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Types Of Legitimacy And How Normative And Regulative Legitimacy Is Managed

1259 words - 5 pages

Regulative Legitimacy
Regulative legitimacy is based on an organization following institutionalized laws and regulations that have been set in place. These are not necessarily based on governmental rules they can also be based on entities such as trade associations. Therefore the institutions that create these rules do not have to have legal power (such as trade associations). However, organizations follow these rules because they are valued by society and society sees organizations that follow the rules as legitimate. The organization decides whether to adhere to the rules by a cost benefit analysis, looking at whether the opportunity lost and the costs imposed by following these rules is overcome by the benefit of being seen as legitimate or if it is lower than a cost of a potential legal fine. By following rules the organization obtains societies approval and support, as it is acting in congruence to societies values. Since laws and regulations are seen as legitimate, following them creates legitimacy for the organization. Rules are followed by most organizations as it lowers uncertainty for them, since they know that other organizations are following them as well and so they know what actions to expect from them. It makes organizations appear rational, since they are following rules that people believe to be rational, since they reflect societies values and views. Therefore they settle for a stable and predictable environment in exchange for the potential to gain a competitive advantage that could come as a result of not following rules. The rules are also followed because of legal and societal repercussions that occur when organizations do not follow them, such as potential boycotts of the organization and fines imposed by government.
To maintain legitimacy at the regulative level organizations have to either follow or pretend to be following rules and regulations. Through isomorphism they take on the environmentally imposed rules and fit their organizational structure and procedures to align with them, at least in a publicly visible way. However, they do have the option of trying to influence what rules exist, and they can do so by lobbying the government and by legally trying to find reasons why they should be exempt from some of the laws. In some cases “powerful organizations attempt to build their goals and procedures directly into society as institutional rules” (Meyer and Rowan 348). If an organization is forced to adopt rules that are in opposition to another rule, which they are required to follow, they overcome this by only loosely coupling “their formal structures and actual work activities” and by not checking up on or paying attention to the results (Meyer and Rowan 341). They encourage “avoidance and discretion” with only truly sticking to some rules and put on a “ceremonial facade” by pretending that they follow the other rules. Companies use examples of times that rules are followed and display them in order to obtain...

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