The SAGE Handbook of Organizational Institutionalism

Royston Greenwood, Christine Oliver, Thomas B. Lawrence, Renate E. Meyer, Royston Greenwood, Christine Oliver, Thomas B. Lawrence, Renate E. Meyer, Author

• Publisher: SAGE Publications Ltd
• Year: 2017
• Print ISBN: 9781529712117, 9781412961967
• eBook ISBN: 9781526415035
• Edition: 2
• Topic: Business
• Subtopic: Management
• Index: Business

The SAGE Handbook of Organizational Institutionalism brings together extensive coverage of aspects of Institutional Theory and an array of top academic contributors.

Now in its Second Edition, the book has been thoroughly revised and reorganised, with all chapters updated to maintain a mix of theory, how to conduct institutional organizational analysis, and contemporary empirical work. New chapters on Translation, Networks and Institutional Pluralism are included to reflect new directions in the field.

The Second Edition has also been reorganized into six parts:

• Part One: Beginnings (Foundations)
• Part Two: Organizations and their Contexts
• Part Three: Institutional Processes
• Part Four: Conversations
• Part Five: Consequences
• Part Six: Reflections

Part I Beginnings (Foundations)

1 Organizational Legitimacy: Six Key Questions

David L. Deephouse, Jonathan Bundy, Leigh Plunkett Tost and Mark C. Suchman

INTRODUCTION

Legitimacy is a fundamental concept of organizational institutionalism. It influences how organizations behave and has been shown to affect their performance and survival (Pollock & Rindova, 2003; Singh, Tucker, & House, 1986). As developed in organizational institutionalism the term has spread widely across the social sciences, and because of this, our current understandings of legitimacy and how it is managed are much more nuanced and elaborate than portrayed in early institutional accounts. In this chapter we seek to bring greater clarity and order to the growing and sometimes confusing literature, focusing on the conceptualization of legitimacy itself and how it changes over time.

This chapter builds from the previous edition (Deephouse & Suchman, 2008, available online at www.sage.org/organizationalinstitutionalism/legitimacy). In updating that chapter we reviewed 1299 publications and conference papers that had the string ‘legitim’ in the title, abstract, or keywords. Reflecting the reach and power of legitimacy, these publications included books and a wide range of journals and across a wide range of disciplines (e.g., communication, political science, public administration, and sociology – not just management). Our goal was to identify broad trends in theory and research, highlight possible theoretical innovations, and suggest important applications for scholars in organizational institutionalism. From this review we identified six central questions around which this chapter is arranged: What is organizational legitimacy? Why does legitimacy matter? Who confers legitimacy, and how? What criteria are used (for making legitimacy evaluations)? and How does legitimacy change over time? These five questions are shown in Figure 1.1. Our final section asks the sixth question, Where do we go from here?, and offers suggestions for future research.

Figure 1.1Overview of organizational legitimacy

We start with the question of ‘What is legitimacy?’ because we are concerned about the concept's ossification in recent years. Our review revealed that a large number of papers simply quote Suchman's (1995: 574) definition verbatim before moving on to discuss whatever particular type of legitimacy was studied in the paper. There has, however, been some noteworthy conceptual movement as well. Several authors have followed Deephouse and Suchman's (2008) recommendation that the term ‘desirable’ in Suchman's (1995) original definition be removed or bracketed to avoid potential confusion with status or reputation, especially if legitimacy is being examined alongside one or more of these other forms of social evaluation. More recently, there have been excellent recent elaborations of the definition of legitimacy (especially Bitektine, 2011 and Tost, 2011). Given these trends, the next section reviews and refines the definition of organizational legitimacy.

Having defined legitimacy, the obvious following question is ‘Why does it matter?’ We discuss why legitimacy matters, highlighting its many benefits to organizations. Having done so, we examine who confers legitimacy, and how. The short answer is that legitimacy can be granted by a variety of sources, each using a distinct routine. Whether through conscious deliberation or preconscious heuristics and taken-for-granted schemas, each source perceives and assesses legitimacy-relevant information, evaluates organizations using this information, and then endorses or challenges them based on those evaluations. Early treatments of legitimacy considered society as a whole as the relevant social system and viewed the nation-state as the primary source of legitimacy (Meyer & Scott, 1983; Parsons, 1956, 1960). Other early accounts viewed organizations in an organizational field as sources of legitimacy, and legitimacy was conferred by their endorsements, often in the form of formal inter-organizational relationships (Galaskiewicz, 1985; Singh et al., 1986). Subsequent treatments recognized that the media could be a source for society as a whole and for particular social systems within it (Deephouse, 1996; Dowling & Pfeffer, 1975; Lamin & Zaheer, 2012). More recent research has added to this list of legitimacy sources – which now includes individuals, investors, social movements, and other stakeholders (Schneiberg & Lounsbury, Chapter 11 this Volume; Tost, 2011). Researchers, in other words, are beginning to examine in greater depth which and how particular sources evaluate, both actively and passively, the legitimacy of organizations and how sources interact with each other and with subject organizations (Bitektine, 2011; Tost, 2011).

The fourth question that we address considers the criteria used by different sources as they evaluate the legitimacy of organizations and their actions. There are several types of criteria, and these can be useful for identifying different dimensions of legitimacy (e.g., regulatory, pragmatic, etc.). However, appreciation that legitimacy evaluations come from multiple sources highlights the possibility that legitimacy criteria may emerge interactively, in the interplay between the various sources evaluating a given organization and the organization itself. And, given the complexity and pluralism of the institutional environment it is possible that inconsistent prescriptions may arise and that debates may ensue among organizations and stakeholders, often in the public sphere. The variety of sources and their possibly conflicting evaluations inevitably bring to the foreground underlying debates at the micro- and meso-levels that influence macro-level legitimacy (Bitektine & Haack, 2015). Thus, we propose that the criteria used to assess legitimacy should be considered sep...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Contents
• Illustration List
• Illustration List
• Notes on the Editors and Contributors
• For Instructors
• Introduction: Into the Fourth Decade
• Part I Beginnings (Foundations)
• 1 Organizational Legitimacy: Six Key Questions
• 2 Organizational Fields: Past, Present and Future
• Part II Organizations and Their Contexts
• 3 Isomorphism, Diffusion and Decoupling: Concept Evolution and Theoretical Challenges1
• 4 The Imitation and Translation of Management Ideas1
• 5 On Hybrids and Hybrid Organizing: A Review and Roadmap for Future Research
• 6 Fields, Institutional Infrastructure and Governance
• 7 Drivers of Community Strength: An Institutional Logics Perspective on Geographical and Affiliation-Based Communities
• 8 The Consequences of Globalization for Institutions and Organizations
• 9 Theorizing the Identity–Institution Relationship: Considering Identity as Antecedent to, Consequence of, and Mechanism for, Processes of Institutional Change
• Part III Institutional Processes
• 10 Institutional Entrepreneurship and Change in Fields1
• 11 Social Movements and the Dynamics of Institutions and Organizations
• 12 Opening the Black Box: The Microfoundations of Institutions
• 13 Coalface Institutionalism
• 14 Towards a Practice-Driven Institutionalism
• 15 Language, Cognition and Institutions: Studying Institutionalization Using Linguistic Methods
• 16 The Evolving Role of Meaning in Theorizing Institutions
• 17 Networks and Institutions*
• 18 Power, Institutions and Organizations
• Part IV Conversations
• 19 Advances to the Institutional Logics Perspective
• 20 Institutional Pluralism Revisited1
• 21 Institutional Work: Taking Stock and Making It Matter
• 22 Living Institutions: Bringing Emotions into Organizational Institutionalism
• 23 The Material and Visual Basis of Institutions
• 24 Advancing Research on Categories for Institutional Approaches of Organizations
• Part V Consequences
• 25 Institutional Theory and Entrepreneurship: Taking Stock and Moving Forward1
• 26 How Institutions Create Income Inequality
• 27 Institutions and Economic Inequality1
• 28 Institutions, Institutional Theory and Organizational Wrongdoing
• 29 Institutional Theory and the Natural Environment: Building Research through Tensions and Paradoxes
• 30 Race and Institutionalism
• 31 Are Diversity Programs Merely Ceremonial? Evidence-Free Institutionalization
• Part VIReflections
• 32 Reflections on Institutional Theories of Organizations
• 33 Institutional Theory: Onward and Upward
• Index