Managing Legitimacy in Business‐driven Social Change: The Role of Relational Work

This paper examines how companies manage their legitimacy in driving social change, drawing attention to how companies proactively negotiate their involvement with nonmarket actors. Building on the legitimacy‐as‐process perspective, I argue that companies construct the legitimacy of their involvement by engaging in relational work, i.e. by investing efforts in shaping their relations with others and thereby redefining roles and responsibilities. To explore the role of relational work in business‐driven social change, I present an inductive, interpretive study of a pharmaceutical company's efforts to build a market for its products by improving diabetes care in Indonesia. Grounded in the empirical study, I develop a process model to explain how legitimacy is redefined from the bottom‐up, i.e. how a company's involvement is re‐negotiated in situ and crafted to attain the social approval of a wider audience. Advancing the micro‐foundations of nonmarket strategy, my model offers new insights into how companies can organize with nonmarket actors and how they can effectively publicize their involvement as socially responsible. I also discuss the model's implications for a more critical research agenda on the political responsibilities of companies in social change.