Organizational Legitimacy: Social Values and Organizational Behavior

Organizations seek to establish congruence between the social values associated with or implied by their activities and the norms of acceptable behavior in the larger social system of which they are a part. Insofar as these two value systems are congruent we can speak of organizational legitimacy. When an actual or potential disparity exists between the two value systems, there will exist a threat to organizational legitimacy. These threats take the form of legal, economic, and other social sanctions. In this paper, it is argued that an empirical focus on organizational efforts to become legitimate can aid in explaining and analyzing many organizational behaviors taken with respect to the environment, and further, can generate hypotheses and a conceptual perspective that can direct additional attention to the issue of organizational legitimacy. This paper provides a conceptual framework for the analysis of organizational legitimacy and the process of legitimation through which organizations act to increase their perceived legitimacy. It presents a number of examples including a discussion of the American Institute for Foreign Study as a demonstration of these ideas in action. Both the particular circumstances which can lead to problems of organizational legitimacy and some of the actions that can be taken to legitimate an organization are illustrated.