Organizational legitimacy and resource acquiring in new venture: The case of organic food social enterprises

Most new ventures suffer from the liability of newness. They usually have limited resources to compete effectively against established organizations, so they need external resource for their survival and growth. However, the ventures with high organizational legitimacy may overcome the predicament. Sometimes, legitimacy is as a means to catch gatekeepers´ eyes if ventures address one norm or social value fitting those gatekeepers. Few literatures empirically evidenced that the relationship between survive and legitimacy of organizations. Nevertheless, the research about how new ventures get their benefit from legitimating activities is seldom to be studied. This study proposes four types of legitimacy, which are regulatory, normative, pragmatic, and cognitive legitimacy alternately, for new ventures´ survival and growth. It also analyzes the influence for their entrepreneurial network members. This study used the case study methodology, inductive study of two organic food shops. It found that legitimacy was useful obviously for new ventures to get resources from exterior organizations, when the claim of legitimating activities was similar to the faith of cooperate partners. The stakeholder supported or not to the new ventures after observing the legitimacy-management activity, but it all depended. Diverse perceptions and reactions of the stakeholders of two ventures emerged consequence to the slight difference of the claims. The entrepreneurial network which the claim of ventures was directly bonded with some members would grow slower than one without. Moreover, the new venture which the legitimacy-management actions were comprehensive or not relative to any members would gain high legitimacy, and its entrepreneurial network may grow rapidly.