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Flashcards in Legitimacy Deck (17):
1

Legitimacy definition

Zimmerman and zeitz
View legitimacy as a social judgement of acceptance, appropriateness and or desirability
Legitimacy is not self decreed and cannot be self proclaimed because it depends upon the options of those who are evaluating the subject

2

LON liability of newness

Younger orgs have a higher propensity to fail than older ones
Stinchcombe

3

Meyer and Rowan

To survive a venture needs legitimacy, social support and approbation from consistants from its institutional environment

4

Legitimacy strategies

Conformance
Selection
Manipulation
Creation
Zimmerman zeitz

5

Entrepreneurs gain legitimacy from

Storytelling (martins et al)
Symbolic management (zott and huy)
Visual symbols (Clarke)

6

Zimmerman zeitz reputation

Oil industry tarnished - oil spill Exxon in Alaskan waters
Chemical industry - environment groups attackrd
Banking and medicine - legitimate

7

Lounsbury and Glynn

legitimacy as a process where orgs continuously make and remake stories to maintain their identity. These efforts importantly complement and extend other strategic efforts by firms that focus on gaining and sustaining competitive advantages

8

LON internal and external hurdles

Internal - lack of reliable routines, learning new roles
External - legitimacy (lack of), uncertainty of environment
Competition

8

Sources of legitimacy

Regulatory - adhering to regs, rules and standards
Moral - societal judgement on is this right
Cognitives - taken for grantedness assumptions
Industry - product, services and practices acceptable - eg Zimmerman oil and chemical and Medicine/ bank

9

Ventures institutional legitimacy

Society looking in
Confirming to institutional expectations of environment by
abiding to regs,
seek endorsement,
build credible management,
expose value norms
and certification

10

Strategic legitimacy

Manipulation external actors perceptions of venture
Managers looking out
So signalling appropriate symbols: lobbying advertising, impression management, networking, resource combination
Distance from institutionalised claims
Red note banks - donkey ad

11

Legitimacy consequences

Business consequences
Legality
Costs of having it (impressive grounds)
Legacy (have to live up to stated things)


Personal consequences
Example - oak digital marketing
Some had tried to gain legitimacy by focusing on sustainability - however some stakeholders didn’t actually care, so then they focus less on that then can feel demoralised


Legitimacy lies
Misrepresentation (increase sales, appear larger, optimism)

12

Legitimacy process model

Zimmerman and zeitz
Strategies - legitimacy - Resources - survabl - growth

13

Zott and huy

Symbols represent an integral part of people knowledge structures
Personal credibility - taken for grantedness
Professional organising - formal structures, managing resources
Organisational achievement - judged on what accomplished
Quality of relationships - prestige, personal attention

14

Clarke reading

With the use of visual cues entrepreneurs manage the expression of their emotions and also make sure that stakeholders experience positive emotions by careful managing surroundings.

Findings suggest that serial entrepreneurs better at effectively using symbols.

Stories aren’t enough

15

Couplan technologies
Clarke

Used formal business dress as a means to framing his venture as having the same procedure and processes as larger org

16

Ruthford et al

Utilitarian logic suggested that entrepreneurs deliberate lying to a finance is ethical when it apparently leads to more benefits than harm (eg jobs) but they have negative effect on trust in long run between entrepreneurs and financier and stakeholder

However under deontological perspective intentional misrepresentation is always wrong