Legitimacy, Inc: From Outsourcing over Crowdsourcing to the Open Sourcing of Governance in Standard Setting Organizations

Oliver Salomon & Simon Barducci

Student thesis: Master thesis


A new type of standard-setting organization (SSO) is emerging which is increasingly focused on the social embeddedness of corporate activity. In the literature addressing this modern SSO format we note capture and a regulatory race to the bottom as the most common critiques. This is troubling as it pertains to the legitimacy of organizations whose purpose is increasingly to legitimize corporate actions. Borrowing from the literature on Corporate Social Responsibility (CSR), we make the argument that these critiques can be productively engaged by incorporating an explicitly political purpose to the socially-oriented SSO. This conceptualization allows for new developments within the SSO literature via the incorporation of normative-prescriptive theories from the Political CSR literature. Conversely, focusing on the SSO from a CSR perspective allows for the development of the CSR literature via examples of practical implementation of concepts prevalent in the CSR literature. To evaluate the legitimacy of SSO governance mechanisms, we propose a framework for institutional comparison drawing on New Institutional Economics and an examination of case studies of governance within SSOs compared to that of select open-source projects. Our analysis suggests specific tenets as a basis for ensuring that the governance mechanisms applied are reflective of a ‘rough consensus’ with regards to an institution’s legitimacy. We propose a theoretical model of governance that goes beyond the current duality between principal and agent to suggest that governance relations are better constituted as a series of linked dyadic relationships as it expands the analytical focus to consider all layers of the legitimacy ‘stack’. The integration of these dyadic relationships via open-source governance mechanisms provides coherence and efficacy to the SSO and resolves the issues of capture and the race to the bottom associated with current state of SSO governance praxis.

Educations, (Graduate Programme) Final Thesis
Publication date2017
Number of pages145
SupervisorsDuncan Wigan