The Dynamics of Standing Still: Firestone Tire & Rubber and the Radial Revolution

Abstract

Business historians have illuminated how first movers in many emerging industries secure an enduring leadership position, but have devoted less attention to the processes by which industry leaders relinquish their dominance. This paper examines why rubber industry leader Firestone Tire & Rubber failed to respond effectively to new technology and foreign competition. The author argues that Firestone did not respond by doing nothing, but rather accelerated activities that had contributed to its past success. Firestone's response was constrained by managers' existing strategic frames and values, and the company's processes and long-standing relationships with customers and employees.

Path dependence and the stabilization of strategic premises: how the funeral industry buries itself

“…While such a unique and extreme case, a ''talking pig,'' is compelling for such theorizing efforts because the studied phenomena may be better observed, it may impose the challenge that the generated theoretical insights are hardly transferrable to other contexts (Lincoln and Guba 1985;Siggelkow 2007). However, a remarkable number of prior studies have identified similar patterns of premise stability, path reproduction, and disruption in a broad range of contexts, such as the automotive industry, the airline industry, the book industry, the camera industry, the cash register industry, the music industry, the newspaper industry, the tire industry, and the typesetter industry (Koch 2011;Kunow et al 2013;MacKay and Chia 2013;Maielli 2015;Miller and Chen 1994;Rosenbloom 2000;Rothmann and Koch 2014;Schreyögg et al 2011;Sull 1999;Tripsas 1997;Tripsas and Gavetti 2000). Furthermore, Schreyögg and Kliesch-Eberl (2007) presumed that pathdependent organizations that face a crisis seem to have a genuine interest in enabling the reproduction of their path by producing desired market outcomes and that processing feedback seems to play an important role in dealing with strategic premises.…”

“…However, some organizations in a variety of industries have been shown to be unable to update their strategic premises in times of crisis despite the strongly negative feedback they received (Eggers and Kaplan 2013;Gilbert 2005;Koch 2011;MacKay and Chia 2013;Maielli 2015;Miller and Chen 1994;Rosenbloom 2000;Rothmann and Koch 2014;Schreyögg et al 2011;Sull 1999;Tripsas 1997Tripsas , 2009Tripsas and Gavetti 2000). For example, Rothmann and Koch (2014) presented the case of path-dependent organizations in an industry that were struck heavily by a severe crisis.…”

“…Yet, these actions did not lead to strategic change but were aimed at restoring the efficiency of the formerly successful strategic pattern because the underlying strategic premises remained uncontested (see also Gilbert 2005;Gilbert and Bower 2002). Sull (1999) notably referred to this phenomenon as ''the dynamics of standing still. ''…”

“…Accordingly, this study provides further evidence that the counterfactual reproduction of paths may not simply be a ''failure to act'' (Weick 1979: 149). Instead, the organizations invested tremendous efforts to respond to the crisis, but these were reminiscent of ''the dynamics of standing still'' (Sull 1999): the responses were aimed at restoring the efficiency of the formerly successful strategic pattern and improved the economic situation in the short run but were unsuccessful in the long run (see also Gilbert 2005;MacKay and Chia 2013;Rothmann and Koch 2014). While prior works rely mainly on resource-based and routine-based reasons to explain this phenomenon and holistically refer to uncontested strategic premises as the root of lacking deviations from the path, this study develops complementary insights (e.g., Eggers and Kaplan 2013;Gilbert 2005Gilbert , 2006Tripsas and Gavetti 2000): by identifying mechanisms that stabilize strategic premises in lock-ins even in times of crisis, this study sheds further light on how and why organizations that are affected by ''the dynamics of standing still'' retain their strategic premises despite the strongly disconfirming feedback that their crisis generates and only conduct slight adjustments to their strategic pattern.…”

“…Instead, these organizations may leave their strategic premises uncontested even in times of crisis and pathologically reproduce their established path instead of conducting strategic change (e.g., Gilbert 2005;Rothmann and Koch 2014;Sull 1999). The uncontested retention of strategic premises even in times of crisis indicates the existence of mechanisms that stabilize strategic premises (e.g., Geiger and Antonacopoulou 2009;McKinley et al 2014;Schreyögg and Kliesch-Eberl 2007).…”