Abstract:This paper is a preliminary attempt to better understand the concept of legitimacy in stakeholder theory. The normative component of stakeholder theory plays a central role in the concept of legitimacy. Though the elaboration of legitimacy contained herein applies generally to all “normative cores” this paper relies on Phillips’s principle of stakeholder fairness and therefore begins with a brief description of this work. This is followed by a discussion of the importance of legitimacy to stakeholder theory as well as the (...) general ambiguity of the term. A distinction is then drawn between normative and derivative legitimacy. Reference to this distinction helps distinguish between a relationship with the organization based on direct moral obligation and one based on the power to help or harm the organization. It is concluded that stakeholders who retain the ability to affect the organization arelegitimate(derivatively), but that this legitimacy is derived from the moral obligation owed other (normative) stakeholders and that the two sorts of legitimacy are importantly different from one another. An example of the normative/derivative distinction at work in managerial decision making is elaborated upon and managerial and research implications are then suggested. (shrink)

Declining levels of stakeholder trust in business are of concern to business executives and scholars for legitimacy- and performance-related effects. Research in the area of stakeholder trust in business is nascent; therefore, the trust formation process has been rarely examined at the stakeholder level. Furthermore, the role of personal values as one significant influence in trust formation has been under-researched. In this paper, we develop a contingency model for stakeholder trust formation based on the effects of stakeholder-specific vulnerability and personal (...) values of the trustor. Using a factorial vignette methodology, we find that Schwartz’s value set interacts with stakeholder roles so that trustworthiness signals of competence and character play differing roles during trust formation. These results inform stakeholder trust research, organizational trust research, and research in personal values. The research also informs managers tasked with rebuilding stakeholder trust in business. (shrink)

We dedicate this book to John Thibaut. He was mentor and personal friend to one of us, and his work had a profound intellectual influence on both of us. We were both strongly influenced by Thibaut's insightful articulation of the importance to psychology of the concept of pro cedural justice and by his empirical work with Laurens Walker in reactions to legal institu demonstrating the role of procedural justice tions. The great importance we accord the Thibaut and Walker work is (...) evident throughout this volume. If anyone person can be said to have created an entire field of inquiry, John Thibaut created the psychological study of procedural justice. (To honor Thibaut thus in no sense reduces our recognition of the contributions of his co-worker, Laurens Walker, in the creation of the field. We are as certain that Walker would endorse our statement as we are that Thibaut, with characteristic modesty, would demur from it. ) Even to praise Thibaut in this fashion falls short of recognizing all of his contributions to procedural justice. Not only did he initiate the psy chological study of the topic, he also built much of the intellectual foun dation upon which the study of procedural justice rests. Thibaut's work with Harold Kelley (1959; Kelley & Thibaut, 1978) created a social psy chological theory of interdependence that, among many other applica tions, serves as the basis for one of the major models of the psychology of procedural justice. (shrink)

ABSTRACT:Re-establishing trust presents a complex challenge for a firm after it commits corporate misconduct. We introduce a new construct, moral salience, which we define as the extent to which the firm’s behavior is morally noticeable to the stakeholder. Moral salience is a function of both the moral intensity of the firm’s behavior and the relational intensity of the firm-stakeholder psychological contract. We apply this moral salience construct to firm misconduct to develop a model of trust repair that is based on (...) goodwill, and moderated by the firm’s stakeholder culture. (shrink)