1. Business Seeking Legitimacy in Africa:
The Role of Core Strategy and Country of Origin
Dr. Domenico Dentoni, Assistant Professor
Management Studies Group, School of Social Sciences, Wageningen University
Dr. Verena Bitzer, Post-Doctoral Researcher
Graduate School of Business, Capetown University
Dr. Jessica Duncan, Assistant Professor
Rural Sociology Group, School of Social Sciences, Wageningen University
Mr. Dimitris Mitsopoulos, Graduate Student
Management Studies Group, School of Social Sciences, Wageningen University
International Food and Agribusiness Management Association Symposium
Capetown, June 16th-20th, 2014

2. Backgound
Agribusiness in Africa:
• Competitive pressure
• Social, political and ecological pressure
Companies need to keep or build legitimacy in society
while securing supply and/or mantain markets
Broad Question:
• What are the different «legitimization strategies»
adopted by agribusiness companies in Africa today?
• How do they vary, and why?

3. Methods: Grounded Theory (1)
DATA (2010-now)
- Top 50 largest world food
companies (mainly, import
from Africa)
- Top 50 largest ag input and
food suppliers in Africa
(mainly, export to Africa)
- Top 200 largest ag-food
businesses («Africa as
home»)
- Secondary data on South-
South investments in Africa
THEORY
• Institutional Theory
& Economics
• Legitimacy and
legitimization
• Business Strategy
Glaser and Strauss 1967

4. Legitimacy Theory
Why legitimacy matters?
• To reduce stakeholder pressure (institutional theory)
• To reduce transaction costs (institutional economics)
Three major types of business legitimacy in society (Ashforth & Gibbs 1990):
In contexts of uncertainty, companies adopt «paradox strategies»: trying to
achieve all three of them at same time (Scherer et al. 2013)
1) PRAGMATIC 2) COGNITIVE 3) MORAL

5. Methods: Grounded Theory
• Inductive Creation of Typologies (Fiss 2011)
• Theoretical vs. Statistical Sampling (Yin 1984)
• Within-Case and Across-Case Triangulation (Eisenhardt 1989)
• Set-Theoretical Approach (Fiss 2007)
Attribute Values
Strategy for Legitimacy Moral / Pragmatic /Cognitive Legimitacy
Stakeholder Pressure Low / High
Core Strategy Procurement / Marketing / «Home»
Country of Origin Developed / Emerging / Africa
Institutional Forms Individual / Bilateral / Multilateral

6. Results: «Western» Companies (1)
Typology 1:
«Western Sellers»
Typology 2:
«Western Buyers»
Typology 3:
«Western Company
based in Africa»
Ex. Syngenta Ex. Unilever Ex. Nestlé
Strategy for
Legitimacy
Pragmatic Moral Pragmatic
Stakeholder Pressure High High Medium
Core Strategy Expand markets in
Africa
Expand supply from
Africa
Expand markets and
supply in Africa
Headquarter Country of
Origin
1. USA, 2. Europe 1. Europe, 2. USA 1. Europe, 2. USA
Main arguments and
related institutional forms
Scientific arguments
supporting the adoption of
new varieties of ag inputs and
food ingredients
Bilateral partnerships
industry/academia (IFAMA?)
Participating to societal debate on
«inclusive development»,
«fostering entrepreneurship» and
linking «farmers to markets».
Multilateral partnerships
industry/NGO/civil
society/academia
Arguments on «supply chain
efficiency», «food security»
and «job creation».
Bilateral partnerships with
NGOs (including company
foundations).

7. «South-South» and African Companies (2)
Typology 4:
«South-South
Investors»
Typology 5:
«South-South
Sellers»
Typology 6:
«African
companies»
Ex. Hubei Lianfeng
Overseas Agricultural
Corporation (China)
Ex. Odebrecht
Agroindustrial (Brazil)
Ex. Shoprite
Strategy for
Legitimacy
Pragmatic Cognitive Cognitive
Stakeholder Pressure Medium Low Low
Core Strategy Expand supply
(especially land) and
market in Africa
Expand markets in Africa Expand markets and
supply in Africa
Country of Origin 1. China; 2. India; 3.
Middle East; 4. Brazil
1. China; 2. India; 3.
Brazil; 4. Middle East
1. South Africa, 2.
Nigeria, 3. Kenya
Main arguments and
related institutional forms
Infrastructure and finance in
exchange of (mainly) land.
Bilateral partnerships with
Govt.
Bringing technology and
increasing competition in ag-food
input markets .
Bilateral partnerships with Govt.
Philantropy through company
foundations.
No partnerships.

8. Conclusions
Company
Core
Strategy
Company
Region of
Origin
Legitimization
Strategies
Institutional
Forms
Broad Initial Question:
• What are the different «legitimization strategies» adopted by agribusinesses in Africa
today?
• How do they vary, and why?
• Businesses adopt no «paradox strategy» (Scherer et al. 2013), but «contingency
strategy»
• Future research: testing and refining in two steps – interviews and survey

9. Thank you. Questions?
Domenico Dentoni
Domenico.Dentoni@wur.nl
Management Studies Group
Global Center for Food Systems Innovation
Wageningen University