¹Department of Management and Organizations, NYU-Stern School of Business, New York, NY, USA

Correspondence: Justin Miller, Department of Management and Organizations, NYU-Stern School of Business, 44 W. 4th St., New York, NY 10012, USA. E-mail: Justin.miller@stern.nyu.edu

Abstract

Combining insights from institutional theory and resource dependence theory, this paper suggests that legitimacy is a scarce intangible resource that is always contested. Legitimacy, as a socially defined resource, represents relational power within a community. The various members of an organizational field, therefore, seek to gain, maintain, defend, and deny to others, access to the legitimacy resource. The author looks to the issue of healthcare-related employment benefits, and notes that organizations deny such benefits in communities containing strong labor movements, substituting less expensive corporate philanthropic practices in order to demonstrate commitment to the social contract and norms of legitimacy while simultaneously denying the legitimacy of organized labor's agenda. In communities without strong labor movements, however, corporations are less encumbered in providing healthcare benefits because in such communities they do not need to work to deny the legitimacy of organized labor.