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Introduction
Research finds that firms need legitimacy or social acceptance, to survive and prosper (Campbell et al., 2012; Zimmerman and Zeitz, 2002). Traditionally, legitimacy has been discussed as an intangible resource gained from constituents such as government institutions or partner firms (Forstenlechner and Mellahi, 2011; Campbell et al., 2012). Little research examines consumers as legitimacy-granting constituents, in fact, business research has “largely overlooked the importance of the legitimacy-based institutional environment to the implementation of customer orientation strategy” (Luo et al., 2008, p. 203). This is alarming, as strategy researchers have cited consumers as legitimacy-granting constituents (Rao et al., 2008; Zimmerman and Zeitz, 2002). Therefore, this current research seeks to investigate consumers’ role in granting legitimacy.
In the current consumer climate where cynicism, boycotts and ethical consumption are at the forefront of relevant topics (Helm et al., 2015; Shin and Yoon, 2018), an understanding of how consumers grant legitimacy or social acceptance, to organizations is certainly relevant to consumer marketers and scholars. Furthermore, as research has found that gaining legitimacy can offset the detrimental effects of the liability of foreignness (Campbell et al., 2012), understanding consumer legitimacy levels would prove relevant to organizations seeking to establish subsidiaries in foreign markets.
Adopting the stance that firms gain legitimacy from their institutional environments, and consumers as constituents that exist within this environment, the institutional theory is used to envision consumers as legitimacy-granting constituents. Furthermore, little progress has been made into legitimacy measurement as most studies still rely on proxies (Rao et al., 2008). This shortcoming is addressed by developing measurement scales. Therefore, this current paper seeks to:
theoretically develop the concept of consumer legitimacy;
construct an approach to measuring this concept; and
demonstrate its utility in a predictive model; thereby addressing an important gap in the literature on legitimacy.
Background and theory
Legitimacy is an organization’s social acceptance by constituents within its environment Suchman (1995). Weber (1946) is known to introduce legitimacy in organization studies. As Weber’s work, research has provided numerous dimensions of legitimacy. Stryker (1994) discusses attitudinal, behavioral and cognitive orientations; Aldrich and Fiol (1994) discuss sociopolitical and cognitive legitimacy; and Scott (1995) relates legitimacy to each of his pillars of institutions: cognitive, regulative and normative. Understanding these different...