The Legitimizing Strategy Of Private Enterprises In The Transitional Economies: The Case Study On The Entrepreneur Perspective

The institutional environment of the transitional economies provides opportunities for private economies'growth, on the other hand, the faultiness of the institutions system resulted in a number of restrictions to enterprises, especially private enterprises. Private entrepreneurs, as the most active actors in the process of reform and opening, take a number of activities to break the system constraints and optimize the institutional environment, as well as their economic behavior.The legitimacy studies investigate the institutional environment on the perspective of organizational managers, to explore how the organization can conduct strategic approach to make its behavior be accepted to the institutional framework.Based on this considerations, the paper explorer that what institutional constraints do private enterprises face to in the transitional economies, and what legitimizing strategies was used by private enterprises, as well as the entrepreneurs'abilities and skills reflected in the legitimacy process.From the Case study, we found that the system of constraints faced by private enterprises are:the industry permission system because of the excessive government control and imperfection in the market degree; limitations of the new choice of system in the process of township enterprises'property rights reform; the lack of service system for private enterprises and result in the restrictive management systems and industry standards for private enterprises. Accordingly, breaking strategy,innovating strategy and defending strategy were taken by private entrepreneurs to get the legitimacy of the institutional environment. In the access of legitimatizing, the private Entrepreneurs take role of institutional entrepreneurs, and their capacity in institutional insight, theorization, collective action, cultural transmission, and their social status are all helpful in the successful implementation of the legitimatizing strategy.