Effect of Social Pressure and Trust on Organizational Legitimacy: A Retailing Sector Perspective

Abstract

Enterprises operate in complex and competitive environments where stakeholders have become more demanding regarding corporate behavior. Organizations must respond to social demands and build trust among stakeholders to be perceived as legitimate. Positive legitimacy evaluations give companies better access to relevant resources, stakeholder support, higher purchasing levels, or stronger commitment. In the retailing sector, competition has strengthened even more than in other sectors due to the complexity of differentiation through tangible matters. Therefore, the main objective of this research is to analyze the effect of social pressure and trust on organizational legitimacy. Next, the impact of legitimacy on consumer purchase intention and engagement will be analyzed. An online survey was distributed among Spanish consumers to achieve this purpose, gathering 200 valid responses. To treat the data, PLS-SEM was applied, and the results confirmed a positive and significant relationship between trust, social pressure, and legitimacy, as well as between legitimacy, engagement, and purchase intention. This situation reflects the importance of appropriate corporate behavior for the success of corporations. The implications of this research can be used by retailing sector managers to improve their social acceptance, ensure long lasting relationships, and improve sales in the future.

Keywords

• social pressure
• trust
• legitimacy
• purchase intention
• engagement

References

1. Adomako, S., and NguYen, N. P. (2023). Eco-innovation in the extractive industrY: Combinative effects of social legitimacY, green management, and institutional pressures. Resources Policy, 80, 103184. doi:10.1016/j.resourpol.2022.103184 google scholar
2. Ailawadi, K. L., Neslin, S. A., Luan, Y. J., and TaYlor, G. A. (2014). Does retailer CSR enhance behavioral loYaltY? A case for benefit segmentation. International Journal of Research in Marketing, 31(2), 156-167. https://doi.org/10.1016/j.ijresmar.2013.09.003 google scholar
3. Aksak, E. O., Ferguson, M. A. and Duman, S. A. (2016). Corporate social responsibilitY and CSR fit as predictors of corporate reputation: a global perspective. Public Relations Review, 42(1), 79-81. https://doi.org/10.1016/j.pubrev.2015.11.004 google scholar
4. Andersch, H., Arnold, C., Seemann, A. K., and Lindenmeier, J. (2019). Understanding ethical purchasing behavior: validation of an enhanced stage model of ethical behavior. Journal of Retailing and Consumer Services, 48, 50-59. https://doi.org/10.1016/j. jretconser.2019.02.004 google scholar
5. Arnold, S. J., Handelman, J. and Tigert, D. J. (1996). Organizational legitimacY and retail store patronage. Journal of Business Research, 35(3), 229-239. https://doi.org/10.1016/0148-2963(95)00128-X google scholar
6. Asgari, A. (2016). LegitimacY of local food in the US market: comparative consumer perspectives. https://doi.org/10.13023/ETD.2016.485 google scholar
7. Bagozzi, R. P., and Yi, Y. (1988). On the evaluation of structural equation models. Journal of the Academy of Marketing Science, 16(1), 74-94. doi:10.1007/BF02723327 google scholar
8. Balaji, M. S., Jiang, Y., and Jha, S. (2019). Green hotel adoption: a personal choice or social pressure? International Journal of Contemporary Hospitality Management, 31(8), 3287-3305. doi: 10.1108/IJCHM-09-2018-0742 google scholar

9. Barreto, I., and Baden-Fuller, C. (2006). To conform or to perform? Mimetic behavior, legitimacY-based groups and performance conse-quences. Journal of Management Studies, 43(7), 1559-1581. doi: 10.1111/j.1467-6486.2006.00620.x google scholar
10. Blanco-Gonzalez, A., Diez-Martîn, F., Cachon-Rodrîguez, G., and Prado-Român, C. (2020). Contribution of social responsibilitY to the work google scholar
11. involvement of emploYees. Corporate Social Responsibility and Environmental Management, 27(6), 2588-2598. doi: 10.1002/csr.1978 google scholar
12. Bianchi, E., Bruno, J. M., and Sarabia-Sanchez, F. J. (2019). The impact of perceived CSR on corporate reputation and purchase intention. google scholar
13. European Journal of Management and Business Economics, 28(3), 206-221. https://doi.org/10.1108/EJMBE-12-2017-0068 google scholar
14. Bodolica, V. and Spraggon, M. (2015). An examination into the disclosure, structure, and contents of ethical codes in publiclY listed acquiring firms. Journal of Business Ethics, 126, 459-472. doi:10.1007/s10551-013-1966-x google scholar
15. Brunk, K. H. (2010). Exploring the origins of ethical company/brand perceptions: a consumer perspective of corporate ethics. Journal of Business Research, 63(3), 255-262. https://doi.org/10.1016/j.jbusres.2009.03.011 google scholar
16. Cachon-Rodrîguez, G., Blanco-Gonzâlez, A., Prado-Român, C. and Fernândez-Portillo, A. (2024). How compulsive and impulsive buYİng affect consumer emotional regulation. ls anxietY a differential element?. European Journal of Management and Business Economics. doi: 10.1108/EJMBE-06-2023-0172 google scholar
17. Chen, Y.S. (2010). “The drivers of green brand equitY: green brand image, green satisfaction, and green trust”, Journal of Business Ethics, 93(2), pp. 307-319. https://doi.org/10.1007/s10551-009-0223-9 google scholar
18. Chin, W. W., Marcolin, B. L. and Newsted, P. R. (2003). A partial least squares latent variable modeling approach for measuring interaction effects: results from a Monte Carlo simulation studY and an e-mail emotion/adoption studY. Information Systems Research, 14(2), 189-217. doi:10.1287/isre.14.2.189.16018 google scholar
19. Clarkson, M. E. (1995). A stakeholder framework for analYzing and evaluating corporate social performance. Academy of Management Review, 20(1), 92-117. doi:10.5465/amr.1995.9503271994 google scholar
20. Corciolani, M., Gistri, G., and Pace, S., (2019). LegitimacY struggles in palm oil controversies: an institutional perspective. Journal of Cleaner Production 212, 1117-1131. doi:10.1016/j.jclepro.2018.12.103 google scholar
21. Czinkota, M., Kaufmann, H. R. and Basile, G. (2014). The relationship between legitimacY, reputation, sustainabilitY and branding for companies and their supplY chains. Industrial Marketing Management, 43(JanuarY), 91-101. https://doi.org/10.1016/j.indmarman. 2013.10.005 google scholar
22. De Melo, J., and Solleder, J. M. (2020). Barriers to trade in environmental goods: How important theY are and what should developing countries expect from their removal. World Development, 130, 104910. doi:10.1016/j.worlddev.2020.104910 google scholar
23. Deephouse, D. L., BundY, J., Tost, L. P. and Suchman, M. C. (2017). Organizational legitimacY: six keY questions. The SAGE handbook of organizational institutionalism 4(2), 27-52. https://doi.org/10.4135/9781446280669.n2 google scholar
24. Dîez-Martîn, F., Blanco-Gonzâlez, A., and Miotto, G. (2022). The impact of state legitimacY on entrepreneurial activitY. International Entrepreneurship and Management Journal, 18(2), 935-955. doi:10.1007/s11365-020-00724-4 google scholar
25. Dîez-Martîn, F., Blanco-Gonzâlez, A., and Prado-Român, C. (2020). The intellectual structure of organizational legitimacY research: a co- google scholar
26. citation analYsis in business journals. Review of Managerial Science, 15(1), 1007-1043. https://doi.org/10.1007/s11846-020-00380-6 google scholar
27. Dodd, M. D. and Supa, D. (2015). Testing the viabilitY of corporate social advocacY as a predictor of purchase intention. Communication Research Reports, 32(4), 287-293. doi:10.1080/08824096.2015.1089853 google scholar
28. Du, S. and Vieira, E. T. (2012). Striving for legitimacY through corporate social responsibilitY: insights from oil companies. Journal of Business Ethics, 110, 413-427. doi:10.1007/s10551-012-1490-4 google scholar
29. Barometer, E. T. (2020). Trust barometer spring update: trust and the COVlD-19 pandemic. Edelman. https://www.edelman.com/ research/trust-2020-spring-update google scholar
30. EesleY, C. and Lenox, M. J. (2006). Firm responses to secondarY stakeholder action. Strategic Management Journal, 27(8), 765-781. doi:10.1002/smj.536 google scholar
31. Fornell, C., and Larcker, D. F. (1981). Evaluating the structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39-50. https://doi.org/10.1177/002224378101800104 google scholar
32. Freudenreich, B., Lüdeke-Freund, F., and Schaltegger, S. (2019). A stakeholder theorY perspective on business models: value creation for sustainabilitY. Journal of Business Ethics, 166(1), 3-18. https://doi.org/10.1007/s10551-019-04112-z google scholar
33. Fuentes, C., and Sörum, N. (2019). Agenting ethical consumers: smartphone apps and the sociomaterial reconfiguration of everYdaY life. Consumption Markets & Culture, 22(2), 131-156. doi:10.1080/10253866.2018.1456428 google scholar
34. Garanti, Z. (2019). Ethical brand perceptions and their impact on brand loYaltY and brand choice intentions: mediating role of emotional brand attachment. Journal of Yaşar Üniversitesi, 14(56), 448-459. https://dergipark.org.tr/en/download/article-file/844931 google scholar
35. Glozer, S., Caruana, R., and Hibbert, S. A. (2019). The never-ending storY: discursive legitimation in social media dialog. Organization Studies, 40(5), 625-650. doi: 10.1177/0170840617751006 google scholar
36. Govind, R., Singh, J. J., Garg, N. and D’Silva, S. (2017). Not walking the walk: how dual attitudes influence behavioral outcomes in ethical consumption. Journal of Business Ethics, 155(4), 1-20. doi:10.1007/s10551-017-3545-z google scholar
37. Guo, H., Tang, J. and Su, Z. (2014). To be different, or to be the same? The interactive effect of organizational regulatorY legitimacY and entrepreneurial orientation on new venture performance. Asia Pacific Journal of Management, 31, 665-685. doi:10.1007/ s10490-013-9361-9 google scholar
38. Guo, R., Tao, L., Bingxin, C. and Tao, W. (2017). A path analYsis of greenwashing in a trust crisis among Chinese energY companies: the role of brand legitimacY and brand loYaltY. Journal of Business Ethics, 140(3), 523-536. doi:10.1007/s10551-015-2672-7 google scholar
39. Haack, P., Sieweke, J., and Wessel, L. (2019). Microfoundations and multi-level research on institutions. İn microfoundations of institu-tions (pp. 11-40). Emerald Publishing Limited. https://doi.org/10.1108/S0733-558X2019000065A005 google scholar
40. Hair, J. F., Risher, J. J., Sarstedt, M. and Ringle, C. M. (2018). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2-24. https://doi.org/10.1108/ebr-11-2018-0203 google scholar
41. HalevY, N. (2017). Preemptive strikes: fear, hope, and defensive aggression. Journal of Personality and Social Psychology, 112(2), 224. doi:10.1037/pspi0000077 google scholar
42. Hallak, R., Assaker, G., O’Connor, P. and Lee, C. (2018). Firm performance in the upscale restaurant sector: the effects of resilience, creative self-efficacY, innovation and industrY experience. Journal of Retailing and Consumer Services, 40, 229-240. doi:10.1016/ j.jretconser.2017.10.014 google scholar
43. Handelman, J. M., and Arnold, S. J. (1999). The role of marketing actions with a social dimension: appeals to the institutional environ-ment. Journal of marketing, 63(3), 33-48. https://doi.org/10.1177/002224299906300303 google scholar
44. Henseler, J., and Schuberth, F. (2020). Using confirmatorY composite analYsis to assess emergent variables in business research. Journal of Business Research, 120, 147-156. https://doi.org/10.1016/j.jbusres.2020.07.026 google scholar
45. Hsu, C. H. C., Oh, H. and Assaf, A. G. (2012). A customer-based brand equitY model for upscale hotels. Journal of Travel Research, 51(1), 81-93. doi: 10.1177/0047287510394195 google scholar
46. lglesias, O., Markovic, S., Singh, J. J., and Sierra, V. (2019). Do customer perceptions of corporate services brand ethicalitY improve brand equitY? Considering the roles of brand heritage, brand image, and recognition benefits. Journal of Business Ethics, 154, 441-459. https://link.springer.com/article/10.1007/s10551-017-3455-0 google scholar
47. Julian, S. D., Ofori-Dankwa, J. and Shepard, A. (2017). Cognitive antecedents of highlighting and decoupling in response to social pressure. Group & Organization Management, 44(3), 652-684. doi: 10.1177/1059601117696679 google scholar
48. Kim, J., Ha, S., and Fong, C. (2014). Retailers’ CSR: the effects of legitimacY and social capital. International Journal of Retail & Distribution Management, 42(2), 131-150. doi: 10.1108/ijrdm-10-2012-0092 google scholar
49. Liu, C., Guo, Y. M. and Lee, C. (2010). Effects of relationship qualitY and switching barriers on customer loYaltY. International Journal of Information Management, 31(1), 71-79. doi:10.1016/j.ijinfomgt.2010.05.008 google scholar
50. Mahadeo, J. D., Oogarah-Hanuman, V. and SoobaroYen, T. (2011). Changes in social and environmental reporting practices in an emerging economY (2004-2007): Exploring the relevance of stakeholder and legitimacY theories. Accounting Forum, 35(3), 158-175. https:// doi.org/10.1016/j.accfor.2011.06.005 google scholar
51. Mena, J. A., Hult, G. T. M., Ferrell, O. C., and Zhang, Y. (2019). Competing assessments of market-driven, sustainabilitY-centered, and stakeholder-focused approaches to the customer-brand relationships and performance. Journal of Business Research, 95, 531-543. doi:10.1016/j.jbusres.2018.07.038 google scholar
52. Miotto, G., Gonzâlez, A. B. and Del Castillo Feito, C. (2018). Social responsibilitY: a tool for legitimation in Spanish universities' strategic plans. Tripodos, 42, 59-79. https://dialnet.unirioja.es/servlet/articulo?codigo=6673755 google scholar
53. Miotto, G., Del-Castillo-Feito, C., and Blanco-Gonzâlez, A. (2020). Reputation and legitimacY: keY factors for higher education institutions’ sustained competitive advantage. Journal of Business Research, 112, 342-353. https://doi.org/10.1016/j.jbusres.2019.11.076 google scholar
54. Miotto, G., and Youn, S. (2020). lmpact of fast fashion retailers’ sustainable collections on corporate legitimacY: Examining the mediating role of altruistic attributions. Journal of Consumer Behavior, 19(6), 618-631. https://doi.org/10.1002/cb.1852 google scholar
55. NunnallY, J. C., and Bernstein, l. H. (1994). PsYchometric TheorY (3rd ed.). McGraw-Hill. google scholar
56. Panzone, L. A., Larcom, S., and She, P. W. (2021). Estimating the impact of the first COVlD-19 lockdown on UK food retailers and the restaurant sector. Global Food Security, 28, 100495. https://doi.org/10.1016/J.GFS.2021.100495 google scholar
57. PaYne, G., Blanco-Gonzâlez, A., Miotto, G., and del-Castillo, C. (2021). Consumer ethicalitY perception and legitimacY: Competitive advantages in COVlD-19 crisis. American Behavioral Scientist, 00027642211016515. doi: 10.1177/00027642211016515 google scholar
58. Porter, M. E. and Kramer, M. R. (2007). StrategY and societY: the link between competitive advantage and corporate social responsibilitY. Strategic Direction, 23(5). https://doi.org/10.1108/sd.2007.05623ead.006 google scholar
59. Reinartz, W., Haenlein, M. and Henseler, J. (2009). An empirical comparison of the efficacY of the covariance-based and variance-based (SEM). International Journal of Research In Marketing, 26(4), 332-344. doi:10.1016/j.ijresmar.2009.08.001 google scholar
60. Schamp, C., Heitmann, M., and Katzenstein, R. (2019). Consideration of ethical attributes along the consumer decision-making journeY. google scholar
61. Journal of The Academy of Marketing Science, 47(2), 328-348. doi:10.1007/s11747-019-00629-x google scholar
62. Smith, J. R., TerrY, D. J., Manstead, A. S. R., Louis, W. R., Kotterman, D. and Wolfs, J. (2008). The attitude-behavior relationship in consumer conduct: the role of norms, past behavior, and self-identitY. The Journal of Social Psychology, 148(3), 311-334. doi:10.3200/ SOCP.148.3.311-334 google scholar
63. Suchman, M. (1995). Managing legitimacy: strategic and institutional approaches. Academy of Management Review, 20(3), 571-610. doi: 10.2307/258788 google scholar
64. TYler, T. R. (2006). PsYchological perspectives on legitimacY and legitimation. Annual Review of Psychology, 57(1), 375-400. doi: 10.1146/ annurev.psYch.57.102904.190038 google scholar
65. Valor, C., Lloveras, J., and Papaoikonomou, E. (2021). Role of emotion discourse and pathic stigma in the delegitimization of consumer practices. Journal of Consumer Research, 47(5), 636-653. https://doi.org/10.1093/jcr/ucaa028 google scholar
66. Waldron, T. L., Navis, C., and Fisher, G. (2013). Explaining differences in firms’ responses to activism. Academy of Management Review, 38, 397-417. https://doi.org/10.5465/amr.2011.0466 google scholar
67. Walsh, M. F., Page Winterich, K. and Mittal, V. (2010). Do logo redesign help or hurt Your brand? The role of brand commitment. Journal of Product & Brand Management, 19 (2), 76-84. https://doi.org/10.1108/10610421011033421 google scholar
68. Woods, T., Asgari, A. and Rossi, J. (2018). Trust signals and legitimacY in local products for local markets. Choices, 33(3), 1-8. doi:10.22004/ ag.econ.276741 google scholar
69. Yang, K., Kim, J., Min, J., and Hernandez-Calderon, A. (2021). Effects of retailers’ service qualitY and legitimacY on behavioral intention: the role of emotions during COVlD-19. The Service Industries Journal, 41(1-2), 84-106. doi:10.1080/02642069.2020.1863373 google scholar