The Pursuit of Legitimacy. Corporate Use of Legitimation Strategies in CSR Crises.

Crises are well-recognized as events that damage a company’s positive reputation, i.e. stakeholder perceptions of the company’s favorability. A less recognized attribute that can be threatened by crises is legitimacy. Different from reputation, legitimacy describes stakeholder perceptions of the company’s appropriateness and conformity with social, value-driven expectations. The loss of legitimacy can cause substantial threat to a company’s existence. CSR crises are such incidents that put a company’s existence at risk. They are defined as incidents where stakeholders perceive the company or its actions as inappropriate regarding social norms and values. If exposed to a CSR crisis, companies thus need specific crisis communication that aims to regain lost legitimacy. These ‘legitimation strategies’ are subject of this research. The objective is to gain in-depth insight regarding the use of legitimation strategies in the face of CSR crises which require active regeneration of legitimacy. Guided by the main research question “How do companies aim to regain their legitimacy in the face of a CSR crisis?”, the press releases related to five CSR-crises from 2012 to 2017 were analyzed in a multi-case study. The affected companies were British bank Barclays, German automotive group Volkswagen, US drug producer Mylan, US bank Wells Fargo, and US airline United. The accused inappropriate incidents were either cases of fraud or cases of serious unethical behavior. In a thematic content analysis patterns of legitimation that could be found within the cases as entities, shifts of legitimation that come with the crisis progress, and patterns of legitimation that were found amongst the cases were examined. The results showed that legitimation in the case of a CSR crisis resembled the general discursive legitimation theories to a significant extent. Those results from practice that were different from the theory-based discursive framework could be explained as well. For instance, through other non-discursive legitimacy theories or the distinct characteristics of a CSR crisis. It was also recognized that different legitimation strategies are applicable for different legitimacy objectives. Legitimation in the analyzed cases was used holistically within the press releases. A universal legitimation approach with legitimation leitmotifs was visible. Legitimation progressively mutated along with the crisis. In the ‘reaction stage’ legitimation based on vague emotional claims, in the ‘correction stage’, information about legitimizing corrective actions were communicated. The ‘transformation stage’ bases on the acceptance that structural change is needed to regain institutional legitimacy. Claims of long-term corporate transformation and future-orientation were characteristic for this final stage. Legitimation patterns were not only visible within the cases but also amongst them. Main themes that were utilized prominently by most of the companies were for instance ‘customer commitment’ or the announcement to ‘make it right’. This overarching use showed that legitimation can be interpreted as a particular CSR crisis response strategy, a ‘regeneration of institutional legitimacy’ strategy.