Constructing and extending legitimacy, and exemplifying social orientation to manage competing institutional logics

The purpose of this paper is to examine how managers of economic organizations in volatile national settings, deal with the challenge of handling competing logics. The testbed for the investigation was a transitional economy. The research reported here contrasts the sense-making and logic-building work of two groups of strategic managers: one group in state-owned and state protected settings, and another group in competitive market settings. Previous work suggests that organisations with an established status are less likely to undertake radical changes due to fear of losing benefits. The study reported here reveals how the erstwhile protected state-owned organizations responded by seeking to extend their legitimacy claims whereas the emergent private sector organisations sought to construct a new legitimacy – in part by adopting some of the logics used by state-firms.