Cole & Chandler (2019). A Model of Competitive Impression Management: Edison versus Westinghouse in the War of the Currents

Authors:

Benjamin M. Cole – Fordham University Gabelli School of Business

David Chandler – CU Denver Business School

Interviewers:

Samantha Darnell – Wharton School of UPenn

Logan Bryan – Wharton School of UPenn

Article link: https://journals.sagepub.com/doi/10.1177/0001839218821439

Question 1. What was the process by which you identified competitive impression management as a theoretical gap? How did you choose the war of the currents as an illustrative case through which you could develop the competitive impression management theory?

This paper was born out of what we thought was peculiar behavior captured in historical documents, related to an issue we have both been interested in for some time.

Towards the end of the nineteenth century, Thomas Edison was one of 200 people surveyed by a New York State commission established to find a less painful and grotesque alternative method of execution to hanging. Edison’s response was to recommend electrocution powered by alternating current, the technology developed by his rival, George Westinghouse. Later, in an attempt to avoid his technology being adopted for this gruesome practice, Westinghouse disparaged AC as inefficient and unstable—a bizarre public admission for someone trying to promote his own invention. So, our theory was really born out of a paradoxical question: “Why would the CEO of one company try to legitimatize a rivals’ product, and, in response, why would the rival company work to delegitimize its own product?”

This paradox took us to the literature on organizational impression management, but we ran into two walls—first, impression management traditionally focuses on impressions of oneself (not others) and, second, when we found studies of others’ impressions being affected, the actors attempting to influence the impressions were never competitors, but social movement organizations or regulators.

In short, we had puzzling organizational behavior and no literature that fully explained it, despite the fact that we see competitors trying to harm perceptions of each other all around us. That’s the gap that became the basis for our theory of competitive impression management, and also the reason why we felt the War of the Currents was an illustrative case through which we could tell this amazing story.

Question 2. With a historical context as rich and well-documented as the war of the currents, it isn’t feasible to tell the whole story or reference all of the source material. Can you talk about the process of distilling this case into the page limits for an article?

You are correct in your assessment that staying within a reasonable page number was a challenge for us. In fact, it became more challenging as we went through the review process as our editor and the reviewers made numerous helpful suggestions. 

As an example of this, the original manuscript focused mostly on the actions of Edison, but one reviewer felt strongly that we couldn’t tell the story properly without adding Westinghouse’s perspective, since he was the campaign target. So that forced us to confront the Westinghouse material, and somehow keep cutting down the manuscript as it grew.

The second challenge was to retain the chain of evidence from the raw material through to our theory building. Because our study used inductive methods, we couldn’t just present the theory and say, “Trust us!” on where everything had come from. We had to show in the paper itself how the raw data led to the theory development. Each of the source documents is in a separate folder in a separate box somewhere in an archive, so our citations alone were something like 13 pages long in the original submission. In the end, we decided to just write what needed to be written, then wordsmith at the end to cut things down.

After the paper was accepted, several portions of our end materials were moved into the online Appendix to conserve space, which was bittersweet for us. Of course, we were delighted to have the paper accepted, but also sad to see so much of the source material that is essential to our story moved online. We are starting to see more and more online Appendixes these days. It would be an interesting project for an enterprising Ph.D. student to try and calculate how useful these online appendices are to scholars, starting with download data from the journals.

Question 3. Edison and Westinghouse competed over an emerging technology and market (electric power transmission). How do you think industry characteristics such as age or structure might affect this model? For example, could the dynamics of competitive impression management play out differently within an oligopoly vs. a more competitive industry?

We see competitive impression management everywhere. In short, we see it wherever firms compete against each other. We worked out early on that, in order for a firm to ‘win’ in the marketplace, it does not necessarily have to be ‘good’ in an objective sense; it just needs to be perceived as ‘better’ than the competition in the eyes of the ultimate customer.

Take, for example, the grocery industry in the U.S., which is one of the most competitive industries anywhere. Did you know that the CEO of Whole Foods Market, John Mackey, used an alias on Yahoo Finance’s bulletin board for seven years to post comments that maligned rival Wild Oats Markets before Whole Foods moved forward with an acquisition of the firm? Firms regularly steal from and spy on each other and fund fake research that is disseminated to mislead customers and other important audiences, such as Congress. There is literally no limit to the vituperative ways in which such competitive impression management manifests.

We also don’t think the age of the industry really matters either. For example, in an ad for a 2015 campaign that you might have seen on TV, GM took focus group members, put them into a room with two cages—one made of high-strength steel and one of aluminum—and then released a grizzly bear into the room with an admonishment to the subjects quickly to choose a cage in order to stay safe. The participants naturally rushed into the steel cage. A second ad interviewed comic book fans to mock the idea of a hero named The Almighty Aluminum Man. Both ads were intended to elicit concerns about safety so as to dissuade customers from purchasing the aluminum-bodied Ford F-150 pickup truck, and instead choose the steel-bodied Chevy Silverado pickup. The auto industry is pretty darn old in the U.S. But we also saw similar competitive activity in the software industry, which is much younger. The key element is competition, not necessarily what ‘type’ of competitive market the firms are competing in or how long they have been doing it.

Question 4. The stages of a competitive impression management campaign are presented in a fairly linear series of stages. Could you speak to some of the dynamism in the process?

We think all authors struggle with the balance between precision and the generalizability of their research. Obviously, the dynamics in the War of the Currents were very complex, but with hundreds of arrows pointing every way, precision would make comprehension impossible. Speaking honestly, we went through over a dozen different diagrams of the dynamics we observed, always asking ourselves whether what we were showing was both comprehensive and digestible. And if it wasn’t, we tried again…and again. The reviewers were a great help as we navigated this balance over multiple rounds.

In the end, at its most parsimonious, competitive impression management entails three distinct stages: (1) a campaigner who takes an action to try to influence perceptions of an audience about a competitor, (2) a reaction (or lack of) by the audience, and (3) a response (or lack of) by the target of the campaign. That’s how we had to structure the subsections and the figures to impart the primary lessons and turn something that is incredibly dynamic and complex into something that is manageable. But that doesn’t mean that the campaigner won’t take two actions and that the target may not respond at the same time as the audience, for example. We clearly leave room for those possibilities in our summary figure and discussion of the findings, but in a way that (we hope) doesn’t distract from making the model useful to others.

Question 5. One of the limitations you note in the article is the issue of generalizability from a single case study. Given how much firms and strategy have changed in the 100+ years since the war of the currents, how do you see the tactics of cooptation and obfuscation playing out in modern businesses?

As noted above, we see competitive impression management anywhere there is a competition among firms. But, you are onto something when you suggest that what that looks like evolves across time.

Today, we think obfuscation and cooptation actually have become easier due to technology. Did you know that both Uber and Lyft have hired people to use the other’s app to secretly order cars then cancel them in order to frustrate the other’s customers with lack of availability and higher surge prices? In fact, bots and the ubiquity of videos and images make creating fake personas super easy for anyone (a technology that is rapidly being adapted to videos). It was recently revealed that the Trump campaign uses for-fee stock photos to falsely portray actual supporters in its Facebook ads. While this example is not for a ‘business’ per se, there is no denying that political campaigns are organizations that are ‘selling something’ to the electorate in a competitive context.

As another example, while not precisely involving rivals, the entire medical community has been struggling to come to terms with how the process of medical research has been coopted by the pharmaceutical industry. Lancet editor Richard Horton called modern medical journals (including his own) “information laundering operations for the pharmaceutical industry.” Other editors have been similarly critical of how two-thirds to three fourths of all drug trials published in major journals—Annals of Internal Medicine, JAMA, Lancet, and New England Journal of Medicine—are funded by industry, and that every trial shows the firm’s drug to be as good as or better than the comparison treatment.

In summary, both obfuscation and cooptation are going strong in modern business environments. We think this also applies to the other tactics we identify. While we do not claim to have listed all possible tactics in our study, we do claim that all of the ones used by Edison and Westinghouse are as relevant today as they were at the end of the nineteenth century.

ONE MORE POINT…

One final point we would like to make, which is not directly related to your questions, speaks to the value of doing historical, case-based research.

One of the reasons that we think our study is valuable (rather than simply interesting theory in a cool context) is because we are theorizing something that is inherent wherever two or more firms compete. In other words, we believe that the processes we uncovered are essential to the competitive dynamic and are a key component of what makes capitalism such a productive economic system.

To put this more explicitly, although not intended by Edison, his campaigns against Westinghouse forced Westinghouse to up his game. However devious Edison’s tactics were or however underhanded they may seem, in order to ‘win’ the battle for the perceptions of the various audiences both inventors were competing for, Westinghouse had to work harder and faster than his rival to overcome his campaign claims. The value to society was a safer and more efficient electricity standard that, without doubt, was one of the defining inventions of the nineteenth century and set the foundation for economic growth ever since.

Studying these two men go at each other, with incredibly high stakes, reminded us both that, although competition is often difficult for companies and stressful for managers, the result is greater value for the consumer and society as a whole. Westinghouse won the War of the Currents, but Edison made his technology better in the process.

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