The organizational legitimacy of Russian firms: Contextual specificity and legitimization strategies
DOI:
https://doi.org/10.21638/spbu18.2020.301Abstract
Russian firms suffer from the negative country of origin effect and legitimacy shortage. This paper has the aim to reveal factors for Russian firms to focus on while build legitimacy both at home and abroad. To identify the existing research directions, the 48 articles applying legitimacy and Russian focus from journals in management and business for all years were analyzed, using both the bibliometric analysis and manual in-depth study of papers. Based on the specificity of the Russian context and literature analysis about the factors of the legitimacy concept, we develop a theoretical framework that is supported by a set of propositions about possible legitimization strategies of Russian firms. Three main pillars of the organizational legitimacy construct such as moral, pragmatic and cognitive, which are accepted as the most
influential ones, were introduced and proposed for Russian firms how to gain them at home and abroad. This paper has the value for both theory and practice. It contributes to the legitimacy literature, responding to many calls to study the microfoundations of the organizational legitimacy and developing the holistic theoretical framework within the Russian context. The findings also are of practical importance for managers and entrepreneurs whose attention is paid to the effective strategic management and legitimacy building both at home and abroad.
Keywords:
liability of foreignness, liability of outsidership, organizational legitimacy, moral legitimacy, pragmatic legitimacy, cognitive legitimacy, Russia
Downloads
Download data is not yet available.
References
REFERENCES
Aasland A., Kropp S., Meylakhs A. Y. 2020. Between collaboration and subordination: State and non-state actors in Russian antidrug policy. Voluntas 31 (2): 422–436.
Abramova A., Garanina O. 2018. Russian MNEs under sanctions: Challenges for upgrading in GVCs (Cases of energy and IT industries). Journal of East-West Business 24 (4): 371–391.
Ahn S.-Y., Park D.-J. 2018. Corporate social responsibility and corporate longevity: The mediating role of social capital and moral legitimacy in Korea. Journal of Business Ethics 150 (1): 117–134.
Ai Q., Tan H. 2020. Uncovering neglected success factors in post-acquisition reverse capability transfer: Evidence from Chinese multinational corporations in Europe. Journal of World Business 55 (3): 101053 (in press).
Aldrich H. E., Fiol C. M. 1994. Fools rush in? The institutional context of industry creation. Academy of Management Review 19: 645–670.
Alexiou K., Wiggins J. 2019. Measuring individual legitimacy perceptions: Scale development and validation. Strategic Organization 17 (4): 470–496.
Alon A. 2013. Complexity and dual institutionality: The case of IFRS adoption in Russia. Corporate Governance: An International Review 21 (1): 42–57.
Alon A., Mennicken A., Samsonova-Taddei A. 2019. Dynamics and limits of regulatory privatization: Reorganizing audit oversight in Russia. Organization Studies 40 (8): 1217–1239.
Balashova E. S., Gromova E. A. 2017. TQM as one of the drivers of Russian industrial sector. Quality-Access to Success 18 (159): 50–53.
Caussat P., Prime N., Wilken R. 2019. How multinational banks in India gain legitimacy: Organizational practices and resources required for implementation. Management International Review 59: 561–591.
Cooper A. C., Gimeno-Gascon F. J., Woo C. Y. 1994. Initial human and financial capital as predictors of new venture performance. Journal of Business Venturing 9 (5): 371–395.
Deeds D. L., Mang P. Y., Frandsen M. L. 2004. The influence of firms’ and industries’ legitimacy on the flow of capital into high-technology ventures. Strategic Organization 2 (1): 9–34.
Deephouse D. L. 1996. Does isomorphism legitimate? Academy of Management Journal 39 (4): 1024–1039.
Deephouse D. L., Bundy J., Tost L. P., Suchman M. C. 2017. Organizational legitimacy: Six key questions. In: R. Greenwood, C. Oliver, T. Lawrence, R. Meyer (eds). The Handbook of Organizational Institutionalism, 27–52. Sage: London.
Delmar F., Shane S. 2004. Legitimating first: Organizing activities and the survival of new ventures. Journal of Business Venturing 19 (3): 385–410.
Díez-Martín F., Prado-Roman C., Blanco-Gonzalez A. 2013. Beyond legitimacy: Legitimacy types and organizational success. Management Decision 51 (10): 1954–1969.
Dixon S., Day M. 2010. The rise and fall of Yukos: A case study of success and failure in an unstable institutional environment. Journal of Change Management 10 (3): 275–292.
Dobbin F., Edelman L., Meyer J., Scott W. R., Swidler A. 1988. the expansion of due process in organizations. In: L. G. Zucker (ed.). Institutional Patterns and Organizations: Culture and Environment, 71–100. Ballinger: Cambridge.
Drori I., Honig B. 2013. A process model of internal and external legitimacy. Organization Studies 34 (3): 345–376.
Elsbach K. D. 1994. Managing organizational legitimacy in the California cattle industry: The construction and effectiveness of verbal accounts. Administrative Science Quarterly 39 (1): 57–88.
Ermolaeva L., Nefedov K., Panibratov A., Viktorov D. 2019. Internationalisation Driving value chain configuration: The case of emerging market IT companies. Journal of East-West Business 25 (4): 340–362.
Foreman P., Whetten D. A. 2002. Members’ identification with multiple-identity organizations. Organization Science 13 (6): 618–635.
Forstenlechner I., Mellahi K. 2011. Gaining legitimacy through hiring local workforce at a premium: The case of MNEs in the United Arab Emirates. Journal of World Business 46 (4): 455–461.
Fröhlich C., Skokova Y. 2020. Two for one: Public welfare and regime legitimacy through state funding for CSOs in Russia. Voluntas 31 (4): 698–709.
Galaskiewicz J. 1985. Interorganizational relations. Annual Review of Sociology 11: 281–304.
Golant B. D., Sillince J. A. A. 2007. The constitution of organizational legitimacy: A narrative perspective. Organization Studies 28 (8): 1149–1167.
Golyagina A., Valuckas D. 2020. Boundarywork in management accounting: The case of hybrid professionalism. British Accounting Review 52 (2): 100841.
Glynn M. A., Abzug R. 2002. Institutionalizing identity: Symbolic isomorphism and organizational names. The Academy of Management Journal 45 (1): 267–280.
Hannan M. T., Carroll G. R. 1992. Dynamics of Organizational Populations. Oxford University Press: Oxford.
Hargadon A. B., Douglas J. Y. 2001. When innovations meet institutions: Edison and the design of the electric light. Administrative Science Quarterly 46 (3): 476–501.
Hultén P., Wilson T. L. 2006. Contextual influence on diffusion of market-oriented approaches in post-Soviet companies. Journal of East-West Business 12 (1): 5–28.
Human S. E., Provan K. G. 2000. Legitimacy building in the evolution of smallfirm multilateral networks: A comparative study of success and demise. Administrative Science Quarterly 45 (2): 327–365.
Humphreys A., Latour K. A. 2013. Framing the game: Assessing the impact of cultural representations on consumer perceptions of legitimacy. Journal of Consumer Research 40 (4): 773–795.
Iakovleva T., Kickul J. 2011. Beyond social capital: The role of perceived legitimacy and entrepreneurial intensity in achieving funding success and superior venture performance in women-led Russian SMEs. International Journal of Entrepreneurship and Small Business 14 (1): 13–38.
Johanson J., Vahlne J.-E. 2009. The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies 40 (9): 1411–1431.
Karhunen P. 2008. Toward convergence in the St. Petersburg hotel industry through the lens of institutional theory. Journal of East European Management Studies 13 (2): 106–128.
Kennedy M. T., Fiss P. C. 2009. Institutionalization, framing, and diffusion: The logic of TQM adoption and implementation decisions among U.S. hospitals. Academy of Management Journal 52 (5): 897–918.
Kiitsak-Prikk K. 2017. Legitimacy and social impact in the context of changing public cultural organizations. Journal of Arts Management Law and Society 47 (2): 105–117.
Klarin A., Ray P. K. 2019. Political connections and strategic choices of emerging market firms: Case study of Russia’s pharmaceutical industry. International Journal of Emerging Markets 14 (3): 410–435.
Klarin A., Sharmelly R. 2019. Strategic sensemaking and political connections in unstable institutional contexts. Journal of Management Inquiry (in press). https://doi.org/10.1177/1056492619862635
Kostova T., Zaheer S. 1999. Organizational legitimacy under conditions of complexity: The case of the multinational enterprise. Academy of Management Review 24 (1): 64–81.
Kostova T., Roth K. Dacin M. T. 2008. Institutional theory in the study of multinational corporations: A critique and new directions. Academy of Management Review 33 (4): 994–1006.
Kuilman J. G., Wezel F. C. 2013. Taking off: Category contrast and organizational mortality in the UK airline industry, 1919–64. Strategic Organization 11 (1): 56–77.
Kulchina E., Oxley J. 2020. Relational contracts and managerial delegation: Evidence from foreign entrepreneurs in Russia. Organization Science 31 (3): 628–648.
Kuzina O., Chernysheva M. 2016. Corporate charity and corporate philanthropy in Russia: An economic sociology analysis. Voprosy Ekonomiki 3: 115–130. (In Russian)
Kuznetsov A., Kuznetsova O., Warren R. 2009. CSR and the legitimacy of business in transition economies: The case of Russia. Scandinavian Journal of Management 25 (1): 37–45.
Kuznetsov A., Kuznetsova O. 2012. Business legitimacy and the margins of corporate social responsibility in the Russian context. International Studies of Management & Organization 42 (3): 35–48.
Kyj M. J., Kyj L. S. 2010. A relational framework for analyzing ventures in cognitive environments: Illustrations from the TNKBP experience. Journal of East-West Business 16 (4): 340–360.
Larson D. W. 2019. An equal partnership of unequals: China’s and Russia’s new status relationship. International Politics. https://doi.org/10.1057/s41311-019-00177-9
Li J., Fleury M. T. L. 2020. Overcoming the liability of outsidership for emerging market MNEs: A capability-building perspective. Journal of International Business Studies 51 (1): 23–37.
Low B., Johnston W. 2008. Securing and managing an organization’s network legitimacy: The case of Motorola China. Industrial Marketing Management 37 (7): 873–879.
Mazepus H., van Leeuwen F. 2020. Fairness matters when responding to disasters: An experimental study of government legitimacy. Governance 33 (3): 621–637.
McCarthy D. J., Puffer S. M., Graham L. R., Satinsky D. M. 2014. Emerging innovation in emerging economies: Can institutional reforms help Russia break through its historical barriers? Thunderbird International Business Review 56 (3): 243–260.
Murphy P. J., Pollack J., Nagy B., Rutherford M., Coombes S. 2019. Risk tolerance, legitimacy, and perspective: Navigating biases in social enterprise evaluations. Entrepreneurship Research Journal 9 (4).
Nosova S. S., Kolodnyaya G. V., Bondarev S. A., Verigo S. A., Kudryashov A. B. 2019. Digital business as a driver of economic growth in Russia. Espacios 40 (24).
Panibratov A. Yu. 2015. Liability of foreignness of emerging market firms: The country of origin effect on Russian IT companies. Journal of East-West Business 21 (1): 22–40.
Panibratov A. Yu., Ermolaeva L. A., Abramkov A. E. 2015. The liability of foreignness in the internationalization process of Russian energy companies. Vestnik Sankt-Peterburgskogo Universiteta. Menedzment 2: 39–73. (In Russian)
Panibratov A., Ribberink N., Veselova A., Nefedov K. 2018. Entry modes and liability of foreignness effects: Evidence from Russian firms on the German market. Organizations and Markets in Emerging Economies 9 (1): 106–122.
Petrovskaya I., Zaverskiy S., Kiseleva E. 2016. Putting assumptions into words: money and work beliefs and legitimacy of entrepreneurship in Russia. European J. International Management 10 (2): 157–180.
Petrovskaya I., Zaverskiy S., Kiseleva E. 2017. Attitude to entrepreneurship in Russia: Three-dimensional institutional approach. Advances in Systems Science and Applications 17 (2): 29–42.
Pollock T. G., Gulati R. 2007. Standing out from the crowd: the visibility-enhancing effects of IPO-related signals on alliance formation by entrepreneurial firms. Strategic Organization 5 (4): 339–372.
Pollack J. M., Rutherford M. W., Nagy B. G. 2012. Preparedness and cognitive legitimacy as antecedents of new venture funding in televised business pitches. Entrepreneurship Theory and Practice 36 (5): 915–939.
Prashantham S., Kumar K., Bhattacharyya S. 2019. International new ventures from emerging economies: Network connectivity and legitimacy building. Management and Organization Review 15 (3): 615–641.
Puffer S. M., McCarthy D. J. 2008. Ethical turnarounds and transformational leadership: A global imperative for corporate social responsibility. Thunderbird International Business Review 50 (5): 303–314.
Puffer S. M., McCarthy D. J., Jaeger A. M. Dunlap D. 2013. The use of favors by emerging market managers: Facilitator or inhibitor of international expansion? Asia Pacific Journal of Management 30: 327–349.
Randrianasolo A. A., Arnold M. J. 2020. Consumer legitimacy: Conceptualization and measurement scales. Journal of Consumer Marketing 37 (4): 385–397.
Rao H. 1994. The social construction of reputation: Certification contests, legitimation, and the survival of organizations in the American automobile industry: 1895–1912. Strategic Management Journal 15 (1): 29–44.
Rezende da Costa P., Silva Braga Junior S., Silveira Porto G., Martinez M. P. 2018. Relational capability and strategic alliance portfolio configuration: A study of Brazilian technology firms. International Journal of Emerging Markets 13 (5): 1026–1049.
Ruef M., Scott W. R. 1998. A multidimensional model of organizational legitimacy: Hospital survival in changing institutional environments. Administrative Science Quarterly 43 (4): 877–904.
Rutherford M. W., Mazzei M. J., Oswald S. L., Jones-Farmer L. A. 2018. Does establishing sociopolitical legitimacy overcome liabilities of newness? A longitudinal analysis of top performers. Group & Organization Management 43 (6): 906–935.
Scott W. R., Meyer J. W. 1991. The organization of societal sectors. In: W. W. Powell, P. J. DiMaggio (eds). The New Institutionalism in Organizational Analysis, 108–140. University of Chicago Press: Chicago.
Scott W. R. 2013. Institutions and Organizations: Ideas, Interests, and Identities. Sage: Thousand Oaks, CA.
Shagalkina M. V., Latukha M. O., Mitskevich E. A., Strogetskaya E. V. 2019. Factors of migration intentions of talented graduates from leading Russian universities. Russian Management Journal 17 (4): 445–466. (In Russian)
Skolkovo, TusPark. 2016. Russia and China: Innovation and Entrepreneurship. [Electronic resource]. https://www.fbacs.com/upload/Report_RUS.pdf (accessed: 01.08.2020). (In Russian)
Song M., Podoynitsyna K., van der Bij H., Halman J. I. M. 2008. Success factors in new ventures: A meta-analysis. Journal of Product Innovation Management 25: 7–27.
Suddaby R., Bitektine A., Haack P. 2017. Legitimacy. Academy of Management Annals 11 (1): 451–478.
Staw B. M., Epstein L. D. 2000. What bandwagons bring: Effects of popular management techniques on corporate performance, reputation, and CEO pay. Administrative Science Quarterly 45 (1): 523–556.
Suchman M. C. 1995. Managing legitimacy: Strategic and institutional approaches. Academy of Management Review 20 (3): 571–610.
Tost L. T. 2011. An integrative model of legitimacy judgments. Academy of Management Review 36 (4): 686–710.
Tornikoski E. T., Newbert S. L. 2007. Exploring the determinants of organizational emergence: A legitimacy perspective. Journal of Business Venturing 22 (2): 311–335.
Tretyak O., Radaev V. 2013. Market power and relational conflicts in Russian retailing. Journal of Business & Industrial Marketing 28 (3): 167–177.
UNCTAD. 2019. World Investment Report 2019: Key Messages and Overview. [Electronic resource]. https://unctad.org/en/PublicationsLibrary/wir2019_overview_en.pdf (accessed: 10.09.2019).
UNCTAD. 2020. World Investment Report 2020: International Production beyond the Pandemic. United Nations [Electronic resource]. https://unctad.org/en/PublicationsLibrary/wir2020_en.pdf (accessed: 28.08.2020).
Vershinina N., Rodgers P., Tarba S., Khan Z., Stokes P. 2019. Gaining legitimacy through proactive stakeholder management: The experiences of high-tech women entrepreneurs in Russia. Journal of Business Research (in press).
Westphal J. D., Gulati R., Shortell S. M. 1997. Customization or conformity? An institutional and network perspective on the content and consequences of TQM adoption. Administrative Science Quarterly 42 (2): 366–394.
Zaheer S. 1995. Overcoming the liability of foreignness. Academy of Management Journal 38 (2): 341–363.
Zaheer S., Lamin A., Subramani M. 2009. Cluster capabilities or ethnic ties? Location choice by foreign and domestic entrants in the services offshoring industry in India. Journal of International Business Studies 40 (6): 944–968.
Zamir F., Saeed A. 2020. Location matters: Impact of geographical proximity to financial centers on corporate social responsibility (CSR) disclosure in emerging economies. Asia Pacific Journal of Management 37 (1): 263–295.
Zeitz G., Mittal V., McAulay B. 1999. Distinguishing adoption and entrenchment of management practices: A framework for analysis. Organization Studies 20 (5): 741–776.
Zhao M. 2012. CSR-based political legitimacy strategy: Managing the state by doing good in China and Russia. Journal of Business Ethics 111 (4): 439–460.
Zimmerman M. A., Zeitz G. J. 2002. Beyond survival: Achieving new venture growth by building legitimacy. Academy of Management Review 27 (3): 414–431.
Downloads
Published
2020-12-04
How to Cite
Panibratov, A. Y., & Rysakova, L. E. (2020). The organizational legitimacy of Russian firms: Contextual specificity and legitimization strategies. Russian Management Journal, 18(3), 289–312. https://doi.org/10.21638/spbu18.2020.301
Issue
Section
Theoretical and Empirical Studies
License
Articles of the Russian Management Journal are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.
