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This volume explores organizational legitimacy in business, featuring examples from a variety of industries around the world. Synthesizing the most current theoretical insights and best practices, the contributing authors examine the ways in which organizational legitimacy can be understood, its perceived influence on the market, and the relationship between organizational legitimacy and overall organizational success. The authors draw from different methodological perspectives to develop a holistic approach to organizational legitimacy that transcends the traditional concepts of corporate reputation, business ethics or corporate social responsibility.

Historically, efforts to understand how organizations acquire, manage and use legitimacy have applied insights from institutional theory, resource dependence theory, organizational ecology and stakeholder theory, but the field has remained fragmented, despite the profound implications of achieving legitimacy for ensuring organizational stability, survival and sustainability through access to capital, resources and business opportunities, as well as problem solving, performance measurement and stakeholder support. Presenting case studies of successful initiatives, the book addresses:

· How organizational legitimacy is defined and measured

· How organizations achieve legitimacy and how they acquire resources

· How different stakeholders (e.g., consumers, investors, employees) make legitimacy judgments and resource allocation decisions

· Whether audiences in the same socio-cultural context arrive at shared legitimacy judgments with regard to a focal organization



Chapter 1. Criteria for Evaluating the Organizational Legitimacy: A Typology for Legitimacy Jungle

The legitimacy of organizations is a conceptual and scientific approach developed theoretically from different disciplines. For the measurement and analysis of legitimacy, researchers have developed typologies, coinciding in many aspects, but with significant differences in others. The diversity of typologies has its origin in the scientific theories not only on which framework the researchers who create them move but also in the object and method of analysis. This has led to the emergence of a profusion of terms used to evaluate the legitimacy of organizations. This gives rise to a jungle of terminology that makes it difficult for researchers to work, especially when empirical research is done. The present work establishes a typology of legitimacy, by taking into account the contributions of different authors, who contribute to define different aspects of the legitimacy of organizations. At the same time, we divide some concepts to achieve a greater clarity and definition of them, a relevant issue when trying to measure and evaluate. In this way, we create a somewhat broader typology than we usually find, defining eight types of legitimacy rather than the three or four types that we generally find in the literature.
Emilio Díez-de-Castro, Marta Peris-Ortiz, Francisco Díez-Martín

Chapter 2. Refocusing Isomorphism to Explain Organizational Legitimacy: A New Approach

Isomorphism is the process by which organizations adopt similar structures, routines, or even strategies. Through this process, organizations obtain legitimacy and become institutionalized. This paper criticizes the traditional definition of isomorphism by suggesting that the idea of similarity has been used to imply that organizations are static, which is only true in a small number of cases. In reality, most organizations change according to internal or external contingency factors. The authors note that isomorphism is at the same time a process as well as a state that is reached by sharing essential organizational characteristics. Through this redefined approach to isomorphism, common characteristics are studied, and new propositions are put forth to improve our understanding on how organizational structures are built while also acknowledging and explaining differences among them.
Emilio Díez-Martín, Emilio Díez-de-Castro, Adolfo Vázquez-Sánchez

Chapter 3. Organizational Legitimacy Research: Contributing Countries and Institutions from 1995 to 2014

Organizational legitimacy has raised great concern in management research; however, no bibliometric studies have been conducted in this field. The aim of this paper is to show the structure formed by the countries and institutions that contribute to research on organizational legitimacy. The development and evolution of organizational legitimacy as a field of study is shown through a bibliometric study in four 5-year periods (from 1995 to 2014). The results provide information on the main countries and institutions that contribute to research in the field of organizational legitimacy, the lines of research that have been developed and who share them, how legitimacy research between countries and institutions is related, which countries and institutions represent real turning points in this field and how the dissemination of organizational legitimacy research between countries and institutions has evolved. In general, this paper shows how since the beginning of research on the concept of legitimacy applied to organizations and the countries that have generated the highest frequency of citations are the USA, Canada, England and Australia, followed later by China, the Netherlands, France and Spain, while the institutions with the most significant frequencies are Univ. of Alberta, Penn State Univ., Harvard Univ., Warwick Univ., York Univ. and Erasmus Univ. This study provides a comprehensive review of the contributors to the discipline of organizational legitimacy, different schools and lines of research, as well as a starting point for future researchers to continue to build a solid theoretical base.
Francisco Díez-Martín, Louis Diez, Alicia Blanco-Gonzalez

Chapter 4. Organizational Legitimacy: Study of Academic Publications in Scientific Journals

The purpose of this research is to develop a study to observe the evolution in the generation of knowledge in the thematic on organizational legitimacy and delimit the areas of knowledge from which scientific production developed so far has been addressed. A bibliometric study of quantitative-descriptive character was carried out of the bibliographic material that addresses the study of organizational legitimacy, considering the scientific article as a unit of analysis. The database object of analysis is developed from an advanced search for terms in the international database Scopus of Elsevier Science. As a result of the search terms, 300 articles were obtained which were collected and processed using Microsoft Office Excel software. The first article was published in 1975, but it is in 2013 and 2014 when a significant growth is observed in the number of publications. The United States and the United Kingdom are identified as the two countries with more affiliations of authors, authorship, and centers, although the most productive authors belong to Spain. This research work provides information to researchers on the current state which the research is in and defines the areas of knowledge from which the study of organizational legitimacy has been approached—information that allows the academic community to assess the degree of maturity of research in this thematic area, as well as those areas of knowledge or approaches which have not been sufficiently addressed by the scientific literature.
José Álvarez-García, Claudia Patricia Maldonado-Erazo, María de la Cruz del Río-Rama

Chapter 5. Political Segmentation of State Legitimacy: The Case of Spain

The state legitimacy is the degree of citizen support to its institutions. However, does every citizen of the country give the same legitimacy scores to the State? Is there any political variable that determines significant differences? In this sense, this research introduces political segmentation variables of state legitimacy such as political interest, political representativeness, political ideology, national identity, or behavioral control. Source data for this study is derived from the last round of European Social Survey (ESS) for Spain in 2014. With a sample of 1.925 citizens, it is proved that political variables have influence in state legitimacy and determine different scores in this metric. These results are very relevant for government because it can establish which are the most sensitive groups and develop effective social politics and communication campaigns. Moreover, the final objective of the state is obtaining the trust within its institutions and the citizen satisfaction, and an analysis depending on the membership group offers more detailed information.
Alicia Blanco-González, Gregory Payne, Camilo Prado-Román

Chapter 6. Increasing Legitimacy and Donations: A Call to Apply Institutional Theory to Nonprofit Fundraising

Why do people donate to some organizations but not others? Why do different countries consider different causes to be worthy of their philanthropy? In the United States, donations from individuals sum up to 71% of total philanthropic contributions to nonprofit organizations. Research on strategies to increase individual giving has identified techniques that provide incremental growth, but do not explain the large differences in support to different types of nonprofits or specific programs within nonprofits (i.e., educational vs. religious, established vs. startup, unrestricted vs. restricted support). While the link between legitimacy and fundraising results is widely acknowledged (Fogal, 2005; Gronbjerg, 1993). Understanding nonprofit funding. San Francisco: Jossey-Bass), the study of legitimacy by institutional theory scholars provides a promising framework from which to study these differences and posit interventions to increase legitimacy. Conversely, nonprofit fundraising presents an ideal field in which to test some of the assumptions of legitimacy theory. This essay is meant as a call to action for cross-pollination among researchers in both fields.
Louis Diez

Chapter 7. Neuromarketing as a Subject of Legitimacy

Even though the concept of neuromarketing is relatively new, it already has numerous opponents. They stress that its interest in the consumer’s subconscious is a clear example of manipulation and an invasion of individual privacy. Yet other authors postulate the countless advantages stemming from a better understanding of the consumers’ wishes enabling organizations to design offers which are more adapted to their private and innermost desires. Due to the controversy that its development and application have created, the need to legitimize this new stream of marketing is therefore evident. However, there are no studies in this field, given the difficulty of appropriately measuring the legitimacy construct and the lack of consensus regarding the term neuromarketing. This work carries out a first approximation to this matter, analyzing the concept of neuromarketing and its evolution regarding its degree of acceptance and dissemination in the scientific community. The ultimate purpose is to determine if neuromarketing is a concept that needs to be legitimized. The results obtained will provide a basis for an in-depth study which will allow the establishing of neuromarketing’s profile of legitimacy and tackle its legitimization in terms of the weaknesses and strengths of each of the dimensions and for each of the sources of legitimacy.
María-Ángeles Revilla-Camacho, Francisco-José Cossío-Silva, Carmelo Mercado-Idoeta

Chapter 8. Legitimacy as Competitive Advantage: A US Airline Case Study

This study seeks to achieve a better understanding of how legitimacy-gaining initiatives become a source of competitive advantage through the mediation of customer satisfaction. Through a case study of five major US airlines (American Airlines, Delta Air Lines, Southwest Airlines, United Continental, and US Airways), the authors analyze the links between legitimacy and customer satisfaction along with the effect of corporate abilities on these variables. Results suggest that more legitimate organizations provide more satisfaction to their customers. Simultaneously, the results show that corporate abilities can also influence this relationship. There was a positive relationship between corporate abilities and legitimacy-building initiatives, as well as between corporate abilities and customer satisfaction. Finally, firm performance is also positively related to the three previous variables: legitimacy, customer satisfaction, and corporate abilities. The primary managerial implication of this study is that not managing legitimacy is putting oneself at risk of losing it. Secondly is that legitimacy could also be used as a leading indicator of customer satisfaction. The present work’s contribution in the nascent field of legitimacy management is to link legitimacy to customer satisfaction, a key variable for firm performance. This begins to fill in the gaps in understanding how legitimacy leads to business results. Furthermore, it also provides a confirmation of previous studies that propose that organizations are not passive receivers of legitimacy but can actively manage it.
Gregory Payne, Ana Cruz-Suarez, Alberto Prado-Román

Chapter 9. Legitimacy and Reputation of Organizations: Their Relationship with Management Systems and Financial Performance

Legitimacy and reputation are intangible assets of growing importance for the survival of organizations, so it is very important to develop strategies that improve these assets. In addition, the implementation of management systems based on ISO standards has had a strong development worldwide since their emergence. The main objective of this research is to analyse whether the adherence to ISO 9001 and ISO 14001 and the implementation of an integrated management system (IMS) of both standards can have a positive effect on the legitimacy and reputation of organizations. On the other hand, a complementary objective is to contrast the influence of these intangible assets on their financial performance. For this purpose, the companies of the IBEX-35 stock index were selected, using structural modelling with PLS through SmartPLS software. The results obtained show that the certification in these ISO standards has a positive influence on the legitimacy and reputation of the organizations that implement them; on the other hand, the establishment of an IMS for both standards has a positive effect on the legitimacy of companies, but it does not have this effect on their reputation. There is also a positive relationship of the two intangible assets on the financial performance of organizations.
Natalia Orviz Martínez, Tatiana Cuervo Carabel, Cristina del Castillo Feito

Chapter 10. Legitimizing and Delegitimizing Factors of Firms in Society: Is It a Problem of Communication or Strategic? An Approach Based on the Distributed Social Value as the Key Factor for the Organizations’ Social Legitimacy

There is an increasing concern about the value contributed by firms to the society as a whole. Transnational companies are particularly being questioned; therefore, legitimation for this kind of corporations is demanded. This chapter analyses four delegitimizing factors: negative added value, negative equity, tax evasion and moral hazard associated to potential situations of bankruptcy. Three legitimizing factors will also be analysed: added value distributed to stakeholders, value distributed by “non-market” mechanisms and emotional value generated to different stakeholders of the entity. Since the lack of legitimation affects large companies to a greater degree, two hypotheses related to the size of the firms have been tested. The first has to do with a larger presence of delegitimizing factors in large firms. The second analyses a smaller distribution in this sort of firms of value generated to stakeholders that are not shareholders assessed by means of the social efficiency ratio (SER). The obtained results allow for identifying whether the criticism towards large firms is supported by objective factors (confirmed hypothesis) or subjective ones (rejected hypothesis) and consequently whether the transnational companies should base their action plans of social legitimation on strategy or on communication.
Jose Luis Retolaza, Leire San-Jose, José Torres Pruñonosa

Chapter 11. Relationship Between Legitimacy and Organizational Success

This article explores the relationship between legitimacy and success in the high education sector. To do so the relationship between legitimacy and organizational results is analysed as well as the relationship between legitimacy and the access to resources. Eight hypotheses related to the legitimacy of the European Higher Education Area in the public universities of Madrid (Spain) are proposed. Hypotheses are tested by using data from students (783 questionnaires), teachers (761 questionnaires) and other publicly available secondary data. Results suggest differences according to the source and the type of legitimacy analysed. There is no appreciable relation between teacher’s legitimacy and their results. However, universities with high teacher’s legitimacy show better access to resources. Regarding student’s legitimacy, we found that universities with high legitimacy obtain a little more better result. Furthermore, high student’s legitimacy leads to better access to resources. This research provides answers to some gaps of the legitimacy literature. Do greatest legitimacy organizations obtain better results? Do they get better access to resources? What type of legitimacy lead to better organizational results?
Serge Miranda, Ana Cruz-Suarez, Miguel Prado-Román

Chapter 12. The Business Legitimacy and Its Relationship with the Corporate Social Responsibility: Analysis of Mexico and Spain Through the Case Method

The main objective of this research is to analyze the relationship between corporate social responsibility and social legitimacy. This is to fill the existing gap in the literature on legitimacy, in relation to the lack of empirical studies linking social responsibility with legitimacy. In order to analyze the relationships raised, we use an inductive methodology, for it will carry out a case study on the eight companies, three Mexican and five Spanish, included in the Fortune World’s Most Admired Companies for the period 2011–2012. The main finding that can be drawn is that it shows that there is a positive relationship between CSR and social legitimacy to business results. Also given the limited literature and research in Spanish companies, this study has demonstrated that Spanish companies also support these relationships, that is, both the social legitimacy as CSR can bring value to the results of the company. From a strategic point of view, managers might consider legitimacy within its strategic objectives. Managers must realize that not being able to manage legitimacy could involve the loss of it. It is no coincidence that companies with greater decreases of legitimacy are those with more internal and external problems. The main contribution of the study is to fill the gap in literature on legitimacy that relates to CSR as well as the lack of empirical studies in this field.
Evaristo Galeana Figueroa, Sandra Escamilla Solano, Dora Aguilasocho Montoya, Paola Plaza Casado

Chapter 13. Corporate Image as an Element of Legitimacy of Chinese Steel Companies

The main objective of this article is to make a diagnosis about the connection between relationship marketing and corporate image through the Chinese steel companies. Corporate image has a strong effect on relationship marketing, because a good corporate image eases the achievement of confidence, influences the purchasing decision and is an essential factor in the virtual transactions when the companies catch customer’s interest. Relationship marketing is also linked with corporate image because it is a good tool to create and improve corporate image. By this way, an online survey technique has been applied to 302 units: the steel sellers/dealers from different Chinese iron and steel companies. The main findings of this research paper are based on statistical analysis (univariate, bivariate and multivariate techniques). Hence, this research paper achieves understanding about corporate image and relationship marketing from the perspective that they complement each other and can make a mutual support. Therefore, by taking into account the obtained survey results, it can be provided some practical suggestions not only for the quality, performance and attraction, as a part of myriad of the concept of corporate image, but also for some important parts of the relationship marketing, like satisfaction, trust, loyalty and social networks.
Duojiezhaxi, Arta Antonovica, Javier de Esteban Curiel

Chapter 14. Informal Economy and Legitimacy. The Spanish Case

The existence of an informal economy is a phenomenon that affects all countries. The amount of the informal economy in Spain in 2013 was estimated to be 196,000 euro millions (18.6% of the gross domestic product; GDP). Although there are several academic studies about the informal economy and its scope, definition, quantification, and positive and negative impacts, the methods used to reduce the impact of the informal economy are not sufficient, and there is an increasing gap between government administration measures and public opinion. For this reason, before adopting a measure to combat the informal economy, it is necessary to analyze the legitimacy of the measure. Lack of, or inadequate, legitimacy means that the measure does not accord with social norms and values, and this could lead to its failure. We carried out research to rationally search for solutions that would end the existence of the informal economy; the research employed previous analyses of the legitimacy of the problem, the effectiveness of measures to combat it, and the relationship between legitimacy and effectiveness. To meet this objective, an empirical online study was carried out between November 2013 and January 2014, via questionnaire; the questionnaire was answered by 745 people and the data were statistically analyzed.
Fernando Iglesias-Pérez, Alicia Blanco-González, Juan Gabriel Martínez Navalón

Chapter 15. Public Interest and the Legitimacy of Media

A fundamental requirement of any democracy is dialogue on the day-to-day affairs of society among its citizens. Such dialogue is a prerequisite for political engagement. How citizens receive information as well as what they receive impacts this dialogue. This essay explores this process by examining agenda setting, framing, and other components of messaging in the democratic process through traditional media as well as social media.
A major focus of this essay is that how such “mediated realities” presented by the press to publics are created and the mediation role of the press and web analytics in this process. This chapter introduces the reader into this new media scenario today and focuses on the challenges created by the contributors of today’s mediated realities. Specifically by legitimizing audience preferences as a criteria for relevant news, has traditional media lost a major function of its role to engage the public with what trained journalists would earmark as relevant issues necessary for informed civic engagement?
Santiago Justel, Josep-Lluís Micó, Gregory Payne, Enric Ordeix-Rigo

Chapter 16. A Study on External and Internal Motivations and Its Influence on the Results of Implementing EN 9100 Standard

EN 9100 is a quality management system standard for the aerospace industry derived from the ISO 9000 standard. The aerospace industry is economically prominent, both worldwide and in Spain. The goals of this paper are (a) to analyze the motivations of Spanish aerospace firms in adhering to EN 9100 standard and (b) to examine whether the type of motivation affects the results of implementing this standard. To accomplish this, both ANOVA and a simple linear regression model were applied to data from the 122 aerospace industry valid survey responses. The results demonstrate that most firms adhere to EN 9100 in the Spanish aerospace industry due to “external” motivations, such as to increase their institutional legitimacy and reputation. Nevertheless, firms, where “internal” motivations such as to improve their operational execution or organizational processes are predominant, showed superior benefits as a result of implementing the standards. The conclusions of this article may be of interest both for academic and professional spheres of activity.
Camilo Prado-Román, Carlos del-Castillo-Peces, Carmelo Mercado-Idoeta

Chapter 17. Explanation of the Relation Between Organizational Legitimacy and Firms’ Price

This research’s objective is to define what is the effect of organizational legitimacy on the price of a company’s stock. To meet the objective, researchers studied both stock index and legitimacy of IBEX 35 in 19 mass media, during a 15-month period of time. Natural language processing (NLP) was used to process data, which was modeled using Bayesian networks. Results show how the probability of increase of firm’s stock prices depends on the legitimacy variation obtained by the firm the day before. Also, they highlight the importance of legitimacy management through mass media, principally social media and specialized media.
Raúl Gómez-Martínez, Loarre Andreu, Francisco Díez-Martín

Chapter 18. Organizational Legitimacy and Stakeholder Trust in the Organization: A Feed-Forward Relationship

The main goal of this study is to enlarge the understanding of the concept of legitimacy. In recent decades, organizational legitimacy has received a great deal of attention from researchers who have tried to establish how organizations acquire, manage, and use it. However, there is still no conceptual agreement on how organizational legitimacy should be understood and how it can be measured. This reflects the complexity in the literature about understanding this phenomenon and suggests research opportunities. This chapter aims to strengthen the understanding of the role legitimacy plays in organizations by reviewing the related literature and analyzing the relationship between legitimacy and trust. Our findings suggest that there is a positive relationship between these two concepts. Moreover, we conclude that legitimacy can be achieved in two different ways: the first via trust and the second via control. In the first instance, we found a double-loop relationship between legitimacy and trust, generating a feed-forward relationship, given that both of these concepts mutually reinforce each other. In the second instance, there is a single-loop relationship because legitimacy based on control improves stakeholders’ trust in the organization. However, there is no reciprocal impact given that the legalistic remedies used are, in fact, the substitutes of trust.
Maria D. Moreno-Luzon, Odette Chams-Anturi, Juan P. Escorcia-Caballero


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