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In search of sustainable legitimacy of private firms in China

Xin Liang (University of Minnesota Duluth, Duluth, Minnesota, USA)
Lin Xiu (University of Minnesota Duluth, Duluth, Minnesota, USA)
Sibin Wu (University of Texas Rio Grande Valley, Brownsville, Texas, USA)
Shujuan Zhang (Northwestern Polytechnical University, Xi’an, China)

Chinese Management Studies

ISSN: 1750-614X

Article publication date: 7 August 2017

Abstract

Purpose

Private firms in China are like the third child in a family, constantly struggling to establish their position in an environment favoring their state-owned and collective siblings. The purpose of this paper is to discover some long-term-oriented legitimacy building strategies for private firms in China.

Design/methodology/approach

This paper examines the effect of both internal and external institutional factors on long-term legitimacy for private enterprises. The authors integrate stakeholder perspective and institutional theory to provide a framework of building sustainable legitimacy.

Findings

The authors’ framework delineates that a private company can build sustainable legitimacy through catering long-term legitimacy conferring to constituents such as customers, social responsibility and patriotism in the external institutional environment.

Practical implications

The authors’ framework further indicates how private firms could leverage internal institutional environment through developing appropriate mission, culture, leadership and human resources practices in conformity to the demands of constituents for gaining long-term legitimacy.

Originality/value

This paper is the first to address the short-term nature of legitimacy building strategies proposed in the past literature. In addition, it is also the first attempt to explore the multiplicity in legitimacy in China in search of long-term legitimacy building approaches.

Keywords

Citation

Liang, X., Xiu, L., Wu, S. and Zhang, S. (2017), "In search of sustainable legitimacy of private firms in China", Chinese Management Studies, Vol. 11 No. 3, pp. 555-578. https://doi.org/10.1108/CMS-02-2017-0026

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited