Strategies of Legitimacy Through Social Media: The Networked Strategy

• Date: 01 May 2016
• Author: Itziar Castelló,Finn Årup Nielsen,Michael Etter
• Published date: 01 May 2016
• DOI: http://doi.org/10.1111/joms.12145

Strategies of Legitimacy Through Social Media: The

Networked Strategy

Itziar Castello, Michael Etter and Finn Årup Nielsen

Universidad Carlos III de Madrid (UC3M); Copenhagen Business School; Technical University of

Denmark

ABSTRACT How can corporations develop legitimacy when coping with stakeholders who have

multiple, often conflicting sustainable development (SD) agendas? We address this question by

conducting an in-depth longitudinal case study of a corporation’s stakeholder engagement in

social media and propose the concept of a networked legitimacy strategy. With this strategy,

legitimacy is gained through participation in non-hierarchical open platforms and the

co-construction of agendas. We explore the organizational transition needed to yield this new

legitimacy approach. We argue that, in this context, legitimacy gains may increase when firms

are able to reduce the control over the engagements and relate non-hierarchically with their

publics. We contribute to the extant literature on political corporate social responsibility and

legitimacy by providing an understanding of a new context for engagement that reconfigures

cultural, network, and power relations between the firm and their stakeholders in ways that

challenge previous forms of legitimation.

Keywords: legitimacy, social media, stakeholder engagement, sustainable development

INTRODUCTION

Organizational researchers implicitly assume that ‘legitimacy ultimately exists in the eye

of the beholder’ (Zimmerman and Zeitz, 2002, p. 361). This view implies a unidirec-

tional perception of legitimacy and presents legitimacy as an evaluative process in which

the beholder of legitimacy judges an organization (Zimmerman and Zeitz, 2002). This

evaluator-target model is echoed throughout the institutional literature (Deephouse and

Suchman, 2008; Meyer and Scott, 1983; Parsons, 1960; Tost, 2011; Weber, 1978) and

is often used to explain legitimacy (or illegitimacy) as a critical driver of institutional and

organizational change (Greenwood et al., 2002; Suchman, 1995) and of the isomorphic

Address for reprints: Itziar Castello, Department of Business Administration, Universidad Carlos III de

Madrid (UC3M), C/Madrid 126, Office: 7.0.56. 28903 Getafe, Madrid (macastel@emp.uc3m.es).

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C2015 John Wiley & Sons Ltd and Society for the Advancement of Management Studies

Journal of Management Studies 53:3 May 2016

doi: 10.1111/joms.12145

adaptation of corporations to social pressures (DiMaggio and Powell, 1983; Greenwood

et al., 2008).

Legitimacy literature also considers the other side of the process, in which organiza-

tions exercise strategic choices to change the type and amount of legitimacy they possess

(Scott, 1995; Suchman, 1995; Vaara and Tienari, 2008; Zimmerman and Zeitz, 2002).

This approach considers the proponents of legitimacy as strategic targets who can be

manipulated to benefit the organization (Baum and Oliver, 1991; DiMaggio and

Powell, 1983; Dowling and Pfeffer, 1975; Zimmerman and Zeitz, 2002). Although these

approaches constitute the basis for most of the legitimacy literature, they fail to fully

analyze the relations between the legitimacy’s subject, typically the organization, and

the beholders, typically the stakeholders, in building legitimacy and managing complex

situations (Bitektine, 2011; Scherer et al., 2013; Tost, 2011). Indeed, the literature tends

to underestimate the importance of power relations between actors in the control of the

legitimacy process (Lawrence, 2008). Moreover, it fails to consider the existence of dif-

ferent cultural orders, including the distinct SD claims (DiMaggio, 1997) that precede

legitimacy formation (Bitektine, 2011) and constitute the legitimation process (Kostova

and Zaheer, 1999).

Political perspectives on legitimacy highlight the power relations between actors and

propose given structural governance conditions in which legitimacy occurs (Mena and

Palazzo, 2012; Scherer et al., 2013; Vogel, 2005). However, the political perspective has

often been accused of being overly normative (Kuhn and Deetz, 2008; Scherer and Pal-

azzo, 2007; Schultz et al., 2013) and of neglecting consideration of the complexity of the

debates between corporations and society by assuming institutionalized interactions

(Baur and Arenas, 2014) and the closure of debates by means of consensus. Such regu-

lated interactions and consensus building are especially unlikely when corporations

address SD issues (Baur and Arenas, 2014), which typically call for the negotiation of

social, economic, and environmental factors (UnitedNations, 1987). Indeed, addressing

SD issues often requires shifting through a multitude of complex and often contradictory

stakeholder demands (Hardy and Phillips, 1998) that are defined beyond nation-state

governance institutions and instead by multiple ethical systems, cultural backgrounds,

and rules of behaviour that coexist within the same communities (Beck, 2006). As the

legitimacy of the business community around SD issues is often challenged (Matten

et al., 2005; Porter and Kramer, 2011; Scherer and Palazzo, 2011), stakeholder engage-

ment processes have become important instruments for legitimacy building (Banerjee,

2003; Scherer et al., 2013).

Since SD issues rest on the principles of environmental integrity, social equity, and

economic prosperity (Bansal, 2005), reactions to these issues based on notions of Corpo-

rate Social Responsibility (CSR) fall beyond general expectations regarding the role of

corporations in a capitalist system (Patriotta et al., 2011; Scherer et al., 2013). Research-

ers have argued that legitimacy in resolving SD issues requires active engagement with

stakeholders (Freeman et al., 2010; O’Riordan and Fairbrass, 2008) and, ‘the ability to

establish trust-based collaborative relationships with a wide variety of stakeholders’

(Sharma and Vredenburg, 1998, p. 735).

Due to their apparent lack of gatekeeping and symmetric two-way communication

(Morsing and Schultz, 2006; Vorvoreanu, 2009), open social media platforms, like

403Strategies of Legitimacy Through Social Media

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C2015 John Wiley & Sons Ltd and Society for the Advancement of Management Studies