From Crisis to Legitimacy Repair: Organizational Responses to Corruption Crises in the Swedish Telecom Industry

Abstract

Organizational crises, such as corruption crises, threaten organizational legitimacy by undermining stakeholder trust, credibility, and social acceptance. In response, organizations often rely on communicative responses and organizational actions aimed at restoring legitimacy. One response that may emerge in such processes is decoupling, however, previous research has paid limited attention to how decoupling functions within legitimacy repair processes during organizational crises. This study aims to address this gap by exploring how organizations respond to corruption crises and how these responses affect legitimacy repair. Based on a qualitative comparative case study, a document analysis was conducted of two Swedish telecommunications companies, Telia and Ericsson, following major corruption scandals connected to operations in Uzbekistan and Iraq. The findings show that both companies initially relied on symbolic communicative responses, including defensive communication and selective disclosure, illustrating forms of decoupling between formal commitments and organizational practices. Over time, the organizations implemented more substantive organizational actions, such as leadership changes, compliance reforms, and restructuring efforts, aimed at restoring legitimacy. This study advances the literature on crisis management and legitimacy repair by demonstrating how decoupling can function both as a short-term legitimacy strategy and as a source of continued legitimacy challenges. Furthermore, the study contributes to understanding how legitimacy repair develops over time within a Swedish organizational context.