Ups and Downs: The Role of Legitimacy Judgment Cues in Practice Implementation

Anne Jacqueminet and Rodolphe Durand ()
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Anne Jacqueminet: Bocconi University - Department of Management and Technology
Rodolphe Durand: HEC Paris

No 1355, HEC Research Papers Series from HEC Paris

Abstract: We explore the way validity and propriety cues contribute to legitimacy judgments about a practice and explain whether the subunit of a large firm increases or decreases the implementation of this practice. Empirically, we examine the extent to which 65 subsidiaries of a multinational enterprise implemented three corporate social responsibility practices. Adopting a set-theoretic approach, we find that both validity and propriety cues are extremely relevant to the understanding of subunits’ implementation of practices over time. The endorsement of a practice in a subunit’s environment plays a particularly crucial role in the extent to which it is implemented, relative to authorization by the parent firm. Furthermore, subunits strongly rely on the active evaluation of the practice’s propriety, such that the consonance between the two propriety dimensions (strategic importance and value compatibility) is central to implementation increase, while dissonance between them can favor implementation decrease. By advancing our understanding of legitimacy judgment formation and practice implementation patterns, our study enriches explanations of organizational conformity and decoupling, and contributes to our understanding of how firms respond to multiple institutional demands.

Keywords: validity and propriety cues; large firm (search for similar items in EconPapers)
JEL-codes: M10 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2019-11-11
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1355

DOI: 10.2139/ssrn.3484775

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