Managing ‘legitimacy level and navigating institutional logics in transitional economies’

This paper examines how senior managers in public and private sector organisations navigated between competing logics in the highly contested environment of a transitional economy. The analysis reveals the role ‘legitimacy level’ plays in organisational survival where the rules of the game are uncertain and ambiguous. 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 in this area suggests that organisations with an established status are less likely to undertake radical changes due to fear of losing benefits in current arrangements and that they thus engage in incremental changes in their organisational practices, structures and strategies. In partial accordance with this literature we found that state enterprises sought to defend but also to extend their legitimacy building. In contrast, the privately-owned enterprises sought to construct a new legitimacy level. They did this through a combination of the adoption of some of the logics deployed by state-owned firms and an assertion of some distinctive logics.