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Organizational Implications of Managing Corporate Legitimacy in Complex Environments – A Longitudinal Case Study of Puma

University of Zurich, Department of Business Administration, UZH Business Working Paper No. 321

57 Pages Posted: 5 Feb 2013 Last revised: 1 Jul 2013

Dorothée Baumann-Pauly

New York University, Center for Business and Human Rights

Andreas Georg Scherer

University of Zurich - IBW Department of Business Administration

Guido Palazzo

University of Lausanne

Multiple version iconThere are 3 versions of this paper

Date Written: November 3, 2012

Abstract

Corporations are operating in complex business environments. The globalization of markets has transformed the division of labor between governments and corporations and today, corporations are expected to take over a political role in global governance processes and provide public goods such as standards for safe work places or environmental protection. Corporations that assume economic and political responsibilities are, however, confronted with heterogeneous, often contradictory, demands of a highly diverse range of stakeholders. Managing these demands poses new organizational challenges for the corporation. In this paper, we explore how corporations respond to complex stakeholder environments and we analyze the legitimacy strategies that corporations employ to maintain their license to operate. In particular, we study the organizational prerequisites for managing legitimacy and how they are changing over time. We draw on the literature on institutional theory and organizational paradoxes and conduct an empirical case study at the sportswear manufacturer PUMA. The results of our qualitative longitudinal study show that managing corporate legitimacy is a dynamic concept and corporations learn over time to adequately adapt organizational capacities, structures and procedures. Based on the findings of our explorative case study, we conclude our article by formulating testable hypothesis.

Suggested Citation

Baumann-Pauly, Dorothée and Scherer, Andreas Georg and Palazzo, Guido, Organizational Implications of Managing Corporate Legitimacy in Complex Environments – A Longitudinal Case Study of Puma (November 3, 2012). University of Zurich, Department of Business Administration, UZH Business Working Paper No. 321. Available at SSRN: https://ssrn.com/abstract=2211482 or http://dx.doi.org/10.2139/ssrn.2211482

Dorothée Baumann-Pauly

New York University, Center for Business and Human Rights ( email )

44 West 4th Street
New York, NY NY 10012
United States

Andreas Georg Scherer (Contact Author)

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

Universitätsstrasse 84
Zurich, 8006
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 )

Lausanne, Vaud CH-1015
Switzerland

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