Global Compact International Yearbook 2013
19
legitimacy); they can (2) adapt to the social context, that is,
meet the expectations of their most important stakeholders
(
cognitive legitimacy); and (3) they can engage in dialogue with
the corporate critics and search for a consensus-based solution
to the issues that cause the legitimacy challenges (moral legiti-
macy). All three strategies are employed to maintain corporate
legitimacy or to restore it after a crisis. Research suggests that
to manage legitimacy successfully, corporations must be able
to activate multiple legitimacy strategies simultaneously.
Greater flexibility in the application of different legitimacy
strategies allows the corporation to develop better responses
to the constantly changing, multi-layered, socially complex
corporate environments of large multinational corporations
that operate in various jurisdictions and cultural settings, as
well as helping them to face the demands of a multitude of
different stakeholders.
However, each legitimacy strategy is associated with a specific
set of organizational capacities (e.g., organizational structures,
procedures, and competences), and combining different strat-
egies may require seemingly incompatible organizational
capacities. For example, a manipulative PR strategy requires
concerted efforts of all corporate functions. Particularly the
corporate communications function must be closely aligned
with all other activities in order to effectively shape public
perceptions. To simultaneously engage in a dialogue with crit-
ics (moral legitimacy) or to silently adapt to social demands
(
cognitive legitimacy) might undermine the effectiveness of
manipulation because these activities dilute the strategy’s
uncompromising focus. By contrast, companies that highlight
their stakeholder dialogue-orientation risk undermining the
dialogue’s credibility should their manipulation strategies
become public. Media reports have recently exposed the
extensive lobbying activities of companies that have built
their public image around a dialogue-oriented corporate CSR
program. The contradicting objectives of the lobbying strategy
called the sincerity of their corporate promises in the context
of CSR into question and resulted in a severe (legitimacy) crisis.
Given the obvious difficulties of creating organizational
capacities for different legitimacy strategies simultaneously,
we asked how organizations that are highly exposed to public
scrutiny design organizational structures and procedures to
manage these tensions. We therefore selected two large brands
Agenda
Stakeholder Management