The Paradox and Constraints of Legitimacy
Karan Sonpar
Federica Pazzaglia
Jurgita Kornijenko
ABSTRACT. This article contributes to the literature on
legitimacy by highlighting its paradox and constraints.
While an optimal level of legitimacy-seeking behaviours
may be necessary for organizational effectiveness, an
excessive focus on legitimacy may lead to stakeholder
mismanagement and have the opposite effect. These
insights emerged from a longitudinal qualitative study of
large-scale changes in public-sector health care in a
Canadian province (1994–2002). In 1994, subordinate
health care organizations underwent government-driven
reforms to promote market-based logics of efficiency and
cost reduction. Initial years post reforms were character-
ized by a singular focus on government-driven priorities
and inattention to other stakeholders. However, instead
of giving benefits of legitimacy, these behaviours led to
anger and activism from non-institutional stakeholders
such as staff and community due to a decline in quality
and patient satisfaction. Eventually, greater attention to
stakeholder concerns ended the stand-off. These findings
also elaborate Suchman’s (Academy of Management Review
20
(3), 571–610,
) framework on legitimacy and
explain that legitimacy may occur for reasons other than
institutionalization of values and be temporary in nature.
KEY WORDS: legitimacy, change, stakeholder theory,
institutional theory, qualitative study
Introduction
Few concepts in organizational sociology have
attracted as much attention as legitimacy (for reviews
see Johnson et al.,
; Suchman,
). An entity
is considered to be behaving legitimately when it
conducts itself in a manner that is accepted as socially
appropriate and consistent with widely held values,
norms, rules and beliefs (Dowling and Pfeffer,
;
Suchman,
). When an organization behaves in a
legitimate manner, key constituents of the society
will ‘provide endorsement and support’ to it
(Elsbach and Sutton,
, p. 699). Since it is not
possible to satisfy all constituents, and since not all
constituents have the ability to confer legitimacy,
organizations need to focus on key constituents.
A large body of work on legitimacy has been
done within the domain of institutional theory
(DiMaggio and Powell,
; Suchman,
Institutional theory identifies the government as a
key constituent of modern society (DiMaggio and
Powell,
; Meyer and Rowan,
) and views
legitimacy as the definitive desired outcome for
organizations, more so in institutionalized fields such
as the public-sector where organizations operate
under government mandate (DiMaggio and Powell,
; Oliver,
). Legitimacy-seeking behaviours
are proposed to be prevalent and inevitable for a few
reasons: they reduce the need for cognitive pro-
cessing by managers as institutional values, norms,
and myths get taken-for granted; they ensure con-
tinued support and access to valued resources from
key institutional constituents; and they facilitate
organizational survival (Deephouse,
; Phillips
et al.,
). Thus, legitimacy requirements may
pressurize organizations to adopt institutionally dri-
ven practices and priorities even if they do not im-
prove efficiency (DiMaggio and Powell,
Despite its ubiquity, legitimacy remains a prob-
lematic concept in institutional theory for three
reasons. First, organizations operate in a world
where several key constituents may exert simulta-
neous pressures for the adoption of practices driven
by different values (Friedland and Alford,
Thus, institutional prescriptions may not be consis-
tent with each other and need to be negotiated
(Dacin et al.,
; Reay and Hinings,
For example, in recent years, hospitals in several
Journal of Business Ethics (2010) 95:1–21
Springer 2009
DOI 10.1007/s10551-009-0344-1
countries have been simultaneously exposed to
pressures from the government asking them to focus
on administrative efficiency and from the medi-
cal community and professional associations asking
them to focus on improving quality of care. Second,
the theory adopts a passive approach to managing
legitimacy (Suchman,
, p. 572) despite Oliver’s
(
) advice that differences in environmental
contexts may affect extent of legitimacy-seeking
behaviours. Moreover, Oliver (
, p. 161) high-
lights how ‘organizational scepticism’ occurs when
legitimacy-seeking behaviours conflict with other
outcomes and explains: A ‘hospital may resist pres-
sures to improve its efficiency if it has doubts about
the impact of this process on the quality of services’.
And third, it largely ignores the temporal dimension
of legitimacy even though it implicitly postulates
that the power of institutional norms may vary over
time (Dacin,
). Thus, ‘maintaining legitimacy’ is
difficult for organizations ‘regardless of how widely
recognized they are or how widely supported they
have been in the past’ (Elsbach and Sutton,
,
p. 700). Similarly, Johnson et al. (
, p. 53) argue
that legitimacy should be seen as a ‘social process’.
The problematic nature of the concept of legiti-
macy in institutional theory motivates this lon-
gitudinal qualitative study, which examines the
prevalence of legitimacy-seeking behaviours by
subordinate organizations and its consequences. We
studied the field of public-sector health care in a
Canadian province (1994–2002), which in 1994
underwent a government-driven reform that led to
the creation of 17 new regional health authorities
(RHAs) with a strong institutional mandate to adopt
market-based logics of efficiency. We believe this
to be an excellent empirical setting to study how
public-sector organizations reconcile competing pres-
sures for legitimacy and stakeholder expectations.
This is so because this field is characterized by three
stakeholder groups expressing competing values on
how health care should be managed: the govern-
ment which is focussed on the economics of health
care due to the escalating and unsustainable costs of
services; health care staff and physicians who are
responsible for delivery of services and believe that
patient outcomes and quality of services should be
the criteria for reforms; and the community who are
the recipients of services and are interested in getting
prompt access to quality care. How then do these
public-sector RHAs manage the competing pres-
sures of legitimacy and stakeholder expectations?
Literature review
Legitimacy has been defined as ‘a general perception
or assumption that the actions of an entity are
appropriate within some socially constructed system
of norms, values, beliefs, and definitions’ (Suchman,
, p. 574). A view that organizations are re-
warded for behaving in a legitimate manner is a
‘ubiquitous theme’ in organization studies (Elsbach
and Sutton,
, p. 700). Despite this, however,
the literature remains fragmented and can be broadly
classified into two distinct approaches to managing
legitimacy – institutional approach and strategic ap-
proach (Oliver,
; Suchman,
). We now
briefly discuss the two approaches, specifically
focussing on aspects that remain relatively under-
developed (see Oliver,
; Suchman,
).
Institutional approach on legitimacy
Institutional theory (DiMaggio and Powell,
Meyer and Rowan,
) adopts an inherently
normative approach in which it views legitimacy as
something that is ‘virtually synonymous with insti-
tutionalization’ (Suchman,
, p. 576). Institu-
tionalization can be seen as a process of acculturation
which leads to imbibing myths and beliefs that are
eventually accepted without much thought as they
assume a taken-for-granted status (Berger and
Luckmann,
; Meyer and Rowan,
; West-
phal et al.,
; Zucker,
). Imbibing institu-
tional myths confers legitimacy upon organizations.
Legitimacy has been argued to improve organiza-
tional effectiveness even if it does not improve
organizational efficiency (DiMaggio and Powell,
; Oliver,
). Despite its wide appeal, the
institutional approach has been criticized as it
underplays how different institutional forces may
pressurize organizations to prioritize different values.
This criticism is aptly illustrated by questions such as
this: ‘Is access to housing and health to be regulated
by the market or the state?’ (Friedland and Alford,
, p. 256). This has led several researchers
to express concerns that the theory has a ‘static,
2
Karan Sonpar et al.
constrained and oversocialized’ view on legitimacy
(Powell,
, p. 183).
Following pioneering works that expressed con-
cerns on legitimacy (Oliver,
; Powell,
;
Suchman,
), some recent studies have pointed
to various factors that appear to highlight the tem-
porality of legitimacy. Emphasis has been placed on
the presence of institutional contradictions and the
need for negotiation and settlement (e.g. Reay and
Hinings,
); it has been recognized that initial
periods of instability within a field can lead to a
contest of sorts amongst constituents to establish
dominant positions within the field (e.g. Maguire
et al.,
); there is a growing recognition that
dominant or well-entrenched views and beliefs may
undergo a process of deinstitutionalization (e.g.
Maguire and Hardy,
; Oliver,
); and there
is an emerging conversation on the role of institu-
tional entrepreneurship to legitimate new practices
(e.g. Greenwood and Suddaby,
).
While there is reasonable agreement in the liter-
ature on the necessity and perceived benefits of
legitimacy, there are also a few exceptions. Notable
exceptions include studies by Kraatz and Zajac
(
), who find little evidence on the constraints of
legitimacy, and Phillips and Zuckerman (
), who
argue that it is primarily the middle-status players
who feel compelled to act legitimately. High-status
players have the reputational capital to indulge in
practices that might be considered deviant, while
low-status players have little to lose and focus on
immediate survival despite the potential costs of
illegitimacy.
Overall, recent studies in institutional theory
present a far more fragmented and sobering view on
the permanence and benefits of legitimacy than early
studies. They also urge us to be attentive to the
factors which can affect legitimacy-seeking behav-
iours, such as organizational status and the presence
of institutional entrepreneurs who foster change
when extant practices are perceived to be inefficient.
What remains relatively under-emphasized by these
studies, however, are the temporal dynamics under
which the benefits of legitimacy might increase or
diminish (Dacin,
; Dacin et al.,
; Suchman,
). Also, previous studies have largely ignored
Suchman’s (
, p. 583) definition of legitimacy as
something that could be either ‘permanent’ or
‘temporary’, thereby implying that legitimation as a
process can occur in occasional bursts, and can re-
quire instances of renegotiation.
Strategic approach on legitimacy
As an alternative to the institutional approach, the
strategic approach (Oliver,
; Suchman,
) to
managing legitimacy is more instrumental and
active. This approach is informed by resource depen-
dence theory (Dowling and Pfeffer,
; Pfeffer
and Salancik,
) and more recently by stake-
holder theory (Freeman,
; Mitchell et al.,
)
and adopts a ‘managerial perspective and emphasizes
ways in which organizations instrumentally manip-
ulate and deploy evocative symbols in order to
garner societal support’ (Suchman,
, p. 572).
Unlike the institutional approach, which sees legit-
imacy as an inevitable consequence of socialization,
the strategic approach sees legitimacy as something
that is deliberately pursued or ignored by subordi-
nate actors. Similar to the institutional approach, the
strategic approach draws attention to how external
actors may act as gatekeepers to key resources and
legitimacy, thereby constraining organizations to
behave in certain ways.
The strategic approach has often been integrated
with the institutional approach to provide theoretical
rationale behind how and why actors may exercise
discretion despite institutional constraints, in other
words, acting in a manner not fully congruent with
institutional expectations (e.g. Child and Yuan,
; Goodstein,
; Greenwood and Suddaby,
; Ingrams and Simons,
; Sherer and Lee,
). The fundamental argument behind this
‘constrained discretion’ is that compelling resource
needs may pressurize organizations to adopt practices
not yet legitimate. Moreover, organizations vary in
the extent to which they depend upon external
constituents for resources. Lower resource depen-
dence implies lower constraints for legitimacy.
These arguments have been put forward to explain
the adoption of new or alternative practices driven
by resource scarcity, an example being the creation
of the staff attorney track by elite law firms to retain
lawyers who did not make it to partner (Sherer and
Lee,
More recently, an emerging conversation within
stakeholder theory has argued in favour of the
3
The Paradox and Constraints of Legitimacy
transient nature of stakeholder salience (Magness,
; Mitchell et al.,
develop a framework that offers some theoretical
clarity on ‘who or what’ should matter to managers
of a firm. In doing this, they overcome several
complaints that the definitional ambiguity of the
concept of stakeholder makes it hard to recognize
who matters (LaPlume et al.,
). Mitchell et al.’s
(
) framework echoes Freeman’s (
) argu-
ment that stakeholder management is the key ele-
ment to improve organizational performance and
can be summarized as follows. First, stakeholder
salience is determined by three attributes: the power
of a stakeholder on a firm; the legitimacy of a
stakeholder’s relationship with a firm and the
urgency of a stakeholder’s claim. Different stake-
holder groups may possess one, two or all the three
attributes. Second, differences in the type of attri-
butes possessed affects salience, with stakeholders
possessing more attributes being more salient. Third,
these relationships are dynamic and ‘stakeholders can
shift from one class to another, with important
consequences for managers and the firm itself’
(Mitchell et al.,
, p. 855).
The descriptive model of stakeholder salience
presented by Mitchell et al. (
) has important
implications on the way we understand legitimacy. It
argues that perceived needs for legitimacy, though
necessary, are insufficient to singularly determine
salience. Next, it clarifies that organizations should
pay attention to a wider range of competing inter-
ests, implying that legitimacy is important but
insufficient to singularly constrain organizations.
And finally, it clearly establishes that organizations
should be attentive to shifts in stakeholder positions
brought forward by environmental shifts or by the
repercussions of the actions of various players. Thus,
one would expect organizations to use a different
repertoire of responses to deal with these shifts.
Most elements of this framework have received
reasonable empirical support (e.g. Agle et al.,
;
Knox and Gruar,
; Parent and Deephouse,
). However, an element that has been largely
ignored, despite it being a part of Mitchell et al.’s
(
) framework, is the dynamic nature of stake-
holder salience. The authors explain:
But even though most theorists might try for static
clarity, managers should never forget that stakeholders
change in salience, requiring different degrees and
types of attention depending on their attributed pos-
session of power, legitimacy, and/or urgency, and that
levels of these attributes (and thereby salience) can vary
from issue to issue and from time to time. This is
problematic because we need to elaborate and
understand how different stakeholder groups might be
characterized by differing levels of salience across time.
As also, lesser attention has been paid to how stake-
holder groups may mobilize support by engaging with
each other. (Mitchell et al.,
, p. 879)
In summary, the strategic approach acknowledges
the temporal and dynamic nature of salience and
presents a more sobering view on the need for
organizations to behave legitimately. Moreover, it
proposes that stakeholders’ actions and/or shifts in
the environment can affect stakeholder salience. This
approach also recognizes that different stakeholder
groups may engage one another in a coalition of
sorts to impose their will upon organizations, a point
that has been supported by some studies (Butterfield
et al.,
; Friedman and Miles,
; Rowley and
Moldoveanu,
) but contested by others (Winn,
; Wolfe and Putler,
).
Methodology
Empirical setting
The empirical setting is that of the newly recom-
posed field of public-sector health care in a Canadian
province (1994–2002). The Alberta provincial gov-
ernment had introduced major health care reforms
through policies and legislations in 1994. Approxi-
mately 200 hospital boards and health units were
dissolved and merged into 17 new RHAs with new
boards. These 17 RHAs continued to exist until
2002, when a new round of reorganization reduced
them to nine. All RHAs were facing pressures for
health care to be run in a more ‘business-like’ and
efficient manner (Reay,
, p. 49) from the
government, namely Alberta Health and Wellness
(AHW). We study the actions undertaken by the full
population of 17 RHAs to be seen as legitimate by
AHW over the period 1994–2002.
Alberta Health and Wellness is the institutional
authority and RHAs are akin to public-sector
organizations that operate under a strict government
4
Karan Sonpar et al.
mandate, receive government funding, receive plan-
ning instructions and guidelines and face significant
influence and interference in the appointment of
their top managers. Moreover, institutional theorists
define governments as the regulatory pillars of
society and identify them as a key constituent that
confers legitimacy (DiMaggio and Powell,
;
Scott,
). The AHW is all the more powerful in
this setting since it is also the constituent that con-
trols the access to key resources such as funds. Other
constituents, however, have divergent interests.
Specifically, the health care staff and physicians who
work within RHAs believe that a model of health
care based on medical outcomes is the correct
model, while the community is interested in having
prompt and convenient access to quality care.
Research design
We use qualitative methods to study the investigated
phenomenon over the sample period (1994–2002).
The study draws upon multiple types of secondary
data – annual reports, newspaper accounts, govern-
ment documents – to get insights into how events
unfolded over the 9 years being studied. The use of
such a research design is appropriate for three rea-
sons. First, qualitative methods are useful for settings
where the aim is theory generation or elaboration as
opposed to theory-testing. ‘Theory-elaboration’ re-
fers to a process where ‘one contrasts pre-existing
understandings with observed events in an effort to
understand existing theory’ (Greenwood and Sud-
daby,
, p. 31; also see Strauss,
). Second, an
understanding of organizational responses to com-
peting interests from stakeholders requires a longi-
tudinal framework to develop a narrative on how
events unfold over time. Moreover, it requires data
that can offer insights into the motivation behind
actions and responses of various stakeholders, aspects
that can only be captured by qualitative methods.
Finally, it requires data that offer real-time accounts
on events since biases of recall may occur when
actors are asked to explain past events (Golden,
Other advantages of secondary data include their
ability to get access to accounts over longitudinal
periods (e.g. annual reports, newspaper articles),
their perceived accuracy since they are publicly
available and are monitored by various agencies, a
fair level of detail, their availability across multiple
organizations and stakeholders and their suitability to
triangulate the validity of insights by comparing
findings obtained from different sources and actors
(Payne et al.,
; Scandura and Williams,
Besides, such data have been successfully used by
prior studies (e.g. Arndt and Bigelow,
; Fiss and
Zajac,
).
Data and analysis
We followed Sieber’s (
, p. 1343) framework on
sampling by ‘special categories’, by collecting data
that offered insights into the views of the actors’
closest to and most affected by the investigated
phenomenon. Our data sources comprise all the
annual reports published by AHW (1994–2002), all
the annual reports available for all the 17 RHAs
(1994–2002) amounting to a total of 135 of possible
136 annual reports, and 351 newspaper articles that
were identified using FACTIVA by using several
keyword searches. This amounted to approximately
10,000 pages of data. The annual reports published
by AHW help us to identify its intentions and
evaluations of RHA actions; RHA annual reports
offer insights into how they evaluated their responses
and identified concerns and priorities of other
stakeholders; and newspaper articles offer insights on
key events (e.g. strikes, new programmes) and on the
views of various actors.
The data was analysed by multiple coders over a
3-year period using content analysis (Krippendorff,
; Miles and Huberman,
; Weber,
Content analysis is a methodology that facilitates the
reduction of large volumes of textual data into
‘much fewer content categories’ (Weber,
p. 12) to make analysis feasible. Such data reduction
can be done at the level of the word, sentence,
theme, paragraph or even the entire article. A major
advantage of content analysis is that the use of
structured techniques to analyse data facilitates reli-
able coding. Content analysis has been widely used
in organization studies to analyse secondary data,
such as formal corporate communications (e.g.
Arndt and Bigelow,
) and newspaper articles
(e.g. Hoffman and Ocasio,
) as such data tend to
be voluminous. Repeated meetings were held with
5
The Paradox and Constraints of Legitimacy
the coders over the course of the study to develop a
codebook and to ensure consistency. Initial coding
was done in pairs to facilitate consistency.
Following Langley’s (
, pp. 703–704) rec-
ommendation for organizing qualitative data using
‘temporal bracketing’, in the first step, we coded all
the data by actor and theme, an example being
coding AHW annual reports by year to identify their
priorities and concerns. In the second step, we or-
ganized the data by time to identify actions of the
various actors at given periods of time, an example
being trying to understand how the various actors
responded to the large-scale changes immediately
following reforms. In the third step, we tried to
identify causal dynamics by identifying patterns in
the data, an example being how singular attention to
the government priorities by RHAs caused anger
and dissatisfaction amongst other stakeholders and
led to protests and activism. The first three steps
helped us to clearly identify patterns and develop a
narrative account on actions and responses by the
various stakeholders. In the fourth and final step, we
returned to the data to confirm, cross-validate,
question and elaborate our prior findings. The use of
multiple data sources and coders enables data and
researcher-triangulation and adds to the robustness
and validity of the findings (Jick,
). Also, this
study constitutes a population experiment over the
entire life and eliminates any concerns with sam-
pling.
Results
While we find that the pressures for change by the
institutional authority (i.e. AHW) were very force-
ful, the response by RHAs to these pressures hap-
pened in a manner that would not be predicted by
traditional theories of institutional change. For
example, Tolbert and Zucker’s (
) influential
study of reforms in the public sector describes how
these reforms get gradually legitimate over time,
implying that initial adoption is slow and gradually
the reforms diffuse and achieve a taken-for-granted
status of sorts (also see Greenwood et al.,
).
In contrast to prior studies that focus on gradual
legitimation due to institutionalization of values or
taken-for-grantedness, we find that legitimacy can
occur quicker and in rapid temporary bursts (see
Figure
). The RHAs followed institutional priori-
ties in the initial years (Period 1: 1994–1996). This
occurred both due to the assertive posture adopted
by AHW and the cognitive legitimacy, specifically
‘comprehensibility’ (Suchman,
, p. 574) of the
reforms to RHAs, given that market-based logics
were present in all sectors of the government. The
singular attention of RHAs to institutional priorities
and their inattention to stakeholder concerns,
however, upset health care workers and community.
It also led to a sharp decline in patient satisfaction
and a negative image of RHAs in the eyes of their
stakeholders. Thus, RHAs started doubting the
benefits of legitimacy through compliance with
AHW directives (Period 2: 1997–Mid 1999) as their
‘moral legitimacy’ (Suchman,
, p. 577) appeared
questionable. A heated battle amongst constituents
ensued in the following years, eventually leading to a
renegotiation of priorities and a settlement after
AHW gave into several stakeholder and RHA de-
mands, including increased budgets and better work
conditions for the staff (Period 3: Mid 1999–2002).
Thus, ‘pragmatic legitimacy’ was achieved through
‘exchange’ (Suchman,
, p. 577).
Legitimacy-driven conduct with inattention
to other stakeholders: Period 1 (1994–1996)
This period can be summarized as follows: (1) strong
pressures for change and large-scale budget cuts by
AHW; (2) strong evidence of legitimacy-seeking
behaviours by 14 of 17 RHAs who prioritized
AHW’s concerns but ignored other stakeholders and
(3) anxiety but little evidence of protests for much of
this period by the staff, physicians or community (see
Table
).
The health care reforms were the result of poor
financial conditions of the province, and of a series
of debates concerning the need of implementing a
series of cost-cutting interventions in several sectors,
to include health care and education. The approach
adopted by the AHW was to ‘cut quick and cut deep
when revising budgets’ by implementing a pro-
gramme of cuts aiming to reduce the budget for
health care by ‘$700 million over four years’ (Nagle,
, p. A8). The integration of ‘204 individual
hospital boards into 17 large health regions’ (‘Alberta
looking’,
, p. N17) translated into massive firing
6
Karan Sonpar et al.
of health care workers – who lost their job due to
the consolidation of services – as well as several
waves of salary cuts.
While the objective of cutting health care
spending in the province was clear, critics observed
that AHW provided sporadic and vague information
and left the responsibility of making budget cuts and
allocating resources entirely to the newly created
RHAs (Mitchell,
, p. A4). Yet, a review of
annual reports and newspaper articles revealed sev-
eral statements and actions by RHAs supportive of
the reforms. Examples include observations on how
‘restructuring necessitated job losses, job changes,
closing facilities, changing roles of facilities and
generally creating more radical changes in one year
than the health system has ever seen’ (Capital Health
Authority 10,
, p. 1); RHA 4 announcing
‘the loss of up to 1,400 such (health care) jobs’
(Mitchell,
, p. A4) and yet, another RHA
planning ‘to cut 114 of 359 acute-care beds in six
hospitals’ (‘Alberta region’,
, p. A3).
We find that 4 of 17 RHAs strongly supported
the business-like system and expressed optimism on
the helpfulness of the reforms. Representative quotes
include RHA 5 arguing that the ‘reorganization of
management has helped integrate programmes and
improve services’ (Regional Health Authority 5,
, p. 2); RHA 2 observing it ‘continues to
support the principle of functional integration of
programmes and services’ (Palliser Health Authority
2,
, p. 12); RHA 1 claiming that the
‘centralization of departments, both support and
clinical, has led to a more coordinated approach in
the delivery of services’ (Chinook Regional Health
Authority 1,
) and ‘Major savings have
resulted from the consolidation of boards, adminis-
tration and business functions such as business and
finance… Patient care has actually improved’
Healthcare
REFORMS
- Funding Cuts
- Use of Force
- Rapid Speed
AHW Still
Expects
Acquiescence
AHW Softens its Stance
- Increased funds for RHAs
- Attention to Staff/Physicians
Passive
Resistance
Growing
Discontent
Strikes
and
Activism
Settlement
Focus on
Legitimacy
Questions on
Legitimacy
Renegotiating
Limits of
Legitimacy
Anxiety but
Limited
Protests
Major Decline in
Patient
Satisfaction
Truce
COMMUNITY
RHA STAFF &
PHYSICIANS
RHA RESPONSE
AHW
1994
1997
2000
2002
Period 1
Period 2 Period 3
Figure 1. RHA response to the government-driven reforms for a business-like model of health care.
7
The Paradox and Constraints of Legitimacy
TABLE I
Period 1 (1994–1996)
Quotes
Strong pressures for
change and budget cuts
by AHW
‘‘Alberta Health Minister Shirley McClellan finalized plans this week to amalgamate 204
individual hospital boards into 17 large health regions. The new super boards will get
budgets from the province and will decide which hospitals in their regions get how much
money. This is likely to result in consolidating services in some hospitals and closing
others’’ (‘‘Alberta looking,’’
, p. N17)
‘‘The Alberta education budget alone is targeted for a $239 million reduction over the
next three years; health care costs must be reduced by $700 million over four years’’
(Nagle,
, p. A8)
‘‘Almost 1,000 health care workers will lose their jobs as the Edmonton regional health
board moves to close 600 beds and slice $128-million from its budget in the next three
years’’ (‘‘Alberta health board,’’
, p. A4)
‘‘As strategies go, observers say, the Alberta government’s method of delivering the bad
news on the health care front is nothing short of brilliant. Not only are announcements
spread out over weeks, but there is no final provincial totting up of the number of people
who will lose their jobs, beds that will be closed or programmes lost’’ (Mitchell,
p. A4)
‘‘Health care costs must be reduced (in Alberta) by $700 million over four years…It is the
premier’s boast he has done all his deficit control through spending cuts, not through tax
hikes. The advice he has been sharing with eastern Canadian politicians is to cut quick and
cut deep when revising budgets… ‘‘You have to hunt where the ducks are’’ is Mr. Klein’s
metaphor for slashing into health and education budget’’ (Nagle,
, p. A8)
‘‘the government itself is not announcing the exact ways in which the health care system
will have to excise nearly three-quarters of a billion dollars from its budget. Rather, the
four-month-old RHAs are doing the deed on their own, with ministers and premier
conspicuously absent’’ (Mitchell,
, p. A4)
RHAs give salience to
government
‘‘Major savings have resulted from the consolidation of boards, administration and busi-
ness functions such as business and finance… We have been fortunate to be able to do that
(ensure access) and avoid many of the problems of the larger and more complex regions.
Patient care has actually improved
’’ (bold in original) (Chinook Regional Health
Authority 1,
, p. 12)
‘‘centralization of departments, both support and clinical, has led to a more coordinated
approach in the delivery of services’’ (Chinook Regional Health Authority 1,
‘‘Restructuring necessitated job losses, job changes, closing facilities, changing roles of
facilities and generally creating more radical changes in one year than the health system has
ever seen’’ (Capital Health Authority 10,
, p. 1)
‘‘One choice that was not open to us was continuing on the funding path we in health
care had followed for decades…The letting go of some of our traditional approaches and
services has been challenging, but is an inevitable reality in health care reform…We
believe that we have made the best choices’’ (Calgary Regional Health Authority 4,
, pp. 1–2)
‘‘The Board proved to be an effective advocate for the citizens in the region…When it
became clear in November that a further planned cut of $37 million was unacceptable,
the Province again responded to our advocacy… Finally, the Board argued a need for an
additional $21 million in funding to sustain current operations’’ (Capital Health Authority
10,
, p. 2)
8
Karan Sonpar et al.
(bold in original) (Chinook Regional Health
Authority 1,
, p. 12).
However, 10 of 17 RHAs expressed a mix of
acceptance and resignation due to the inevitability
of cost cuts. Like compliance, resignation is a type
of acquiescence (Oliver,
). This was evidenced
in statements such as the following: ‘One choice
that was not open to us was continuing on the
funding path we in health care had followed for
decades…The letting go of some of our traditional
approaches and services has been challenging, but is
an inevitable reality in health care reform…We
believe that we have made the best choices’ (Cal-
gary Regional Health Authority 4,
pp. 1–2). RHAs acknowledged that their ‘task was
not easy’ and that it ‘took forethought, strength and
– at times – courage to continue with the changes’
(East Central Regional Health Authority 7,
, p. 2). Several RHAs also rationalized that a
trend to ‘eliminate duplication and streamline
TABLE I
Continued
Quotes
Anxiety but weak pro-
tests by other stake-
holders
‘‘The fact that only 34% of the nurses who were eligible to vote cast a ballot reflects the
high level of frustration and disappointment with what’s happening in the workplace, said
David Harrigan, UNA’s Director of Labour Relations. The nurses have now taken a large
‘voluntary’ rollback but have not received any reassurances that their jobs will be any
more secure or that the deterioration of working conditions will be stopped’’ (‘‘United
nurses,’’
)
‘‘The province’s physicians are set to launch Stop the Cuts – the most important campaign
ever undertaken by Alberta doctors. Dr. J. Guy Gokiert, president of the Alberta Medical
Association which represents the 5,100 members behind the campaign, says the public
awareness initiative calls for an end to cuts in Alberta’s health care system. ‘Physicians feel
they can no longer remain silent,’’ explains Dr. Gokiert. ‘‘We have spent the past two
years trying to work with the health reforms – but are now concluding that the cuts have
gone too far and our health care system is no longer working well’’ (‘‘Physicians launch,’’
)
‘‘Congratulations to the striking health care workers in Calgary who are showing
incredible courage in this strike. Your actions demonstrate that working people will not
let the quality of health care and their jobs be threatened by these ideologically motivated
attacks,’’ says CLC President Bob White. ‘‘The Canadian Labour Congress pledges its
support for your strike and your struggle for quality health care…I am confident that, with
the support of the Alberta Federation of Labour and other progressive organizations, you
will win. Keep up the fight’’ (‘‘White pledges,’’
)
‘‘Dr. Fred Moriarty, newly-elected president of the Alberta Medical Association, wants
Mr. Klein to sit back and assess what has happened to date before carrying out the next
round of planned cuts…’’ ‘‘The effects of the (first-round) funding cuts are not yet fully
implemented,’’ Dr. Moriarty says. ‘‘So the consequences of those cuts, we won’t fully feel
until next year. We think there should be some public debate before further cuts are
made. The only measure of success so far is the fiscal one–that they reached their targets’’
(Nagle,
, p. A8).
‘‘Less than two years later, the Eckville hospital is set to be closed, a casualty of Mr. Klein’s
cost-cutting drive. There will be no replacement. Residents of this town of 900 will be
left with a 30-minute drive to the nearest health centre, and the hospital’s dozen long-
term-care patients will be transferred anywhere a bed can be found.’’ ‘‘This is going to
have a heavy social impact on this community,’’ said Kevin McEntee, the hospital’s
administrator for the past 15 years. ‘‘I agree money needs to be saved, but I think there’s
smarter ways of doing it than robbing a community of its hospital’’ (Feschuk,
, p. A1)
9
The Paradox and Constraints of Legitimacy
operations is not exclusive to the health sector’
(Crossroads Regional Health Authority 9,
While a majority of RHAs either supported or
resigned to a business-like system, three RHAs
resisted AHW. RHA 10 expressed serious concerns
with the reforms and openly challenged AHW’s
decisions. While those supportive RHAs favoured a
strategy in which a ‘dramatic change (was) made in
our first year of operation’ (East Central Regional
Health Authority 7,
, p. 3); RHA 10
argued they ‘deliberately slowed the pace of change,
in large part due to the input from the staff and the
public that more time was needed to absorb the
change’ (Capital Health Authority 10,
,
p. 2). Further, it explained how it was resisting
AHW pressures by expressing concerns with the
reforms process and was successful in getting AHW
to relent to their demands:
The Board proved to be an effective advocate for the
citizens in the region…When it became clear in
November that a further planned cut of $37 million
was unacceptable, the Province again responded to our
advocacy… Finally, the Board argued a need for an
additional $21 million in funding to sustain current
operations. The province, through the Oberg report,
reviewed CHA’s operations, and agreed that interim
funding was necessary… (Capital Health Authority 10,
, p. 2)
While we found evidence of concerns by com-
munity and staff, the limited evidence on organized
activism brought us to conclude that Period 1 was
generally characterized by weak signals from stake-
holders. Towards the end of Period 1, however,
discord started to brew. Physicians were amongst the
first stakeholders to organize protests to prevent
further cost-cutting programmes and to raise
awareness on the severed conditions of health care
services in the province. An early indicator was a
physician campaign:
The province’s physicians are set to launch Stop the
Cuts – the most important campaign ever undertaken
by Alberta doctors. Dr. J. Guy Gokiert, president of
the AMA which represents the 5,100 members behind
the campaign, says the public awareness initiative calls
for an end to cuts in Alberta’s health care system.
‘‘Physicians feel they can no longer remain silent,’’
explains Dr. Gokiert. ‘We have spent the past two
years trying to work with the health reforms – but are
now concluding that the cuts have gone too far and
our health care system is no longer working well’’.
(‘Physicians launch’,
)
Here, the president of the Alberta Medical
Association (AMA) acknowledges that while physi-
cians had remained silent for the first 2 years of the
reforms, they were now organizing more forcefully.
Meanwhile, concerns for the perceived decline in
quality of health care and job satisfaction were
leading health care workers in several RHAs to start
a series of protests. Another early indicator of
activism was a strike by health care workers in the
RHA 4 in November 1995. The strike received
support from external associations such as the
Canadian Labour Congress and the Alberta Federa-
tion of Labour who supported the strike and
‘pledged (their) support’ as a sign of the dissatisfac-
tion by various stakeholders with the current health
care conditions (‘White pledges’,
Nurses and support staff were concerned about
job security, despite the fact that they had accepted
salary cuts as a means to save their jobs. In 1994,
United Nurses of Alberta (UNA) released a state-
ment to the press highlighting how they had ‘not
received any reassurance that their jobs will be any
more secure or that the deterioration of working
condition will be stopped’ (‘United nurses’,
Moreover, the community was concerned about the
effect of the reforms on the quality of health care
services. The frustration was particularly severe in
smaller communities that often lost local access as
part of the process of consolidation. One such
example reported in the Globe and Mail is that of a
small town that lost its only community hospital.
Residents ‘will be left with a 30-minute drive to the
nearest health centre’ while ‘the hospital’s dozen
long-term-care patients will be transferred anywhere
a bed can be found’ (Feschuk,
, p. A1). Simi-
larly, physicians also offered a reserved response to
AHW’s reform efforts with the President of AMA
gently nudging ‘Mr. Klein (Premier of Alberta) to sit
back and assess what has happened to date before
carrying out the next round of planned cuts’. He
further argued: ‘We think there should be some
public debate before further cuts are made. The only
measure of success so far is the fiscal one – that they
reached their targets’ (Nagle,
, p. A8). RHAs’
10
Karan Sonpar et al.
singular attention to institutional priorities set by
AHW was fermenting anger in other stakeholders.
Also, the decline in the confidence by community
and health care workers in RHAs’ actions resulted in
RHAs becoming more critical to the point that they
started questioning the benefits of legitimacy.
Turmoil and recognizing the constraints of legitimacy:
Period 2 (1997–mid 1999)
This period was one of turmoil and can be sum-
marized as follows: (1) health care workers and
community exert growing pressures on RHAs and
AHW to be attentive to their concerns about a de-
cline in quality of care; (2) AHW defiantly continues
to push RHAs to implement its priorities; and (3)
RHAs begin to recognize the constraints of legiti-
macy, with 11 of 17 RHAs even questioning the
perceived benefits of AHW’s mandate (see Table
).
This period saw a combined effort by some
stakeholders – community and health care workers –
who began voicing their concerns and anger in
several forums. The press, as also RHA annual
reports, were replete with references to a major
decline in quality of services and access to care. A
well-publicized survey showed that ‘nearly half of
Albertans (are) dubious about whether the system
will be able to care for them when they get sick’
(Laghi,
, p. A1). Here is another example
profiling the anger within Albertans:
‘‘They told me they would have to look for a bed
elsewhere – maybe Vancouver or Saskatoon,’’ the
daughter said. ‘‘Then they said they found a bed in
Saskatoon and that was the last intensive care bed in
Western Canada. That is not acceptable’’. (‘‘Doctors
suggest,’’
, p. B5)
We also found evidence that the health care
workers and community were mobilizing support so
as to pressurize both RHAs and AHW to revise their
agenda. The advocacy role of physicians and staff is
highlighted in ‘an extraordinary hardening of atti-
tudes by people who, traditionally, are champions of
the status quo: doctors, nurses and other health care
givers have joined forces to send a message (to
AHW)’ (Ziegler,
, p. A13). Nurses protested
because they wanted higher wages and improved
working conditions. For example, ‘about 300 nurses
picketed in front of an Edmonton hospital to protest
against working conditions and the changes made to
the health care system since Mr. Klein took over
four years ago’ (Mahoney,
, p. A4). Other
health care providers protested because they wanted
job security. For example, approximately ‘5,000
hospital workers returned to work yesterday after
staging a six-hour illegal walkout that forced super-
visors to deliver meals and operate other services.
The walkout… ended with their union claiming
victory over attempts by the Capital Health
Authority to cut starting wages and use more con-
tract workers in place of full-time personnel’ (Laghi,
, p. A10). Physicians protested because they
wanted higher salaries and greater authority in run-
ning health care, an example being activism by the
AMA who ‘asked Edmonton’s 1,700 doctors to
close their offices on May 8 and shut the doors
on Edmonton-area clinics during… (the) holiday
weekend May 16 to 18. Calgary doctors have
threatened office closings on May 1’ (‘Alberta MDs’
job action’,
, p. A3).
Alberta Health and Wellness responded to these
messages with a defiant attitude. The Premier of
Alberta Mr. Ralph Klein and the Health Minister
Mr. Halvar Jonson were quoted to have made
statements such as ‘it is unlikely (physicians’) protest
will lead to more money’ (‘Rural MDs’,
p. A3), and to have argued that any nurses’ strike
‘would be an illegal strike that would fall to the
Minister of Justice to deal with. He (Mr. Klein)
stopped short of threatening striking nurses with jail’
(Laghi and Mitchell,
, p. A1). AHW’s persis-
tence was also evidenced in its formal communica-
tions. The Minister of Health (Alberta Health,
, p. 2) argued: ‘Some Albertans have
expressed concerns whether or not such dramatic
change was necessary. The answer is yes. Costs in
health were spiralling virtually out of control. The
health system was not well organized and there was
costly duplication of services’. Not only was AHW
defiant in the face of stakeholder pressures, it also
resorted to some dramatic measures to reassert its
seriousness about cutting costs. An example is AHW
blowing up a hospital with dynamite and broad-
casting this ‘spectacle’ live on television.
They have been setting dynamite for days throughout
the skeleton of what was once Calgary’s foremost
11
The Paradox and Constraints of Legitimacy
TABLE II
Period 2 (1997–1999)
Quotes
Stakeholder activism
and protests rise
sharply
‘‘Also yesterday, the Alberta Medical Association asked Edmonton’s 1,700 doctors to close
their offices on May 8 and shut the doors on Edmonton-area clinics during the Victoria
Day holiday weekend May 16 to 18. Calgary doctors have threatened office closings on
May 1. The job action is to put pressure on the province to raise doctors’ fees’’ (‘‘Alberta
MDs’ job action,’’
, p. A3)
‘‘Despite a tentative contract, the union representing Alberta’s nurses hadn’t ruled out the
possibility of a strike last night because there was no agreement on working conditions for
500 long-term-care nurses.’’ ‘‘No one settles until everybody settles,’’ said Heather Smith,
president of the United Nurses of Alberta (Mahoney,
, p. A4)
‘‘Earlier in the day, about 300 nurses picketed in front of an Edmonton hospital to protest
against working conditions and the changes made to the health care system since Mr. Klein
took over four years ago. The province has slashed about $550-million from a budget of
about $4.1-billion since 1993 and rolled back nurses’ wages by more than 5 per cent’’
(Laghi,
, p. A3)
‘‘About 5,000 hospital workers returned to work yesterday after staging a six-hour illegal
walkout that forced supervisors to deliver meals and operate other services. The walkout by
housekeeping staff, admissions personnel and other support workers ended with their
union claiming victory over attempts by the Capital Health Authority to cut starting wages
and use more contract workers in place of full-time personnel’’ (Laghi,
, p. A10)
Government’s defi-
ance despite con-
cerns of RHA and
stakeholders
‘‘Mr. Klein said he was not worried that threats of a strike would harm him in the public’s
eye. I don’t feel threatened by the strike, he said. I get blamed by all kinds of people. He
said he has not become involved in the negotiations, and it was clear he wished to portray
the looming strike as something outside of his domain. He frequently repeated his message
that this would be an illegal strike that would fall to the Minister of Justice to deal with. He
stopped short of threatening striking nurses with jail. But he castigated nurses who would
contemplate illegal action, saying they would ‘‘abandon their responsibilities and violate
the nurses’ code of conduct’’ (Laghi and Mitchell,
, p. A1)
‘‘Some Albertans have expressed concerns whether or not such dramatic change was
necessary. The answer is yes. Costs in health were spiralling virtually out of control. The
health system was not well organized and there was costly duplication of services. Two
hundred separate health and hospital boards added to administrative costs’’ (Alberta Health,
, p. 2)
‘‘Two television stations in Calgary will carry live coverage of the early-morning demo-
lition and two more are considering whether they ought to. Police will be there in force to
make sure neck-craning members of the public do not venture too close. Police conser-
vatively estimate a crowd of up to 50,000 as long as the snow stays away. It’s all part of
what some say will be an unprecedented North American spectacle: the reduction to
rubble of a massive complex of buildings that until a matter of months ago was a high-tech
urban hospital worth $300-million. …The razing of the General (Hospital) is a response to
a modern dilemma: As governments cut spending on health care and close hospitals, what
do you do with the abandoned buildings? The answer in Premier Ralph Klein’s home turf
is to implode it’’ (Mitchell,
, p. A7)
‘‘Premier Ralph Klein and Health Minister Halvar Jonson both said Monday it is unlikely
the protest will lead to more money. Klein said the new fee schedule was accepted in a vote
by doctors last month: ‘‘Those negotiations are complete. I would suggest that if they have
a problem, then they take up that problem with their bargaining agent, the AMA’’ (‘‘Rural
MDs,’’
, p. A3)
12
Karan Sonpar et al.
hospital…Two television stations in Calgary will carry
live coverage of the early-morning demolition and
two more are considering whether they ought to…It’s
all part of what some say will be an unprecedented
North American spectacle: the reduction to rubble of a
massive complex of buildings that until a matter of
months ago was a high-tech urban hospital worth
$300-million. (Mitchell,
, p. A7)
Even though AHW continued to aggressively
push its agenda, the decline in patient satisfaction
was causing the community to emerge as the salient
stakeholder. The benefits of following the institu-
tional mandate were being questioned on account of
a decline in the ‘moral legitimacy’ (Suchman,
,
p. 577) of reforms as RHAs perceived the current
situation as a threat that was adversely affecting their
image in the eyes of other stakeholders. Thus,
increasing attention paid to the community in Per-
iod 2 can be explained in light of the argument put
forward by Dutton and Jackson (
, p. 81) that
threats are more likely to be attended to than
opportunities. For example, the CEO of RHA 15
observes their need to balance attention to the
government and to the community and argued:
‘Two over-riding forces now drive health service
delivery in our region. People are better informed
about health services and want more sensitivity to
their health needs, and government has become
more price conscious and is demanding lower costs
and greater efficiency’ (Keeweetinok Lakes Re-
gional Health Authority 15,
, p. 4).
One such example of how RHA response started
to change due to growing dissatisfaction amongst
various stakeholders with the effects of the reforms is
that of RHA 4. While this RHA in Period 1 had
argued that ‘the key to a good health system is not
necessarily to spend more, but to allocate our re-
sources wisely’ (Calgary Regional Health Authority
4,
, p. 3), it now highlighted in its 1998–
1999 Annual Report that a ‘recent poll by Angus
Reid found 61 per cent of those polled think the
Calgary health care system is in crisis’ (Calgary
Regional Health Authority 4,
). The
CEO and Chair of RHA 4 further argued: ‘During
the next year, one of our major objectives will be to
close the gap between people who are saying we’re
doing a good job and the people who are concerned
we are in a crisis. We will also demonstrate that we
are listening’ (Calgary Regional Health Authority 4,
, pp. 5–6).
Other RHAs explained how they had ‘increased
the frequency, nature and scope of our community
consultation’ (Chinook Regional Health Authority
1,
, p. 4), and argued ‘the Board
TABLE II
Continued
Quotes
RHAs rethink and
question the benefits
of following AHW’s
priorities
‘‘Restructuring has had a significant impact on staff morale…feelings of fear, frustration,
exclusion, and mistrust have been common as have concerns about workload, stress and
lack of recognition’’ (Mistahia Regional Health Authority 13,
, p. 40)
‘‘Two over-riding forces now drive health service delivery in our region. People are better
informed about health services and want more sensitivity to their health needs, and
government has become more price conscious and is demanding lower costs and greater
efficiency’’ (Keeweetinok Lakes Regional Health Authority 15,
, p. 4)
‘‘We are frustrated that we cannot directly influence service delivery on reserve but are
responsible for all health seeking behaviour off reserve’’ (Northwestern Regional Health
Authority 17,
, p. 20)
‘‘During the next year, one of our major objectives will be to close the gap between people
who are saying we’re doing a good job and the people who are concerned we are in a
crisis. We will also demonstrate that we are listening’’ (Calgary Regional Health Authority
4,
, pp. 5–6)
‘‘the key to a good health system is not necessarily to spend more, but to allocate our
resources wisely’’ (Calgary Regional Health Authority 4,
)
13
The Paradox and Constraints of Legitimacy
recognizes that the most important element in set-
ting future directions are the residents we serve’
(Peace Regional Health Authority 14,
,
p. 1). RHAs went to great lengths to show their
dissent with AHW’s directives, causing entire boards
of directors to be fired by AHW as they refused to
cut costs. Here is one incident reported in The Globe
and Mail (Kenny,
, p. A4):
‘‘Health Minister Halvar Jonson said he replaced the
15-member Lakeland Regional Health Authority
board with an administrator because the government-
appointed group wasn’t doing its job.’’ ‘‘The primary
reasons for the decision made today followed a number
of efforts at review and improvement in the fiscal
management and governance style of the board,’’ Mr.
Jonson said. In January, board chairman Dareld Cholak
said he refused to make spending cuts that would
threaten the health of residents – even if it meant he
lost his job. ‘‘If I get replaced, at least I know we did
what we could and patient care is not in jeopardy,’’ he
said. ‘‘It’s already down to the bare bones. There is no
more room to cut without hurting the people of this
region.’’
By the end of Period 2, RHAs had started being
more attentive to the needs of the community and
opposing further cuts to prevent an additional
deterioration of health care quality. However, sev-
eral concerns of health care staff and physicians had
remained unresolved. In particular, concerns about
hiring and retaining staff members and deteriorated
working conditions following salary cuts and salary
freezes had remained ignored.
Renegotiating legitimacy and settlement amongst
stakeholders: Period 3 (mid 1999–2002)
This period can be summarized as follows: (1) inci-
dents of activism by staff and physicians intensified
and became more disruptive; (2) AHW softened its
stance by increasing funding to RHAs and paying
more attention to the requests made by staff and
physicians; and (3) weak evidence of legitimacy-
seeking behaviour by 13 of 17 RHAs who increas-
ingly
prioritized
concerns
of
their
staff
and
physicians, leading to a settlement within the field
(see Table
).
Unrest and activism by staff and physicians – al-
ready present in earlier periods – intensified in
Period 3. UNA observed that ‘it could prove diffi-
cult to attract people to what she described as
Alberta’s poor working environment’ (‘Edmonton
looks beyond Alberta’
, p. A6). ‘Hundreds of
surgeries were cancelled and hospitals were operat-
ing at minimal service levels across Alberta yesterday
as 10,000 nurses and other health care workers
staged an illegal strike’ (Cudmore,
, p. A1).
Physicians enacted ‘rotating work stoppages varying
by location and specialty’ and ‘(Health Minister) Mar
got a first-hand taste of public discontent with the
job action last week when some doctors had their
clinic phones forwarded to his Calgary office’
(Necheff,
). Several surveys conducted at the
beginning of Period 3 documented that staff and
physicians were frustrated due to the lasting effects of
the 1994 reforms. The Kitchener-Waterloo Record
profiled the AMA stating: ‘It is becoming an
increasingly frustrating way to make a living…The
rewards from the patients are significant but you
seem to be under-appreciated and undervalued by
other parts of the health care system such as gov-
ernment and RHAs’ (‘Half of doctors dissatisfied’,
, p. D05). On one occasion, protests and anger
by physicians had extreme consequences, as they led
to the resignation by the Board of Directors of an
RHA:
Association doctors voted at a mid-August meeting 59
to 1 for a resolution calling on Alberta Health Minister
Gary Mar to disband the board and properly fund
needed services in the region. Citing an inability to
balance the demands of doctors for better patient care
and keeping a tight budget, the 11-member board
resigned Tuesday. (‘‘Doctors say,’’
)
The increased frequency and intensity of episodes
of activism prompted AHW and RHAs, separately,
to embark on several rounds of negotiation with staff
and physicians. The main outcomes were the
implementation of a remuneration plan, which in-
cluded ‘wage increases of up to 8 per cent in the first
year, up to 4 per cent in the second year and up to
3.75 per cent in the third year’ (‘New deal for Alta
hospital’,
) and a substantial increase in the
amount of funding allocated by AHW to RHAs
with a specific focus on staffing issues:
To improve results, we started by increasing total
health care expenditures by 14.5 per cent, to $5.6
14
Karan Sonpar et al.
TABLE III
Period 3 (2000–2002)
Quotes
Continued incidents
of stakeholder activ-
ism
‘‘(Physicians enacted) rotating work stoppages varying by location and specialty’’ and ‘‘(Health
Minister) Mar got a first-hand taste of public discontent with the job action last week when some
doctors had their clinic phones forwarded to his Calgary office’’ (Necheff,
)
‘‘Association doctors voted at a mid-August meeting 59 to 1 for a resolution calling on Alberta
Health Minister Gary Mar to disband the board and properly fund needed services in the region.
Citing an inability to balance the demands of doctors for better patient care and keeping a tight
budget, the 11-member board resigned Tuesday’’ (‘‘Doctors say,’’
)
‘‘Hundreds of surgeries were cancelled and hospitals were operating at minimal service levels
across Alberta yesterday as 10,000 nurses and other health care workers staged an illegal strike.
The workers at 159 hospitals defied a court-sanctioned cease-and-desist order and walked off the
job yesterday morning after the union and province failed to agree on a new contract’’ (Cudmore,
, p. A1)
‘‘It is becoming an increasingly frustrating way to make a living,’’ said Bond (President, AMA).
‘‘The rewards from the patients are significant but you seem to be under-appreciated and
undervalued by other parts of the health care system such as government and regional health
authorities’’ (‘‘Half of doctors dissatisfied,’’
, p. D05)
‘‘Alberta’s family physicians are looking forward to working with the public, other health care
professionals, regional health authorities, and key decision-makers in the Alberta Government’’,
says Dr. Staniland. ‘‘As partners, we are confident that health care reform strategies will be
developed to maintain a high quality health care system that is affordable and accessible’’ (‘‘Alberta
Chapter,’’
)
AHW softens its
stance and increases
funding
‘‘Alberta Premier Ralph Klein says he hopes an illegal strike by thousands of health care workers
will end by tomorrow at the latest. He says he has faith in negotiations that have just resumed.
Klein says as far as he’s concerned, the two sides aren’t far apart. Thousands of Alberta health care
workers hit the picket line this morning to press demands for more money. Klein says he believes
there will be a resolution by tomorrow at the latest. Klein says his government doesn’t want to
resort to back-to-work legislation’’ (Edmonds,
‘‘To improve results, we started by increasing total health care expenditures by 14.5 per cent, to
$5.6 billion. This new funding enables regional health authorities to hire over 1,000 additional
front-line staff’’ (Alberta Health and Wellness,
, p. 4)
‘‘The Alberta government will spend an extra $54 million this year to cut wait times for joint
replacements, cancer treatments and heart surgeries. The end result will be significantly better
access to health services in Alberta,’’ Health Minister Halvar Jonson said Thursday at the Royal
Alexandra Hospital’’ (Bennett,
‘‘A new collective agreement between Alberta health employers and the Canadian Union of
Public Employees offsets rollbacks in the 1990s, union officials say. The three-year agreement
includes wage increases of up to 8 per cent in the first year, up to 4 per cent in the second year and
up to 3.75 per cent in the third year. We didn’t get everything we wanted but the new agreement
removes some of the inequities caused by concessions in the early 1990s, said Sandy Miller,
president of CUPE’s Alberta Health Care Council’’ (‘‘New deal for Alta hospital,’’
‘‘Don Mazankowski, a former federal cabinet minister and chairman of the Alberta Premier’s
Advisory Council on Health, said the province must consider increasing health care premiums
and making patients pay for some medical procedures currently insured by medicare. We don’t
believe that throwing more tax money at the problem is the way to solve it, he told the
committee during its stop in Edmonton on Wednesday. There may have to be some sharing of
costs’’ (‘‘Citizens, corporations should pay more,’’
)
15
The Paradox and Constraints of Legitimacy
billion. This new funding enables RHAs to hire over
1,000 additional front-line staff. (Alberta Health and
Wellness,
–2000, p. 4)
As a result of this increase in funding by AHW,
the health care budget in the province increased in
Period 3 to $6.3 billion, a 43.18% increase from the
early years post reforms. However, while one might
interpret these shifts in AHW policy as the sole
consequence of the decline in patient satisfaction and
the increase in staff activism, it is important to rec-
ognize that the oil boom in Alberta had created
an economic environment conducive to raising
expenses on account of the windfall oil royalties.
The funding increases to RHAs and the positive
response on issues such as recruiting, working con-
ditions and salary requests finally ended the tensions
that had dominated Periods 1 and 2. Actions by
AHW and RHAs to placate stakeholders by meeting
some of their demands led to a ‘pragmatic legiti-
macy’ of sorts of the reforms through ‘exchange’
(Suchman,
, p. 578). Like the type of legitimacy
prevalent in the first two periods, this is also an
‘episodic’ or ‘temporary’ form of legitimacy since
actions are occurring for reasons other than institu-
tionalization or taken-for-grantedness (Suchman,
, p. 583).
We also noticed that staff and physicians emerged
as the salient stakeholder for RHAs in Period 3
RHAs. This is in contrast to our earlier findings for
Period 1 – when the government was the salient
stakeholder – and Period 2 – when the community
was the salient stakeholder.
Annual reports of RHAs were replete with ref-
erences explicitly stating that meeting the needs of
health care workers was the paramount necessity.
Here is a representative quote highlighting this shift
in priorities: ‘Our Board at its annual planning
retreat determined that the highest priority for our
region for 1999–2000 was to add staffing for core
programmes’ (Palliser Health Authority 2,
). And also, ‘Union and management agreed to
achieve the targeted savings together without con-
tracting out services’ (Headwaters Health Authority
3,
). RHAs mentioned how they were
starting to cooperate ‘with the Regional Medical
Staff to successfully recruit additional physicians to
TABLE III
Continued
Quotes
Weak evidence of
legitimacy-seeking
behaviour by RHAs
‘‘We put lots of different measures into place to recruit nurses, to increase the number of seats in
nursing schools in Calgary, Alberta and Canada, so we’re in a very different position this summer,
said Linton (chief nursing office director, Calgary Health Region). Recruitment is one thing, but
the situation is a lot more welcoming in Alberta, partly because there’s more appreciation for their
work but also because of higher wages – 17 to 22 per cent increases were granted last year’’
(Heyman,
, p. B1)
‘‘Our Board at its annual planning retreat determined that the highest priority for our region for
1999–2000 was to add staffing for core programmes’’ (Palliser Health Authority 2,
‘‘Union and management agreed to achieve the targeted savings together without contracting out
services’’ (Headwaters Health Authority 3,
‘‘In an effort to stem the exodus of brain surgeons from southern Alberta, the Calgary regional
health authority has decided to top up their incomes until a new provincial agreement on fees is
reached. The sought-after specialists told the authority just before Christmas many of them would
leave if pay and conditions didn’t improve within days. This followed three of the region’s 10
neurosurgeons leaving in 2000 for jobs elsewhere’’ (‘‘Calgary neurosurgeons,’’
)
‘‘(In) an effort to stem the exodus of brain surgeons from southern Alberta, the Calgary regional
health authority has decided to top up their incomes until a new provincial agreement on fees is
reached. The sought-after specialists told the authority just before Christmas many of them would
leave if pay and conditions didn’t improve within days. This followed three of the region’s 10
neurosurgeons leaving in 2000 for jobs elsewhere’’ (‘‘Calgary neurosurgeons,’’
)
16
Karan Sonpar et al.
communities in the region’ (Aspen Regional Health
Authority 11,
). Here is one such
example where staffing concerns within RHAs led
them to temporarily top up the salaries of a group of
physicians to prevent them from leaving even before
they obtained the necessary agreement for wage
increases from AHW:
…(In) an effort to stem the exodus of brain surgeons
from southern Alberta, the Calgary regional health
authority has decided to top up their incomes until a
new provincial agreement on fees is reached. The
sought-after specialists told the authority just before
Christmas many of them would leave if pay and
conditions didn’t improve within days. This followed
three of the region’s 10 neurosurgeons leaving in 2000
for jobs elsewhere. (‘‘Calgary neurosurgeons,’’
As a result of these efforts by AHW and RHAs,
the number of health care professionals in the
province increased as documented by the following
newspaper article:
‘‘In May, the CHR said it had about 650 more nurses
compared to the same month last year. The total stands
at 7,813, and in the last three months there has been a
net increase of 174 nurses.’’ Noreen Linton, director
of the chief nursing office at the CHR, said regions
and governments across Canada have reacted strongly
to the dearth of nurses to overcome what’s emerged as
a worldwide shortage. ‘‘We put lots of different
measures into place to recruit nurses, to increase the
number of seats in nursing schools in Calgary, Alberta
and Canada, so we’re in a very different position this
summer,’’ said Linton. Recruitment is one thing, but
the situation is a lot more welcoming in Alberta, partly
because there’s more appreciation for their work but
also because of higher wages – 17 to 22 per cent in-
creases were granted last year. (Heyman,
, p. B1)
Overall, Period 3 can be defined as one charac-
terized by the renegotiation of the goals and prior-
ities of health care, and the salience of the various
stakeholders. Such renegotiation led AHW and
RHAs to acquiesce to several demands of stake-
holders and to slow down the pace of changes. It
appeared that the defining element of Period 3 was
not so much the need of RHAs to be seen as
legitimate but rather the need of RHAs to play an
active role in ending the battle amongst the various
stakeholders. These findings also highlight how the
changing dynamics within the field led to different
stakeholder groups becoming more salient than
others over time. In Period 1, AHW was the salient
stakeholder and was successful in ushering a health
care model based on cut-cutting and administrative
efficiency. In Period 2, the community was the
salient stakeholder due to a major decline in patient
satisfaction. In Period 3, physicians and staff became
the salient stakeholders as they asserted their influ-
ence through strikes and protests until their concerns
on working conditions and salaries were acted upon.
Discussion and conclusion
This study finds that the degree of legitimacy-
seeking behaviours by subordinate health care
organizations differs across time: (1) initial years were
characterized by RHAs singularly focussing on the
government mandate for market-based logics and
largely ignoring the concerns of other stakeholders;
(2) these actions paradoxically led to a loss of con-
fidence by non-institutional stakeholders due to the
deterioration in quality of care and patient satisfac-
tion, which then fostered anger and activism; and (3)
stakeholder activism led the government and RHAs
to pay greater attention to stakeholder interests and
concerns and ended the stand-off.
These findings elaborate and run counter to
extant theory in four ways. First, they contribute to
the literature on legitimacy by highlighting the
paradox of excessive legitimacy-seeking behaviours.
While an optimal level of legitimacy-seeking
behaviours may improve organizational effective-
ness, a singular focus on legitimacy may lead to
stakeholder mismanagement and have the opposite
effect. Thus, it is not only possible that actors may
come across as overreacting, nervous and clumsy if
they excessively focus on legitimacy as suggested by
Ashforth and Gibbs (
) but also that an excessive
focus on legitimacy may be detrimental to an orga-
nization. The managerial implication is that a stra-
tegic approach to engaging and managing various
groups as advocated by Mitchell et al. (
), as
opposed to simply focussing on few key constituents
that confer legitimacy, may be more necessary than
proposed by institutional theory.
Second, we elaborate the constraints of legitimacy
by developing the argument that an organization’s
need for legitimacy will change over time. While a
17
The Paradox and Constraints of Legitimacy
focus on key entities that confer legitimacy is par-
ticularly necessary in unstable environments, legiti-
macy becomes less beneficial beyond a certain point.
This leads us to echo Dowling and Pfeffer’s (
,
p. 126) argument that legitimacy is a ‘dynamic
constraint which changes as organizations adapt’.
Also, we extend Dacin’s (
) arguments by pro-
posing that the benefits of legitimacy decline after an
optimum level has been reached (also see Deep-
house,
). The managerial implication is that
organizations should be optimally legitimate soon
enough and then focus on efficiency.
Third, we contribute to Mitchell et al.’s (
framework by elaborating how stakeholder groups
mobilize support and actively engage one another to
pressurize the focal organizations and to challenge
the salience of the dominant stakeholder. Despite
institutional pressures, health care in Alberta resem-
bled more a ‘battlefield’ than an arena of passive
compliance to legitimation efforts by AHW (also see
Hoffman’s (
) discussion of reforms in the US
chemical industry). Attacks on the legitimacy of
reforms were launched by health care workers and
physicians who persistently questioned their moral
appropriateness. The implication is that the authority
of institutional functionaries might be insufficient to
make the needs of legitimacy compelling in the face
of stakeholder resistance and engagement.
Finally, we empirically elaborate and support two
ignored aspects of Suchman’s (
) theoretical
framework, namely the presence of different and
temporary forms of legitimacy. For example, RHAs
accepted the new model of health care delivery
being promoted by AHW even though it had not
yet been institutionalized as it appeared to be cog-
nitively legitimate and ‘comprehensible’ (Suchman,
, p. 574) in light of the wave of cost reduction
across sectors. This, coupled with strong pressures
from AHW, resulted in immediate compliance to
institutional priorities in Period 1. However, the
negative evaluation of the state of health care services
in the province post reforms led RHAs to question
their ‘moral (or normative) legitimacy’ (Suchman,
, p. 577). The poor moral legitimacy (Suchman,
) in Period 2 was again episodic as it was
resolved through funding increases, salary increases,
new hiring and retention practices and physicians
becoming a part of the decision-making. These steps
by AHW and RHAs created ‘pragmatic legitimacy’
through exchange (Suchman,
, p. 577). Thus,
legitimacy may occur for reasons other than insti-
tutionalization of values and be temporary in nature.
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Karan Sonpar and Federica Pazzaglia
University College Dublin,
Dublin, Ireland
E-mail: karan.sonpar@ucd.ie
Jurgita Kornijenko
University of Alberta,
Edmonton, Canada
21
The Paradox and Constraints of Legitimacy
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