How nascent community enterprises build legitimacy in internal and external environments

Community enterprises (CEs) have become a widely used mechanism in addressing problems associated with socio-economic decline in rural areas. Using a legitimacy perspective, we explore how emerging CEs are able to access resources needed to start and sustain their operations. Studying two music festivals that aim to improve the identity and economy of rural communities, we show that the legitimation process requires different legitimacy building strategies within different environments. Three key legitimation strategies emerge: conformance to the internal (rural community) environment; conformance to the external (cultural festival) environment; and changing the internal (rural community) environment. Legitimacy is built in an iterative process, where CEs leverage legitimacy developed in one environment to build legitimacy in a different stakeholder audience. Hence, new ventures can strategically benefit from differences in legitimacy judgments among different audiences.