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Organizational Legitimacy and Stakeholder Information Provision 1
Author(s) -
Woodward David G.,
Edwards Pam,
Birkin Frank
Publication year - 1996
Publication title -
british journal of management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.407
H-Index - 108
eISSN - 1467-8551
pISSN - 1045-3172
DOI - 10.1111/j.1467-8551.1996.tb00123.x
Subject(s) - accountability , legitimacy , extant taxon , mandate , principal (computer security) , stakeholder , interpretation (philosophy) , public relations , business , principal–agent problem , political science , law and economics , sociology , corporate governance , law , philosophy , evolutionary biology , politics , computer science , biology , operating system , linguistics , finance
One interpretation of the concept of organizational legitimacy is that it stems from the cultural values of society, and suggests that businesses operate under a mandate that may be withdrawn if organizations are seen not to be doing the ‘right’ things. This suggests there is something in the nature of a principal‐agent relationship in existence, and that some form of accountability is then owed by the agent (the organization) to the principal (society). This paper seeks to investigate the nature of this accountability, distinguishing between the accountability which exists towards those elements of society with which an organization has a contractual relationship, and those where it does not. Adopting a pluralist stance, stakeholder theory is then used to illustrate the possible nature of both the form of legitimacy relationship extant, and of the accountability that the principal might expect of the agent.