Establishing Cognitive Legitimacy in Emerging Organizations: The Role of Prestige
AbstractEntrepreneurs with venture ideas must establish cognitive legitimacy so they can acquire essential resources needed for survival. We extend the concept of cognitive legitimacy by developing a model through which entrepreneurs in emerging high growth organizations attempt to establish and build cognitive legitimacy. This is based on the composition of their new venture team and advisory board. Novice entrepreneurs can draw on the prestige of their new venture team and advisory board to enhance perceptions of their emerging organization's cognitive legitimacy. Novelty of the venture idea moderates relationships between both new venture team prestige and advisory board prestige and cognitive legitimacy; thus entrepreneurs whose emerging organizations rely on highly novel products or services will likely need to establish higher levels of prestige to create cognitive legitimacy.
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