Legitimacy Processes in Organizations: Volume 22

Before addressing these three issues, I provide some background on the key theoretical approaches to legitimacy employed in this volume: two legitimacy theories in social psychology and institutional theory in organizational analysis. Virtually every contributor draws upon at least one of these theories; several authors draw upon two of these theories, offering a way to bridge them and/or apply them to a substantive concern.

Three theories of legitimacy – Dornbusch and Scott’s “Evaluation and the Exercise of authority” (EEA), Walker and Zelditch’s “Legitimacy and the Stability of Authority” (LSA), and Meyer and Rowan’s “Institutonalized Organizations” (IO) – are integrated into a single consistent theory interrelating the internal and external legitimacy processes of organizations. One consequence of IO, the decoupling of sanctions, evaluations, and performance, contradicts EEA and LSA. The contradiction is addressed by aligning the scope of the three theories, which proves to be the source of the contradiction, accommodating their principles to the change in their scope. Translating their terms into a single, consistent language, auxiliary principles are formulated that interrelate their legitimacy processes and conditionalize pressures for evaluation and control and therefore the decoupling of sanctions, evaluations, and performance – the conditions depending on type of environment, extent of dependence on it, and its organization. Integration does not alter the basic principles of EEA or IO but does correct LSA’s over-estimation of the stability of authority and provides IO with a mechanism by which and refines the conditions under which sanctions, evaluations, and performance come to be decoupled.

Teamwork represents a democratic logic that may contradict the bureaucratic logic characterizing many organizations. I develop arguments based on new institutional theory suggesting that such a contradiction threatens a team’s legitimacy. My study of 71 teams lends support for two claims that capture a legitimacy paradox confronting teams: (1) Egalitarian work processes do correspond to more effective interactions within teams, however (2) To the extent that egalitarianism is uncommon in the organization in which a team is embedded, external evaluations of team effectiveness are less favorable. I discuss the implications of these arguments for subsequent research on organizational teamwork.

The use of routines in the decision-making process of individuals, groups and organizations is a well accepted yet taken for granted phenomenon. One goal of organizations is to develop group routines that are efficient, but at the same time flexible. However, this presents a paradox because routines that are efficient at one point in time, or for a particular task, may persist, be unquestioned, and become increasingly inefficient for the group and the organization. This chapter develops a formal theory that describes the processes by which the legitimation of particular group structures impacts the development and use of group routines. The theory presented draws from theories of legitimation, expectation states theory, and institutional theory. The theory formally depicts three sources of legitimation: a referential belief structure (set of cultural beliefs) about expertise and leadership, authorization or superordinate support of a leader, and endorsement (support by group) of a leader. Specifically, the theory addresses: (1) how different sources of legitimation make groups more or less hierarchical; and (2) how the different sources of legitimation make group routines more or less flexible.

Bourdieu clearly articulates how cultural capital works at the macro-level and how it leads to the reproduction and legitimation of inequality. He is less clear about other levels of analysis. We address this gap by drawing on social psychological theories and by suggesting that cultural capital is best treated as a multi-level concept – with “cultural capital” produced at the macro-level, “subcultural capital” produced at the meso-level, and “multicultural capital” produced at the micro-level. We illustrate with an exploratory analysis of an advertising agency in Eastern Europe, thereby highlighting legitimacy processes occurring among its departments and personnel.

We empirically examine the institutional dynamics attending the process whereby legitimate organizational symbols become illegitimate. We conducted two studies, one historical and one comparative, of those firms that appended “dot-com” to their names during the period of “Internet euphoria,” 1998–1999. The first study analyzes the legitimacy over time for one case, that of Egghead software, the first organization to affix “dot-com” to its name. The second study compares the legitimacy of firms named “dot-com” in the wake of the “dot-com” crash, using both public perceptions and financial valuations. Results from the two studies indicate that good organization names can go bad rather quickly and illustrate how swift and definitive the process of deinstitutionalization can be.

This paper analyzes a multidimensional model of organizational legitimacy, competencies, and resources in order to develop the linkage between institutional and resource-based perspectives by systematically detailing relationships among these factors and organizational viability. The underlying mechanisms of isomorphism and market partitioning serve as a point of departure by which the effects on organizational persistence of two sociocultural processes, cultural (constitutive) legitimation and sociopolitical (regulative) legitimation, are distinguished. Using data on 589 national self-help/mutual-aid organizations, this chapter explores how isomorphism and market partitioning foster legitimacy and promote organizational viability. Results show that the more differentiated an organization’s core competencies and resources, the greater the sociopolitical legitimacy; the more isomorphic an organization’s competencies and resources, the greater the cultural legitimacy. The latter isomorphic processes, however, do not promote greater organizational viability. In fact, while isomorphism legitimates with respect to cultural recognition, it is heterogeneity, not homogeneity, that promotes organizational survival.

Processes of legitimacy and justice pervade work organizations. Here we focus on how legitimacy (collective sources of support for an authority) and procedural justice (use of fair procedures) affect how individuals interpret and respond to situations involving unfair outcomes such as underpayment. We draw upon the legitimacy perspective of Walker and Zelditch and the procedural justice approach of Tyler to develop two new models, one in which the two factors constitute objective and independent contextual elements and one in which perceptions of legitimacy and procedural justice are reciprocal. Both models have implications for understanding fairness and compliance in organizations.

This chapter revisits and extends the multiple-source, multiple-object theory of legitimacy in organizations. It introduces the idea of legitimized regimes and uses it to extend the theory’s range beyond the usual focus on power and domination. The theory describes mechanisms that: (1) establish the legitimacy of new or contested regimes; and (2) facilitate the spread of legitimacy to structures and processes that lie outside organizational boundaries. The chapter uses current affirmative action debates to illustrate the mechanisms under study. The work concludes with a summary that includes discussion of prospects for research on extensions of the multiple-source, multiple-object theory.