper, St. John the Baptist and the Mona Lisa are all the work of his hand. In that sense, they are both repeated patterns and feats of genius.

For Sonenshein, some retailers are, in a sense, the da Vincis of suburban America. Sonenshein examined data from a fast-growing retailer that operates a chain of roughly 400 clothing, jewelry, accessory and gift stores across the U.S., and was fascinated to see how it could surprise its customers each season while maintaining a brand image that makes the retailer easily identifiable. Sonenshein realized that the retailer was effectively routinizing creativity.

When he interviewed corporate managers and store employees at the retailer he calls “BoutiqueCo,” a pattern emerged. Sonenshein discovered something he calls “familiar novelty” in the way the retailer designs its stores. While most stores use a rigid floor plan for the display of merchandise, BoutiqueCo instead adopts a set of flexible guidelines.

These rules of the road are explicit enough to ensure that each store is readily identifiable as a BoutiqueCo outlet. But because the display rules afford a great deal of flexibility, they allow space for creative employees to come up with their own ideas. If merchandising were a musical score, Sonenshein observed a dynamic that is less like marching band music and more like jazz. Employees are encouraged to riff off of the main themes of the chain to regularly create something unexpected.

Of course, creating novel effects doesn’t come naturally to everyone. It takes a certain kind of individual to achieve it, especially in the highly visual area of merchandising. Store managers told Sonenshein that they actively look for employees who are willing to take visual risks and engage creatively while still keeping to the rules of the company road.

Finally, creativity is routinized in the stores’ feedback systems. This takes place both among employees, who frequently discuss and even debate their work with each other, and in the more formal setting of managerial feedback. Managers actively encourage creativity, urging employees to put their personalities into the work of the store, to the point where brand identity and individual identity intermingle.

So what does the experience of one outlet tell us about the relationship between creativity and routines? Sonenshein suggests that there is a strong role for personalization of routine tasks in the creative workplace. When employees bring their own preferences to routine performances, it can elevate them from mundane to novel.

Of course, it’s unlikely that a window dresser will create the next Mona Lisa while promoting the spring line. Genius like da Vinci’s may only come along once in a millennium. But if we put a little soul into our work under the guidance of managers who allow us to riff off of the corporate sheet music, remarkable things become possible.

Scott Sonenshein is the Henry Gardiner Symonds Professor of Management at Jones Graduate School of Business at Rice University.

To learn more, please see: Sonenshein, S. (2016). Routines and creativity: From dualism to duality. Organization Science, 27(3), 739–758.

Last week’s raid on the Catholic Diocese of Dallas, which police say hasn’t fully cooperated with a sexual abuse investigation, comes in the wake of dozens of Catholic bishops releasing lists of the priests in their dioceses who were credibly accused of child abuse.

The raid is symbolic of a crisis of faith in the organization and its leadership, according to a reputation management expert at Rice University’s Jones Graduate School of Business.

Anastasiya (Annie) Zavyalova, associate professor of strategic management at Rice Business, is available to discuss Catholic dioceses’ crisis and reputation management with the media. Zavyalova said releasing the names has been a small step in the right direction, particularly toward healing relations with parishioners.

In Dallas, trust repair will be a long-term process, Zavyalova said. “Its effectiveness will be contingent on who drives the process: In this situation, in order to work, the repair will have to be initiated by the laity, not by those in power at the church,” she said.

Zavyalova’s recent research includes an in-progress study of how parishioners reacted to the names of priests released by the Archdiocese of Philadelphia in 2005. Her general research focuses on negative events in organizations and the role of the media and organizational identification for stakeholder support following such incidents.

To schedule an interview with Zavyalova, contact Jeff Falk, associate director of national media relations at Rice, at jfalk@rice.edu or 713-348-6775.

Rice University has a VideoLink ReadyCam TV interview studio. ReadyCam is capable of transmitting broadcast-quality standard-definition and high-definition video directly to all news media organizations around the world 24/7.

Follow the Jones Graduate School of Business on Twitter @Rice_Biz.

Follow Rice News and Media Relations on Twitter @RiceUNews.

Related materials:

Zavyalova bio: http://business.rice.edu/person/anastasiya-zavyalova

Jones Graduate School of Business: http://business.rice.edu