Overcoming liability of newness through legitimacy: A stakeholder salience perspective
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Findings are presented on how start-up ventures in search of legitimacy are affected by internal and external stakeholders. Additionally, the salience that start-up entrepreneurs place on external and internal stakeholders in pre- and post-start-up legitimacy attainment is studied. Institutional theory, resource-based view of the firm, and stakeholder salience theory inform our discussion. using case and survey research methods nine start-up and three established Australian wineries from eight different regions are studied. Data collection consisted of: (1) semi-structure interviews with owner(s); (2) field research notes; and (3) a validation questionnaire. The findings suggest that start-ups, in this instance wineries, are able to attain legitimacy through both external and internal sources. Implications are discussed and include: (1) a greater understanding of how start-ups attain legitimacy; (2) start-ups rely to a greater extent on internal more so than external sources, but both are used to gain legitimacy, suggesting that institutional and resource-based view theories are complementary in the context of start-ups, and (3) the salience of stakeholders by start-ups in attaining and maintaining legitimacy remains relatively stable over time.
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