Legitimacy building in the evolution of small-firm multilateral networks: A comparative study of success and demise

This article reports a longitudinal examination and comparison of two multi lateral networks of small and medium-sized firms in the U.S. wood-products manufacturing industry. The research focused on how each of these networks built legitimacy over the course of their early evolution, from the pre-net work field, to initial formation and growth, and toward sustainment, culmin ating in the success of one and the demise of the other. Our findings demon strate that despite differences in their early bases of support, which resu lted in very different strategic emphases, the two networks ultimately had to address three conceptually distinct dimensions of legitimacy-the network as form, the network as entity, and the network as interaction. Based on t he findings, we develop specific propositions and draw some tentative concl usions about how legitimacy is established in multilateral networks and how the failure to build legitimacy across the three dimensions may lead to ne twork collapse.