Beyond legitimacy: legitimacy types and organizational success

Abstract

Purpose -The purpose of this paper is to clarify and extend knowledge concerning the relationship between legitimacy and organizational success within the framework of institutional theory. Design/methodology/approach -While previous research has found links between legitimacy and organizational success, the authors test this assumption by case analysis, on a sample of thirteen Spanish Mutual Guarantee Societies. Data were collected from survey questionnaire and Annual Financial Reports. Findings -Results of the empirical examination confirm that, within this population, organizations with greater legitimacy obtain better organizational results as well as improved access to resources. The findings also show that not all dimensions of legitimacy contribute equally to organizational success. Practical implications -For managers, the authors have included a recommendation that legitimacy is an important element of an organization's success that must be strategically managed and be considered as a required goal in the organization's strategic planning process. Managers should analyze legitimacy, in their own activity sector, to identify the most useful types of legitimacy. In the specific case of Spanish MGSs, the most beneficial strategic actions are those geared towards obtaining pragmatic legitimacy. Originality/value -The analysis provides a new approach to measure legitimacy. It also provides empirical advances to the organizational legitimacy process, showing its usefulness as a key factor for organizational success.

Determinants of environmental disclosures of listed firms in Ghana

“…Thus, in order to acquire the resources, these organisations must constantly interact with their environment. Impliedly, the performance and survival of an organisation in part is dependent on the support it receives from its immediate environment (Díez-Martín et al 2013;Chelli et al 2014). Ingley (2008) posits that the social and environmental implications of a firm's economic activity have led to a significant increase in the demands placed on companies in relation to the sustainability of their behaviour and the information which they provide.…”

“…But in a bid to gain legitimacy, most organisations have recognized the relevance of their environment to their businesses and the need to safeguard it. As Díez-Martín et al (2013) maintain, a number of organizations have failed not because they lack resources or because of faulty products, but due to a complete loss or deterioration of their legitimacy. Consequently, research on environmental disclosures has gained prominence in recent times.…”

Enacting change through borrowed legitimacy: an institutional perspective

“…Aggravating the already problematic agenda of extending legitimacy, having the objective of enacting change implicitly requires defiance of social norms. According to institutional theory, an organization that fails to conform to social norms, and seeks to extend legitimacy will have great difficulty in obtaining legitimacy (Meyer & Rowan, 1977;Ashforth & Gibbs, 1990;Powell & DiMaggio, 2012;Díez-Martín et al, 2013).…”

“…For example, it is easy to imagine a church patron trusting the advice of his/her church leader regarding an auto-mechanic's trustworthiness and ability simply because they trust their church leader's evaluation of the auto-mechanic. Similarly, as organizations gain legitimacy from existing constituents, it becomes easier to gain legitimacy from subsequent constituents (Aldrich & Fiol, 1994;Powell & DiMaggio, 2012;Díez-Martín et al, 2013;Peeters et al, 2014).…”

“…Implicit in enacting change is the proposition that change can be planned purposively and executed. Legitimacy is at the heart of an organization's ability to obtain resources, and ultimately achieve its objectives-in this case, enacting change; an organization obtains legitimacy from constituents to the extent that the organization conforms to society's norms, values, and expectations (Meyer & Rowan, 1977;Pfeffer & Salancik, 1978;Díez-Martín et al, 2013;Peeters et al, 2014). The objective of enacting change is troublesome to institutional theory because it contradicts the notion of conforming to social norms (Scott, 2008).…”