Micro-level legitimacy in new industry creation : the role of media in legitimacy construction

Abstract

What is in common in most of the research about emerging industries is how they emphasize the importance of gaining and maintaining legitimacy. This makes sense, as legitimacy is commonly considered difficult to be gained and repaired but manageable to maintain once gained. After all, legitimacy management bases greatly on communication, more precisely to communication between the organization and its several audiences. For this reason only, it is critical to deepen our understanding about legitimacy’s complexity and multiplicity. This research has gathered a comprehensive introduction to the existing research over legitimacy (Suchman 1995), which is the leading light of the study, and its surrounding themes, such as institutional theory (Meyer & Rowan 1997 and DiMaggio & Powell 1983) as background and emerging industries (Aldrich & Fiol 1994 and McGahan et. al. 2004) as related environment, which again create the constructing structure for the study.

The literature implicates the same most of us have noted and witnessed; in today’s contemporary world, media, in all its forms, is a crucial macro-level actor which has a significant influencing power. Media has an impact on individuals’ impressions, attitudes and behavior towards the presented content in question, and thus has an impact on individuals’ micro-level legitimacy evaluations and judgments.

This study concentrated on deepening our understanding and further illustrating the complexity of building legitimacy for new industry by using cryptocurrency industry as an illustrative example and utilizing the means of quasi-experimental research.

Quasi-experimental research methods enabled to research the topic, nuances and trend changes in micro-level legitimacy views, which sometimes, is under such contextual constrain that it cannot be addressed with more conventional or standard approaches. Two major findings rose from the empirical findings; 1. All legitimacy category views (pragmatic, moral and cognitive) can be affected by and through media and 2. Respondents without prior experience in cryptocurrencies assumed that cryptocurrencies are generally considered as appropriate. Most notable findings within the sample group were related to nuance shifts and trend changes in respondents’ moral consequential legitimacy and cognitive comprehensibility views on micro-level, which were susceptible to media impact. It is commonly acknowledged that pragmatic legitimacy views reflect the audience self-interests directly or indirectly and therefore, can be manipulated and affected. However, it is notable that also parts of moral and cognitive legitimacy can be impacted, as they do not reflect individuals’ interest but rather individual’s evaluation what is correct and right thing to do and evaluation about inevitability. This study can be considered as a shout out for researchers to act upon the risen empirical findings to further study the phenomenon of impacting moral and cognitive micro-level legitimacy evaluations and judgments by and through media with either more in-depth qualitative approach or by conducting a true experiment with a larger sample group to generate results which could be more widely generalized.