How ventures maintain stakeholder support amidst operational legitimacy threats

Abstract

We explore how ventures mitigate operational legitimacy threats—threats that originate within the venture and challenge claims relating to the venture's ability to deliver on its promised value proposition. Through an inductive study of four ventures working to deliver their promised products following successful crowdfunding campaigns, we reveal a process of three rhetorical practices that ventures can use to maintain stakeholder support:humanizing the venture,normalizing setbacks and resolutions, andrevising pragmatic claims. The first two practices contribute to the formation ofdispositional legitimacy buffersthat allow the third practice to be effective in mitigating fallout fromexposedoperational legitimacy threats. We conclude by offering contributions to the cultural entrepreneurship literature and to research on venture–stakeholder communication. Entrepreneurs must often determine whether to disclose operational issues to stakeholders. On one hand, entrepreneurs may resolve these operational issues without stakeholders ever knowing of their occurrence. On the other hand, such issues could balloon to negatively impact whether a venture can deliver its promised offering. We identify three rhetorical practices, two of which entrepreneurs can utilize before an operational issue even occurs, to generate favorable judgments with stakeholders and increase the likelihood that their ventures will be able to maintain support if an operational issue becomes exposed.