Abstract
Entry of new organizations, including multinational enterprises from emerging markets (EMNEs), raises the ethical question of will they benefit society. The concept of legitimacy answers this question because it is the overall assessment of the appropriateness of organizational ends and means. Moreover, gaining legitimacy enables EMNEs to succeed in new host countries. Past work examined collective level indicators of the legitimacy of MNEs, but recent research recognizes the importance of individuals’ perceptions as the micro-foundation of legitimacy. This study first uses new pragmatism, deontology, and utilitarianism to demonstrate that legitimacy is fundamentally an ethical concept—a perspective that has been overlooked in management research. Second, this study uses a seven-step procedure to develop and validate a measure of individuals’ perceptions of the legitimacy of Chinese EMNEs operating in The Netherlands, a developed country. Six dimensions of legitimacy were identified. The study also finds support for this legitimacy judgment process linking the dimensions: validating knowledge → propriety judgments → generalized judgment. This work provides additional micro-foundations to research on legitimacy and contributes to the ongoing process of construct validation. Future research could use the validated measure in other settings and use specific ethical theories in depth to refine the concept of legitimacy.
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Notes
Authors’ calculation based on the data from UNCTAD https://unctadstat.unctad.org/wds/TableViewer/tableView.aspx
To ensure the translation accuracy and cross-cultural equivalence, we use the collaborative approach proposed by Douglas and Craig (2007). In the first stage, two translators translated the questionnaire from English into Dutch separately. In the second stage, a review meeting was held with the translators and two independent reviewers (one Dutch native speaker and one English native speaker) to decide on the final version. There were two main tasks in the meeting: one was to resolve inconsistencies, and the other was to ensure that the questionnaire accurately captures the same meaning in each language.
Data retrieved in Oct. 2017 from https://www.cbs.nl/en-gb
Data retrieved in June 2020 from https://www.statista.com/statistics/914489/population-of-the-netherlands-by-education-level/
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Acknowledgements
This research receives support from the Natural Science Foundation of China (NSFC) Research Grant (Project No.71562034). We appreciate the comments of Professor Paul Bliese and Professor Ravi Ramamurti. Prior versions were presented at The 6th Copenhagen Conference on Emerging Multinationals Economies and the Beedie School of Business at Simon Fraser University, and we thank participants for their insights.
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Jianhong Zhang declares that she has no conflict of interest; David L. Deephouse declares that he has no conflict of interest; Désirée van Gorp declares that she has no conflict of interest; Haico Ebbers declares that he has no conflict of interest.
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Appendices
Appendix 1 List of Survey Items
Items used to measure legitimacy in the first survey |
|---|
1. The Chinese firmsa conform to values held by our society |
2. The Chinese firms are committed to meet norms and cultures standards that our community expects of foreign owned firms |
3. The Chinese firms conform to regulatory standards in our society |
4. The business practice of Chinese firms is acceptable |
5. The business practice of Chinese firms is proper |
6. The business practice of Chinese firms is desirableb |
7. The business practice of Chinese firms is appreciatedb |
8. For Chinese firms, I see a gap between formally agreed upon behavior and behavior in practice regarding rules and regulationsb |
9. The Chinese firms are beneficial to our society |
10. The Chinese firms provide opportunities to us to overcome the economic recession |
11. The Chinese firms provide good product/services to our society |
12. The Chinese firms are involved in our communityb |
13. The Chinese firms are good citizensc |
14. The Chinese firms are non-problematicb |
15. I follow news about Chinese firms |
16. I discuss with friends and people around me about Chinese firms in The Netherlands and/or other countries |
17. I am aware that more and more Chinese firms come to Netherlandsc |
18. How often do you hear or read that Chinese firms are being questioned or challenged in terms of their activities? |
19. How often do you hear or read that Chinese firms are being endorsed in terms of their activities in terms of their activities? |
Additional items used to test criterion-related validity in the second survey |
20. I am willing to work for a Chinese firm in The Netherlands |
21. I am willing to enter into a working contract with a Chinese firm |
22. I am willing to recommend Chinese firms to my friends |
23. I feel proud of working for Chinese firms |
24. I am willing to use products and services provided by Chinese firms |
Appendix 2: The Descriptive Profiles of Two Surveys
Survey 1 | Survey 2 | |
|---|---|---|
Time | October and November 2016 | December 2016 to February 2017 |
Administration | On-line survey with Qualtrics | On-line survey with Qualtrics |
Language | English | Dutch |
Number of items measuring legitimacy | 19 | 14 |
Respondents | Students (International MBA, Executive MBA, Modular MBA, and Part-time MSc) at Nyenrode Business Universiteit | Dutch citizens. 28.0% of the respondents have university education |
Number of useable questionnaires | 201 | 318 |
Basic characteristics of respondents | Average age is 34 Percentage of females is 45.0% | Average age is 37 Percentage of females is 55.7% |
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Zhang, J., Deephouse, D.L., van Gorp, D. et al. Individuals’ Perceptions of the Legitimacy of Emerging Market Multinationals: Ethical Foundations and Construct Validation. J Bus Ethics 176, 801–825 (2022). https://doi.org/10.1007/s10551-020-04599-x
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DOI: https://doi.org/10.1007/s10551-020-04599-x