An organization’s legitimating principle can blind it to shifting political demands.

Evidence

The legitimacy mechanism helps explain the institutional rise of the PA. It also explains the development of a blind corner with regard to its political environment. Self-financing projects had always been the key to its legitimacy as an entrepreneurial agency. This financing principle was a justification for its existence and its expansion. It explains why the Authority would not listen to local demands for commuter rail improvement and to protests against the fourth jetport or the WTC. When the Authority was eventually forced to adopt the ailing rail system, it was criticized for organizational arrogance and financial mismanagement – which both damaged its legitimacy. — Georg Schreyögg and Jörg Sydow, The Hidden Dynamics of Path Dependence, 309

Categorization

• XREF: Pays off the reader’s kept highlights on financial self-sufficiency driving the PA’s myopia and on the TVA’s legitimacy collapse.
• SEED: Angle: the legitimation mechanism as a structural blind spot — when what makes an institution credible is exactly what makes it deaf to its environment.