Legitimacy in Organizational Institutionalism Deephouse and Suchman Presented

Legitimacy in Organizational Institutionalism Deephouse and Suchman Presented by Amanda Hinojosa

Evolution of Legitimacy �Beginnings: Weber �legitimacy of authority types �New institutional theory �Meyer and Rowan (1977) � Legitimacy results from being efficient and from conforming to institutionalized myths in the organizational environment. � Legitimacy insulates the organization from external pressures �Zucker (1977)

Definitions of Legitimacy �Meyer and Scott (1983) �The degree of cultural support for an organization �Pfeffer and Salancik (1978) �Legitimacy is known more readily when it is absent than when it is present. �Knoke (1985) �The acceptance by the general public and the relevant elite organizations of an association’s right to exist and to pursue its affairs in its chosen manner.

Legitimacy: Gains and Losses �Galaskiewicz (1985)- Organizations seek to gain legitimacy �Ashforth and Gibbs (1990)-Purposes of legitmation efforts: �Gaining �Maintaining �Defending �Elsbach (1994), Elsbach and Suttion (1992)

The turning point-1995 �“Legitimacy is not a commodity to be possessed or exchanged but a condition reflecting cultural alignment, normative support, or consonance with relevant rules or laws” (Scott 1995: 45) �“Legitimacy is a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs and defintions” (Suchman 1995: 574)

Normative legitimacy �Normative legitimacy IS NOT Normative isomorphism �Normative legitimacy- congruence with general social values �Normative isomorphism-congruence with eithics and worldviews of formal professions

Professional vs. Normative �Normative legitimacy IS NOT Normative isomorphism �Professional legitimacy-legitimacy conferred by professional endorsement (on any grounds) �Normative legitimacy- legitimacy conferred by any audience (including but not limited to professionals)

Measuring ‘taken-for-grantedness’? �Absence of questioning—problem is research asks questions, which then violates the taken-forgrantedness �Archival- Number of media articles (greater numbers=more legitimacy �Problems (i. e. car industry) �If completely taken for granted… �Any brilliant ideas from the class?

Subjects of legitimation �Almost anything! �BUT beware of aggregating lower-level subjects of legitimacy to assess legitimacy of higher-level subjects

Sources of legitimacy �Who has collective authority over legitimation in any given setting? �Depends on focus of research question �Society at large, specific legitimacy-granting authorities, media, interorganizational relations �What type of research questions would warrant looking at each of the possible sources of legitimacy?

Sources of Legitimacy �Common sources of legitimacy are often also organizations �Legitimate sources of legitimacy? �Legitimate to some may be illegitimate to others �What problems does this introduce into research questions about legitimacy? �Absence of legitimacy challenges a good way to measure legitimacy?

Legitimation processes �Need for research on the order in which different sources confer legitimacy and the different dimensions of legitimacy are conferred. �Ideas on possibilities?

Antecedents of Legitimacy �Technical efficiency, conformity to institutional myths (Meyer and Rowan 1977) �Tested by Deephouse (1996)—legitimacy to one audience may not mean legitimacy to another �Suchman-Organizations may also gain legitimacy by manipulating rather than conforming to environments �Use of text to gain legitimacy

Consequences of Legitimacy �Enhances organization survival �Strategic view of legitimacy�Legitimacy can be manipulated to achieve organizational goals �Legitimacy affects competition for resources �Various types of legitimacy can affect other performance measures

Legitimacy, status and reputation �Status: socially constructed, intersubjectively agreedupon and accepted ordering or ranking of social actors (Washington & Zajac, 2005)…based o n esteem or deference �Reputation: is a generalized expectation about a firm’s future behavior or performance based on collective percepetions of past behavior on performance (Ferguson, Deephouse, & Ferguson, 2000)

Your thoughts? �Why should we look at legitimacy? �What questions are best answered by looking at legitimacy (as opposed to looking at status or reputation)? �How do you think legitimation, reputationbuilding and status-seeking intersect and overlap?

Legitimacy Source-Conformity to social guidelines Visibility and Credibility Presumption of propriety Criterion for status-group membership Status Evaluation by Legitimation sources Standing and mobility Source-Ascription and Group Mobility Reputation Source-Achievement and self-presentation Increased returns to performance

Discussion �Legitimacy and its dimensions are analytic concepts (not fully separable empirical phenomena) �Investigate the sources of legitimacy, and legitimacy at multiple levels of analysis �Draw on work of other disciplines to improve understanding of organizational legitimacy

New research suggestions �Births and deaths of legitimating sources �Legitimation at multiple levels �Within organizations �Among organizations �Within organizational fields

OT questions �Why do organizations exist? �Why are firms the same/different? �What causes changes in organizations? �Why do some firms survive and others don’t? �What are the emerging issues?