Which statement describes the relationship between Institutional Theory (IT),Legitimacy Theory (LT)and Stakeholder Theory (ST)?
A) IT is a normative theory while LT and ST are positive theories.
B) IT is a more detailed version of LT, and is broadly consistent with ST.
C) The mechanisms IT suggests firms will use to align the perceptions of their performance with society's values could include the mechanisms suggested by LT and ST.
D) The mechanisms IT suggests firms will use to align the perceptions of their performance with society's are different from the mechanisms suggested by LT and ST.

Question

Quizplus · Accepted Answer

Institutional Theory (IT) proposes that firms will conform to the institutional environment in order to gain legitimacy and support from stakeholders. Legitimacy Theory (LT) suggests that firms will strive to gain legitimacy by meeting the expectations of society and stakeholders. Stakeholder Theory (ST) proposes that firms must consider the needs and expectations of a range of stakeholders, including society, in order to create long-term value. While these theories have different emphases and origins, they are broadly consistent with each other and can work together to help firms align their perceptions of performance with societal values. Therefore, choice C is the correct answer.

Which Statement Describes the Relationship Between Institutional Theory (IT),Legitimacy Theory