Seeking Strategic Coherence - Balancing Internal and External Legitimacy in Pluralistic Settings

Within an through strategic practices, organizations (whether for-profit, non-profit or public) strive for legitimacy of their goals and actions, both internally vis-à-vis employees and internal stakeholders as well as externally with respect to external stakeholders and the wider society. Thus, if we are to understand strategy as social practice, we need to develop a subtler understanding of these internal and external legitmation processes.

In order to account for and in defining an organization's aspiration to balance internal and external legitimacy, we offer the notion of strategic coherence. Strategic coherence (as intended outcome of strategy formation) refers to an ideal, hard to attain balance between internal and external legitimacy. Further, we suggest legitimation as the discursive processes organization's engage in when seeking internal and external legitimacy. In particular, we posit that internal and external legitimation processes are central to organizational strategy work. The content or object of these legitimation processes seems mainly to be an organiziation's identity. Internally, competing organizational identity claims are negotiated in order to be 'validated' by internal stakeholders. Externally, a validated organizational identity claim is advocated in order to be 'accredited' by an organization's environment. Lastly, we suggest that accomplishing strategic coherence is more challenging in pluralistic organizations.

Our research project aims to further recent advancements in the study of competitive advantage that take a social constructivist orientation - a perspective that suggests competitive success may involve achieving a balance of the external expectations that are held within a firm's external environment and of those internal expectations that are held within a firm's internal environment. In this respect, we offer of the concept of strategic coherence and explore processes of how organizations aim at seeking a balance between managing internal and external legitimacy. Then, we wish also to contribute to institutional theory and to research on legitimacy by exploring how organizations actually reconcile external representation and internal workings. Lastly, our focus also furthers prior research on how organizations aim to establish external legitimacy and to acquire resources from external resource-holders by elaborating on the internal dynamics through which multiple groups of actors may aim to mobilize their own interests in the construction and reconstruction of those basic images through which organizations present themselves to others.

Swiss National Science Foundation Professorship