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Abstract Platform enterprises established by relying on digital technology have strong resource allocation and resource mobilization capabilities. By setting up the interface of multilateral interaction, platform enterprises have promoted the trading activities that did not exist or could not be completed, brought new vitality to the market, and quickly established moral legitimacy. However, at the same time, because most of the platform enterprises start from the emerging fields where the regulation is vague and the organizational form has not yet solidified, and the Chinese government often adopts an “inclusive and prudent” attitude towards enterprise innovation behavior, some platform enterprises violate their original “pro-social” value proposition in the process of business expansion and their behaviors are alienated, facing the threat of moral legitimacy. How should platform enterprises deal with the threat of moral legitimacy to maintain their initial legitimacy?
Most of the existing researches focus on the process of “platform enterprises crossing the initial legal threshold”. However, the subsequent legitimacy management of platform enterprises is also worthy of attention. The reasons are as follows: First, due to the unique bilateral structure and network effect characteristics of platform enterprises, the platform has gathered a large number of products and service resources in different regions and many fields, and the maintenance cost of the legitimacy of platform enterprises is higher. Second, the embedding of digital technologies such as algorithms has caused many problems of lack of new social responsibility in the development process of platform enterprises. At the same time, those moral problems that have not been solved in traditional economic activities will be further amplified under the platform situation, and the hidden danger of moral legitimacy threat will be greater. Third, due to the existence of network effect, the ability of platform enterprises to resist the threat of legitimacy may be weaker. The negative attitude of the unilateral group of supply/demand will spread rapidly through the network effect, which will cause the whole platform to face the survival crisis rapidly.
Based on this, through a comparative analysis of two typical platform enterprises, Pinduoduo and Xiaohongshu with the threat of moral legitimacy, this paper depicts a unique legitimacy management process of platform enterprises.
This study depicts a heterogeneity of moral legitimacy threat from the audience perspective of legitimacy evaluation and puts forward a moral legitimacy threat on the business level and a moral legitimacy threat on the architecture level, thus responding to the appeal of scholars to pay attention to the institutional environment of platform enterprises. Subsequently, this paper closely follows the unique bilateral structure and network effect characteristics of platform enterprises, explores the legalization strategy choice and its internal mechanism of platform enterprises in the face of different moral legitimacy threats, and extracts important research propositions. Specifically, on theon basis of distinguishing different threats of moral legitimacy, this paper proposes that platform enterprises can adopt asymmetric legalization strategies for suppliers and demanders with the help of network effect, thus reducing the legalization cost of enterprises. Finally, this paper pays attention to the internal conflicts between the dual roles of platform enterprises in their choice of legalization strategies. Therefore, based on the previous analysis framework of “situation characteristics-strategy choice” and the logic of “threat type-role positioning-strategy implementation”, this paper proposes that platform enterprises will follow different institutional logics under different threats to choose development ideas of platform enterprises, and identify the logic behind platform enterprises’ strategy choice, thus enriching the analysis framework of platform enterprises’ strategy choice. These findings contribute to the relevant literature of platform strategy and legitimacy management, and have certain practical guiding significance for new platform enterprises in managing legitimacy in business expansion.
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Published: 30 June 2021
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