Status, uncertainty and performance in Formula One racing
Fabrizio CastellucciPurpose
This study examines how the relationship between uncertainty and performance varies across levels of organizational status. Specifically, it analyzes how status conditions the relationship between two distinct sources of uncertainty – firm-specific uncertainty arising from a firm's own production processes and partner-specific uncertainty originating from key external partners – and organizational performance.
Design/methodology/approach
The study draws on an unbalanced panel of Formula One constructors competing between 1993 and 1999. Using detailed race-level data, the analysis employs high-dimensional fixed-effects regression models to examine how status interacts with firm- and partner-specific uncertainty. Additional event-history analyses provide suggestive evidence regarding the underlying mechanisms of search behavior and access to resource quality.
Findings
The results indicate that status plays a dual role in the relationship between uncertainty and performance. High-status firms exhibit lower performance than low-status firms under conditions of firm-specific uncertainty, consistent with reduced problemistic search and weaker development of integration capabilities. In contrast, high-status firms exhibit higher performance under conditions of partner-specific uncertainty, consistent with exchange partners being more selective in their favor during such periods.
Originality/value
This study contributes to the literature by distinguishing between firm- and partner-specific uncertainty and demonstrating that organizational status differentially moderates their relationship with performance. By integrating behavioral theory of the firm with status-based theories of markets, the paper offers a more nuanced understanding of how organizations respond to uncertainty in competitive environments.