The relationship between Institutional Theory (IT),Legitimacy Theory (LT)and Stakeholder Theory (ST)is that:
A) IT is a normative theory while LT and ST are positive theories
B) IT is a more detailed version of LT, and 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), Legitimacy Theory (LT), and Stakeholder Theory (ST) are all concerned with how organizations respond to external pressures in order to ensure their survival and success. However, they each approach this question from a slightly different angle: IT focuses on the importance of conforming to prevailing societal expectations and norms; LT emphasizes the need for organizations to demonstrate that they are operating within socially acceptable bounds; and ST stresses the importance of balancing the needs and expectations of various stakeholders in order to achieve long-term success. While these theories are distinct, there is some overlap between them, and the mechanisms that IT suggests firms will use to address legitimacy concerns – such as engaging with stakeholders, increasing transparency, and demonstrating social responsibility – are broadly consistent with the recommendations of LT and ST.

The Relationship Between Institutional Theory (IT),Legitimacy Theory (LT)and Stakeholder Theory