Unveiling Propriety, Validity, and Consensus: A multilevel examination of legitimacy following the Global Financial Crisis

About the Research

Previous work on legitimacy has conceptualized its multilevel nature, encompassing individual-level propriety and collective-level validity. Recently, scholars have introduced the construct of consensus, the degree to which evaluators agree in terms of their propriety beliefs. While validity and consensus can overlap, they can also manifest distinctly, with validity masking underlying disagreement (i.e., low consensus). While some work has begun to theorize the effects of this validity-consensus incongruity from a multilevel perspective, it has not yet systematically integrated micro-oriented theory to explain how evaluators assess legitimacy. We address this gap by examining the individual-level consequences of the validity-consensus incongruity following a negative shock. Specifically, using a multilevel regression discontinuity design and data from 6,260 evaluators across 17 countries, we examine changes in evaluators’ propriety beliefs about the legitimacy of free markets following the 2008 global financial crisis. In contrast to prior research, we theorize that high validity amplifies a shock’s negative impact on evaluators’ propriety beliefs. In addition, we establish how consensus explains variation in evaluators’ responses to a shock, particularly in high-validity, low-consensus contexts. By bringing together two important strands of the legitimacy literature, we extend prior theory and pioneer an empirical test of legitimacy’s nuanced nature.

About Patrick Haack

Patrick Haack is a Professor of Strategy and Responsible Management at HEC Lausanne. His current research focuses on the study of legitimacy and legitimation. He is the Director of the HEC Research Center for Grand Challenges and an International Research Fellow at the Oxford University Centre for Corporate Reputation.

Date: Thursday 7 November, 2024

Time: 12:45-14:15 CEST

Venue: Room Roland Calori (B3), (Zoom link provided to registered attendees)

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