Understanding Legitimacy Theory Quiz

What is the main idea behind Legitimacy Theory in the context of organisations?

• Organisations must always maximise profit, regardless of public opinion.

• Organisations seek to ensure their actions are perceived as legitimate by society.

• Organisations should only follow government regulations.

• Organisations are not influenced by societal expectations.

According to Legitimacy Theory, why might a company publish a sustainability report?

• To confuse competitors.

• To demonstrate to society that its operations are responsible and acceptable.

• To increase the number of pages in its annual report.

• To avoid paying taxes.

Which of the following best describes a 'legitimacy gap'?

• The difference between a company’s profits and its expenses.

• The difference between what society expects and what the organisation actually does.

• The gap between two buildings.

• The difference between two legal systems.

If a company faces negative media coverage about its environmental impact, what might Legitimacy Theory suggest the company should do?

• Ignore the media.

• Take actions to address the concerns and communicate these to the public.

• Increase prices.

• Reduce staff wages.

Which of the following is NOT a strategy for managing legitimacy according to Legitimacy Theory?

• Changing actual practices to meet societal expectations.

• Communicating more effectively about existing practices.

• Ignoring public opinion entirely.

• Attempting to change societal expectations.

Legitimacy Theory is most closely related to which of the following concepts?

• The social contract between organisations and society.

• The law of supply and demand.

• The periodic table.

• Newton’s laws of motion.

Which of the following is an example of an organisation seeking legitimacy?

• A company donating to local charities after a pollution incident.

• A company hiding its financial statements.

• A company refusing to engage with the public.

• A company ignoring environmental regulations.

Why is legitimacy important for organisations?

• It helps them avoid all forms of taxation.

• It allows them to continue operating with the support of society.

• It guarantees unlimited profits.

• It means they never have to innovate.

Which of the following statements is TRUE according to Legitimacy Theory?

• Organisations are unaffected by changes in societal values.

• Organisations must adapt to changing societal expectations to maintain legitimacy.

• Legitimacy is only important for government agencies.

• Legitimacy is not related to public perception.

If an organisation’s actions are not aligned with societal values, what is a possible consequence according to Legitimacy Theory?

• The organisation will automatically become more profitable.

• The organisation may lose public support and face difficulties operating.

• The organisation will be unaffected.

• The organisation will receive more government funding.