1-5 of 5 Results

  • Keywords: legitimacy x
Clear all

Article

The Role of the Media in Corporate Governance  

Michael K. Bednar

Corporate governance scholars have long been interested in understanding the mechanisms through which firms and their leaders are held accountable for their actions. Recently, there has been increased interest in viewing the media as a type of corporate governance mechanism. Because the media makes evaluations of firms and leaders, and can broadcast information to a wide audience, it has the potential to influence the reputation of firms and firm leaders in both positive and negative ways and thereby play a role in corporate governance. The media can play a governance role and even influence firm outcomes by simply reporting about firm actions, giving stakeholders a larger voice with which to exert influence, and through independent investigation. However, despite the potential for the media to play a significant governance role, several barriers limit its effectiveness in this capacity. For example, media outlets have their own set of interests that they must strive to fulfill, and journalists often succumb to several cognitive biases that could limit their ability to successfully hold leaders accountable. While significant progress has been made in understanding the governance role of the media, future research is needed to better understand the specific conditions in which the media is effective in this role. Understanding how social media is changing the nature of journalism is just one example of the many exciting avenues for future research in this area.

Article

New Venture Legitimacy  

Greg Fisher

Starting an entrepreneurial endeavor is an uncertain and ambiguous project. This uncertainty and ambiguity make it difficult for entrepreneurs to generate much needed resources and support. In order to address this difficulty, a new venture needs to establish legitimacy, which entails being perceived as desirable, proper, or appropriate within the socially constructed system of norms, values, beliefs, and definitions within which it operates. New venture legitimacy is generated from various sources and hence has three broad dimensions—a cognitive, a moral, and a pragmatic dimension. The cognitive dimension accounts for the extent to which the activities and purpose of a venture are understood by key audiences and how knowledge about that venture spreads. The moral dimension reflects the extent to which a venture is perceived to be doing the right thing. The pragmatic dimension accounts for the extent to which a new venture serves the interests of critical constituents. All three of these dimensions factor into a legitimacy assessment of a new venture. Legitimacy is important for new ventures because it helps them overcome their liabilities of newness, allowing them to mobilize resources and engage in transactions, thereby increasing their chances of survival and success. Although legitimacy matters for almost all new ventures, it is most critical if an entrepreneur engages in activities that are new and novel, such as establishing a new industry or market or creating a new product or technology. In these circumstances, it is most important for entrepreneurs to strategically establish and manage a new venture’s legitimacy. The strategic establishment and management of new venture legitimacy may entail arranging venture elements to conform with the existing environment, selecting key environments in which to operate, manipulating elements of the external environment to align with venture activities, or creating a whole new social context to accommodate a new venture. Enacting each of these new venture legitimation strategies may necessitate employing identity, associative, and organizational mechanisms. Identity mechanisms include cultural tools and identity claims such as images, symbols, and language by entrepreneurs to enhance new venture legitimacy. Associative mechanisms reflect the formation of relationships and connections with other individuals and entities to establish new venture legitimacy. Organizational mechanisms account for manipulating the organization and structure of a new venture and the achievement of success measures by that venture to attain legitimacy. Ultimately all of this is done so that various external parties, with different logics and perspectives, will evaluate a new venture as legitimate and be prepared to provide that venture with resources and support.

Article

Optimal Distinctiveness  

Karl Taeuscher

Optimal distinctiveness research is a rapidly growing area of scholarship that integrates key theoretical insights from strategic management and institutional theory. Strategic management research highlights differentiation as a key driver of competitive advantage and superior performance, while institutional theory emphasizes conformity as a central driver of organizational legitimacy and resource acquisition. Optimal distinctiveness research synthesizes these two perspectives and explores the tension that arises from conflicting pressures for differentiation (distinctiveness) and conformity (similarity). This emerging body of research departs from traditional positioning research in strategic management—which primarily explored corporations’ strategic positions within mature industries—by attending to a variety of competitive settings (e.g., newly emerging market categories, online marketplaces), forms of differentiation (e.g., based on product features, narratives, or category affiliations), levels of analysis (e.g., business level, product level), and performance outcomes (e.g., customer demand, resource acquisition, audience evaluations). By advancing understanding about a broad array of phenomena, optimal distinctiveness research has profound implications for strategic management, entrepreneurship, and organization studies. A central concern in this rapidly growing body of research is to understand how positions on the continuum between similarity and distinctiveness affect performance outcomes. Early optimal distinctiveness research showed that organizations often benefit from positioning themselves near the middle of this continuum, where the relationship between their distinctiveness and performance resembles an inverted U-shape. Over time, however, scholars spotlighted various contingencies that shape the distinctiveness–performance relationship, pointing to important boundary conditions under which organizations derive the most desirable (i.e., optimal) outcomes through low or high levels of distinctiveness. Extant research also shows that organizations can strategically alleviate the tension between differentiation and conformity by, for instance, buffering legitimacy in alternative ways or by differentiating on dimensions that do not impose any related conformity pressures. Scholarship further explores the sources of heterogeneity in organizations’ distinctiveness, including the conditions and strategic considerations that lead organizations to pursue distinctiveness. Toward this aim, extant research particularly emphasizes organizations’ strategic efforts to attain optimal distinctiveness through storytelling and other symbolic forms of differentiation and conformity. Collectively, these explorations help to understand why, when, and how organizations pursue distinctiveness and how distinctiveness shapes varied performance outcomes.

Article

Multicultural Identities at Work  

Yih-Teen Lee and Nana Yaa Gyamfi

Cultural identity, a specific form of social identity that refers to a person’s degree of identification and sense of belonging to a specific cultural group, has been extensively examined as a kind of social identity over the past decades, especially in the fields of migration, cross-cultural psychology, and applied international management. Meanwhile, exposure to settings with different cultures typically triggers a process of acculturation, enabling individuals to develop multicultural identities, whereby people see things from multiple cultural groups’ perspectives, feel at one with the cultural groups, and act according to the norms of those cultural groups. Individual organizational members serve as the conduit by which culture influences and is influenced by organizational life. There exist various forms of multicultural identities with different psychological and behavioral implications on individuals. In terms of plurality, to date, extant studies accumulated extensive knowledge on biculturalism, which focuses on individuals having two distinct cultural identities and how these identities intersect and influence the individual. Beyond biculturalism obtained through birth, ancestry, or immersive foreign experience, individuals may become multicultural by being simultaneously immersed in more than two cultures: a situation common among children of immigrants (i.e., second-generation immigrants), children raised in multicultural households, third culture individuals who spend their formative years outside their passport country, and individuals living within multicultural societies. A key to understanding multicultural identities is how these multiple identities are structured within individuals. Scholars largely agree that the structural pattern of identities affects the outcomes and degree of synergy among multiple identities. Widely accepted modes of structuring multiple identities include relative strength of identities involved and how multiple identities relate to each other. Scholars have built on these lines of thinking to examine specific forms of multicultural identities and their outcomes. Furthermore, research indicates that multiculturals possess unique identity resources relevant to organizational life, including cognitive strengths, relational capital and belonging, and leadership-related competencies. Although there is evidence for responsiveness of multicultural identity to situational cues, there are also strong arguments made in favor of the agency of individuals over their multiple identities. The foregoing notwithstanding, individuals with multicultural identities must balance their agentic enactments of identity with societal requirements of legitimacy. In particular, business organizations play a vital role in providing identity workspaces and other enabling factors which legitimize multicultural identities. Additionally, business organizations play the role of balancing power, status and other dynamics between multicultural and non-multicultural members.

Article

Institutional Theory in Organization Studies  

Robert J. David, Pamela S. Tolbert, and Johnny Boghossian

Institutional theory is a prominent perspective in contemporary organizational research. It encompasses a large, diverse body of theoretical and empirical work connected by a common emphasis on cultural understandings and shared expectations. Institutional theory is often used to explain the adoption and spread of formal organizational structures, including written policies, standard practices, and new forms of organization. Tracing its roots to the writings of Max Weber on legitimacy and authority, the perspective originated in the 1950s and 1960s with the work of Talcott Parsons, Philip Selznick, and Alvin Gouldner on organization–environment relations. It subsequently underwent a “cognitive turn” in the 1970s, with an emphasis on taken-for-granted habits and assumptions, and became commonly known as “neo-institutionalism” in organizational studies. Recently, work based on the perspective has shifted from a focus on processes involved in producing isomorphism to a focus on institutional change, exemplified by studies of the emergence of new laws and regulations, products, services, and occupations. The expansion of the theoretical framework has contributed to its long-term vitality, though a number of challenges to its development remain, including resolving inconsistencies in the different models of decision-making and action (homo economicus vs. homo sociologicus) that underpin institutional analysis and improving our understanding of the intersection of socio-cultural forces and entrepreneurial agency.