The Advocacy Trap: When Legitimacy Building Inhibits Organizational Learning

Abstract

This article describes a relationship between legitimacy building and learning for a new firm in a nascent industry. Through a longitudinal study of a new firm in the nascent smart city industry, we found that the firm failed to make progress on important internal initiatives, despite notable external successes including attracting prestigious employees, partnering with well-known companies, and receiving extensive positive media attention. Exploring these concurrent developments, we discovered a surprising relationship between the firm’s external successes and its internal failures. We propose that the legitimacy building that helped the new firm establish external success gave rise to cognitive and emotional internal dynamics that inhibited organizational learning. We call this dynamic the advocacy trap. By suggesting a downside to legitimacy building and identifying a novel barrier to organizational learning—rooted in cognition and emotion, and especially salient in new firms and nascent industries—our...