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Organizational Legitimacy: Different Sources – Different Outcomes?

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Organizational Legitimacy: Different Sources – Different Outcomes? Organizational Legitimacy: Different Sources – Different Outcomes? by Olga Voronina Hawn Business Administration Duke University Date:_______________________ Approved: ___________________________ William Mitchell, Co-Supervisor ___________________________ Richard Burton, Co- Supervisor ___________________________ Aaron Chatterji ___________________________ Andrew Spicer ___________________________ Stephen Tallman Dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Business Administration in the Graduate School of Duke University 2013 ABSTRACT Organizational Legitimacy: Different Sources – Different Outcomes? by Olga Voronina Hawn Business Administration Duke University Date:_______________________ Approved: ___________________________ William Mitchell, Co- Supervisor ___________________________ Richard Burton, Co- Supervisor ___________________________ Aaron Chatterji ___________________________ Andrew Spicer ___________________________ Stephen Tallman An abstract of a dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Business Administration in the Graduate School of Duke University 2013 Copyright by Olga Hawn 2013 Abstract An abstract of a dissertation that examines different dimensions of legitimacy stemming from different sources, and how they condition the effects of each other. The traditional literature studies organizational legitimacy as a uni-dimensional phenomenon, however, there are multiple audiences with different systems of values that evaluate organizations and based on the fit with their values grant or withdraw legitimacy from the firm. This dissertation examines three different dimensions of legitimacy (i.e. social, market, and home country) and shows that they may substitute each other in affecting organizational outcomes. This is shown in a financial event study of additions and deletions from the Dow Jones Sustainability Index, a qualitative study of the nature of corporate social responsibility (CSR) in the emerging market of Russia, and a large-scale quantitative analysis of M&A deals, where the acquirer comes from Brazil, Russia, India, China and South Africa (BRICS). iv Dedication To my family and friends. v Contents Abstract ......................................................................................................................................... iv List of Tables .................................................................................................................................. x List of Figures .............................................................................................................................. xii Acknowledgements .................................................................................................................. xiii 1. Introduction ............................................................................................................................... 1 2. Literature .................................................................................................................................... 7 2.1 Different Sources of Legitimacy ..................................................................................... 8 2.2 Legitimacy, status or reputation? ................................................................................. 12 2.3 Dynamics of legitimacy ................................................................................................. 14 3. Qualitative Evidence .............................................................................................................. 15 3.1 Literature ......................................................................................................................... 16 3.2 Empirical Context ........................................................................................................... 25 3.3 Results .............................................................................................................................. 27 3.3.1 Methodology .............................................................................................................. 27 3.3.2 What CSR Means in Russia ...................................................................................... 30 3.3.3 How Firms in Russia Can Use CSR to Facilitate International Expansion ........ 45 3.4 Discussion and Conclusions ......................................................................................... 55 4. Strategic Role of Corporate Social Responsibility in International Expansion of Emerging Market Multinationals ............................................................................................. 63 4.1 Literature review ............................................................................................................ 63 vi 4.2 Hypotheses ...................................................................................................................... 73 4.3 Results .............................................................................................................................. 82 4.3.1 Sample selection ........................................................................................................ 82 4.3.2 Measures ..................................................................................................................... 84 4.3.3 Data analysis method ................................................................................................ 95 4.3.4 Hypothesis 1 (Completion) ...................................................................................... 96 4.3.5 Hypothesis 2 (Duration) ......................................................................................... 101 4.3.6 Hypothesis 3 (Developed country host)............................................................... 107 4.3.7 Robustness checks ................................................................................................... 109 4.4 Discussion and conclusions ........................................................................................ 114 4.4.1 Discussion ................................................................................................................. 114 4.4.2 Conceptual contributions ....................................................................................... 117 4.4.3 Managerial Implications ......................................................................................... 120 4.4.4 Limitations and future research ............................................................................ 121 5. Two Coins in One Purse? The Interaction Between Social and Market Legitimacy in the Dow Jones Sustainability Index ........................................................................................ 124 5.1 Literature Review ......................................................................................................... 124 5.1.1 Introduction.............................................................................................................. 124 5.1.2 Different Sources, Outcomes and Dynamism of Organizational Legitimacy. 130 5.1.3 Social legitimacy ...................................................................................................... 132 5.1.4 Financial market legitimacy ................................................................................... 134 5.1.5 Relationship between Social and Market Legitimacy ........................................ 137 vii 5.2 Hypotheses .................................................................................................................... 141 5.2.1 Hypotheses development ....................................................................................... 141 5.2.2 DJSI and Social legitimacy ..................................................................................... 146 5.2.2.1 The Dow Jones Sustainability Index (DJSI) .................................................. 146 5.2.2.2 DJSI in Media and Academia ......................................................................... 148 5.2.2.3 DJSI and Social Legitimacy ............................................................................. 151 5.2.2.4 DJSI and Companies ........................................................................................ 152 5.2.2.5 DJSI and Analysts ............................................................................................ 153 5.3 Results ............................................................................................................................ 156 5.3.1 Methods and Data ................................................................................................... 156 5.3.2 Measures ................................................................................................................... 160 5.3.3 Results ....................................................................................................................... 169 5.4 Discussion and Conclusions ....................................................................................... 177 6. Discussion .............................................................................................................................. 182 7. Future Research ..................................................................................................................... 188 8. Conclusion ............................................................................................................................
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