What is it about?
How new sectors are created and legitimated is yet to be understood. This study puts forward a process model of new industry legitimation. The model theorizes the process of change from an initial condition in which an industry does not exist to a final condition in which it is institutionalized.
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Why is it important?
Our findings reveal three different contexts in which legitimation takes place: legitimation of the new industry and of the new venture domestically and internationally. A new venture drives the process of industry legitimation by achieving legitimacy threshold first nationally at meso and micro levels as well as internationally. The challenge therefore for such a venture is to establish legitimacy in the absence of any precedents at the organization, industry or international levels. Unless at least one new venture achieves legitimacy threshold in a new industry there is no possibility for that industry to become institutionalized. These findings lead us to speculate about whether there may be a role for investment in programs of industry legitimacy building in pursuit of public policy objectives.
Perspectives
This study is unique not only because it addresses an unexplored area of new industry creation and legitimation, but also because it is based on exclusive, ethnographic access to data and processes from the inception of the venture and the sector to their legitimation and institutionalization. Its findings have far reaching implications, especially for policy makers and international development organizations.
Dr. Romeo V. Turcan
Aalborg Universitet
Read the Original
This page is a summary of: An ethnographic study of new venture and new sector legitimation, International Journal of Emerging Markets, January 2016, Emerald,
DOI: 10.1108/ijoem-10-2012-0142.
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