Legitimacy Theory

Legitimacy Theory is a concept that explains how organizations seek to maintain their acceptance and support from society. It suggests that companies must act in ways that are considered socially and ethically acceptable to their stakeholders, such as customers, employees, and communities. When an organization’s actions align with societal values and expectations, it is viewed as legitimate. If it strays from these values, it risks losing support and credibility. Essentially, legitimacy is about ensuring that a business not only complies with laws but also meets the broader expectations of the people it serves.