Change, institutional theory, and business legitimacy

This chapter brings together and discusses the implications of neo-institutional theories about organizational change as translation for the implementation of stakeholder management and the legitimate business organisation. It suggests that – according to these theories - being a legitimate business organisation is not something that the organisation is but rather something that the organisation does. First, the organisation needs to institutionalise stakeholder management as the way the business organisation organises its management processes. Then it needs to negotiate and develop its identity as a socially constructed boundary object that is interpreted, theorised and viewed as legitimate across stakeholders intersecting social worlds. Then as more and more humans and stakeholder groups become interested, mobilized, exercise their roles and start acting on the basis of the assumption that the particular business organisation as a boundary object is to be interpreted and viewed as legitimate, the legitimate business organisation is becoming constructed as a social fact.