Discussion 2

Legitimacy Theory states that organisations seek to ensure they operate within the bounds and
norms of their respective societies (Hummel and Schlick 2016, Van Zijl et al 2017). Although
the negative media publicity is disadvantageous for the business of the international cruising
companies, the media publicity aims to raise awareness of passengers for their safety, which is in
turn considered as an ethical behavior for the society (Aerts and Cormier 2009). Therefore, the
international cruising companies should respect the negative media publicity in this situation. All
in all, although the media publicity has an adverse effect on the sales and operating results of the
international cruising companies, the negative media publicity is a legitimate practice for the
society that was communicated to the public and thus these organizations must respect them.
Besides, the Legitimacy Theory allows companies to voluntarily make particular disclosures
(Behram 2015), which means the international cruising companies can either involve or ignore
making disclosures in their report in relation to the hardship, however, in this case, the
international cruising companies should strictly make disclosures within their annual reports or
on their corporate websites in relation to the hardship suffered by passengers on cruise ships
during this pandemic. To explain, this activity of honestly making disclosure of the issue pay
them recognition of the public and the companies will be perceived as legitimate as mentioned in
the legitimacy theory (de Fine Licht 2011). As a business entity, the International Cruise
Companies should seek to ensure that the customers are satisfied with their services and
products, which is generally done through strong sales and offering top quality services and
products and be honest in all situations.

References

Aerts, W. and Cormier, D., 2009. Media legitimacy and corporate environmental
communication. Accounting, Organizations and Society, 34(1), pp.1-27.

Behram, N., 2015. A Cross-Sectoral Analysis of Environmental Disclosures in a Legitimacy

Theory Context. Journal of Management and Sustainability, 5(1).
de Fine Licht, J., 2011. Do We Really Want to Know? The Potentially Negative Effect of
Transparency in Decision Making on Perceived Legitimacy. Scandinavian Political Studies,
34(3), pp.183-201.

Hummel, K. and Schlick, C., 2016. The relationship between sustainability performance and
sustainability disclosure – Reconciling voluntary disclosure theory and legitimacy
theory. Journal of Accounting and Public Policy, 35(5), pp.455-476.

Van Zijl, W., Wöstmann, C. and Maroun, W., 2017. Strategy disclosures by listed financial
services companies: Signalling theory, legitimacy theory and South African integrated
reporting practices. South African Journal of Business Management, 48(3), pp.73-85.