How governmental agencies legitimize organizations: A case study on Chinese business schools from 1977 to 2014

This study investigates the role of governmental agencies in the legitimation process of Chinese business schools. Although governmental agencies are crucial actors that have unquestioned coercive power to influence the whole legitimation process, most studies mainly focus on their gatekeeping activities in the legitimation process, such as approval and rating, and little research has been done on how they influence the legitimation process at its outset. We conduct a case study on the development of Chinese business schools to investigate this problem. Based on the legitimacy theory of organizations, we identify two key legitimacy activities of governmental agencies-defining the desirability and appropriateness of judgments-in the legitimation process. These findings indicate that regulatory agents can play active roles in the legitimation process, rather than evaluating specific actions passively, as an observer, as indicated in existing studies. We also develop a process model of legitimation in which the governmental agencies play a dominant role and highlight the decisive function of national-level factors. The results contribute to the study on the legitimacy process in general as well as in the Chinese context, which has been rarely examined.