Abstract

Business legitimacy is important for any business, especially in times of economic downturn and increased media attention on corporate scandals. However,legitimacy is a quality that comes from society itself, sometimes influenced by the actions or image of the firm, but also rooted in the basic cultural values of the population. This study takes “legitimacy gap” as its dependent variable, defining it as the difference between expected and observed levels of social and environmental performance for both publicly-traded and family-owned business. The study was conducted with a random sample using mailed surveys, and was oriented towards the forest products sector. Results indicate that family-owned businesses have lower legitimacy gaps (therefore, higher legitimacy) than publicly-traded companies, especially when the latter are considered very profitable. These findings were especially strong for women and for respondentswith a high social responsibility (SRO) orientation.