Organizational Legitimacy

Organizational legitimacy is a central concept within organizational research. Most definitions of organizational legitimacy refer to the appropriateness or alignment of a subject with its social system as evaluated by social actors within it. The term “subjects” is used to refer to the many types of social arrangements whose legitimacy is evaluated; “subjects” is used instead of “objects” because “subjects” grants at least some level of autonomy to the social arrangement or the actors involved and because legitimacy is fundamentally subjective, not objective. Earlier examinations of legitimacy frequently considered a nation-state or other authoritative actors in an organizational field as the evaluator; later examinations have considered communities, world society, and the individual as evaluators. Organizational legitimacy has been studied for many subjects in addition to organizations themselves, including industries (such as electricity generators), populations of organizations (such as newspapers), classes of organizations (such as multinational enterprises), structures (such as the multidivisional form), practices (such as downsizing and specific technologies), and organizational leaders (such as CEOs). Consideration of leaders and authority structures within organizations demarks a boundary between organizational legitimacy and legitimacy in groups, a topic in social psychology that also has a large body of research, as mentioned in Legitimacy in Related Disciplines. This article focuses on organizational legitimacy rather than legitimacy of individuals within groups and organizations. This article begins with the emergence of legitimacy into organization theory literature in 1956 and traces its movement into resource dependence and institutional theories in the 1970s. The next section illustrates its entry into management and organization research. Three sections present a review of legitimacy research, theoretical advancements, and its relationships with other concepts. The next three sections consider different sources of legitimacy; two of these are related to field-level evaluators, and the third considers individuals as the micro-foundation of legitimacy in a social system. The section on managing legitimacy includes four subsections. Three are on gaining, maintaining, and losing legitimacy; the fourth focuses on the analysis of texts of those championing the legitimacy of a subject and of others responding with differing levels of support. Two sections about the importance of legitimacy in entrepreneurship and multinational enterprises follow. The final section presents brief introductions to research in related fields that also study legitimacy, both organizational and other types.