Societal Legitimacy Research Articles

HOW IMPORTANT IS CSR COMMITMENT IN SHAPING CORPORATE REPUTATION?

Objective: The study investigates the relationship between CSR and corporate reputation, given the trend of companies integrating CSR to meet stakeholders’ expectations and enhance reputation. Theoretical Framework: The study employs stakeholder theory to emphasize positive stakeholder relationships' impact on corporate reputation, the institutional approach advocating strategic societal engagement, signal theory highlighting CSR's role in signaling commitment to stakeholders, and legitimacy theory emphasizing active CSR participation to maintain societal legitimacy. Method: We use a panel data model on a sample of the world's most admired companies between 2015 and 2019. The proxy considered for corporate reputation includes eight firms’ attributes. Results and Discussion: Findings provide the positive relationship between CSR and corporate reputation firstly the stakeholders’ theory which suggests that companies engage in CSR in order to improve their image and meet stakeholders’ expectations suggesting that ethical CSR practices can create a belief that the organization upholds ethical standards and cares about the well-being of society, which, therefore, positively influences corporate reputation. Research Implications: The study has direct implications for academia and business, emphasizing CSR’s importance in enhancing corporate reputation, urging transparent implementation of CSR initiatives, and highlighting competitive advantages associated with responsible business practices. Originality/Value: The study provides novel insights into the relationship between CSR commitment and corporate reputation by employing a comprehensive corporate reputation proxy and a panel data model analysis of globally renowned companies across various industries. It offers new insights into CEO motivations for CSR adoption.

When Institutional Plates Collide: The Dynamic Impact of Informal Institutions on Capital Market Development

We provide an institutional theory perspective to examine societal legitimacy in the context of capital market development. While prior research has focused on the importance of formal institutions, firms are embedded within broader socio-economic structures associated with informal institutions. Using content analysis and a unique dataset of 3244 newspaper articles between 2004 and 2013, we develop a dynamic measure capturing the public perception of capital markets as a proxy of informal institutions. We run a Prais–Winsten regression with panel-corrected standard errors to explore the dynamic relationship between public perception of capital markets and equity market size in Austria and Poland. We further theoretically and empirically explore how formal and informal institutions mutually reinforce each other in the context of capital market development. Our results suggest that informal institutions matter differently in developed and emerging economies.

Taking a Stand: The Discursive Re-Positioning of Journalism

ABSTRACT This study employs positioning theory to examine the discursive power struggle and negotiation over the rights and duties of the news media in the United States and illustrates how journalists discursively construct their professional identity within a specific situational interaction. The examination of 480 editorials by 570 news organizations—which were published in response to President Trump’s the news media “is the enemy of the people” accusation—reveals that news organizations around the country attempted to discursively re-position themselves and thus alter the local moral order defined by President Trump. Findings show that news organizations used three positioning practices (self-positioning, second-order or other positioning and third-order positioning) to not only reclaim professional, institutional and societal legitimacy respectively, but also undermine Trump’s legitimacy as an attacker and change the anti-press narrative he promoted. In this process journalists dynamically construct their professional identity by altering their position within different storylines, which also created inconsistencies in their claims to their professional legitimacy.

Stock exchange price currents, financial information and market transparency: an introduction

Financial markets derive their political and societal legitimacy from their ability to produce fair and accurate prices. However, reviewing the literature on how stock exchanges price securities, we find an inherent tension between market organization and price disclosure, which is borne out by this special issue's historical case studies.

Social auditing in the supply chain: business legitimisation strategy rather than a change agent

PurposeThis paper aims to examine the role of social auditing in legitimising the relationship between the buyer and supplier firms rather than strengthening corporate accountability in the global supply chain.Design/methodology/approachApplying case study methodology and drawing on Suchman’s theory on societal legitimacy, it is argued that social audits are artefacts of legitimacy, and global firms dominate the buyer–supplier relationship across the supply chain. The analysis is based on data collected from different secondary sources, including Walmart’s corporate sustainability reports.FindingsUsing Walmart’s relationship with Tazreen Fashions Limited around the Tazreen factory fire incident as a case study, it explains that the practices which attempt to symbolically demonstrate accountability from social audits need to shift to a more continuous and sincere demonstration of accountability through the social audit process. For this to occur, the cognitive and pragmatic approaches that international buyers have previously used in auditing their supply firms’ social responsibility are no longer sufficient to achieve societal legitimacy. Instead, a moral turn needs to underpin the intentions and actions of these buyers to maintain legitimacy and demonstrate accountability across the supply industry in developing economies.Originality/valueThe findings of the study answer the questions raised in the extant literature about the expectation from social auditing and whether social auditing serves to ensure corporate accountability. The paper contributes to the policymaking discussion of how social auditing can be configured to include a legal provision to ensure that social auditing is not a parroting tool for corporations.

International entrepreneurship in Sub-Saharan Africa: interfirm coordination and local economy dynamics in the informal economy

PurposeThe International Labor Organization (2020) estimates that eight out of ten enterprises (i.e. own-account workers and small economic units) are informal worldwide. However, less is known about the internationalization of informal enterprises. Here, it is argued that economic blocs, such as sub-Saharan Africa, with a greater proportion of informal enterprises, may provide broader societal legitimacy for them to operate internationally. Thus, informal firms would need to collaborate with other firms to overcome their resource constraints. Geographic colocation is one way to facilitate positive interfirm interactions that promote networking and subsequently cooperation. The purpose of this paper is, thus, to addresses two questions. Firstly, how and to what extent does interfirm marketing cooperation in geographic colocation influence the internationalization of micro and small informal manufacturing enterprises? Secondly, how do the perceived benefits of local external economies moderate this relationship?Design/methodology/approachThe study draws evidence from 125 randomly selected informal enterprises located in two major clusters in Ghana, using a mixed-method approach.FindingsThe partial least square - structural equation modeling (PLS-SEM) analysis applied revealed two central points. Firstly, sharing marketing costs allows informal firms to upgrade their phases of export development directly. Secondly, the linkage of increasing sales activities and local external economies encourages the progress of the phases of export development and the scope of internationalization. Results confirm that the cluster benefits of interfirm cooperation and local external economies on the informal firm internationalization process complement each other in addition to their linear relationship.Originality/valueThe study contributes to understanding the nexus of the informal sector, geographic colocation and the entrepreneurial internationalization literature. The results should motivate researchers and policymakers to approach informal firm internationalization through collaborative business activities.

Continuity and change in forest restoration. A comparison of US ecology and forestry in the 1940s and 1990s

Previous research has paid little attention to the multiple meanings of the concept of forest restoration. To gain a more comprehensive view of forest restoration, this paper compares the US forest restoration debate of the 1940s and 1990s, in the disciplines of ecology and forestry. The paper focuses on historical approaches to pasts and futures, and on “sociotechnical imaginaries” providing societal legitimacy to restoration ventures. Historical scientific papers constitute the paper’s empirical sources. The analysis shows that, among ecologists and foresters, forest restoration of the 1940s was oriented towards efficiency and challenges such as wood demands during World War II, whereas restoration of the 1990s was oriented towards conservation and environmental challenges. The approaches of the 1940s′ ecologists and foresters seem motivated by a sociotechnical imaginary connecting forest restoration to societal progress, whereas the approaches of their 1990s′ counterparts seem motivated by a sociotechnical imaginary connecting forest restoration to the task of mitigating society’s impacts. Based on the conclusions, it is argued that future research on forest restoration would benefit from comparing the idealized pasts of both yield- and conservation-oriented conceptions of forest restoration.

Transformative change and policy-making: the case of bioeconomy policies in the EU frontrunners and lessons for latecomers

European Union (EU) policies and initiatives have played an increasingly crucial role in the strategic development of bioeconomy across Europe, albeit in a widely uneven manner. This paper provides an overview of the system and policy changes that allowed some countries to become bioeconomy frontrunners in the EU and derives potential lessons for latecomers from the Central and Eastern European (CEE) region. Theoretically, we rely on the conceptual ideas of sustainability transitions and transformative innovation policy to highlight the nature and challenges of a transition towards bioeconomy. Our results show that the requirements of systemic and policy-supported transitions towards bioeconomy are threefold: stable and long timeframes in policy-making and dynamic change agents (fitting particular systems); participatory processes in policy co-design to co-develop visions; and the societal legitimacy of and commitment to bioeconomy.

Circular economy and second-hand firms: Integrating ownership structures

Sustainable management of materials and resources provides sustainable solutions that form the basis for a circular economy (CE). However, there is limited empirical research that represents the effects of business models on the triple bottom line of sustainability and ultimately contribute to the implementation of CE systems. Therefore, in this study, we aim to explore the role of second-hand firms with different ownership structures and their specific impact in promoting CE. A multiple case study based on semi-structured interviews was conducted in Finland. Findings show that ownership structures and the underlying motivations determine the societal legitimacy and transparency of the second-hand firms that in turn contribute to reducing the environmental burden and improving societal well-being locally. Similarly, results reveal that collaborative approaches among second-hand firms and other stakeholders might improve the circular flow of products and materials, ultimately contributing to the implementation of CE. The main contribution of this study is that it highlights the role of second-hand firms and their ownership structures on the implementation of CE systems at the local level and therefore moves away from traditional business models where production firms are usually the unit of analysis.

Worlds Apart? – The Challenges of Aligning Brand Value for NGO’s

Brands are increasingly part of how international aid and development Non-Government Organisations (NGOs) operate, but there are challenges in aligning NGO brand value across diverse stakeholders. This research explores how key decision makers within one major NGO – Oxfam—construct the challenges of brand value alignment, using an Interpretative Phenomenological Analysis methodology. Three master-themes emerge demonstrating key tensions around aligning NGOs brand value: the difficulty of balancing competing stakeholder needs, the internal cultural conflict around branding, and the existential dilemma underlying the societal effectiveness of NGOs. This paper proposes that NGOs can better navigate these intra—brand tensions using Brand-as-Purpose as an organizing principle; framing shared identity, creating a dynamic container for stakeholder interests and cultivating Moral Capital strongly anchored in increasing recipient wellbeing. This paper is one of the first pieces of research which explores how NGOs make sense of aligning brand value in the context of complex stakeholder cultures and recipient sovereignty. Brand-as Purpose is put forward as an organizing principle to help balance three key tensions around brand value alignment. This paper proposes that Moral Capital anchored in recipient wellbeing underpins NGO brand value and societal legitimacy and needs to be paramount in how NGO’s establish and legitimize their brands.

Corporate Power in the Bioeconomy Transition: The Policies and Politics of Conservative Ecological Modernization in Brazil

The bioeconomy transition is a double-edged sword that may either address fossil fuel dependence sustainably or aggravate human pressures on the environment, depending on how it is pursued. Using the emblematic case of Brazil, this article analyzes how corporate agribusiness dominance limits the bioeconomy agenda, shapes innovation pathways, and ultimately threatens the sustainability of this transition. Drawing from scholarship on power in agri-food governance and sustainability transitions, an analytical framework is then applied to the Brazilian case. The analysis of current policies, recent institutional changes and the case-specific literature reveals that, despite a strategic framing of the bioeconomy transition as a panacea for job creation, biodiversity conservation and local development (particularly for the Amazon region), in practice major soy, sugarcane and meatpacking conglomerates dominate Brazil’s bioeconomy agenda. In what can be described as conservative ecological modernization, there is some reflexivity regarding environmental issues but also an effort to maintain (unequal) social and political structures. Significant agribusiness dominance does not bode well for smallholder farmers, food diversity or natural ecosystems, as major drivers of deforestation and land-use change (e.g., soy plantations, cattle ranching) gain renewed economic and political stimulus as well as greater societal legitimacy under the bioeconomy umbrella.

How do group affiliates benefit from dual legitimacy to acquire resources in emerging economies? Evidence from China

PurposeThis paper aims to examine the relationships between the group affiliates’ dual legitimacy (membership legitimacy and societal legitimacy) and dual resource acquisition (intra-group and out-group), and the moderating roles of environmental uncertainty and munificence in the emerging economies.Design/methodology/approachThis paper adopts hierarchical regression analysis to test the hypotheses based on the unique data of 251 group affiliated firms in China and applies the alternative measurements and alternative methodology of structural equation modeling into robustness check to confirm the results.FindingsThe results show as follows: the group affiliates can benefit from membership legitimacy for intra-group resource acquisition and out-group resource acquisition through the mediations of societal legitimacy and intra-group resource acquisition. However, in the linkage between affiliates’ membership legitimacy and intra-group resource acquisition and the linkage between societal legitimacy and out-group resource acquisition, environmental uncertainty plays the positive moderating roles while environmental munificence plays the negative moderating roles. Under the condition of high environmental uncertainty and low environmental munificence, the linkage between membership legitimacy and intra-group resource acquisition, and the linkage between societal legitimacy and out-group resource acquisition reach the strongest level.Research limitations/implicationsThe findings highlight the importance of dual legitimacy building for group affiliates to acquire resources both inside and outside the business group when they operate in emerging economies characterized by high environmental uncertainty and low environmental munificence. However, it does not explore the contextual factors (e.g. institutional distance) affecting the relationship between the affiliate’s membership legitimacy and societal legitimacy. Then more group-level factors are expected to be included and explored with multi-level models in the future studies.Originality/valueThe findings reveal the mechanism of how group affiliates benefiting differently from dual legitimacy to acquire resources in the emerging economies, which also provide a new interpretation for the questions of who benefiting more from the group affiliation, how and why (Carney et al., 2009). This research also explores the moderating roles of task environmental characteristics (environmental uncertainty and environmental munificence) on the affiliate's dual legitimacy and dual resource acquisition, which helps understand why legitimacy building is more important in terms of resource acquisition in the emerging economy characterized by uncertainty and non-munificence.

Contextualizing Security Innovation: Responsible Research and Innovation at the Smart Border?

Current European innovation and security policies are increasingly channeled into efforts to address the assumed challenges that threaten European societies. A field in which this has become particularly salient is digitized EU border management. Here, the framework of responsible research and innovation (RRI) has recently been used to point to the alleged sensitivity of political actors towards the contingent dimensions of emerging security technologies. RRI, in general, is concerned with societal needs and the engagement and inclusion of various stakeholder groups in the research and innovation processes, aiming to anticipate undesired consequences of and identifying socially acceptable alternatives for emerging technologies. However, RRI has also been criticized as an industry-driven attempt to gain societal legitimacy for new technologies. In this article, we argue that while RRI evokes a space where different actors enter co-creative dialogues, it lays bare the specific challenges of governing security innovation in socially responsible ways. Empirically, we draw on the case study of BODEGA, the first EU funded research project to apply the RRI framework to the field of border security. We show how stakeholders involved in the project represent their work in relation to RRI and the resulting benefits and challenges they face. The paper argues that applying the framework to the field of (border) security lays bare its limitations, namely that RRI itself embodies a political agenda, conceals alternative experiences by those on whom security is enacted upon and that its key propositions of openness and transparency are hardly met in practice due to confidentiality agreements. Our hope is to contribute to work on RRI and emerging debates about how the concept can (or cannot) be contextualized for the field of security—a field that might be more in need than any other to consider the ethical dimension of its activities.

Performance agreements to ensure societal legitimacy in the social housing sector; an embedded case study of implementation in the Netherlands

In 2015 the Housing Act was revised in order to further regulate the social housing sector in the Netherlands and thereby improve the steering possibilities for the central government to coordinate housing associations. This included local performance agreements for social housing policy obtaining a legal status. By introducing this policy instrument central government seeks to facilitate and ensure the tri-partite cooperation between municipalities, housing associations and tenants’ organisations in order to release funds by housing associations for social benefit. This should improve the position of municipalities and tenants’ organisations in social housing, and improve legitimate policy making. In this paper the main research question is: How are local performance agreements implemented targeting increased societal legitimacy in local social housing policy making, and what are its strengths and weaknesses in three selected cases in the Netherlands? A case study research design was used involving three local embedded case studies. As a theoretical framework the Contextual Interaction Theory was used. Data collection involved expert interviews and review of policy documents. Results reveal several weaknesses that impede the implementation of performance agreements, including issues in the broader governance regime and context, as well as issues with the inter-organisational structure and stakeholder interaction regarding the tri-partite cooperation between the key actors. This has to do with the precarious role of the tenants’ organisations in the process, and the local housing policy as the basis of local performance agreements. Results also show that implementation of performance agreements is more difficult in cities with dense urban areas.

An Empirical Investigation of the Regulatory and Non-Regulatory Challenges of the UK Islamic Retail Banking

The paper examines the regulatory and non-regulatory challenges facing the growth of Islamic retail banking in the UK. Our analyses reveal that policy-makers and regulators in the UK have taken many actions to encourage the growth of Islamic finance. However, despite the suitable regulatory environment, UK Islamic retail banks have so far failed to convince consumers of the credibility of their services due to the questionable structure of their products. Intriguingly, the current system of Shar¯ı‘ah assurance is perceived to have several weaknesses which could perhaps lead to ambiguity, confusion and loss of credibility in the eyes of consumers. Our findings also reveal several key religio-ethical considerations. In particular, we highlight that the future of UK Islamic retail banking is bleak unless these issues are urgently tackled by creating a more transparent Islamic banking system and improving the current structure of Shar¯ı‘ah-compliant products to preserve the expected ethical and societal legitimacy of Islamic banks.

Renegotiating societal-military relations in Pakistan: the case of the Pashtun Tahafuz Movement

ABSTRACT This article examines the Pakistani military’s changing response to the Pashtun Tahafuz Movement (PTM), to better understand pathways to military accountability and democratic change. An apolitical, non-violent civil-society movement, the PTM challenged the military’s domestic-security practices for over a year, eliciting uncharacteristic concessions despite the apparent motive, opportunity and precedent for repression. Curiously, though, the role of civil society in renegotiating military behaviour has been overlooked in mainstream civil–military relations, which focuses on coup propensity at one extreme and harmonious democratic configurations at the other. Using first-hand interviews with PTM activists, security officials, commentators and politicians, this study argues that the PTM’s unique appeal to societal and constitutional legitimacy constrained military responses, creating an opportunity to contest military behaviour publicly in a fashion impossible for conventional political elites. Although the military eventually resorted to force, this was itself facilitated by attacks on the underlying parameters of the PTM’s societal legitimacy, underscoring the importance of societal-military relations in the space between civilian control and coup d’état.

Trust as an analytical concept for the study of welfare programmes to reduce child health disparities: The case of a Swedish postnatal home visiting programme

Abstract The aim of this article is to outline a theoretical framework for how the concept of trust can be used as analytical tool for a study of the aim, design, output and societal legitimacy of a Swedish welfare programme conducted to reduce disparities in health and social inequities and to give newborn a positive start in life. This programme, labelled Grow Safely, implies that home visits will be conducted at six occasions at first-time parents by different professionals: child health care nurses, midwifes, dental hygienists and counsellors from the social services. Prior to when the intervention is carried out, the involved professionals in the programme will be participating in training in order to increase the possibility that the home visits will be carried out in similar ways and be followed the same manual throughout the programme. The welfare programme will be based on relationships on different levels: between professionals and parents, between different professionals, between professionals and managers, and between organisations. Trust is believed to be of significance for the development of relationships as well as for the social legitimacy of the implantation of welfare programmes. Therefore, our ambition is to embrace a broad perspective on trust, combining insights from a variety of research traditions and analyses on macro, meso and micro levels in the outline a model for how the concept of trust can be used as an analytical tool for studying welfare programmes like Grow Safely. We argue for that the model can capture the significance of trust at different levels: individual, professional, organisational and societal levels as well as interplays between these levels, and consequently be useful in to analyse implementations of welfare programmes.

Self-employment and eudaimonic well-being: Energized by meaning, enabled by societal legitimacy

This study investigates why and where self-employment is related to higher levels of eudaimonic well-being. We focus on meaningfulness as an important eudaimonic process and subjective vitality as a eudaimonic well-being outcome that is central to entrepreneurs' proactivity. Building on self-determination theory, we posit that self-employment, relative to wage-employment, is a more self-determined and volitional career choice, which enhances the experience of meaningfulness at work and perceptions of work autonomy. In a multi-level study of 22,002 individuals and 16 European countries, meaningfulness at work mediates the relationship between self-employment and subjective vitality and explains this relationship better than work autonomy. We identify moderating effects of context: the societal legitimacy of entrepreneurship in a country affects the choice set of alternative career options that individuals can consider and thus shapes the experience of meaningfulness at work and work autonomy, and thereby indirectly subjective vitality. These findings expand our understanding of eudaimonic well-being, entrepreneurs' work, and the role of context in entrepreneurship and well-being research. They complement existing research on hedonic well-being of entrepreneurs and extend the scarce literature on their eudaimonic well-being.

Institutional work and implementation of a performance measurement and management system in a developing country

PurposeThis paper aims to investigate the actions and activities undertaken by public managers of a local government to institutionalise an externally mandated performance measurement and management (PMM) system in a developing country.Design/methodology/approachA qualitative case study of one of the best-ranked early adopters of PMM in a local government in Indonesia was undertaken, with interviews with public officers at various organisational levels, along with an extensive documentary review. An institutional work perspective was used to explain the types of work undertaken to institutionalise PMM at the organisation.FindingsThe PMM change was shown to be centralised and directed from the top and facilitated by other public officers. The Mayors’ instrumental and political view of PMM as a tool for efficiency and societal legitimacy enabled the adoption of PMM. The political and cultural work of the Mayor and the key officers involved constructing new rules pertaining to PMM, specifically in dealing with resource allocation and its associated sanctions and rewards, which encouraged more substantive implementation. The substantive implementation of PMM had a significant influence on the norms and values of the local government.Research limitations/implicationsThe case organisation is the local government of a relatively medium-sized city. Therefore, it may be easier to achieve tighter control and coordination as compared to the local government of other larger cities.Originality/valueThe paper highlights the interrelated nature of institutional work in the creation and disruption of institutions. In addition, the three main types of institutional work, i.e. political, cultural and technical work, are not mutually exclusive. The paper also indicates the processes involved in the implementation of PMM, which unfolds from the establishment of a policy, its impact, and the role of the actors in the process.

Do Female Directors Signal Indian SME IPOs Quality? Evidence From a Quantile Regression Approach

The purpose of this article is to examine the influence of female directors on the underpricing of small and medium enterprise (SME) initial public offerings (IPOs) in an emerging country like India which is relatively a fruitful setting to investigate. The research in relatively underexplored area is undertaken using a sample of 403 SME IPOs issued between 2012 and 2018. Ordinary least square (OLS) regression (mean regression) and quantile regression (QR, median regression) has been used to examine the signaling role of female directors on listing day performance of Indian SME IPOs. The results unveil that presence of female directors on IPO board reduces the underpricing. However, the negative relationship lacks statistical association between the variables. Similar results have been obtained when proportion of female directors instead of female dummies is used to gauge the impact on underpricing. The study highlights the need to increase the proportion of women directors on board to break the ‘glass ceiling’ and capitalize their talent for improving IPO performance. The extant research investigating the impact of female directors has largely been concentrated on larger companies in developed countries. Thus, the present research contributes to the literature by examining its influence in context of IPOs of smaller firms which needs effective signals to communicate true quality to investors thereby gaining societal legitimacy.