Abstract

Legitimacy is essential to the survival of new firms. In this research I empirically test how organizational actors negotiate interpersonal relationships, institutional constraints and resource limitations to achieve legitimacy. The critical question is: How do entrepreneurs define and work towards accomplishing legitimacy, given limitations of social, human and financial capital? In an effort to answer this research question, I am engaged in a year-long participant observation research in four small businesses: an aerospace factory, an organic farm, a florist, and a home health aide placement center. Each of these businesses is an exemplar of different “categories” of small businesses, distinguished by their business ownership structures (multiple family member ownership, franchisee owner, etc.), customer base (other businesses or customers) and business objectives (for-profit or not-for-profit).

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