1. Organizational legitimacy as a social evaluation Alex Bitektine, HEC Montreal 2012-08-041Pecha Kucha Presentation

2. The Institutional World Myriads of isomorphic organizations comply, conform, and acquiesce, driven by fear and uncertainty… But it is not all doom-and-gloom, because from time to time institutional entrepreneurs defy the status quo and change the social norms – Deinstitutionalize existing structures and practices – Institutionalize the new ones …And the new organizations, structures and practices will survive and persist for years or even centuries if… 2012-08-042Pecha Kucha Presentation

3. Legitimacy 2012-08-043Pecha Kucha Presentation What’s inside? Where can you get it? (Can I buy it?) How much of it do you need? How long does it last? Is it good for everyone? Are there any side effects? Overdose symptoms? Interactions? Are there different recipes? Can I use something else instead? ? …they can get

4. Legitimacy The most popular definition: – “… 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 definitions” (Suchman, 1995) The longest definition (enumerative): 2012-08-044Pecha Kucha Presentation What’s inside? ScopeThe concept of organizational legitimacy covers perceptions of an organization or entire class of organizations, judgment/evaluation based on these perceptions, and behavioral response based on these judgments … Evaluating audience … rendered by media, regulators, and other industry actors (advocacy groups, employees, etc.), who… Perceived dimensions … perceive an organization’s processes, structures, outcomes of its activity, its leaders, and its linkages with other social actors and… Analytical processing …judge the organization either by classifying it into a preexisting [positively evaluated] cognitive category/class or by subjecting it to a thorough sociopolitical evaluation, which… Benefit diffusion … is based on the assessment of the overall value of the organization to the individual evaluator (pragmatic legitimacy), his social group, or the whole society (moral legitimacy) and, … Compliance mechanism … through the pattern of interactions with the organization and other social actors, the evaluating actor supports, remains neutral, or sanctions the organization depending on whether the organization provides the benefit(s) prescribed by the prevailing norms and regulations. (Bitektine, 2011)

5. 2012-08-045Pecha Kucha Presentation 1) Cognitive legitimacy 2) Sociopolitical legitimacy A set of legitimacy dimensions D (1,2, … i) derived from environmental constraints, Organizations ’ performance P Di on these dimensions as perceived by the stakeholders, A threshold level of acceptable performance T Di on each of these dimensions, and The relative importance W Di of each of these dimensions to the stakeholder (W Di values represent weights applied to the respective legitimacy dimensions such that Σ i (W Di )=100%). The overall sociopolitical legitimacy L of an actor with a given stakeholder: What’s inside? (Bitektine, 2008) (Aldrich & Fiol, 1994) Sociopolitical legitimacy:

6. Legitimacy Isomorphism, conformance, compliance (Meyer & Rowan, 1977, DiMaggio & Powell, 1983) Legitimating ties (Baum & Oliver, 1991) Institutional entrepreneurship (DiMaggio, 1988; Eisenstadt, 1980) / work (Lawrence, 2006) – Symbolic acts (Meyer & Rowan, 1977; Fiss, 2006) – Member mobilization (Barnett, 2006; Olson, 1965) – Professionalization (Greenwood & Suddaby, 2006) – Membership strategies (Lawrence, 1999) – Rhetorical strategies (Suddaby, 2005) – Discourse (Maguire, et al., 2004; Golant & Sillince, 2007) – Framing (Benford, 2000; Kaplan, 2008) … 2012-08-046Pecha Kucha Presentation Where can you get it? (Can I buy it?) Are there different recipes?

7. Legitimacy 2012-08-047Pecha Kucha Presentation Are there any side effects? Overdose symptoms? Interactions? Is it good for everyone? Side effects: – Legitimacy gained through isomorphism comes at a cost of competitive differentiation (Deephouse, 1999; Miller & Chen, 1995) – Limits the resource acquisition choices (Oliver, 1997) Overdose (little evidence): – Organizational sacrilege (Harrison, Ashforth & Corley, 2009) Interactions (little evidence): – With identity? (Ruef, 2000; Weber, Heinze & DeSoucey, 2008) – With personality traits and orientations (Tost, 2011)

8. Legitimacy To a large extent YES! Observation: In development of a reflective scale for measurement of cognitive legitimacy, sociopolitical legitimacy, reputation, and status (Bitektine, Vandenberghe, Hill; in progress): – Correlation Reputation – Sociopol. Legitimacy = 0.79 – Correlation Reputation – Status = 0.66 – Correlation Sociopolitical Legitimacy – Status = 0.51 – Cognitive legitimacy – fairly distinct from all others NOTE: Pearson correlations of the means, N = 393. NNFI = 0.97, CFI = 0.98, RMSEA = 0.077. 2012-08-048Pecha Kucha Presentation Can I use something else instead?

9. So Where Is the Magic? Judgment aggregation – How do we arrive to the “overall legitimacy”? – Judgments about multiple features – Judgments by multiple actors / audiences – Judgments based on incomplete information Outcome attribution – Correlations and regressions do not imply causality + left censoring issue (=> we need experiments!) – Are we dealing with outcomes of legitimacy or it is reputation, status, celebrity, CEO charisma, etc. that cause the outcome? (=> we need to establish the discriminant validity of our constructs!) 2012-08-049Pecha Kucha Presentation Does it actually exist?

10. Legitimacy: Work Needed Measurement issues – Validation of proxy measures – Discriminating legitimacy from reputation, celebrity, status, etc. – How much legitimacy (and of what kind) do you need to elicit support or to achieve acceptance? – How low can you go before you trigger sanctions? Micro-organizational perspective – Is it legitimacy that causes the outcome? – If so, how does it work in evaluators’ heads? How does it translates into organization-level outcomes? 2012-08-0410Pecha Kucha Presentation How much of it do you need? How long does it last? Is it legitimacy?