Organizational legitimacy & British Multinationals in West Africa, 1945-1970

Abstract

Multinationals experiences significant legitimacy challenges in less developed countries between 1945 and 1970. Formerly imperial companies were particularly affected, and the article follows the fate of five British firms in Ghana and Nigeria, of which three were freestanding companies and two were globally diversified multinationals. Their corporate responses to legitimacy challenges fall into three distinct periods: first, they failed to maintain their legitimacy, then they pragmatically sought to repair the damage to their reputation. Eventually, they successfully maintained their regained legitimacy by implementing appropriate policies for the political and economic context of newly independent states in Africa. Some firms do better than others: the freestanding companies were acquired by other multinationals because they failed to adopt the polycentric management approaches (local autonomy and local staff for subsidiaries) that made the more diversified multinationals successful.