Legitimacy Strategies in a Globalized World: Organizing for Complex and Heterogeneous Environments

University of Zurich, Chair of Foundations of Business Administration and Theories of the Firm, Working Paper No. 202

58 Pages Posted: 20 Dec 2011 Last revised: 4 Jan 2012

See all articles by Andreas Georg Scherer

Andreas Georg Scherer

University of Zurich - IBW Department of Business Administration

Guido Palazzo

University of Lausanne

David Seidl

University of Zurich - Department of Business Administration (IBW)

Date Written: January 3, 2012

Abstract

Corporate legitimacy can be understood as the social acceptance of a corporation and its behaviour. The social and environmental side effects of the production, distribution, and consumption of goods and services increasingly create legitimacy problems for corporations, which now occupy centre stage in the debate on sustainable development. Corporate legitimacy is vital to the survival of corporations in competitive environments. The literature distinguishes three strategies that corporations commonly employ to address legitimacy problems: adapt to external expectations, try to manipulate the perception of their stakeholders or engage in a discourse with those who question their legitimacy. This paper investigates when and how corporations should apply these different strategies, a question that has so far been largely neglected. We suggest that corporations have to activate all three legitimacy strategies, despite their inherent incompatibilities. Discussing the legitimacy challenges corporations face with relation to sustainable development, we will develop a theoretical framework for three legitimacy strategies and their organizational prerequisites.

Keywords: Globalization, Institutional Theory, Legitimacy, Paradox, Sustainability

Suggested Citation

Scherer, Andreas Georg and Palazzo, Guido and Seidl, David, Legitimacy Strategies in a Globalized World: Organizing for Complex and Heterogeneous Environments (January 3, 2012). University of Zurich, Chair of Foundations of Business Administration and Theories of the Firm, Working Paper No. 202 . Available at SSRN: https://ssrn.com/abstract=1974193 or http://dx.doi.org/10.2139/ssrn.1974193

Andreas Georg Scherer (Contact Author)

University of Zurich - IBW Department of Business Administration ( email )

Plattenstrasse 14
Zurich, 8032
Switzerland
+41 44-63 45302 (Phone)
+41 44-63 45301 (Fax)

HOME PAGE: http://www.business.uzh.ch/professorships/as.html

Guido Palazzo

University of Lausanne ( email )

Quartier Chambronne
Lausanne, Vaud CH-1015
Switzerland

David Seidl

University of Zurich - Department of Business Administration (IBW) ( email )

Hottingerstrasse 10
Plattenstrasse 14
Zurich, 8032
Switzerland

HOME PAGE: http://www.om.uzh.ch

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