Strategic Venturing as Legitimacy Creation: The Case of Sustainability

Abstract

Legitimacy is crucial for the survival and growth of strategic ventures inside larger corporations. Yet, despite much progress, research on the strategic venturing‐legitimacy nexus, that is, how internal strategic initiatives gain legitimacy and become part of the corporate strategy, remains underexplored. Drawing on the analysis of a longitudinal case study of the development of a sustainability initiative within a major diversified firm, we identified three core mechanisms of legitimation – seeding, energizing and prospering – that turned the concept of sustainability from an internally widely shared moral obligation into a business case. Our study contributes three distinct mechanisms that facilitate the legitimation and the integration of a strategic initiative within the corporate strategy. Moreover, we show how the sequence of legitimation mechanisms matters and highlight the inherently sequenced nature of strategic venture legitimation.

Artful Legitimacy: The Role of Materiality in Practices of Legitimation

“…The first materialisation practice consisted of establishing relations between art and the norms that make it recognisable as well as with its immediate environment. This first set of practices resonates with current research on legitimacy, which suggests that legitimacy proceeds by relating, in the audience's perception, the actions under scrutiny with existing expectations (Reihlen et al, 2021). However, our findings extend this insight by demonstrating that this is achieved not only through discourse and persuasion but also through the material ways in which the actions are accomplished.…”

“…Some studies have hinted at materiality's role in legitimation. For instance, Reihlen et al (2021) note that strategic targets can be materialised in artefacts to make them durable.…”

“…artistic practice) and the norms through which audiences evaluate them (Alexander & Bowler, 2021; Weiner, 2019). Suchman (1995) notably distinguished between an audience’s perception of pragmatic, moral and cognitive legitimacy, and Reihlen, Schlapfner, Seeger, and Trittin-Ulbrich (2021) similarly noted that the public assesses the resources, the discursive and relational processes and the persuasive efforts that a firm deploys to establish its legitimacy. Legitimacy is in the eyes of those who evaluate it, and assessments can ‘stockpile’ to form the audience’s disposition towards the organisations (Baba, Sasaki, & Vaara, 2021).…”

“…Some studies have hinted at materiality’s role in legitimation. For instance, Reihlen et al (2021) note that strategic targets can be materialised in artefacts to make them durable. Furthermore, the selection of objects, furniture and spatial design can legitimise local actions with respect to a company-wide strategy (Arnaud, Mills, Legrand, & Maton, 2016).…”

“…This means that legitimation is not achieved with respect to an external audience, as is implied by the focus on stakeholders’ perceptions (Reihlen et al, 2021; Suddaby, Bitektine, & Haack, 2017), incumbents’ recognition of legitimate new players in the field (De Clercq & Voronov, 2009) or the distinction between internal and external legitimacy (Drori & Honig, 2013). Indeed, the assumption that legitimation requires an audience rests on a conventional view of communication in which emitters ‘send’ legitimation signals to recipients.…”