Advertisement

The Role of Normative Legitimacy in the Development of Efficiency-Driven Countries

  • Emilio Díez
  • Camilo Prado-RománEmail author
  • Francisco Díez-Martín
  • Alicia Blanco-González
Chapter

Abstract

Within the framework of institutional theory, legitimacy is a key factor for organizational and—more specifically—entrepreneurial success. Similarly, legitimacy is seen as an essential component of a country’s development. The goal of the present study is to better understand the role of a country’s legitimacy on its entrepreneurial activity and overall development. Furthermore, the authors research the influence of cultural resources on country-wide legitimacy perceptions. A case study is performed on the effect of normative legitimacy in efficiency-driven countries. The results suggest parallel behaviors between normative legitimacy and entrepreneurial activity. Nevertheless, unexpected relationships were discovered in the link between legitimacy, cultural resources, and development.

Keywords

Entrepreneurial Activity Human Development Index Institutional Theory Cultural Resource Entrepreneurial Opportunity 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

References

  1. Acs, Z. (2006). How is entrepreneurship good for economic growth? Innovations: Technology, Governance, Globalization, 1(1), 97–107.CrossRefGoogle Scholar
  2. Acs, Z. J. (2008). Foundations of high impact entrepreneurship. Foundations and Trends in Entrepreneurship, 4(6), 535–620.CrossRefGoogle Scholar
  3. Alcantara, L., Mitsuhashi, H., & Hoshino, Y. (2006). Legitimacy in international joint ventures: It is still needed. Journal of International Management, 12(4), 389–407.CrossRefGoogle Scholar
  4. Aldrich, H. E., & Fiol, C. M. (1994). Fools rush in? The institutional context of industry creation. Academy of Management Review, 19(4), 645–670.Google Scholar
  5. Baum, J. A. C., & Oliver, C. (1991). Institutional linkages and organizational mortality. Administrative Science Quarterly, 36(2), 187–218.CrossRefGoogle Scholar
  6. Baum, J., & Oliver, C. (1992). Institutional embeddedness and the dynamics of organizational populations. American Sociological Review, 57(4), 540–559.CrossRefGoogle Scholar
  7. Beelitz, A., & Merkl-Davies, D. M. (2011). Using discourse to restore organisational legitimacy: “ceo-speak” after an incident in a German nuclear power plant. Journal of Business Ethics, 108(1), 101–120.CrossRefGoogle Scholar
  8. Bitektine, A. (2011). Toward a theory of social judgments of organizations: The case of legitimacy, reputation, and status. Academy of Management Review, 36(1), 151–179.CrossRefGoogle Scholar
  9. Blanchflower, D. G., & Oswald, A. J. (1998). What makes an entrepreneur? Journal of Labor Economics, 16(1), 26–60.CrossRefGoogle Scholar
  10. Brown, A. D. (1998). Narrative, politics and legitimacy in an IT implementation. Journal of Management Studies, 35(1), 35–58.CrossRefGoogle Scholar
  11. Brown, A. D., & Toyoki, S. (2013). Identity work and legitimacy. Organization Studies, 34(7), 875–896.CrossRefGoogle Scholar
  12. Bruton, G. D., Ahlstrom, D., & Li, H.-L. (2010). Institutional theory and entrepreneurship: Where are we now and where do we need to move in the future? Entrepreneurship: Theory and Practice, 34(3), 421–440.Google Scholar
  13. Bruton, G. D., & Alhstrom, D. (2003). An institutional view of China’s venture capital industry: Explaining the differences between China and the West. Journal of Business Venturing, 18(2), 233–259.CrossRefGoogle Scholar
  14. Busenitz, L. W., Gomez, C., & Spencer, J. W. (2000). Country institutional profiles: Unlocking entrepreneurial phenomena. Academy of Management Journal, 43(5), 994–1003.CrossRefGoogle Scholar
  15. Carree, M. A., Thurik, A. R., Acs, Z. J., & Audretsch, D. B. (2010). The impact of entrepreneurship on economic growth. In Z. J. Acs & D. B. Audretsch (Eds.), Handbook of entrepreneurship research (Vol. 5, pp. 557–594). Fairfax, VA: Springer.CrossRefGoogle Scholar
  16. Cruz-Suárez, A., Díez-Martín, F., Blanco-González, A., & Prado-Román, C. (2014). Análisis de las relaciones entre la legitimidad organizativa, sus fuentes y dimensiones. Revista Venezolana de Gerencia, 19(65), 9–22.Google Scholar
  17. Cruz-Suarez, A., Prado-Román, A., & Prado-Román, M. (2014). Cognitive legitimacy, resource access, and organizational outcomes. Revista de Administração de Empresas, 54(5), 575–584.CrossRefGoogle Scholar
  18. De Clercq, D., Danis, W. M., & Dakhli, M. (2010). The moderating effect of institutional context on the relationship between associational activity and new business activity in emerging economies. International Business Review, 19(1), 85–101.CrossRefGoogle Scholar
  19. Deeds, D. L., Mang, P. Y., & Frandsen, M. L. (2004). The influence of firms’ and industries’ legitimacy on the flow of capital into high-technology ventures. Strategic Organization, 2(1), 9–34.CrossRefGoogle Scholar
  20. Deephouse, D. L. (1996). Does isomorphism legitimate? Academy of Management Journal, 39(4), 1024–1039.CrossRefGoogle Scholar
  21. Deephouse, D., & Carter, S. (2005). An examination of differences between organizational legitimacy and organizational reputation. Journal of Management Studies, 42(2), 329–360.CrossRefGoogle Scholar
  22. Deephouse, D., & Suchman, M. (2008). Legitimacy in organizational institutionalism. In K. Greenwood, R. Oliver, C. R. Suddaby, & K. Sahlin-Andersson (Eds.), The sage handbook of organizational institutionalism (pp. 49–77). London: Sage Publications.CrossRefGoogle Scholar
  23. Díez-Martín, F., Blanco-González, A., & Prado-Román, C. (2010). Measuring organizational legitimacy: The case of mutual guarantee societies. Cuadernos de Economía Y Dirección de La Empresa, 43(junio), 115–144.CrossRefGoogle Scholar
  24. Díez-Martín, F., Prado-Román, C., & Blanco-González, A. (2013a). Beyond legitimacy: Legitimacy types and organizational success. Management Decision, 51(10), 1954–1969.CrossRefGoogle Scholar
  25. Díez-Martín, F., Prado-Román, C., & Blanco-González, A. (2013b). Efecto del plazo de ejecución estratégica sobre la obtención de legitimidad organizativa. Investigaciones Europeas de Dirección Y Economía de La Empresa, 19(2), 120–125.CrossRefGoogle Scholar
  26. DiMaggio, P., & Powell, W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147–160.CrossRefGoogle Scholar
  27. Drori, I., & Honig, B. (2013). A process model of internal and external legitimacy. Organization Studies, 34(3), 345–376.CrossRefGoogle Scholar
  28. Eisenhardt, K. M., & Graebner, M. E. (2007). Theory building from cases: Opportunities and challenges. Academy of Management Journal, 50(1), 25–32.CrossRefGoogle Scholar
  29. Elsbach, K. D., & Sutton, R. I. (1992). Acquiring organizational legitimacy through illegitimate actions: A marriage of institutional and impression management theories. Academy of Management Journal, 35(4), 699–738.CrossRefGoogle Scholar
  30. Frydrych, D., Bock, A. J., Kinder, T., & Koeck, B. (2014). Exploring entrepreneurial legitimacy in reward-based crowdfunding. Venture Capital: An International Journal of Entrepreneurial Finance, 16(3), 247–269.CrossRefGoogle Scholar
  31. Gatewood, E. J., Shaver, K. G., & Gartner, W. B. (1995). A longitudinal study of cognitive factors influencing start-up behaviors and success at venture creation. Journal of Business Venturing, 10(5), 371–391.CrossRefGoogle Scholar
  32. Ger, G. (1999). Localizing in the global village: Local firms competing in global markets. California Management Review, 41(4), 64–83.CrossRefGoogle Scholar
  33. Hannan, M. T., & Carroll, G. (1992). Dynamics of organizational populations: Density, legitimation, and competition academy of management review (Vol. 18, p. 304). New York: Oxford University Press.Google Scholar
  34. Hayek, F. (1945). The use of knowledge in society. American Economic Review, 35(4), 519–530.Google Scholar
  35. Hayton, J. C., George, G., & Zahra, S. A. (2002). National culture and entrepreneurship: A review of behavioral research. Entrepreneurship: Theory and Practice, 26(4), 33–52.Google Scholar
  36. Hopp, C., & Stephan, U. (2012). The influence of socio-cultural environments on the performance of nascent entrepreneurs: Community culture, motivation, self-efficacy and start-up success. Entrepreneurship & Regional Development, 24(9–10), 917–945.CrossRefGoogle Scholar
  37. Kannan-Narasimhan, R. (2014). Organizational ingenuity in nascent innovations: Gaining resources and legitimacy through unconventional actions. Organization Studies, 35(4), 483–509.CrossRefGoogle Scholar
  38. Kihlstrom, R. E., & Laffont, J.J. (1979). A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion. Journal of Political Economy, 87(4), 719–748.Google Scholar
  39. Kirzner, I. (1973). Competition and Entrepreneurship. Chicago, IL: University of Chicago PressGoogle Scholar
  40. Kistruck, G. M., Webb, J. W., Sutter, C. J., & Bailey, A. V. G. (2014). The double-edged sword of legitimacy in base-of-the-pyramid markets. Journal of Business Venturing.Google Scholar
  41. Krueger, N. F., Reilly, M. D., & Carsrud, A. (2000). Competing models of entrepreneurial intentions. Journal of Business Venturing, 15(5–6), 411–432.CrossRefGoogle Scholar
  42. Lamberti, L., & Lettieri, E. (2011). Gaining legitimacy in converging industries: Evidence from the emerging market of functional food. European Management Journal, 29(6), 462–475.CrossRefGoogle Scholar
  43. Levie, J., & Autio, E. (2008). A theoretical grounding and test of the GEM model. Small Business Economics, 31(3), 235–263.CrossRefGoogle Scholar
  44. Li, J., Yang, J. Y., & Yue, D. (2007). Identity, community, and audience: How wholly owned foreign subsidiaries gain legitimacy in china. Academy of Management Journal, 50(1), 175–190.CrossRefGoogle Scholar
  45. Liñán, F., & Santos, F. J. (2007). Does social capital affect entrepreneurial intentions? International Advances in Economic Research, 13(4), 443–453.CrossRefGoogle Scholar
  46. Liñán, F., Santos, F. J., & Fernández, J. (2011). The influence of perceptions on potential entrepreneurs. International Entrepreneurship and Management Journal, 7(3), 373–390.CrossRefGoogle Scholar
  47. Meyer, J., & Rowan, B. (1977). Institutionalized organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83(2), 340–363.CrossRefGoogle Scholar
  48. North, D. (1990). Institutions, institutional change, and economic performance. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  49. Oliver, C. (1991). Strategic responses to institutional processes. Academy of Management Review, 16(1), 145–179.Google Scholar
  50. Peng, M. W., Sun, S. L., Pinkham, B., & Chen, H. (2009). The institution-based view as a third leg for a strategy tripod. Academy of Management Perspectives, 23(3), 63–81.CrossRefGoogle Scholar
  51. Ruebottom, T. (2013). The microstructures of rhetorical strategy in social entrepreneurship: Building legitimacy through heroes and villains. Journal of Business Venturing, 28(1), 98–116.CrossRefGoogle Scholar
  52. Ruef, M., & Scott, W. (1998). A multidimensional model of organizational legitimacy: Hospital survival in changing institutional environments. Administrative Science Quarterly, 43(4), 877–904.CrossRefGoogle Scholar
  53. Schumpeter, J. A. (1934). The theory of economic development (p. 255). Cambridge, MA: Harvard University Press.Google Scholar
  54. Scott, W. R. (1995). Institutions and organizations (p. 178). Thousand Oaks, CA: Sage Publications.Google Scholar
  55. Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11(4), 448–469.CrossRefGoogle Scholar
  56. Starr, J. A., & MacMillan, I. C. (1990). Resource cooptation via social contracting: Resource acquisition strategies for new ventures. Strategic Management Journal, 11(4), 79–92.Google Scholar
  57. Stenholm, P., Acs, Z. J., & Wuebker, R. (2013). Exploring country-level institutional arrangements on the rate and type of entrepreneurial activity. Journal of Business Venturing, 28(1), 176–193.CrossRefGoogle Scholar
  58. Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. The Academy of Management Review, 20(3), 571.Google Scholar
  59. Thornton, P., Ribeiro-Soriano, D., & Urbano, D. (2011). Socio-cultural factors and entrepreneurial activity: An overview. International Small Business Journal, 29(2), 105–118.CrossRefGoogle Scholar
  60. Tornikoski, E. T., & Newbert, S. L. (2007). Exploring the determinants of organizational emergence: A legitimacy perspective. Journal of Business Venturing, 22(2), 311–335.CrossRefGoogle Scholar
  61. Treviño, L. K., den Nieuwenboer, N. A., Kreiner, G. E., & Bishop, D. G. (2014). Legitimating the legitimate: A grounded theory study of legitimacy work among ethics and compliance officers. Organizational Behavior and Human Decision Processes, 123(2), 186–205.CrossRefGoogle Scholar
  62. Veciana, J., & Urbano, D. (2008). The institutional approach to entrepreneurship research. Introduction. International Entrepreneurship and Management Journal, 4(4), 365–379.CrossRefGoogle Scholar
  63. Yin, R. K. (2009). Case study research: design and methods. In L. Bickman & D. J. Rog (Eds.), Essential guide to qualitative methods in organizational research (Vol. 5, p. 219). London: Sage Publications.Google Scholar
  64. Young, M. N., Tsai, T., Wang, X., Liu, S., & Ahlstrom, D. (2014). Strategy in emerging economies and the theory of the firm. Asia Pacific Journal of Management. doi: 10.1007/s10490-014-9373-0.Google Scholar
  65. Zimmerman, M. A., & Zeitz, G. J. (2002). Beyond survival: Achieving new venture growth by building legitimacy. The Academy of Management Review, 27(3), 414.Google Scholar
  66. Zucker, L. (1987). Institutional theories of organization. Annual Review of Sociology, 13, 443–464.CrossRefGoogle Scholar

Copyright information

© Springer International Publishing Switzerland 2015

Authors and Affiliations

  • Emilio Díez
    • 1
  • Camilo Prado-Román
    • 2
    Email author
  • Francisco Díez-Martín
    • 2
  • Alicia Blanco-González
    • 2
  1. 1.Universidad de Sevilla and European Academy of Management and Business EconomicsSevillaSpain
  2. 2.Universidad Rey Juan Carlos and European Academy of Management and Business EconomicsMadridSpain

Personalised recommendations