What is the Contemporary Approach of Organizations Towards Legitimacy?

Abstract

This thesis examines how organizations address the challenge of managing legitimacy in an increasingly complex environment characterized by shifting stakeholder dynamics. Legitimacy, as a concept, has been a subject of theoretical debate for decades. Milton Friedman's assertion in 1970 that organizations should primarily serve shareholder interests by maximizing profit within the boundaries of societal norms has been a foundational principle. However, societal expectations have evolved, leading to new perspectives on legitimacy. Drawing on evolutions within the field of academic articles on legitimacy, stakeholder- and issue management, this thesis searches to fill a gap in the existing research by employing fresh empirical data and comparing the findings to the frameworks of a stakeholder- and issue management perspective. By examining case studies of TERMA, Philip Morris, Danske Spil, and Danske Bank, this thesis explores the strategic communication processes these organizations employ to manage legitimacy in a rapidly changing environment. The analysis emphasizes the importance of ESG reporting, advocacy strategies, crisis communication, and stakeholder engagement in shaping organizational legitimacy. Moreover, by applying concepts such as strategic ambiguity and polyphony, organizations can engage multiple stakeholders and influence discourse within their respective issue arenas to enhance legitimacy. Through an in-depth exploration of these processes, this thesis aims to provide insights into how organizations can effectively manage legitimacy, navigate complex institutional environments, and maintain relevance and support from key stakeholders.