This experimental study examines individuals’ legitimacy judgments. We develop a model that demonstrates the role of attributed motives and corporate credibility for the evaluation of organizational legitimacy and test this model with an experimental vignette study. Our results show that when a corporate activity creates benefits for the firm—in addition to social benefits—individuals attribute more extrinsic motives. Extrinsic motives are ascribed when a corporation is perceived as being driven by external rewards as opposed to an altruistic commitment to a social (...) cause. Extrinsic motives negatively affect corporate credibility and organizational legitimacy judgments. This article contributes to a better understanding of the complex process of organizational legitimacy judgment by shedding light on the individual’s perspective and expounding the relationship between attributed motives, corporate credibility, and organizational legitimacy. (shrink)

Friedman’s view on corporate social responsibility is often accused of being incoherent and of setting rather low ethical standards for managers. This paper outlines Friedman’s ethical expectations for corporate executives against the backdrop of the strong emphasis he puts on individual freedom. Doing so reveals that the ethical standards he imposes on managers can be strictly deduced from individual freedom and that these standards involve both deontological norms and the fulfillment of particular stakeholder expectations. These insights illustrate the necessity to (...) reconsider how Friedman’s approach relates to other important normative theories of business ethics. Contrasting Friedman’s approach with stakeholder theory and integrative social contract theory—when considering the importance he assigns to individual freedom—shows how and why these approaches differ. Still, the comparison also highlights striking similarities. This paper contributes to a better understanding of Friedman’s position—which is still one of the most influential approaches in business ethics research—because it enables a differentiated look at its strengths and weaknesses. (shrink)