Legitimizing the relevance of cooperatives under the pressures of isomorphism

Abstract

In contemporary capitalist markets, cooperatives face increasing isomorphic pressures that can narrow their original purpose and, in doing so, risk compromising cooperative identity. Despite extensive research on institutional pressures, little is known about how cooperative leaders themselves legitimize the relevance of the cooperative model under these conditions. We examine how the relevance of cooperatives— defined here as the legitimacy, necessity, and value of the cooperative form for members and society —is justified by managers in this environment. We conducted 41 in-depth interviews with CEOs and governing body chairpersons from Finnish cooperatives and analyzed them using qualitative content analysis. Our findings reveal two main legitimation perspectives: a dominant functional perspective centred on economic benefits and business continuity, and a less frequent ideological perspective emphasizing the provision of domestic services, reduction of inequality, correction of market failures, regional vitality, and participatory opportunities. Results highlight that when functional legitimation narrows cooperative relevance to the pursuit of economic benefits alone, the risk of identity erosion increases. The study contributes to the corporate purpose literature by demonstrating how isomorphic pressures shape cooperative managers’ interpretations of relevance, often privileging short-term economic imperatives over the cooperative movement’s broader societal mission.