Public Sector Innovation, Social Entrepreneurship and Business Legitimacy

The chapter discusses legitimacy in relation to public sector innovation, social entrepreneurship, and CSR. All three terms refer to organizing principles and managerial trends that, implicitly or explicitly, have implications not only for our understanding of organizations but also of the role and division between the three sectors of society. The chapter aims to understand legitimacy as a critical concept in relation to these three phenomena and analyzes and discusses ways to study legitimacy in relation to them. It draws on legitimacy studies in institutional theory with its sociological and empirically oriented approach and political philosophy with a normative understanding of legitimacy, and the potentials and challenges of these two approaches to legitimacy are discussed. Legitimacy in relation to public sector innovation, in a normative sense, always follows the idea about what the public sector is and should be. The study of social entrepreneurship deploys an institutional theory conception of legitimacy to challenge economic and rationalist explanations for the emergence of social enterprise, thereby displaying its ideological and political underpinnings. The study of CSR critically discusses an example of deliberative legitimacy, which represents direct transfer of a normative political concept of legitimacy to corporate legitimacy studies. The discussion shows that the premises of such a transfer need to be further developed in order to be empirically and normatively convincing.