Beyond legitimacy: legitimacy types and organizational success

Abstract

Purpose – The purpose of this paper is to clarify and extend knowledge concerning the relationship between legitimacy and organizational success within the framework of institutional theory. Design/methodology/approach – While previous research has found links between legitimacy and organizational success, the authors test this assumption by case analysis, on a sample of thirteen Spanish Mutual Guarantee Societies. Data were collected from survey questionnaire and Annual Financial Reports. Findings – Results of the empirical examination confirm that, within this population, organizations with greater legitimacy obtain better organizational results as well as improved access to resources. The findings also show that not all dimensions of legitimacy contribute equally to organizational success. Practical implications – For managers, the authors have included a recommendation that legitimacy is an important element of an organization's success that must be strategically managed and be considered as a required goal in the organization's strategic planning process. Managers should analyze legitimacy, in their own activity sector, to identify the most useful types of legitimacy. In the specific case of Spanish MGSs, the most beneficial strategic actions are those geared towards obtaining pragmatic legitimacy. Originality/value – The analysis provides a new approach to measure legitimacy. It also provides empirical advances to the organizational legitimacy process, showing its usefulness as a key factor for organizational success.