Changing legitimate discourse: a case study

This study is concerned with the explanations that managers give to various company stakeholders, in the case of factory closures for example. More generally, the paper examines the way justifications of managerial action are produced and "consumed", and how the "legitimacy" on which they are based can change over time. With the help of a longitudinal case study the paper describes and seeks to explain the legitimisation processes involved in the major organisational transformations that the case firm has had to face due to radical market changes (joining EU) and organisational changes. It is argued that managers may become prisoners of their context. This may mean that even if they made "correct" decisions, they may still justify these actions "incorrectly" relative to the new cultural and market environment, and thus do not acquire legitimacy. In the reported case almost the whole executive board of the firm was fired--the first time such a thing had happened in the history of Finnish corporate life. It is also shown that the justification of managerial action may be deliberately manipulated in public discourse. One powerful legitimative device in such discourse is to invoke financial distress, or the idea of such distress, which may be needed for triggering genuine changes.