The Role of Social Legitimacy in the Organization's Efficiency

Neo institutional theory bases its arguments on the notion that organizations are socially rewarded by legitimacy, resources, and survival based on their acceptance institutional pressures (of coercive, normative, and mimetic). Neo institutional theory explains an organization’s actions within an institutional and strategic vision and as a response to both institutional and competitive pressures. Some experts expressed their criticism of the legitimacy of institutional theory is more socially and to improve the efficiency does not help, in fact the legitimacy and efficiency are inconsistent goals. To response to this criticism, the aim of this paper is to survey legitimacy role on organization efficiency by combining neo institutional theory and transaction cost theory. The goal of this research is development and the way of this research is survey- analysis. Statistical population of research is 2 banks of Eghtesade Novin and Persian in Tehran. This research is presented that the result of re-definition of neo-intuitional theory is consistence to new environmental requirement. This research is presented that the result of re-definition of neo-intuitional theory is consistence to new environmental requirement. That mean the legitimacy and efficiency are not inconsistent and it can be concluded that the efficiency can be provided by the legitimacy in addition to pervious source.