Abstract
Conventional wisdom predicts that normative conformity is needed to obtain legitimacy, which allows organizations to keep transacting with resource-providing audiences. However, evidence suggests many organizations openly engage in normative deviance, such as environmental inaction, while bearing few or no costs. We contend this incongruence stems from our limited understanding of how legitimacy evaluations work. Hinging on research in cognition, we argue that audiences do not consistently consider and compare organizational behaviors against established social norms. Rather, reliance on this social information is positively related to difficulties in obtaining individual information ⸺that acquired through one’s own experience⸺ about whether it is appropriate to transact with them. It follows that the more audiences turn to social information, the greater the impact of normative deviance. Because difficulties in obtaining individual information are contingent on the characteristics of the evaluated organization’s environment, we test this theorizing by exploring how complexity, munificence, and dynamism moderate the impact of normative deviance regarding climate commitment on performance. By suggesting that legitimacy might not always be necessary, this work qualifies our understanding of normative deviance, legitimacy, and social evaluations. Furthermore, we show why institutions are social systems of control that can fall short of addressing Grand Challenges.