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Rethinking New Venture's Cognitive Legitimacy: An Experimental Study
Author(s) -
Li Xueling,
Wang Chong,
Xu Xiaobo
Publication year - 2014
Publication title -
systems research and behavioral science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.371
H-Index - 45
eISSN - 1099-1743
pISSN - 1092-7026
DOI - 10.1002/sres.2281
Subject(s) - legitimacy , cognition , perception , reputation , perspective (graphical) , business , new ventures , marketing , product (mathematics) , psychology , entrepreneurship , political science , computer science , law , finance , artificial intelligence , geometry , mathematics , neuroscience , politics
New ventures' legitimacy problems, including cognitive legitimacy, appear to stem from ‘legitimacy threshold’ and ‘the liability of newness’. Based on the legitimacy model proposed by Shepherd and Zacharakis, we extended their cognitive legitimacy from the customer's perspective in this paper. A theoretical framework is proposed to build cognitive legitimacy from new ventures' product, organization, and managers by differentiating customers' positive perception and negative perception. 100 samples were collected in an experimental study to analyze 900 decision values. The findings suggest that a company's cognitive legitimacy is related to both quantity of information and quality of information owned by customers. Specifically, customers' positive cognition will improve cognitive legitimacy, whereas the negative will decrease it. Therefore, cognitive legitimacy includes not only corporate recognition but also corporate reputation. Copyright © 2014 John Wiley & Sons, Ltd.