Sensemaking, institutions and crises of legitimacy : the case of Nike's sweatshop

The aim of this study is to explore the phenomenon of the legitimacy crisis. This is a variant of organizational crises which, although increasingly common and managerially relevant, is still under-explored. A legitimacy crisis signals a problematic relationship between the focal organization and its socio-institutional environment which calls for repairing of meaning. Having considered this, the study has developed a theoretical framework that integrates the sensemaking and institutional perspectives to investigate this phenomenon. To operationalize this theoretical framework, I have conducted a single longitudinal case study featuring Nike in the 1990s' sweatshop controversy, using a narrative approach and documenting the narrative unfolding of the crisis as the unit of analysis. An extensive collection of publicly accessible archival data constituted the bulk of the data base. By means of this framework, the research provides rounded understanding of the causes of legitimacy crises, their unfolding patterns, and organizations' responses to them. Moreover, this theoretical integration also contributes to narrowing the gap between the sensemaking and institutional theories. The findings highlight that rational myths serve as sensegiving mechanisms for social actors, and that their effects penetrate the interplay between frameworks and meanings in sensemaking processes, as well as operating throughout the process of organizational restructuring in the context of a legitimacy crisis. Moreover, this study identifies that improving the efficiency of sensemaking, and thereby improving meaning management, is the key to resolving a legitimacy crisis. This should be achieved through the modification and elaboration of interpretation frameworks. In particular, this study highlights the effects of organizational structuring in facilitating both internal and external communication during a legitimacy crisis, thereby contributing to the improved management of the unfolding crisis and to resolution of the crisis.EThOS - Electronic Theses Online ServiceGBUnited Kingdo