Legitimacy, autonomy and trust: a recipe for organizations to operate in the public interest

Purpose This study aims to examine the effect of publics' legitimacy evaluations on Arthur W. Page's conceptualization of "reasonable freedom of action" by breaking it into two parts: (1) perceived organizational autonomy and (2) trust in the organization. Design/methodology/approach This study conducted an online experiment using a 2 (legitimacy: low, high) x 2 (legitimacy type: institutional, actional) between-subjects design. Measured variables included perceived organizational autonomy and trust. Findings Organizations acting in their own self-interest while ignoring community norms and expectations were perceived to be exercising higher levels of organizational autonomy and have lower levels of trust. The interaction between legitimacy type and level had an effect on perceived organizational autonomy and trust. Research limitations/implications Public's view their relationships with organizations from a perspective that prioritizes responsibility and conformity to community norms and expectations. Also, organizations have more to lose by acting in their own self-interest to resolve institutional legitimacy concerns and more to gain by handling them in a way that includes the public interest than when they are managing an actional legitimacy situation. Practical implications Societal norms, values and beliefs, which may have accommodated, or even supported, an organization's approach to doing business in the past, can change over time, calling into question an organization's legitimacy and its ability to operate in the public interest. As a result, organizational leaders need the Chief Communication Officer to help them understand current societal norms, values and beliefs. Originality/value This study addresses a core assumption of the organization-public relationship paradigm that has not yet been studied empirically. It also expands the understanding of organizational autonomy from a public perspective and examines the effect of legitimacy on organizational autonomy and trust.