Why do people perceive some organizations as legitimate while others performing similar tasks struggle to gain acceptance? Imagine a private company running a public vaccination facility, or a private organization managing a citizen participation process. The service may be competent, the procedures may be rigorous, and the outcomes comparable to those of a public agency. Yet people may still hesitate and ask: is this the right kind of organization for this task?
In our Journal of Management Studies article, we examine how people form microlevel legitimacy judgments. We study how individual evaluators, such as a resident deciding whether to trust a privately run vaccination center or a citizen assessing whether a private firm should manage their local participation process, develop what scholars call propriety beliefs: judgments about whether an organization is appropriate, desirable, and proper in a given context. Our study shows that these judgments are shaped by two mechanisms. First, evaluators interpret validity cues, or signals about whether others approve or disapprove of the organization. Second, they assess categorical fit, or whether the organization matches the expected category for a given role. To examine both mechanisms, we ran two factorial vignette experiments with 1,866 participants in Germany, in which we varied the type of organization delivering a public service as well as the validity cues present in each scenario.
The cues people use to judge organizations
Participants read short scenarios describing a public service, namely a vaccination program or a citizen participation process. We varied the cues present in each scenario: authorization cues, reflecting approval or criticism from authorities, experts, or formal institutions, and endorsement cues, reflecting support or opposition from peers, citizens, users, or relevant publics. Participants then rated how appropriate, desirable, and proper they found the organization for the task.
These cues rarely arrive in isolation. Consider the private vaccination facility: the regional health authority endorses the arrangement, but a local residents’ association publicly raises concerns. How does a citizen weigh those conflicting signals? Our experiments tested exactly these combinations. We find that positive validity cues strengthen propriety beliefs, while negative cues weaken them. Endorsement cues often matter strongly, especially when authorization cues are neutral or ambiguous. And negative authorization can still be consequential, even when endorsement is high.
The missing piece: Categorical fit as a key distinct cognitive mechanism
Yet validity cues are not the whole story. Evaluators also ask a more basic question: does this organization fit the task?
We introduce categorical fit to capture this mechanism. Categorical fit refers to whether an organization’s category aligns with expectations for a given role. Because people use familiar category labels, such as public organization or private company, to form initial impressions, perceptions of categorical fit then shape propriety beliefs. In our study, public administrations generally evoke higher categorical fit than private organizations in public-service contexts.
Return to the private vaccination facility. Even if health authorities approve and community groups are supportive, many citizens may still feel uneasy, because a private company simply does not match their mental picture of who should be running a public health service. That unease is not irrational. It reflects a deeper mechanism: an initial legitimacy penalty that other positive signals then have to work hard to overcome. Across both of our studies, perceived categorical fit was the strongest and most consistent predictor of propriety beliefs.
Why this matters in practice
In a world where organizational forms are increasingly hybrid, legitimacy judgments are often formed under conditions of limited, mixed, or ambiguous information. Think of private firms delivering public services, non-profits entering commercial markets, or public agencies forming commercial ventures. Citizens, users, regulators, and communities rarely evaluate organizations based on complete information. Legitimacy cannot be managed only by demonstrating competence or collecting formal approval. Three practical lessons follow.
- Focus on positive endorsement cues. Rather than relying solely on authorization from higher-level actors, practitioners should invest in building visible support from peers, citizens, and relevant audiences. Social media campaigns, testimonials, and public endorsements are particularly effective when official signals are neutral or delayed.
- Prevent negative validity cues. Organizations should treat reputation as a key risk factor in their internal risk assessments, monitoring potential endorsement and authorization risks and engaging proactively with stakeholders to address emerging concerns before they turn into negative cues.
- Reflect critically on categorical labels. It is crucial to understand which category labels stakeholders associate with a given organizational form. When organizations change their field of activity or enter a new context, such as when a private firm steps into a traditionally public role, categorical misfit is a predictable legitimacy risk. Targeted communication that directly addresses the “why us?” question, alongside active stakeholder engagement, can help reframe initial impressions before they harden.
Our study shows that legitimacy is not simply granted or denied. It is constructed through propriety beliefs that move along a continuum, from strong acceptance to uncertainty, conditionality, or rejection, depending on the signals people receive and the categorical fit they perceive.
