Talking the walk: the deflation response to legitimacy challenges

Organizations need legitimacy to be able to operate effectively. Consequently, and just like their participants, multi-stakeholder initiatives (MSIs) need to respond when faced with legitimacy challenges from external parties. We build on current theory to identify three organizational elements that can be made the subject of legitimacy critique – i.e., statutory procedures, objectives and mechanisms – and use these elements to structure our analysis of a conflict-ridden case concerning the United Nations Global Compact (UNGC). Whereas prior work suggests that organizations can respond to such conflicts in a fashion consistent with either moral entrapment or decoupling, we show that organizations can also respond by deflating their statutory procedures and objectives. A deflationary response can help organizations maintain their validity by diminishing the ability of external parties to advance propriety-legitimacy critiques against them. By examining this alternative response, we expand the scope and refine the analytic detail by which organizational legitimacy conflicts can be investigated.