Entrepreneurs and legitimacy: a case study of the paternity testing industry in Australia

The paper uses the paternity testing industry to explore the importance of legitimacy for entrepreneurs in the creation of new industries. Following Aldrich and Fiol (1994), it distinguishes between cognitive legitimacy whereby entrepreneurs must persuade others of the ‘tangible reality of the new activity’, and sociopolitical legitimacy whereby they must persuade others that it is ‘appropriate and right, given existing norms and laws’. The first wave of entrepreneurs in the paternity testing industry was fundamentally concerned with its cognitive legitimacy. For the most part they were concerned with technical and procedural issues, in order to satisfy their customers in government and law. The fact that government agencies were their main customers made their task much easier. To the extent that cognitive legitimacy was resolved, so was sociopolitical legitimacy. The second wave of entrepreneurs was also concerned with cognitive legitimacy, but in a more complicated way. In extending the market for paternity testing, they established cognitive legitimacy among the wider public through intensive media exposure, but breached the procedural protocols established by the first wave of entrepreneurs. In turn, the new entrepreneurs compromised the sociopolitical legitimacy of paternity testing. In other words, cognitive and sociopolitical legitimacy are not necessarily consistent.