Legitimacy of Entrepreneurs in the Iron Triangle Concept. Which is Prioritized? Price, Quality or Service?

Gde Deny LARASDIPUTRA; Putu Gede Wisnu Permana  KAWISANA; I Made  YOGIARTA

doi:10.38142/ijesss.v5i5.1219

Authors

Gde Deny LARASDIPUTRA Universitas Warmadewa, Bali, Indonesia
Putu Gede Wisnu Permana KAWISANA Warmadewa University, Indonesia
I Made YOGIARTA Warmadewa University, Indonesia

DOI:

https://doi.org/10.38142/ijesss.v5i5.1219

Keywords:

Iron Triangle, Legitimacy, Entrepreneurship

Abstract

This study aims to understand how entrepreneurs, especially members of the Indonesian Young Entrepreneurs Association (HIPMI) Denpasar branch, prioritize and balance price, quality, and service factors in running their businesses. Using an interpretive approach and in-depth interview method, this study explores entrepreneurs' experiences and strategies in applying the Iron Triangle Concept to face market competition. The research findings show that the priority of one factor is influenced by market conditions, consumer needs, and the business's position in the growth cycle. Entrepreneurs who prioritize price tend to use competitive strategies to attract consumers, while those who prioritize quality focus on improving the reputation of products or services. On the other hand, superior service is an important factor in building long-term customer loyalty.
This study confirms that business success lies in the ability to balance these three factors adaptively according to market dynamics. In addition, these findings provide practical insights for novice entrepreneurs in understanding how to manage the basic elements that are important for building business sustainability and legitimacy. This study contributes to the entrepreneurship literature by offering strategic guidance based on real experiences for entrepreneurs in managing the complexity of competitive markets.

Downloads

Download data is not yet available.

References

Adomako, S., & Tran, M. D. (2023). Beyond Profits: The Linkages Between Local Embeddedness, Social Legitimacy, and Corporate Philanthropy in The Mining Industry. CSR & Environmental Management, Wiley. DOI: 10.1002/csr.2585.

Akkermans, J., Tomlinson, M., & Anderson, V. (2024). Initial Employability Development: Introducing a Conceptual Model Integrating Signalling and Social Exchange Mechanisms. European Journal of Work and Organizational Psychology. 33:1, 54-66, DOI: 10.1080/1359432X.2023.2186783

Anderson, E. W. (1996). Customer satisfaction and price tolerance. Marketing Letters, 7(3), 265–274. https://doi.org/10.1007/BF00435742.

Deephouse, D. L. 1996. Does isomorphism legitimate? Academy of Management Journal, 39: 1024–1039.

Deephouse, D. L., & Carter, S. M. 2005. An examination of differences between organizational legitimacy and organizational reputation. Journal of Management Studies, 42: 329–360.

Demers, C., Giroux, N., & Chreim, S. (2003). Merger and acquisition announcements as corporate wedding narratives. Journal of Organizational Change Management, 16(2), 223–242.

Erkama, N., & Vaara, E. (2010). Struggles over legitimacy in global organizational restructuring: A rhetorical perspective on legitimation strategies and dynamics in a shutdown case. Organization Studies, 31(7), 813–839.

Fisher, G., Kotha, S., & Lahiri, A. (2016). Changing with the times: An integrated view of identity, legitimacy and new venture life cycles. Academy of Management Review, 41: 383–409.

Fornell, C., Johnson, M. D., Anderson, E. W., Cha, J., & Bryant, B. E. (1996). The American Customer Satisfaction Index: Nature, Purpose, and Findings. Journal of Marketing, 60(4), 7–18. https://doi.org/10.1177/002224299606000403

Glozer, S., Caruana, R., & Hibbert, S. A. (2018). The never-ending story: Discursive legitimation in social media dialogue. Organization Studies, 40(5), 625–650.

Hak, A., Dul, J. (2009). Pattern matching (No. ERS-2009-034-ORG). ERIM report series research in management Erasmus Research Institute of Management. Erasmus Research Institute of Management. Retrieved from http://hdl.handle.net/1765/16203

Jackson, D. (2024). The Relationship between Student Employment, Employability-Building Activities and Graduate Outcomes. Journal of Further and Higher Education, 48:1, 14-30, DOI: 10.1080/0309877X.2023.2253426

Joutsenvirta, M., & Vaara, E. (2015). Legitimacy struggles and political corporate social responsibility in international settings: A comparative discursive analysis of a contested investment in Latin America. Organization Studies, 36(6), 741–777.

Korkeamäki, L., & Kohtamäki, M. (2020). To outcomes and beyond: Discursively managing legitimacy struggles in outcome business models. Industrial Marketing Management 91 (2020) 196–208.

Lundqvist, M., & Middleton, K. W. (2024). Making The Whole University Entrepreneurial-Decades of Legitimacy-Building Through Chalmers School of Entrepreneurship. Technovation Science Direct. https://doi.org/10.1016/j.technovation.2024.102993.

Luyckx, J., & Janssens, M. (2020). Ideology and (de)legitimation: The Belgian public debate on corporate restructuring during the Great Recession. Organization, 27(1), 110–139.

Malik, M. E., Ghafoor, M. M., & Iqbal, H. K. (2012). Impact of brand Image , service quality and price on customer satisfaction in Pakistan telecommunication sector. International Journal of Business and Social Science, 3(23), 123–130.

Marianne, D. Sison. (2013). Creative Strategic Communications: A Case Study of Earth Hour. International Journal of Strategic Communication. Volume 7, - Issue 4. https://doi.org/10.1080/1553118X.2013.826227

Pontelli, G. E., & Pigatto, J. A. M. (2024). Management of the Impression of Legitimacy in Federal Universities. Administração Pública e Gestão Social. ISSN: 2175-5787

Quinlan, M, M. (2017). Interpretive Research. Published 2017 by JohnWiley & Sons, Inc. DOI: 10.1002/9781118901731.iecrm0122. https://www.researchgate.net/publication/320928610

Ryu, K., & Han, H. (2010). Influence of the Quality of Food, Service, and Physical Environment on Customer Satisfaction and Behavioral Intention in Quick-Casual Restaurants: Moderating Role of Perceived Price. Journal of Hospitality and Tourism Research, 34(3), 310–329. https://doi.org/10.1177/1096348009350624

Sinkovics, N. (2018) Pattern matching in qualitative analysis. In: Cassell, C., Cunliffe, A. L. and Grandy, G. (eds.) The SAGE Handbook of Qualitative Business and Management Research Methods: Methods and Challenges. Sage Publications: Thousand Oaks, CA, pp. 468-484. ISBN 9781526429278 (doi: 10.4135/9781526430236.n28).

Singh, J., & Sirdeshmukh, D. (2000). Agency and trust mechanisms in consumer satisfaction and loyalty judgments. Journal of the Academy of Marketing Science, 28(1), 150–167. https://doi.org/10.1177/0092070300281014

Siltaoja, M. (2009). On the discursive construction of a socially responsible organization. Scandinavian Journal of Management, 25(2), 191–202.

Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. The Academy of Management Review, 20(3), 571–610.

Suddaby, R., Bitektine, A., & Haack, P. (2017). Legitimacy. Academy of Management Annals, 11(1), 451–478.

Suddaby, R., & Greenwood, R. (2005). Rhetorical strategies of legitimacy. Administrative Science Quarterly, 50(1), 35–67.

Tamrat, W. & Teffera, D. (2023). Organisational Legitimacy of Private Providers: Regulators’ Ratings and Perspectives. Springer. Higher Education. https://doi.org/10.1007/s10734-023-01002-2

Tost, L. P. (2011). An integrative model of legitimacy judgments. Academy of Management Review, 36(4), 686–710.

Vaara, E., & Monin, P. (2010). And acquisitions ? Recursive perspective on discursive legitimation and organizational action in mergers and acquisitions. Organization Science, 21(1), 3–22.

Vaara, E., & Tienari, J. (2008). A discursive perspective on legitimation strategies in multinational corporations. Academy of Management Review, 33(4), 985–993.

Van Leeuwen, T. (1996). The grammar of legitimation. (Unpublished Manuscript).

Van Leeuwen, T. (2007). Legitimation in discourse and communication. Discourse & Communication, 1(1), 91–112.

Van Leeuwen, T., & Wodak, R. (1999). Legitimizing immigration control: A discoursehistorical analysis. Discourse Studies, 1(1), 83–118.

Visnjic, I., Wiengarten, F., & Neely, A. (2016). Only the brave: Product innovation, service business model innovation, and their impact on performance. Journal of Product Innovation Management, 33(1), 36–52.