LEGITIMACY AND LEGITIMACY STRATEGIES IN SOCIALENTERPRISES:A CASE STUDY.

LEGITIMACY

AND LEGITIMACY

STRATEGIES IN

SOCIAL

ENTERPRISES:

A CASE STUDY.

Author:

H.J.F. Jansen

Student number:

S3030911

Supervisor:

Dr. O. Belousova

Co-Assessor:

Dr. C.H.M. Lutz

Date: June

20th,

2017

Wordcount:

25108

Master Thesis

MSc. Small business & Entrepreneurship

Faculty of Economics and Business

ABSTRACT

4.1 CASE MAGANDA

In the pre start-up phase Janssens travelled to Indonesia to explain the benefits of cooperation to the social target group, which gained pragmatic legitimacy with them. Also this personal contact was used to gain personal legitimacy. Furthermore, clear agreements on the cooperation and the payment of fair amounts of money were implemented to gain pragmatic legitimacy with the social target group.

4.1.1 SUBTITEL

ACK

NOW

LEDGE

MENT

Before we really start I would like to thank a number of people who have helped me during the pro-cess of writing this thesis. First I would like to thank the four managers with whom I conducted the interviews for this study. With their help I was able to find useful data about legitimacy and legitima-cy strategies of social enterprises in practice. But most of all I would like to give my special thanks to Dr. O. Belousova for guiding me through the whole process from A to Z, so Olga: спасибо!

TABLE OF

CONTENTS

1 Introduction ... 6

2. Theory ... 10

2.1 Social entrepreneurship... 11

2.2 Legitimacy and legitimacy strategies... 12

2.3 Stakeholders... 14

2.4 Legitimacy and stakeholders over time... 16

2.5 Dynamism in goals over time... 19

2.6 Research framework... 20 3. Methodology... 22 3.1 Sampling... 23 3.2 Variables... 25 3.2.1. Legitimacy... 25 3.2.2. Stakeholders... 26 3.2.3. Legitimacy strategies... 28 3.2.4. Goal dynamics... 29 3.3 Data collection... 29 3.4 Data analysis... 30

3.5 Quality of the study... 31

4. Results... 32

4.1 Case BAST... 33

4.1.1. Stakeholders... 33

4.1.2. Types of legitimacy and legitimacy strategies... 34

4.1.3. Dynamics in goals over time... 38

4.1.4. Concluding remarks... 39

4.2 Case Maganda... 40

4.2.1. Stakeholders... 40

4.2.2. Types of legitimacy and legitimacy strategies... 40

4.2.3. Dynamics in goals over time... 44

4.2.4. Concluding remarks... 45

4.3 Case FairMail... 46

4.3.1. Stakeholders... 46

4.3.2. Types of legitimacy and legitimacy strategies... 46

4.3.3. Dynamics in goals over time... 50

4.3.4. Concluding remarks... 51

4.4 Case Tony’s Chocolonely... 52

4.4.2. Types of legitimacy and legitimacy strategies... 53

4.4.3. Dynamics in goals over time... 57

4.4.4. Concluding remarks... 58

4.5 Cross case analysis... 58

5. Discussion... 62 6. Conclusion... 66 6.1 General conclusion... 67 6.2 Managerial implications... 68 6.3 Limitations... 69 6.4 Recommendations... 69 References... 70

Appendix A - Time lines... 74

Appendix B - Interview guide... 91

Appendix C - Coding example (Tony’s Chocolonely... 92

TABLE OF

FIGURES

Table 1: List of definitions of legitimacy... 13

Table 2: List of stakeholder groups based on existing literature... 17

Table 3: Operationalization of stakeholder groups ... 27

Table 4: Interviewees... 30

Table 5: Circumstances of the interviews... 31

Table 6: Stakeholders of BAST... 33

Table 7: Stakeholders of Maganda... 40

Table 8: Stakehoders of FairMail... 46

During the past decades the phenomenon of social entrepreneurship has become increasingly popular as a research topic among scholars. The concept, a symbiosis of practices regarding societal improve-ment on one side and commerce to gain revenue at the other, has been defined in multiple ways in the literature. In the basis, what separates social entrepreneurship from regular commercial business practices in general, is the central mission that guides the business’ performance in the direction of a certain societal improvement (Austin, Stevenson & Wei-Skillern, 2006). Zahra, Gedajlovic, Neubaum & Shulman (2009) regard social entrepreneurship as a true entrepreneurial exploitation of opportuni-ties, by emphasizing the innovative character of merging social and commercial goals together in one business format. Others take a more skeptical perspective and states that social enterprises are not-for-profit organizations masking as for-not-for-profit (Reis, 1999). Recently, Doherty, Haugh & Lyon (2014), after reviewing multiple established approaches, came to the general conclusion that social entrepreneurship consists of the adoption of some form of commercial activity aiming at generation of revenue in order to succeed in certain social goals.

However, defining a goal as “social” does not yet concretizes the concept. In practice some businesses tend to focus on commercial aspects in order to improve human wellbeing and others focus on the commercial aspects to improve or protect the environment. These approaches are also referred to as “sustainable entrepreneurship” in the literature (Glavas & Mish, 2015). Moreover, implementation of the three aspects together in a business model as a “triple bottom line” approach is described as a “People, Planet and Profit” approach by Harris (2003). Where People resembles the focus on human wellbeing, Planet is about the environmental issues and Profit is about the commercial goals of the business to influence the two others.

Although more proper insights of social goals are facilitated by the triple bottom line approach, this set up can provoke conflicting views between people. “A great challenge for social enterprises is dealing with the conflicts resulting from the diverse expectations of stakeholders” (Yang & Wu, 2016, 327), because some stakeholders perceive the social goals to be fundamental for the enterprise, whereas others might see a priority in gaining economic profit, as Yang and Wu state. As a solution to the problem, they argue that a legitimation strategy should be incorporated into the design of a social enterprise’s business model.

Yet, in the literature, different approaches of the concept with regard to legitimacy have been evaluated so far, through different theoretical lenses. Sigaram (2016) looked at the moral and cogni-tive legitimacy of social ventures, focusing on the start-up phase of social enterprises until the nascent venture survival based on the first three years. This, in order to understand the relationship between legitimacy and resource acquisition. Creating awareness at stakeholders of established businesses is discussed by Bhutiani (2016). She mentions that different stakeholders take their own perspectives and to gain and maintain legitimacy with them in a social enterprise is important in order to overcome resis-tance to change among employees and more over to convince (potential) customers of the company’s social impact.

to be a strategy in case a business lost legitimacy over time due to certain business practices.

So the existing literature proposes general ideas about a dynamic legitimacy strategy with a firm’s audience. However, “how” this process is actually implemented in practice, especially with re-gard to social enterprises, is to the writer’s best knowledge, not yet well addressed in this literature. Because of the fact that social enterprises in general have another type of audience than traditional com-mercial businesses, findings about legitimacy strategies of existing literature might differ. For example the people in third world countries that are helped with the initiative, but also the fact that there are certain social goals that are aimed for, may reason for further research. Knowledge about practical im-plementation of these strategies over time can help managers of future social enterprises in developing a successful strategy for their business. Therefore, this study will elaborate on the practical implication of legitimacy strategies in social enterprises over time.

Furthermore, the basis of social enterprises often lies in visionary predefined goals of the entre-preneur, who wants to create a better world (Yusuf & Sloan, 2013). However, in their study Yusuf and Sloan found that during the start-up phase and also in later stages of the business life cycle, effectual decision-making approaches are used to build the business. Effectual decision-making approaches are characterized by using a given set of means to find possible effects that can be created with it. Moreover, in effectual approaches, the particular effect selected is a function of factors like the degree of control achieved through strategic alliances. (Sarasvathy, 2001) This view suggests that during the business life cycle, contrary to the initial vision of the entrepreneur, goals of the firm can change because of the influence of these factors. Since legitimacy with stakeholders is partly gained through the achievement of a business’ goal statements (Meyer, Rowan, Powell & DiMaggio, 1991) changes with regard to the goals may initiate a change in legitimacy perceptions with a firm’s audience as well. Nevertheless, this dynamic view with regard to a social firm’s goals is, to the extent of the writer’s knowledge, not yet well addressed in existing literature. If dynamism exists, this can have implications on stakeholder’s legitimacy and legitimacy strategies implemented by the social enterprises. This study therefore, will also look at the existence of dynamics in People, Planet and Profit oriented goals of social enterprises over time.

THE RESEARCH QUESTIONS ADDRESSED IN THIS STUDY:

Based on the research gaps identified in this paragrap, the following research questions are formulated: • Main research question: “How do social enterprises approach legitimacy and legitimacy

strat-egies in practice?”

To further specify the main research question, three sub questions are formulated. As determined in this introduction different types of legitimacy and legitimacy strategies can be distinguished, however how these are linked to the audience in practise is not yet well addressed in the literature, therefore the following sub question is developed:

• Sub question 1: “What types of legitimacy and legitimacy strategies do social enterprises use with the audience?”

Furthermore it has been determined that legitimacy strategies change over time, however how this is implemented in practice is not yet well addressed in existing literature, therefore the second sub ques-tion is stated as follows:

• Sub question 2: “How do the legitimacy strategies of social enterprises change over time?” Also the dynamics of social enterprises’ goals might exist according to the literature. If these exist, it might be an important influencer of legitimacy and legitimacy strategies for social enterprises, therefore the third and last sub question is as follows:

2

THEORY

THEORY

2.1 SOCIAL ENTREPRENEURSHIP

The phenomenon of social entrepreneurship is still a relatively young research domain. In the early stages the concept was linked to not-for-profit organizations, which implemented entrepreneurial ac-tivities to gain money for their charity (Chell, 2007). In her study she focused on the determination of social enterprises’ distinctive characteristics and endeavored to explain their emergence. In later stages this shifted towards studies investigating their management (Battilana and Dorado 2010; Pache and Santos 2011). And more recently critical views have been developed with regard to ethics in a social enterprise context (Teasdale 2012). These varying theoretical lenses have been assessed in the context of social enterprises because their characteristics deviate from traditional commercial organizations. “Social enterprises pursue the dual mission of achieving both financial sustainability and social pur-pose and, therefore, do not fit neatly into the conventional categories of private, public or non-profit organizations.” (Doherty, Haugh & Lyon (2014). Based on the review of multiple definitions, Doherty et al. divided the concept of social entrepreneurship in two main characteristics; having a commercial activity aiming at profit, and also having social contributions in order to create a better world, where the former is a mean to achieve the latter.

The social goals of a firm can be further specified and divided in two broad categories accord-ing to existaccord-ing theory. On one side social goals can focus on the wellbeaccord-ing of humans, and next to that a social goal can focus on impact to the environment (Margolis and Walsh 2003, Wood 2010, Glavas & Mish, 2015) If either one of the two is combined with a commercial business model, it constitutes a social enterprise with a double bottom line approach. In addition if both of them are intertwined with a commercial business model it constitutes a triple bottom line approach. Such a combination is rooted in the People, Planet and Profit approach as described by (Harris, 2003). Inherently, in such a set up there exists a conflict among the three dimensions, since they represent varying interests (Harris, 2003). The Profit perspective aims at gaining profit by producing products and services, while the Planet part aims at having a positive effect on the environment by decreasing the pollution because of the business prac-tices or even decrease it in general. The People part has its focus on communities in which the firm op-erates. In the literature it is found that the audiences, also referred to as stakeholders, see businesses as responsible entities for social and environmental practises (Sharma and Henriques 2005; Brammer and Millington, 2008). In addition, different interests of a firm’s stakeholders might influence the emphasis on the different goals of a social enterprise (Yusuf & Sloan, 2013). A way to deal with the conflicts is with finding ways to create legitimacy with stakeholders, however the ways to create legitimacy can differ among different stakeholders (Yusuf &Sloan, 2013), and moreover they can change over time (Suchman, 1995; Singaram 2016)

2.2 LEGITIMACY AND LEGITIMACY STRATEGIES

Legitimacy in business contexts has been viewed from multiple theoretical lenses in the past decades until now. Table 1 presents an overview of legitimacy definitions over time, adapted from Bitektine (2011), which recently also was used by Singaram (2016).

Before the 1960’s management theorists looked at organizations as if it were “rational systems”, which were basically designed for the transformation of material inputs into material outputs in an efficient way (Richard, 1992). However since the late 1960’s, views have changed and institutional theories concluded that different dynamics in an organizational environment do not come from technological or material aspects alone, but that cultural norms, beliefs, symbols and rituals are very important drivers too (Powell & DiMaggio, 1991). This change in view led to the concept of organizational legitimacy. As one of the first scholars that stressed out the principle, Parson (1960), implemented the concept of the shared values and beliefs about business practices towards its social system. Later Dowling and Pfeffer (1975) acknowledged cultural differences with respect to legitimacy. Also the variety of stake-holders related to legitimacy is further discussed by Deephouse (1996). These scholars focused mainly on cognitive legitimacy, which assumes organizations to be legitimate when they are “understandable”. However, another point of view constitutes evaluative legitimacy, resembling a firm’s “desirability” (DiMaggio & Powell, 1991). Despite the different perspectives on legitimacy, “many researchers em-ploy the term legitimacy, but few define it. Furthermore, most treatments cover only a limited aspect of the phenomenon as a whole and devote little attention to the systematizing alternative perspectives (...)” (Suchman 1995, p.572). In this study, Suchman proposed a clear and rather complete distinc-tion between different types of legitimacy, based on synthesizing a large base of scientific works. By taking into account both evaluative and cognitive dimensions in his definition he explicitly showed the dynamic views of the audience with respect to a firm’s legitimacy. Moreover, this double focused perspective, very well resembles the legitimacy circumstances of social enterprises as described by Singaram (2016), since both moral aspects towards the firm’s impact on society as well as the practical implications towards the stakeholders’ self-interest are taken into account. Moreover, since Suchman’s definition is considered rather complete and up to date by many scholars that recently used it as a basis for their study (Washington & Zajac, 2005; Bitektine, 2011; Singaram 2016), the definition of legitima-cy will also serve as a fundament for this master thesis.

Legitimacy is a generalized perception or assumption that the actions of an entity are

desirable, proper, or appropriate within some socially constructed system of norms,

values, beliefs, and definitions”. (Suchman, 1995, p. 574)

Looking at the three aspects “desirable, proper, or appropriate”, desirability is about actions that are wished for and perceived as attractive by the audience, it resembles the evaluative legitimacy approach. Furthermore, actions are proper if they are reasonable and understandable for the audience, resembling the cognitive legitimacy approach, and appropriateness is about the actions being suitable and conve-nient for the stakeholders, as a combination between evaluative and cognitive legitimacy (Suchman, 1995). Nevertheless, social desirable, proper, or appropriate actions remain subjective concepts which are for example cultural dependent (Dowling & Pfeffer, 1975), making it hard to define them properly.

Definition of legitimacy:

Source:

“Appraisal of action in terms of shared or common values in the context of the involvement of the action in the social system”

Parson (1960 p.175)

Justification of organization’s “right to exist” Maurer (1971 p. 361)

Implied congruence with the cultural environment, with “the norms of acceptable behavior in the larger social system”

Dowling & Pfeffer (1975 p. 122)

Activities that are accepted and expected within a context are then said to be legitimate within that context

Pfeffer (1981 p.4)

Array of established cultural accounts that “provide expla-nations for existence”

Meyer & Scott (1983 p. 201)

“Social fitness” Oliver (1991 p. 160)

A generalized perception of organizational actions as “de-sirable, proper, or appropriate within some socially con-structed system of norms, values, beliefs and definitions”

Suchman (1995, 574)

“The endorsement of an organization by social actors” Deephouse (1996 p. 102)

“Acceptance of the organization by its environment” Kostova & Zaheer (1999 p. 64)

“The level of social acceptability bestowed upon a set of activities or actors”

Washington & Zajac (2005 p. 284)

The degree to which broader publics view a company’s activities as socially acceptable and desirable because its practices comply with industry norms and broader societal expectations”

Rindova, Pollock, & Hayward (2006 p. 55)

“A social judgement of appropriateness, acceptance, and/ or desirability”

In order to give meaning to the three determinants, scholars have tried to develop distinctions in legitimacy types, resting on different behavioral dynamics. Some of them emphasize the political as-pects taking governmental rules and laws as input for legitimacy rules of thumb, leading to “regulatory legitimacy” (Deephouse, 1996) and “sociopolitical normative legitimacy” (Zimmerman & Zeitz, 2002). Others took into account the internal aspects of the organization with regard to its insiders leading to “internal legitimacy” (Kostova & Roth, 2002) and “personal legitimacy” based on the leader’s charisma (Suchman, 1995). From the different lenses, Suchman subtracted three broad types of legitimacy which he called “pragmatic legitimacy, moral legitimacy, and cognitive legitimacy”. They all contain a gen-eralized assumption “that organizational activities are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions.” (Suchman, 1995, 577).

• Pragmatic legitimacy:

Taking into account the outcomes of a business’ activities by and for the evaluator(s) him-, her- or themselves

• Moral legitimacy:

Taking into account normative approval of a business’ actions by and for society • Cognitive legitimacy:

Taking into account the comprehensibility and taken-for-grantedness of a business’ actions by and for society

As stated earlier, Suchman’s framework takes into account legitimacy issues with regard to a firm’s direct impact on its stakeholders; this is resembled in the pragmatic legitimacy. And as well it takes as global perspective with regard to society as a whole, by means of moral and cognitive legitimacy. This makes the model applicable in order to research legitimacy of social enterprises with its audience in a narrow and broader perspective. Moreover Suchman’s approach is based on a meta-analysis that takes into account a big share of literature in the field of legitimacy, increasing the reliability of the model. Therefore the framework of Suchman will be used as a basis in this paper. Furthermore legitimacy is inseparably linked to a firm’s audience; the next paragraph will further elaborate on that.

2.3 STAKEHOLDERS

To define more particular stakeholder groups, theory is needed that separates stakeholders from non-stakeholders (Mitchel, Agle and Wood, 1997). Looking at the established literature, different schol-ars have developed theory and determined more narrow definitions to make boundaries more explicit. In the early stages, Coronell & Shapiro (1987) focused on the corporate stakeholders or inves-tors, the ones that were related to the financing of a firm. More recently, Singaram 2016 also mentioned the importance of creating legitimacy with investors in order to gain (financial) resources in the startup phase of a social enterprise. Next to that, Coronell and Shapiro defined non-investor stakeholders look-ing at “the distinction between explicit contractual claims that firms issue to non-investor stakeholders, such as wage contracts and product warranties, and implicit claims, such as the promise of continuing service to customers and job security to employees.”( p. 6). These aspects of their study made them define stakeholders as “claimants” who have “contracts”. In addition, Langry (1994) put the emphasis on the stakeholders that do not have contracts, but that have a moral or legal claim: “The firm is signifi-cantly responsible for their well-being, or they hold a moral or legal claim on the firm.” (p. 433).

Although claimants and contracts thus seem to be important determinants of a firm’s stakehold-ers, for small businesses in particular, another important driver is mentioned by Thompson, Wartick & Smith (1991). According to them a key stakeholder group is formed by the professional network of the firm, which in case of small businesses not necessarily is based on contracts but also on trust (Hoffmann 7 Schlosser, 2001; Varamäki & Vesalainen, 2003). They see the relationships of small businesses with other organizations as a primary determinant of stakeholders. Many social enterprises van be consid-ered small businesses with less than 250 employees (www.socialenterprise.nl); therefore this stakehold-er group might be important for them as well.

Furthermore, by means of a meta-analysis, Mitchel, Agle and Wood (1997) determined three attributes that help managers to determine classes of stakeholders in a firm’s environment; “We then propose that classes of stakeholders can be identified by their possession or attributed possession of one, two, or all three of the following attributes: (1) the stakeholder’s power to influence the firm, (2) the legitimacy of the stakeholder’s relationship with the firm, and (3) the urgency of the stakeholder’s claim on the firm.” (Mitchel et al. 1997, 854) Based on the presence of these attributes a particular stakeholder’s salience can be determined and with that managers can decide on what stakeholder groups to prioritize their focus. The more these three attributes are present with a certain stakeholder group, the more priority managers should give to this stakeholder or stakeholder group according to Mitchel et al. However, Clarkson (1995) proposed a more predetermined and explicit stakeholder distinction for management by taking the corporate social performance as a base. This study assumes stakeholders as people closely related to a firm and who manage or whom have to be managed by the firm. Or as he stated it “Stakeholders are persons or groups that have, or claim, ownership, rights, or interests in a corporation and its activities, past, present, or future.” (Clarkson, 1995, 106) In this study he explic-itly mentions the general stakeholder groups; shareholders and investors, employees, customers, and suppliers are mentioned as primary stakeholders. Next to that he mentions the public stakeholder group consisting of governments and communities that provide the infrastructures and markets and whose rules and laws have to be obeyed. However the interdependence between a corporation and its primary stakeholder group is much higher than with the public stakeholder group according to Clarkson and therefore this former demands an active management. For this reason primary stakeholder groups might be most important for social enterprises as well.

and environmental impact (Sharma and Henriques, 2005; Brammer and Millington, 2008), which is closely related to the focus on social enterprises in this case.

Based on the previous mentioned literature seven main stakeholder groups have been deter-mined for social enterprises in this study. An overview is given in table 2. In the left column the names used in this study are proposed and in the right column the sources they are based on are mentioned. The primary stakeholder groups as presented by Clarkson seem to have overlap with most of the groups as mentioned by other scholars that are cited. Moreover, because this typology explicitly contains the most important general stakeholders in the supply chain, this will be used as a basis for this study. Investors and shareholders, employees, customers and suppliers are therefore taken into account. Looking at the suppliers of a social enterprise’s main products, these often are located in third world countries and be-come a special part of the enterprise because they are the drivers of the social goals of the firm. The sup-pliers therefore will be called the “social target group” in the sequel. The customers of social enterprises can be consumers or other businesses. As determined in the previous paragraph, social enterprises try to align their commercial goals with this stakeholder group, therefore it will be called the “commercial target group” from now on. Furthermore, investors and shareholders with social enterprises are divided in investors and owners in this study, since multiple social enterprise are privately owned entities with one or two owners and possibly external investors, or they are non-profit organizations transformed in a for profit organization with external investors (Smith, Cronley, & Barr, 2012). A fifth target group taken into account consists of the employees. Furthermore, Thompson et al (1991) mentioned the importance of a small business’ professional network partners. With respect to social enterprises a distinction is made between social and non-social partner organizations, these two groups might have some overlap with the other target groups mentioned, however those are often based on contracts, but for a small business network this is not necessarily the case.

However, now that more theoretical insight is gained in particular stakeholder groups of social enter-prises, their relationship with a firm’s legitimacy is still not yet well addressed. Therefore, in the next paragraph the relationships between these variables as well as their dynamics will be further developed.

Stakeholder group:

Source:

1. Social target group (The suppliers that are being helped with the ini-tiative)

“Have, or claim, ownership, rights, or interests in a corporation and its activities” Clarkson, 1995: 106

“The firm is significantly responsible for their well-being, or they hold a moral or legal claim on the firm.” Langtry, 1994:

433

2. Commercial target group (The ones that buy the products, so customers)

“Have, or claim, ownership, rights, or interests in a corporation and its activities” Clarkson, 1995: 106

“Those groups without whose support the organization would cease to exist” Standford memo, 1963

3. Investors “Have, or claim, ownership, rights, or interests in a corporation and its activities” Clarkson, 1995: 106

The importance of financial resources as mentioned by Singa-ram 2016

4: Owners “Have, or claim, ownership, rights, or interests in a corporation and its activities” Clarkson, 1995: 106

5: Employees “Have, or claim, ownership, rights, or interests in a corporation and its activities” Clarkson, 1995: 106

“Claimants who have contracts” as mentioned by Coronell &

Shapiro 1987: 5

6. Other social organiza-tions

“The relationship with another organization” as mentioned by

Thompson et al., 1991 : 209

7. Other non-social organi-zations

“The relationship with another organization” as mentioned by

privileges or discrimination towards the firm by its stakeholders. The higher the stakeholders place a business on their social rank, the higher its status. Status therefore can also be negative when a firm is assessed low on the social rank, which might be correlated to a decrease in legitimacy perception of the firm by its audience.

Reviewing more explicit legitimacy studies shows that businesses have different strategies to deal with dynamism in legitimacy perceptions by their stakeholders. Looking at the start-up phase of businesses, Meyer et al. (1991) propose that legitimacy with stakeholders has to be “gained”, for example through the achievement of a business’ goal statements. In addition, if firms are looking for support of the stakeholders, whether it is the government, investors or even the ones being served, the firm has to prove its worth (Singaram, 2016). As he states: “To attract a variety of resources they (social enterprises) have to convince their early stakeholders that they are legitimate bets.” (Singaram, 2016, p.1). Recently Bhutiani (2016) mentioned that different stakeholders take their own perspectives and to gain legitimacy with them in a social enterprise is important in the start-up phase, for example in order to overcome resistance to change among employees and more over to convince potential customers of the benefits of the company’s social impact. So, in general, gaining legitimacy with stakeholders seems to be an important practice in the emerging stages of a social enterprise. The process of gaining legiti-macy, according to Zimmer & Zeitz (2002), is formed by the strategic actions of the business that lead to legitimacy with the audience. And more precise, Suchman (1995) describes the gaining process as “building legitimacy” with stakeholders, which can be the case in two different situations; first when new firms enter new markets and second when new firms enter existing markets. According to him, in both situations a firm has to create legitimacy with (potential) stakeholders.

Some studies tend to take more mature business stages into account and propose that legitimacy strategies, other than gaining, are implemented in these later stages of a business life cycle. For example Ashforth & Gibbs’ (1990) paper “explores how organizations often “protest too much” their legitimacy and produce the opposite effect of that desired.” (Ashforth & Gibbs, 1990, p. 177). Herein they focus on established firms that are in a situation where legitimacy is already present. However since they assume legitimacy is dynamic, extending, maintaining and defending legitimacy strategies are proposed to be important for later stages in a business life cycle.

They assume that extending legitimacy occurs when organizations become established or when they enter new domains of activity or utilize new structures and processes. According to the paper, ex-tending legitimacy focuses on winning the confidence and support of “wary constituents and potential constituents”. In that sense it has some overlap with gaining legitimacy with potential stakeholders, which also could be seen as winning support of potential constituents.

and make these explicitly noticeable for their existing stakeholders.

The third strategy that is mentioned by Ashforth & Gibbs, defending legitimacy, happens when the gained legitimacy of a firm is threatened or challenged, leading to intense and reactive actions by the management of a firm. Or in other words, when a firm’s gained positive status is threatened (Wash-ington & Zajac, 2005).

Furthermore, another strategy is mentioned by Suchman (1995), called repairing legitimacy. As he describes repairing legitimacy has a lot in common with gaining legitimacy. However instead of creating legitimacy, repairing resembles a “reactive response to an unforeseen crisis of meaning” (Suchman, 1995, p. 597). It is about rebuilding legitimacy with established stakeholders that have had perceived legitimacy but lost it because of certain events. In that sense it resembles the repair of a firm’s lost positive status (Washington & Zajac, 2005).

The five types of legitimacy strategies determined in this paragraph; gaining, extending, main-taining, defending and repairing seem to cover important legitimacy strategies in businesses. How-ever, the exact implementation of each strategy during a business life cycle is not clearly stated in the literature. Partly this could be due to the fact that business life cycles are not very well specified in the articles, the only distinction found is between young start-up situations (Bhutiani, 2016) and more established situations (Ashforth & Gibbs’ 1990) in general. And next to that also because moments of strategy implementation have to do with the development of the status and reputation of a firm, which is not only time dependent but is also influenced by multiple factors like goal statements, performance or transparency of communication for example. (Meyer et al., 1991; Zimmer & Zeitz 2002 : Washington & Zajac, 2005) For that reason no clear statement can be made about specific important life cycle stages within legitimacy strategies, other than the distinction between the importance of gaining in start-up and younger phases and the importance of extending, maintaining, defending and repairing in later stages. Furthermore the literature does not propose any clear distinction about legitimacy strategies with regard to different specific stakeholders as the ones proposed in table 2 on page 17. For that reason this study will look at how the variables of legitimacy types, strategies, a firm’s stakeholder groups relate to each other. A parametrization of the five types of legitimacy strategies will be provided in the method section.

2.5 DYNAMISM IN GOALS OVER TIME

in contrast to the initial vision of the entrepreneur. If dynamism exists, this can have implications on stakeholder’s legitimacy perceptions and legitimacy strategies implemented by the social enterprises, since legitimacy with stakeholders is partly gained through the achievement of a business’ goal state-ments (Meyer et al., 1991) To the writer’s best knowledge, there is not yet any clear literature about the dynamism of social enterprises’ goals. Therefore in this study it will be investigated if this dynamism in social enterprises really exists.

2.6 RESEARCH FRAMEWORK

In this chapter different variables have been defined. First a clear definition of social enterprises is gen-erated by taking into account three variables with regard to the firm’s goals; social, environmental and commercial goals, where commercial should combined with at least one of the others.

The importance of legitimacy with respect to social enterprises is stressed out and is defined by means of existing literature. The definition and model of Suchman (1995) will be used as a basis for this study, taking into account three types of legitimacy; pragmatic-, moral- and cognitive legitimacy. To the writer’s best knowledge, how these three types of legitimacy are related to specific stake-holder groups is not yet clearly studied from the social enterprises point of view, in existing literature. Therefore, seven different stakeholder groups that seem to be related to social enterprises have been determined based on existing literature; the social target group, commercial target group, investors, owners, employees, other social organizations and other non-social organizations. In this study it will be researched if and how the different legitimacy types are linked to the types of stakeholder groups. Furthermore, according to the literature discussed, “time” is correlated with dynamism in legit-imacy. Therefore enterprises in general seem to incorporate five different types of legitimacy strategies; gaining, extending, maintaining, defending and repairing legitimacy are proposed. With regard to social enterprises, to the writer’s best knowledge, it is not yet clearly described how social enterprises the strategies in practice. Therefore, this will be focused on in this study.

Finally, in this chapter it is also determined that with the passing of time, certain events might happen that initiate a dynamism of a firm’s goals. The goals of a social enterprise, the social-, environ-mental- and commercial goals, therefore might change or shift in importance. Since it is also determined that a social enterprises’ goals are an important gainer of legitimacy with stakeholders this phenomenon might influence the legitimacy perceptions with the stakeholders. Therefore this study will also assess the existence of goal dynamism.

3.1 SAMPLING

The goal of the study is to extend existing knowledge about legitimacy with regard to social enterprises. To do so it is tried to find what types of legitimacy and legitimacy strategies these firms aim for in prac-tice and also it is tried to find out to what extend a social enterprise has dynamic goals. This has been translated in the following research question and sub questions:

• Main research question: “How do social enterprises approach legitimacy and legitimacy strate-gies in practice”

• Sub question 1: “What types of legitimacy and legitimacy strategies do social enterprises use with audience?”

• Sub question 2: “How do these legitimacy strategies of social enterprises change over time?” • Sub question 3: “To what extend are the goals of social enterprises dynamic over time?” In order to develop theory based on practical insights, a case study can best be used (Yin, 1994). There-fore, in this study four qualitative case studies are explored to find answers on the research questions. The businesses taken into account were BAST, Maganda, FairMail and Tony’s Chocolonely. They are selected based on theoretical sampling, as proposed by Glaser & Strauss (1967), where different cri-teria are taken into account. First, the cases had to include social enterprises that have either a double or triple bottom line goal orientation. That means that a combination of People and or Planet oriented goals had to be combined with a Profit oriented goal (Harris, 2003). Second, the firm’s had to provide information transparently (Eisenhardt, 1989). Therefore, information about performance and impact had to be provided through online channels such as corporate websites and social networks. Third, homo- and heterogeneity between the cases was taken into account (Eisenhardt, 1989). Two young and two more established firms have been observed in order to create heterogeneity that made measurement of legitimacy strategy differences over time possible. Furthermore, homogeneity was created by select-ing businesses that are all Dutch founded enterprises, that sell physical products, and that have a social target group sited in a third world country. This was done in order to constrain variation in variables that might bias outcomes. It turned out that all businesses involved can be considered social enterprises with a triple bottom line approach. A brief description of all four cases can be found on the next page.

The first case takes into account BAST, the company is established in in 2013 by Jeroen

Marto-no Janssens. BAST sells barbeque briquettes made of waste material from the coconut industry

in Indonesia. The main focus of BAST is threefold. It tries to sell quality briquettes to

custom-ers in the western market. Quality of the products is assured by the fact that the briquettes burn

longer, more constant and warmer than existing traditional briquettes made from charcoal.

Moreover, it produces less smoke than the traditional ones. Next to that, BAST focuses on

the environmental impact by means of reducing coconut waste in Indonesia and the fact that

forests are saved, since traditional barbeque briquettes are made of wood. And finally there is

a direct impact on the wellbeing of the population in Indonesia by stimulating the local

econo-my. This is done by producing the briquettes, packages and brochures in Indonesia with local

people for fair prices.

The second case involves the company Maganda. The firm was established in 2015 and

oper-ates since 2016. The main goals of this young firm are threefold. It has a commercial focus by

selling shoes to the Dutch market through their own web shop. The current focus of Maganda is

to sell summer shoes to women that are into fashion and care about sustainability as well. Next

to that the firm focuses on the wellbeing of people from the Philippines, by letting local

shoe-makers produce the shoes for fair prices. Moreover these people are actively involved in the

process where they have to come up with input for the business structures and activities. As a

third goal, the company focuses on producing and selling in a sustainable manner by using

nat-ural materials for the shoes, waste material for packaging and green transportation for delivery.

FairMail is the third case. This firm was established in 2006 by Janneke Smeulders and in

2007 her partner Peter den Hond joined the company. The main focus of the firm is threefold.

The commercial goal of the firm is to sell content for post cards to established publishers. The

content consists of photographs made by teenagers in three third world countries; Peru, India

and Morocco. This makes the link to the social goal of the firm, which is to provide teenagers

from under developed areas with the opportunity to develop themselves. These kids get free

photography lessons, this teaches them to create good quality photographs. FairMail uses these

photographs for the content of their cards, in return the teenagers earn money for each card that

is sold with their content. They have to invest the money in education, housing and health care

insurances. As a third focus point, FairMail tries to be environmentally sustainable by printing

cards on FSC paper and bio ink and using bio plastics for packaging.

3.2 VARIABLES

In this paragraph the different variables as determined in the theory chapter will be further specified and operationalized. First the different types of legitimacy will be further specified, then the stakeholder groups are parametrized, followed by the legitimacy strategies, finally also goal dynamics will be taken into account.

3.2.1 LEGITIMACY

To define legitimacy, the definition as proposed by Suchman (1995) is used: “Legitimacy is a general-ized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions.” (Suchman, 1995, p. 574). In his article, Suchman proposes a more specific legitimacy typology that further defines legitimacy. This typology will be used in order to operationalize the legitimacy variables and make them measur-able in this study. The following varimeasur-ables are taken into account:

1. Pragmatic legitimacy

Pragmatic legitimacy “rests on the self-interested calculations of an organization’s most immediate audiences.” (Suchman, 1995, p. 578). These are the direct exchanges between the business and its au-dience. Sometimes it can also involve broader political, economic, or social interdependencies, where the behavior of the business visibly affects the well-being of the audience.

2. Moral legitimacy

Moral legitimacy is approved with the societal norms. It is the evaluation of the business and its activi-ties and whether or not it is morally acceptable (Aldrich & Fiol, 1994). It is less individualistic oriented than the pragmatic legitimacy. Or as Suchman describes it: “Unlike pragmatic legitimacy, moral legit-imacy is “sociotropic”- it rests not on judgments about whether a given activity benefits the evaluator, but rather on judgments about whether the activity is “the right thing to do.” (Suchman, 1995, p. 579). Furthermore Suchman states that it often represents the outcomes of the particular activities and its effect on societal welfare. The moral legitimacy is subdivided in four categories; “consequential legit-imacy, procedural legitlegit-imacy, structural legitlegit-imacy, and personal legitimacy.” The moral legitimacy will be measured based on these four sub categories:

2.1 Consequential legitimacy is about the evaluations of outputs and its consequences. In tra-ditional markets consumer’s judgements of quality and value for example are important deter- minants of this type of legitimacy.

2.2 Procedural legitimacy takes into account evaluations of techniques and proce- dures. Organizations can be considered moral legitimate when they make use of socially accepted techniques and procedures with regard to for example producing, selling and shipping their products.

a business’ ability to stably replicate procedures. For example the availability of departments with skilled people that are “right for the job” is important.

2.4 Personal legitimacy is the final type of moral legitimacy, which is about the eval-uations of leaders and representatives of the business. The charisma and traits of indi- vidual organizational leaders are influencers of this type of moral legitimacy.

3. Cognitive legitimacy

Cognitive legitimacy proposes an important role for comprehensibility in legitimation, in the sense that culture defines explanations for an organization’s existence and its practices, therefore these prac-tices have to be understandable for the audience as Suchman states. Next to that it is representing the taken-for-grantedness of business practices by the audience. These are “widely held beliefs and taken-for-granted assumptions that provide a framework for everyday routines, as well as the more specialized, explicit and codified knowledge and belief systems promulgated by various professional and scientific bodies” (Scott, 1994, p. 81). Zimmerman and Zeitz (2002) state in a broader sense that cognitive legitimacy gives an identification of the “game” and, therefore, constructs reality for the participants in a social manner. So cognitive legitimacy is about the taken-for-grantedness of a social enterprise’s practices.

To measure the presence of all different types of legitimacy in this study, it first was looked at what activ-ities and events are important according to the social enterprises in order to create legitimacy with the audience. And second the outcomes were compared with the definitions as proposed in this paragraph to determine the presence of the legitimacy types, by the researcher. This was done with respect to seven distinct stakeholder groups as determined in the theory section. The next sub paragraph will provide an operationalization of these stakeholder groups.

3.2.2 STAKEHOLDERS

Stakeholder

group:

Source:

Operationaliza-

tion:

1. Social target group

“Have, or claim, ownership, rights, or interests in a corporation and its activities” Clarkson, 1995: 106 “The firm is significantly responsible for their well-being, or they hold a moral or legal claim on the firm.” Langtry, 1994: 433

People in third world countries who are aimed for with regard to the social goals (so the suppliers).

2. Commercial target group

“Have, or claim, ownership, rights, or interests in a corporation and its activities” Clarkson, 1995: 106 “Those groups without whose support the organiza-tion would cease to exist” Standford memo, 1963

The people that are aimed for with re-gard to the commer-cial goals (so the customers).

3. Investors “Have, or claim, ownership, rights, or interests in a corporation and its activities” Clarkson, 1995: 106

The importance of financial resources as mentioned by Singaram 2016

The people external from the company, who have a finan-cial share in the company.

4: Owners “Have, or claim, ownership, rights, or interests in a corporation and its activities” Clarkson, 1995: 106

The people with legal ownership of the firm.

5: Employees “Have, or claim, ownership, rights, or interests in a corporation and its activities” Clarkson, 1995: 106 “Claimants who have contracts” as mentioned by

Coronell & Shapiro 1987: 5

The people that are working for the so-cial enterprise with a definite or indefi-nite contract.

6. Other social organizations

“The relationship with another organization” as

mentioned by Thompson et al., 1991 : 209

Other organizations that have a social goal.

7. Other non-social organizations

“The relationship with another organization” as

mentioned by Thompson et al., 1991 : 209

3.2.3 LEGITIMACY STRATEGIES

In the theory section different legitimacy strategies have been determined (Ashforth & Gibbs, 1990; Suchman, 1995; Meyer et al., 1991). The implementation of these different strategies over time will be assessed with respect to the different stakeholder groups as defined earlier. The different legitimacy strategies are now further specified and operationalized.

1. Gaining

Gaining legitimacy has been proposed by multiple scholars. Meyer et al. (1991) propose that legitimacy with stakeholders has to be “gained”, therefore the firm has to prove its worth. Suchman (1995) de-scribes the gaining process as “building legitimacy” and Singaram (2016) emphasizes the social enter-prises have to convince their early stakeholders to attract resources. Based on these existing definitions, gaining legitimacy in this study is seen as the concept where businesses try to create legitimacy with stakeholders or potential stakeholders, who up till the particular moment in time did not yet perceive the legitimacy.

2. Extending

Ashforth & Gibbs (1990) propose extending to be another important legitimacy strategy in later life cy-cle stages when new domains of activity are entered or new structures and processes are utilized. Based on their theory, extending legitimacy in this study is seen as the business practices that aim at winning the confidence and support of untrusting stakeholders and potential constituents.

3. Maintaining

Maintaining legitimacy according toAshforth & Gibbs occurs when a firm gained enough endorsement with its stakeholders for ongoing activity. They say the process of maintaining legitimacy includes 1) a firm’s effort to make sure that the ongoing role of performance and the symbolic assurances are all well, and 2) a firm’s anticipation and prevention of potential challenges to legitimacy. In addition Suchman (1995) acknowledged maintaining as an important legitimacy strategy. According to his view business-es are continuously in danger because of environmental threats. They therefore should continuously try to predict future changes and protect past accomplishments and make these explicitly noticeable for their existing stakeholders. Based on this literature, maintaining legitimacy in this study is seen as the actions undertaken by a firm to make sure gained legitimacy is prevented from decreasing by making sure ongoing performances and assurances are well and by making sure potential challenges to estab-lished legitimacy are predicted and prevented.

4. Defending

Ashforth and Gibbs also mention defending legitimacy as an important strategy. Based on their insights this happens when managers of a firm show intense and reactive actions because of gained legitimacy being threatened or challenged.

5. Repairing

To measure the presence of the different types of legitimacy strategies in this study, it is looked at what activities and events are important according to the social enterprises in order to create legitimacy with the audience. And second the outcomes are compared with the definitions as proposed in this paragraph to determine the presence of the legitimacy strategies by the researcher. This is done with respect to the seven distinct stakeholder groups.

3.2.4 GOAL DYNAMICS

Finally the goal dynamics were measured with respect to the three dimensions People, Planet and Prof-it. As determined in the theory section dynamism might exist over time. Dynamism was measured by determining the shift in relative importance of the three types of goals for the firm. It will be looked at if there is a difference between the goals as set by the vision of the entrepreneur in the startup phase and what they are in the current situation.

3.3 DATA COLLECTION

Primary data is gathered by means of in-depth interviews with owners/ managers of the firms, and sec-ondary data is collected through analysing the companies’ online information, such as corporate web-sites, fora, social media and official documents like annual reports. New data and sources were added until no new or valuable information could be found anymore (Strauss & Corbin, 1990).

At first the secondary data was gathered, it was used to analyse the businesses and their time-lines, the outcomes are presented in Appendix A. Based on these insights and the variables, as oper-ationalized in the previous paragraph, a semi-structured interview was developed that is presented in Appendix B. The primary data was collected by means of conducting the interviews with owners or managers of the different enterprises, see table 4 on the next page. The interviews were recorded and later transcribed. The aim of the interviews was to understand which activities and events in the firms’ existence contributed to the firms’ legitimacy and legitimacy strategies and how the businesses changed over time and what the visions are with regard to the future.

It is chosen to collect the primary data by means of interviews with the ownners/ managers of the firms for the following reasons:

• Since they are actively part of the business on a daily basis, they are the ones that have the complete overview and therefore can best provide valuable information about the

firm’s legitimacy strategies with regard to all stakeholders

• Furthermore this approach is very suitable for gaining insights in who the relevant holders for the firms are, which provides an opportunity for future research, for example

to verify and extend the outcomes of this study with these particular stakeholders • Moreover, looking at the time constraints of this research, this approach provided the

3.4 DATA ANALYSIS

Different methods to analyse data, as presented by Eisenhardt (1989), were used in this paper. A with-in-case analysis is conducted for each of the before mentioned cases. All the data gathered from desk research is analysed by reading and interpreting with regard to the earlier operationalized variables. The outcomes are used as input for setting up the interviews. Furthermore, the interviews were analysed by reading, coding and interpreting them. Finally a cross-case analysis was conducted by comparing the outcomes of the individual within-case analyses to find any similarities or contradictions.

Open and axial coding

After reading the interview transcripts thoroughly, open coding was performed. Paragraphs and sen-tences were summarized by writing down their meaning with a couple of words. In that way different paragraphs were linked.

Furthermore, also axial coding was performed. The paragraphs and sentences derived from the open coding procedure were, whenever possible, matched with; stakeholder groups, type of legiti-macy, legitimacy strategy, and the goal orientations. These insights were derived from the researcher’s interpretations. Firstly, the seven types of stakeholders were assessed by asking the question: To what stakeholder groups does this relate? Next to that the types of legitimacy was assessed by asking the question: What type of legitimacy is related to it? The legitimacy strategies were assessed by asking the question: What is the influence of it on legitimacy? And finally to determine the orientation of the underlying business goals, the following question was asked: What type(s) of goals are pursued with these actions? Appendix C provides an example of the coding with regard to the social target group of Tony’s Chocolonly.

Case:

Interviewee:

BAST Jeroen Janssens, CEO Maganda Loes van Rheen, CEO FairMail Peter den Hond, CCO/ CFO Tony’s Chocolonely Henk Jan Beltman, CEO

3.5 QUALITY OF THE STUDY

The quality of this study is obtained by different aspects. First, written memos for the interview guide were used to direct the research activities and to guarantee controllability (Corbin & Strauss, 2008). The memos were set up in a detailed manner in order to make replication of the research by others possible (Aken, Berend & Bij, 2012) (see appendix B). In addition, the circumstances of the interviews are presented in table 5 below. Second, to be reliable the outcomes have to be independent of the re-search to make it generalizable (Yin, 2003). To overcome the problem, the rere-search biases are avoided as much as possible by using the same guiding questions in the interviews with different participants as well as using the same interviewer to conduct them. Moreover, the interviews have been recorded to avoid missing important information. To overcome instruments biases, multiple research instruments were applied, like analysing documents and desk research in combination with in-depth interviews. This triangulation helps to avoid biases of the single instruments by complementing and correcting each other (Aken et al., 2012). Moreover, by using two different types of data a stronger substantiation of constructs and propositions can be provided (Eisenhard, 1989). Also controlling for respondents is mentioned as important for the independence of the respondents included in the research (Aken et al., 2012). Therefore different social entrepreneurs were interviewed separately (Aken et al., 2012). Third the experiment was also validated for construct-, internal- and external validity. Results therefore have to be justified by the way they are generated (Aken et al., 2012). Construct validity is described as “es-tablishing correct operational measures for the concepts being studied” (Yin, 1994, p.34). Therefore, the questions regarding the interviews in this study were based on the literature and they aimed at analyz-ing the presence of all variables determined in the theory section. In addition, internally validity arises when conclusions about relationships are justified and complete (van Aken et al., 2012). The varying perspectives and experiences of the different entrepreneurs increased the likelihood that relevant links are determined. Finally, the outcomes of the study are based on the views of different entrepreneurs; this increases the chances of generalizability and thus external validity (Van Aken et al., 2012).

Case:

Circumstances:

BAST A face to face interview of 1 hour was conducted, using a semi-stan-dardized interview guide with follow up questions.

Maganda A Skype interview of 1 hour was conducted, using a semi-standardised interview guide with follow up questions

FairMail A Skype interview of 1 hour was conducted, using a semi-standardised interview guide with follow up questions

Tony’s Chocolonely A phone call was made to conduct an interview of 1 hour, using a semi-standardised interview guide with follow up questions

4

RESULTS

4.1 CASE BAST

4.1.1 STAKEHOLDERS

Stakeholder group:

Stakeholders with regard to BAST:

1. Social target group • The Indonesian producer of cocos briquette and its work-force

2. Commercial target group

Direct:

• The retailers, both social and non-social oriented

Indirect (Consumers):

• Hard core barbecuer, with no interest in the social aspect, only focus on quality product

• The group of mainstream family barbecuers

• The sustainable oriented people, that often buy fair trade and social responsible products

3. Investors • 2 external shareholders • Crowd funders

4: Owners • Jeroen Janssens 5: Employees

-6. Other social orga-nizations

• Social retailers (like WAAR)

• Social enterprises to do promotions with (like GRO, Bar-relQ)

• Social platforms (like socialenterprise.nl, ONE WORLD and Cordaid)

7. Other non-social organizations

• Specialist (web)shops for barbecuers (like Intratuin and vuurenrook.nl)

• Schools and universities (like university of Wageningen)

4.1.2 TYPES OF LEGITIMACY AND LEGITIMACY STRATEGIES

In this paragraph it will be assessed what types of legitimacy exist in case of BAST with regard to the seven distinct stakeholder groups. Moreover it will be determined what actions BAST implemented or still implements for gaining, maintaining, extending, defending and repairing the different types of legitimacy.

Social target group

In the pre start-up phase Janssens travelled to Indonesia to explain the benefits of cooperation to the social target group, which gained pragmatic legitimacy with them. Also this personal contact was used to gain personal legitimacy. Furthermore, clear agreements on the cooperation and the payment of fair amounts of money were implemented to gain pragmatic legitimacy with the social target group.

Later, during the cooperation this legitimacy was extended and maintained by involving the social target group in the process of product development and “letting them be responsible for their own business” as entrepreneurs. This transparent and clear setup also was implemented to gain procedural and structural legitimacy with the social target group. A practical example of this fair cooperation:

The supplier came up with the idea to sell single briquettes that work for 1,5 hours, they asked me how I thought about the idea and they asked me what design would work best. I decided to make the briquette round to make it not too different from the existing competition and now we sell it.”

Furthermore, the complete product with packaging is produced in Indonesia to create more awareness with these stakeholders of what they actually produce, Janssens hopes to gain a more taken for granted-ness in this way, so cognitive legitimacy is gained and maintained:

I believe people need to be actively involved in the process. In this sense people (from Indonesia) are able to run their own business and provide themselves with an income. With BAST I try to do that by buying the products in Indonesia and also let them pack it there, so the people there see what they actually produce.”

Commercial target group

Within this group a distinction can be made between retailers and consumers. The consumers can be subdivided in three types; the “left wing” that puts focus on buying sustainable products, the “middle group”, represented by families that like to barbecue and also like the addition of a social goal, and the “right wing” that wants quality barbecue equipment and that does not care about social goals.

First, for the left wing, social goals are communicated; BAST gains consequential legitimacy by showing the potential impact on the environment. Therefore, the decrease of coconut waste and wood logging that is needed with traditional charcoal is communicated. Structural and procedural le-gitimacy are gained by explaining the “fair chain”; the complete production process is outsourced to the Indonesian supplier for a fair price, and the company is actively made part of the development process.

To maintain and extend this legitimacy, the firm continuously communicates transparently

about the progress and development of the factory and its workers in Indonesia by means of photos and text on the corporate website and social media, as can be seen in Appendix A. In addition cognitive legitimacy is gained by cooperating with retailers that resemble the needs of the three consumer groups:

(…) it is important to have retailers that serve all the different types (of consumers). For example FONQ.nl is a retailer that serves the mainstream group, WAAR is for the left wing and the specialized barbeque web shops like vuurenrook.nl serve the

die-hard barbecuers on the right side, where the last group is less interested in the social story.”

This cognitive legitimacy was further maintained and extended by increasing the amounts of retailers. For the left wing group an important step was that “de Wereldwinkel” became a sales partner and later also the WAAR shops. In addition, winning the Cordaid award and being linked to social platforms like socialenterprise.nl helped with gaining taken for grantedness, leading to cognitive legitimacy:

Partners are really important to create a good image of your company, especially for social enterprises. For example Cordaid is an important partner for BAST, they support the plans and ideas of enterprises with awarding them. 10.000 euros in my case. When such a platform shows trust in you it convinces other people of your trustworthiness.”

For the mainstream and right wing consumers, mostly the quality of the products has to be convinc-ing. Therefore, BAST communicates the long and equal heating capacity of the briquettes and the little amount of smoke produced compared to traditional charcoal, especially for the people that barbe-que frebarbe-quently, this is very important. With that pragmatic and consebarbe-quential legitimacy is gained. In addition, partnerships with specialized retailers, like vuurenrook.nl, are used to support these quality statements. Later these legitimacy types also were extended using tutorial videos on YouTube that help consumers to use the briquettes.

To serve all consumers BAST also innovates. On product level it recently introduced a new product, the “BAST ONE”, aiming at a specific niche market of people that live in the city. This gains pragmatic and consequential legitimacy with a new group of customers. Also at the moment it cooper-ates in a project with the University of Wageningen. Looking at the future, BAST is planning to launch a web shop where the consumer can buy the products directly with BAST; this might become the next step in maintaining and extending pragmatic and consequential legitimacy as well as structural and procedural legitimacy, with all three types of consumer groups:

I also want to work on consumer relations, for example a web shop with the option to start a subscription structure where people can order a product online with one press on the button…. I often get these requests, and I don’t want to waste that potential, moreover the margins are higher in that case so there is a good opportunity to increase sales and thus impact.”

A final action of the company that is intended to maintain and extend legitimacy with regard to the middle group and right wing consumers is a rebranding:

Currently I am doing a rebranding. So far I always focused on the sustainability as pects and the social aspect with my layout. Looking at the packaging for example this

“

“