Legitimacy-building Strategies Research Articles

Driving Social Innovation in Bottom-of-the-Pyramid Markets through International Social Alliances: The Role of Legitimacy

International social alliances—in which multinational enterprises (MNEs) and social enterprises (SEs) collaborate—are a vital source for the development and scaling up social innovations for value creation. Yet, these alliances face significant legitimacy challenges, which are more glaring in bottom-of-the-pyramid markets (BOPMs) within emerging and developing economies owing to weak and underdeveloped formal institutions. Drawing on the legitimacy, institutional, and social alliances literature, we develop a conceptual framework that explains the importance of developing social, institutional, and commercial legitimacy in international social alliances operating in BOPMs. We also explored the challenges faced by international social alliances in BOPMs and the factors that enable MNEs and SEs to build different types of legitimacy. We contribute to international business research by providing an understanding of various legitimacy building strategies enacted by international social alliances based in BOPMs for social value creation.

Impairment (in)visibility and stigma: how disabled entrepreneurs gain legitimacy in mainstream and disability markets

ABSTRACT Entrepreneurs’ use of linguistic practices, such as storytelling, in building legitimacy with customers and others is well documented. Yet, not all entrepreneurs may equally use or benefit from such practices in their legitimacy-building efforts. For those with stigmatized social identities, like disability, embodied properties and practices of non-linguistic, more visual kind, may be salient despite being under-explored in the entrepreneurial legitimacy studies. To address this knowledge gap, this article examines how disabled entrepreneurs gain legitimacy with customers and, more specifically, how impairment visibility shapes their capacity to do so. Drawing primarily on in-depth interviews with UK-based entrepreneurs, the article extends Suchman’s work by reconceptualizing his legitimacy-building strategies considering impairment visibility. It is argued that impairment visibility can both enable and constrain legitimacy depending on the product offering and the target market. Disabled entrepreneurs are found to adopt four embodied legitimacy-building strategies in the marketplace, each with specific implications for their micro-level interactions with customers.

Orchestrator legitimacy in a nascent ecosystem: The case of Atos and fintechs

In ecosystems where collaboration between firms is advantageous or even necessary to progress firm innovation, buy-in must be won from stakeholders to enable operative actors to do so. Flashy ideas and big promises may carry weight in the process of winning them over, but convincing stakeholders of the legitimacy of the proposed collaboration is paramount. In this paper, we investigate how actors within a firm engage in a bifurcated legitimacy campaign to coerce internal and external stakeholders into supporting an innovating orchestration system. Drawing on a unique case study at one of Europe's leading IT service integrators, and drawing on institutional theory and ecosystems literatures, we specifically look at shifting motives, expectations, and legitimacy-building strategies through a process lens to shed light on how an incumbent's internal and external stakeholders can be cleverly made to work for each other.

Contract Enforcement in Marketing Channels: Contract Legitimacy and Influence Strategies

Prior research has yet to explore the endogenous nature of the contract itself that may affect contract enforcement. Drawing insights from the institutional theory, we investigate the how three types of contract legitimacy (i.e., regulative legitimacy, normative legitimacy, and cognitive legitimacy) influence the effectiveness of interfirm contract enforcement, and the moderating effects of influence strategies. We examine the effectiveness of contract enforcement not only taking account of the behavioral results of compliance, but also internal perception of channel dyadic trust. Using a longitudinal field survey data and archival data, we find three types of legitimacy play different roles in influencing compliance and trust. Cultural- cognitive legitimacy is the most effective one for the trust building, and non-coercive influence strategies can improve the effectiveness of three-type legitimacy better than coercive influence strategies. This paper contributes to the institutional literatures by investigating the effectiveness of legitimacy building of marketing channel contracts, and further explores the interaction effect of legitimacy building strategies and the exercise of influence strategies.

Exploring citizens’ judgments about the legitimacy of public policies on refugees

PurposeThe purpose of this paper is threefold: to introduce a theoretical frame regarding the meaning of legitimacy as an intangible asset of the public sector; to test a way of operationalizing legitimacy typologies that allows exploring and comparing how citizens from two countries evaluate the legitimacy of public policies; and to suggest implications for governments’ legitimacy-building strategies in shared international crisis, such as the refugees coming from the Syrian region.Design/methodology/approachBuilding on Suchman’s typology, it was defined and categorized different types of legitimacy into concrete measurable, communication related statements concerning consequential, procedural, structural and personal. For the illustrative example, four focus groups were conducted in two different European societies as a mean to have two poles of comparison.FindingsThe paper reports current understanding of legitimacy by citizens, discusses how different legitimacy types might demand different communication and public diplomacy approaches. The basis for hypothesis for further research on how governments should build legitimacy during emerging societal issues such as immigration policies is set.Practical implicationsIt proposes a typology and its operationalization, discusses how communication might shape legitimacy and profiles the challenge governments have in building it. Within a public diplomacy context, it brings clues for new strategies to the challenge of explaining policies on international crisis combining the tension of domestic with foreign publics.Originality/valueThere is little research so far in search for clues for communication strategies for the legitimacy of policies on the 2015 European refugee’s crisis. This contributes to the emerging area of intangible assets in the public sector and tests a focus-group research strategy with both hermeneutical and pragmatic aims. Combine public diplomacy theory with public sector intangible assets theory to respond to the tension of internal and external public demands.

Achieving Legitimacy in Cross-Border Higher Education: Institutional Influences on Chinese International Branch Campuses in South East Asia

All universities must achieve legitimacy, as this is essential to attract students, staff, and resources, including funding. To achieve legitimacy in transnational higher education, universities must conform to the rules and belief systems in the host countries. Adopting a case study approach, this research aims to investigate the different institutional influences on three Chinese international branch campuses (IBCs) that operate in South East Asia. The institutional factors behind the strategies taken in establishing and operating such branch campuses are discussed, as well as the different legitimacy building strategies adopted to counteract the liability of foreignness in the host countries. It was found that legitimacy is established through three modes: legitimacy conformity, selective legitimacy conformity/nonconformity, and legitimacy creation, which are adopted according to the IBC’s dependence on local resources and the strength of the institutional forces in the host country.

In search of sustainable legitimacy of private firms in China

PurposePrivate firms in China are like the third child in a family, constantly struggling to establish their position in an environment favoring their state-owned and collective siblings. The purpose of this paper is to discover some long-term-oriented legitimacy building strategies for private firms in China.Design/methodology/approachThis paper examines the effect of both internal and external institutional factors on long-term legitimacy for private enterprises. The authors integrate stakeholder perspective and institutional theory to provide a framework of building sustainable legitimacy.FindingsThe authors’ framework delineates that a private company can build sustainable legitimacy through catering long-term legitimacy conferring to constituents such as customers, social responsibility and patriotism in the external institutional environment.Practical implicationsThe authors’ framework further indicates how private firms could leverage internal institutional environment through developing appropriate mission, culture, leadership and human resources practices in conformity to the demands of constituents for gaining long-term legitimacy.Originality/valueThis paper is the first to address the short-term nature of legitimacy building strategies proposed in the past literature. In addition, it is also the first attempt to explore the multiplicity in legitimacy in China in search of long-term legitimacy building approaches.

How nascent community enterprises build legitimacy in internal and external environments

ABSTRACTHow nascent community enterprises build legitimacy in internal and external environments. Regional Studies. Community enterprises have become a widely used mechanism in addressing problems associated with socio-economic decline in rural areas. Using a legitimacy perspective, this paper explores how emerging community enterprises access resources needed to start and sustain their operations. Studying two music festivals that aim to improve the identity and economy of rural communities, three legitimation strategies emerge: conformance to the internal (rural community) environment; conformance to the external (cultural festival) environment; and changing the internal (rural community) environment. The legitimation process requires different legitimacy-building strategies within different environments, and community enterprises can benefit from differences in legitimacy judgements.

Examining the relationship between legitimacy-building strategies and firm revenues

Research question: The secondary ticket market has traditionally lacked the perception that it was a safe and legitimate place to acquire tickets. The current study examined the relationship between legitimacy-building strategies, such as lobbying for the deregulation of anti-ticket-scalping laws and engaging in partnerships with established sport organizations, and the revenues generated by the largest secondary market firm, StubHub. This study was conducted within the context of National Football League (NFL) ticket resale.Research methods: StubHub provided ticket resale figures for all 256 regular season games which took place during the 2007 NFL season. Hierarchical regression was utilized in order to examine the relationships between both price restrictions and secondary market partnerships, and ticket resale price and ticket resale volume.Results and findings: Results indicate secondary market partnerships have a significant influence on firm revenues, increasing the number of transactions while accounting for only slight decreases in price. Anti-scalping laws have a less pronounced association with resale volume and price.Implications: This research extends academic literature on secondary market operations and provides practical implications as primary and secondary market firms as well as state and local legislatures may use the findings to inform their decision-making.

Legitimacy building strategies in conditions of discretionary legal enforcement: A logic of social action approach

The present study explores strategies used to legitimize the transfer of organizational practices in a situation of institutional upheaval. We apply the logic of social action (Risse, 2000) to analyze the effectiveness of consequence-based action and communication-based action, in terms of higher coordination, lower conflict, and overall higher economic performance. Consequence-based legitimation is obtained by using a system of distributor incentives tied to performance of specific tasks, while communicative legitimation can be achieved by recommendations and warnings. Our setting is an export channel to European emerging economies. Our results indicate that in the absence of legitimacy, as manifested in discretionary legal enforcement, consequence-based legitimation is more effective than communicative legitimation in reducing conflict, increasing coordination, and ultimately in improving the performance of the export dyad.

When do Family Members Join Boards? Legitimacy-Building Strategies for Family Members

As a departure from previous literature that has focused on the consequences of family management, this study turns our attention to its antecedents. This study extends our understanding of when family members join boards of directors by focusing on the legitimating aspects of board membership. According to the findings, family members are appointed to boards of high-performing and high-reputation firms in an effort to build the legitimacy of family leadership. Furthermore, organizational efforts to legitimize leadership are focused on family members who are most in need of legitimacy: family members beyond the second generation. Evidence in support of these mechanisms is found using panel data of business group affiliated firms in South Korea.

Establishing legitimacy in the secondary ticket market: A case study of an NFL market

As a result of the occasional unethical business practices of its members, such as price gouging and ticket fraud, the secondary ticket market for sporting events has struggled to gain legitimacy from the perspective of leagues, teams, and consumers. However, as this industry has grown exponentially in the past decade with the advent of the Internet, entities that resell tickets have implemented several strategies for improving the negative images resulting from these unethical practices. As primary and secondary ticketing operations continue to merge through secondary market sponsorships, teams and other sport properties must carefully consider public perceptions of this market before determining their own level of involvement with it. Understanding what strategies the members of the secondary market use to repair and enhance these perceptions is the first step in making that judgment. The purpose of this study was to examine the legitimacy-building strategies in a National Football League (NFL) market for each segment of the secondary ticket market (scalpers, licensed ticket brokers, and secondary ticket market websites). Additionally, a new strategy for legitimacy-building (legitimacy acquisition) is also presented.

Private firms in China: Building legitimacy in an emerging economy

Firms are legitimized by their environments if they survive and prosper. But firms can also proactively build legitimacy to enhance their long-term growth prospects. This is vital for private firms based on emerging economies given the weak protection for private property. This article examines ways in which private firms in China build legitimacy for themselves and their industries. Through field interviews with firm founders and top managers in China various legitimization strategies and the conditions under which they can be used are examined. The authors also conducted follow-up interviews in Taiwan to investigate legitimacy-building strategies there. Though more advanced, Taiwan's economy shares many cultural traditions with Mainland China, and it presents firms with similar legitimacy-related challenges. Interviews with managers of multinationals operating in China were also conducted to determine what they are learning from the legitimization strategies of the indigenous Chinese firms.

Learning from successful local private firms in China: Establishing legitimacy

Executive Overview Many international firms have found China a difficult market in which to prosper. In spite of this, many local private Chinese enterprises are succeeding, although they face an institutional environment that can be quite hostile. One of the principal reasons many local private firms have been able to succeed in a challenging environment where many multinationals have struggled is that they pursue strategic actions that establish their legitimacy in the society. The result is that the negative impact of meddlesome officials and the lack of well-codified and enforceable laws is reduced. This article identifies nine legitimacy-building strategies that local private firms have employed in China's transition economy. International firms entering these markets would be well served by observing and creatively replicating the local private firms' behaviors that helped to establish legitimacy.