Principles for designing superior stakeholder organizations i: reconciling efficiency and legitimacy by communication

In this article I analyze the role of communication for organizational efficiency and organizational legitimacy. The main point is that under conditions of environmental complexity and dynamics characteristic for economic activity in a globalized economic system, business firms need to extensively engage in communicative processes with their stakeholders to obtain information necessary for organizational survival. In general, such processes are also suitable to generate organizational legitimacy, which is becoming increasingly central to the successful management of business firms. By introducing the concept of multifunctional communication, opportunities and limits of the simultaneous generation of organizational efficiency and organizational legitimacy by means of stakeholder communication are discussed.