Legitimacy Maintenance After a Corporate Social Irresponsibility Scandal: Lessons From The Parmalat Case

From the organizations’ perspective, maintaining legitimacy in such contexts has been considered relatively unproblematic (Patriotta, 2011; Scherer et al., 2013) as it entails following adaptive strategies and conforming substantially (or even merely symbolically) to the dominant institutional logics (Suchman, 1995; Elsbach, 1994; Scherer et al., 2013). 3 Nonetheless, whilst the implementation of a adaptive strategy to maintain the corporation with its main audiences is a necessary phase, it cannot be considered sufficient to assure the maintenance of audience support. Audiences evaluate competitive advantage and other sources of reassurance that supporting the company is worthwhile from a rational perspective. This restoration process may be complemented by the corporations’ power over resource dependent audiences. Independent audience decisions are based on the competitive advantage of firm in each business. When their are untouched, the adaptive strategy leads to audience support and successful business rehabilitation processes with all audiences, even with those that were initially harmed. However, if competitive advantage is feeble independent audiences will not sustain the weak business (or corporation) even if adaptive strategies have been implemented. The presence of an unharmed competitive strategy is crucial to the selection of which parts of an organization (or the organization as a whole) can be reintegrated with all the main audiences of the company after a CSI scandal, including the “harmed” audience. The richness of the empirical setting allows us to highlight that a significant difference between firm characteristics that plays a crucial role in determining the reactions of the main constituent audiences and, consequently, the possibility for maintain the legitimacy. The post-crisis turnaround processes to succeed is the possession of sound source(s) of competitive advantage in one (or more) of the business(es) in which the firms operates

The relationship between institutions and value creation in software development models

Purpose - The purpose of this paper is to analyse the possibility for firms to consider institutional settings to systematically direct dispersed individual efforts of discovery and invention towards objects (products or processes) of their interest in order to enhance their value creation capacity. Design/methodology/approach - The authors conduct a comparative analysis of the different institutional settings within which software products are invented and produced – closed producer-centred model, open user-centred model, and hybrid interactive producer-user model. Findings - The authors draw indications regarding the possibility to design institutional settings for value creation and the potential pitfalls tied to these strategic tools. Originality/value - A theoretical framework is elaborated in order to understand the different ways in which institutional contexts influence and direct value creation processes. The model analysed shows the firms’ deliberate attempt to stimulate a dynamic process of social interaction and communication which may foster higher levels of creativity and innovation. In order to guarantee the necessary accessibility and to sufficiently motivate external programmers towards the perception of a new code, the firm has to surrender the traditional source through which it appropriates value: barriers to the accessibility of the code developed through IPRs. The adoption of an institutional setting which facilitates dynamic value creation processes suggests, therefore, the need to turn to dynamic mechanisms for value appropriation in parallel

Contesti istituzionali e sviluppo d'impresa: un approccio economico-manageriale

Dottorato di ricerca in economia aziendale. 12. ciclo. A.a. 1998-99. Tutore Carlo Dominici. Coordinatore Carmelo Butta'Consiglio Nazionale delle Ricerche - Biblioteca Centrale - P.le Aldo Moro, 7, Rome; Biblioteca Nazionale Centrale - P.za Cavalleggeri, 1, Florence / CNR - Consiglio Nazionale delle RichercheSIGLEITItal

Managerial irresponsibility and firm survival. Pivoting the company in the aftermath of a social scandal.

This study is focused on the analysis of the factors that underlie managerial social irresponsibility scandals and the dimensions that influence the possibility to pivot the company back to success after a social scandal. Three characteristics distinguish organizational crises due to social scandals: (a) they often have such a significant negative impact on corporate performance to pose the very survival of the firm is at risk; (b) social evaluations of the firm determine both the emergence and the possibility to resolve these corporate crises; and (c) time is crucial, as the rapidity of the effective management of the crisis enhances the chance of its successful outcome. Thus, indications regards the relevant dimensions to analyse and the types of actions to take following social scandals may enhance the rapidity and effectiveness of the management of these corporate crises, increasing the chances of their success. The thesis proposed in this study is that the capacity to pivot the company back to sustainable survival in the aftermath of social scandals depends on the interplay between legitimacy loss and restoration, on the one hand, and the reputation of the company’s business units, on the other hand. Whilst legitimacy signals the firms’ alignment to cognitive, moral and pragmatic social norms and expectations, reputation signals the firms capacity to create value. Though these social evaluations are distinct, the argument made in this volume is that they are interconnected, as social irresponsibility scandals trigger an active process of overall re-evaluation of both aspects. The positive judgment of legitimacy restoration and firm reputation are both necessary to restore or maintain the relationships on the basis of which firms may sustainably draw resources and support from their environment

Structural and Knowledge Dynamics in Inter-firm Complex Systems

The paper aims to scrutinize the drivers of interfirm network structural dynamics and their influence on knowledge creation and diffusion over time. Interfirm knowledge networks are complex webs of linkages connecting a variety of idiosyncratic firms within and across industries. By serving as conduits through which information, knowledge and other resources flow and reputations are signaled (Poldony, 2001; Owen-Smith & Powell, 2004), they support cooperation in knowledge sharing and creation processes

Structural Dynamics of Interfirm Knowledge Networks

In this chapter, we investigate the drivers of interfirm network structural dynamics and their influence on knowledge creation and diffusion processes that occur in such networks over time. Interfirm knowledge networks are complex webs of linkages connecting a variety of idiosyncratic firms within and across industries. Aimed to contribute to answer the recent calls for a more dynamic and multilevel view to understand network structures and processes, we leverage the complex network research to formulate a multilevel theoretical framework that clarifies the structural dynamics and knowledge creation and diffusion potential of interfirm networks