Institutional or not? : Municipally-Owned Enterprises’ Quest forLegitimacy among Stakeholders andConflicting Goals

Abstract: Purpose: While research on state-owned enterprises (SOEs) have been lagging, even less can be found on municipally-owned enterprises (MOEs). The authors intend to use literature covering SOEs and apply them on MOEs in an analogue fashion. This study aims to uncover similarities and differences between the two aforementioned types of public ownership and contribute to the field of MOEs. This would allow for future researchers of MOEs to know in what way previous findings on SOEs is accurate and where extra caution must be placed. The authors will also consider the implications of institutional theory and how this can be used to understand the reality MOEs find themselves in. Design/methodology/approach: The authors has employed a qualitative approach where eleven MOEs have been interviewed. All of the eleven enterprises were located in the Swedish province of Värmland. The interviews were conducted in a semi-structured fashion and the analysis was achieved through a mix of selective and open coding. Findings: Enterprises matched expectations from stakeholders, where higher demands were met with greater social care and lower expectations facilitated a business approach. Furthermore, enterprises viewed their owners as the most important stakeholders and were willing to make decisions that favored them, even if other stakeholder groups disbenefit from this. Furthermore, a combination of actively searching for legitimacy and relying on institutional theory was employed by the MOEs, which could possibly contribute to institutional theory. Research limitations/implications for future research: Further research into these matters are of interest to build on the understanding of SOEs and apply them to MOEs. It is suggested to conduct a study including MOEs of greater size, as most organizations included in this study were too small to ‘successfully’ implement non-acquiescence matters such as decoupling and mission drift. Furthermore, a case-study of a single organization would perhaps shed some light on this matter, as this study’s focus on eleven enterprises has a bit of a tendency to only scratch the surface.