ABSTRACT
The rapid growth of Erie Insurance was driven, in part, by geographic expansion. In 1997 the ERIE sold insurance in nine states—Indiana, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia—and the District of Columbia. Erie Insurance's focus on innovation, along with service and cost, gave the company a significant competitive advantage in the insurance business. A crucial aspect of Erie Insurance's historical development of its competitive advantage was the creation of a corporate culture that focused on innovation; "new combinations" as Schumpeter termed them. The values surrounding the key elements of Erie Insurance's business strategy became cultural norms embraced by the company's employees and agents. The importance of executive leadership to innovation raises the question of who or whom was responsible for making Erie Insurance an entrepreneurial firm. H. O. Hirt hired Sam Black in 1927 as Erie Insurance's claims manager because he knew Black shared his vision about cost, quality and service.
