Regulatory legitimacyRegulatory legitimacy is based on an organization that follows the institutionalized laws and regulations that have been put in place. These are not necessarily based on government rules; they can also be based on entities such as professional associations. It is therefore not necessary that the institutions which create these rules have legal power (like professional associations). However, organizations follow these rules because they are valued by society and society views organizations that follow these rules as legitimate. The organization decides whether to adhere to the rules through a cost-benefit analysis, considering whether the lost opportunity and costs imposed by following these rules are outweighed by the benefit of being considered legitimate or if they are lower than the cost of a potential project. legal fine. By following the rules, the organization gains approval and support from society because it acts in accordance with society's values. Since laws and regulations are considered legitimate, compliance with them creates legitimacy for the organization. The rules are followed by most organizations because it reduces uncertainty for them, since they know that other organizations also follow them and therefore know what actions to expect from them. This makes organizations appear rational because they follow rules that people believe are rational because they reflect the values ​​and opinions of society. Therefore, they settle for a stable and predictable environment in exchange for the opportunity to gain a competitive advantage that could arise from non-compliance with the rules. The rules are also followed because of the legal and societal repercussions that arise when organizations fail to follow them, such as possible organizational boycotts and fines imposed by g...... middle of paper ... ...Ezra W. Zuckerman. “The Categorical Imperative: Securities Analysts and the Illegitimacy Discount.” American Journal of Sociology, v. 104 (1999), pp. 1398-1438. Freeland, Robert F. “Normative Legitimacy.” University of Wisconsin-Madison. Conference. Hargadon, A. and Douglas, Y. 2001. “When Innovations Meet Institutions: Edison and the Design of Electric Light.” » Administrative Science Quarterly 46: 476-501. James G. March. “Following the rules [and logic of relevance]”. Chapter 2 in An Introduction to Decision Making. New York: Free Press, p. 57-76 and 100-102, 1994. Joan Acker. “Hierarchies, jobs, bodies: a theory of gendered organizations. » Gender and society, v. 4 (1990), pp. 139-158. John Meyer and Brian Rowan, “Institutionalized Organizations: Formal Structure as Myth and Ceremony,” American Journal of Sociology, v. 83 (1977), pp... 340-363.