Getting Up After Falling Down: A Tale of Three Communities

Drawing on rich longitudinal data covering a period of more than 15 years, our study highlights specific affective and non-financial components of the entrepreneurial process in the context of community- based entrepreneurship (CBE). Without an understanding of the concrete role of the community in exit, re-entry, and growth, community members of such ventures may lack the awareness and resources to engage in a perennial venture. Despite the importance of community ventures in fostering economic development and growth, little is known about the antecedents, context and processes of entrepreneurial exit and re-entry in the realm of CBE. We, therefore, address this gap through an in-depth case study of a community-based initiative in the Cauca region of Colombia. We investigate how three distinct cultural communities reach successful collaboration after overcoming an initial organizational death. Our findings illustrate that exit was the result of several factors including the lack of a strong sense of community identity. However, over time the community members developed a solid sense of belonging, trust and reliance as they tackled difficult events such as exit and market struggles on one hand and engaged in positive community building events on the other hand. Moreover, the sense of belonging that the three different communities developed are comparable to a unique extended family business, whereby the non-financial aspects of the enterprise meet the communities’ affective needs. We term this affective component “community socio-emotional wealth”

Theorizing the Grey Area between Legitimacy and Illegitimacy

Despite a proliferation of research on legitimacy, the ‘grey area’ that lies between legitimacy and illegitimacy remains undertheorized. Responding to calls for further research, we clarify the construct of legitimacy and extend legitimacy theory by providing a conceptual framework for analyzing the legitimacy-illegitimacy continuum. First, we propose three novel legitimacy states between legitimacy and illegitimacy: conditional legitimacy, unknown legitimacy, and conditional illegitimacy, and elaborate on the distinct qualitative characteristics of the five legitimacy states. Second, we offer a model of the dynamics of legitimacy state change and the (in)stability of the issue-specific reference framework that is used to judge them. Third, our legitimacy states bridge the research streams on legitimacy judgment formation and legitimation strategies thereby advancing the integration of these relatively separate research streams more broadly. Our paper contributes to a more robust understanding both of how legitimacy states can be conceptualized and analyzed in future research, and of how they can be dealt with in managerial practice

What is the quack about? Legitimation strategies and their perceived appropriateness in the foie gras industry

This study contributes to the legitimacy literature by investigating the perceived appropriateness of legitimation strategies used by controversial organizations. Through a mixed-method approach comprising interviews and conjoint experiments, we shed light on how evaluators perceive the appropriateness of five legitimation strategies used by the foie gras industry in France and how evaluators’ environmentalism and media skepticism influence their perceptions. Some strategies favored by the industry are perceived as inappropriate by evaluators and thus may obstruct or worse, counter the intended goal of legitimacy enhancement. Moreover, we observe that evaluators’ high environmentalism and high media skepticism affect the perceived appropriateness of the strategies, albeit not of all five. Evaluators with high media skepticism favor explanation discourses and strategies that establish a common identity of the industry. Evaluators with high environmentalism favor the use of recognizable quality standards and labels, yet they are wary of high levels of organization through structured representation of industry interests

All Entrepreneurs are Equal but Some are More Equal than Others

This paper sheds light on how ethno-racial stereotypes affect legitimacy perceptions about entrepreneurs. Our findings show that compared to nonminority entrepreneurs, minority entrepreneurs are perceived as less legitimate due to their ethno-racial attributes. Our study confirms the presence of an ethno-racial hierarchy among different minority groups that increases the harshness of legitimacy perceptions for lower status minority groups. Entrepreneurs’ higher level of education alleviates some of those inequalities but fails to eliminate them completely. We demonstrate that observers’ beliefs in a just world play a fundamental role in mitigating or increasing the harshness of legitimacy perceptions. Through three conjoint experiment studies, totaling 22,608 evaluations nested in 1,413 observers from the general public in the United States, we examine how entrepreneurs from two minority groups, Black Americans and Latinx, are judged relative to nonminority entrepreneurs (White Americans) after their endeavors have failed. We then further examine whether there are differences when these two groups of minority entrepreneurs are judged relative to each other. This study contributes to a deeper understanding of how system inequality and prejudice endure in business

“Let's Do The Fracking Talk: An Experimental Approach To Understanding Legitimacy Perceptions”

The literature on legitimacy has established that to form legitimacy judgments, individual evaluators process two perceptual inputs. They interpret the behavior of the entity under scrutiny and benchmark it to their personal sets of norms, values, and beliefs, and they interpret the judgments of legitimacy awarding institutions through the validity cues that these institutions convey. Building on the literatures on legitimacy perception, on independence and pro-environmental values, we offer an evaluation model of legitimacy judgment formation and test this model on 5,928 assessments about the use of a new technology of fracking made by 247 observers. We find that variance in legitimacy evaluations depends both on the validity cues from legitimacy awarding institutions, on evaluators’ basic values, and the interaction between the two. Specifically, we observe that four validity cues - public support, economic impact, regulations, and longevity - are used simultaneously and have significant effects on the legitimacy judgment but also that regulations bolster the effects of the other cues. Lastly, we find that differences in evaluators’ basic values moderate the effect of the validity cues on legitimacy judgments. Particularly, higher pro-environmental values of evaluators suggest less favorable perceptions of high economic impact; higher pro-environmental values suggest more favorable perceptions when public support is high. Intriguingly, the higher the pro-environmental values as well as the higher the level of independence, an established venture is perceived as more legitimate than a new venture

The Two Faces of Janus A Mixed-Method Study of Legitimacy Struggles

In this paper, we examine how controversial organizations manage their legitimacy. We first investigate what type of legitimation strategies such organizations take to enhance their legitimacy in the eyes of evaluators. Second, we examine how evaluators perceive the appropriateness of these strategies. In addition, we also shed light on the moderating effects of environmental values and media skepticism on the relationship between legitimation strategies and their perceived appropriateness by evaluators. We utilize a mixed method study. It comprises a series of interviews with actors in the French Foie Gras industry in order to determine which strategies they take. Drawing from the qualitative findings, we use conjoint experiments to investigate the relative weights of five distinct legitimation strategies on their perceived appropriateness and the moderating effects of media skepticism and environmental values based on 922 decisions

Legitimate or Illegitimate: Insights into validity cues, core values and legitimacy assessments

The literature on legitimacy has established that to form legitimacy judgments, individual evaluators process two perceptual inputs. On the one hand, they interpret the behavior of the organization under scrutiny and benchmark it to their personal sets of norms, values, and beliefs. On the other, they interpret the judgments of legitimacy awarding institutions though validity cues that these institutions express. Evaluators use these cues to form a legitimacy judgment about an entity. In this paper, we seek to add to the current knowledge of the legitimacy formation process by answering two questions: (1) what are the relative weights of validity cues in the legitimacy assessments of individual evaluators and (2) what is the moderating influence of independence and pro-environmental values on the effects of the validity cues on the legitimacy judgments. We test our hypotheses using hierarchical linear modeling on 4944 legitimacy assessments nested in 206 individuals. We find that validity cues indicating public support, economic impact, regulations, and longevity have significant effects on legitimacy assessments of individual evaluators. Second, we observe that evaluators make simultaneous use of different validity cues in their judgment that are linked to different sources of validity, and that appeal to different types of legitimacy. Lastly, we find that individual differences in core values and characteristics of evaluators moderate the effect that the validity cues have on the legitimacy judgment