International Journal of Economics, Business and Innovation Research
Vol. 2 No. 04 (2023): July, International Journal of Economics, Business and Innovation Research (IJ

Implementation Of Legitimacy Theory On SME To Achieve Sustainability

Dewi Diah Fakhriyyah (Universitas Negeri Malang)
Sudarmiatin Sudarmiatin (Faculty of Economics and Business, Universitas Negeri Malang, Indonesia)
Agus Hermawan (Faculty of Economics and Business, Universitas Negeri Malang, Indonesia)



Article Info

Publish Date
10 May 2023

Abstract

Small and Medium Enterprise (SME) have and important role to contribute to the national economy and also can contribute to achieve sustainable development goals (SDG). To achieve sustainability, SME should have a positive effect on the surrounding community. There is a theory that can be applied to support the existence of SMEs, namely the legitimacy theory. Legitimacy theory is widely used in the literature to explain Corporate Sustainability. Some of the things that SMEs do to achieve legitimacy are as follows, SME implement corporate social responsibility, communicating CSR to stakeholder, attract foreign investor by enhance social, environment, and governance performance. In addition, the legitimacy of SME can be viewed from the owner-manager of SME’s perspective. Based on owner manager’s perspective, to establish legitimacy can be from customer’s satisfaction through the value of the product/service, and also by give a responsibility to employees. SMEs that can achieve legitimacy, can achieve sustainability.

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Journal Info

Abbrev

IJEBIR

Publisher

Subject

Decision Sciences, Operations Research & Management Economics, Econometrics & Finance

Description

International Journal of Economics, Business and Innovation Research (IJEBIR) is a high quality open access peer reviewed research journal. providing a platform for the researchers, academicians, professional, practitioners and students to impart and share knowledge in the form of high quality ...