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Rethinking the Relationship Between Reputation and Legitimacy: A Social Actor Conceptualization

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Abstract

Legitimacy and reputation are both perceptions of approval of an organization's actions. Legitimacy is a perception that organizations conform with taken-for-granted standards. Reputation is a perception that organizations are positively distinctive within their peer group. While the need for inclusion and distinction may seem somewhat contradictory on its face, we maintain that both functional demands are grounded in an organization's adopted social identities, or social identity referents, characterized herein as social category memberships. Social identities constitute an organization's reference group and provide stakeholders with standards by which assessments of the organization are made. Organizations are seen as having legitimacy when they comply with the minimum standards of a particular social identity prototype – a prototypical X-type organization. Organizations have good reputations when they are viewed favorably relative to the ideal standard for a particular social identity – an ideal, or esteemed, X-type organization. Conventional thinking holds that legitimacy is a requirement of all organizations, whereas reputation is a desirable, but not essential property. This paper argues that, from the perspective of identity theory, reputation and legitimacy are complementary, reciprocal concepts, linked to the dual identification requirements: who is this actor similar to and how is this actor different from all similar others. The implications of this ‘fresh perspective’ for organizational reputation scholarship are discussed.

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Notes

  1. Both Zuckerman (1999) and Hannan et al. (2007) use the term social identity. In Zuckerman's case, social identities constrain a firm's identity by defining its legitimacy requirements and specifying its audience, and for Hannan et al., identity, more generally, refers to a ‘virtual social identity’ that sets expectations that audiences have of an organization (2007: 101–102). We subscribe to the same use of the term ‘social identity’ as offered by these scholars.

  2. Institutional scholars may note a similarity between our notion of minimum standards and institutional logics (eg Friedland and Alford, 1991; Clemens and Cook, 1999). From institutional logics, organizations learn recipes for attaining legitimacy. We simplify this somewhat by arguing that minimum standards simply designate the most basic recipe for legitimacy – what we refer to as a member prototype.

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Acknowledgements

We acknowledge valuable feedback from Teppo Felin, David Deephouse, Greta Hsu and the Organizational Research Group at BYU on earlier versions of this paper.

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  1. Kellogg School of Management, Northwestern University, Evanston, IL, USA

    Brayden G King

  2. Marriott School of Management, Brigham Young University, Provo, UT, USA

    David A Whetten

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King, B., Whetten, D. Rethinking the Relationship Between Reputation and Legitimacy: A Social Actor Conceptualization. Corp Reputation Rev 11, 192–207 (2008). https://doi.org/10.1057/crr.2008.16

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