Creating Stakeholder Legitimacy in the Eyes of Stakeholders: The Case of Havana’s Paladares

Abstract

In desperation for survival, the Cuban government legalized limited forms of self-employment in the fall of 1993, and the Paladar industry (in home restaurants) was born and their numbers proliferated. For the next 25 years, the state oscillated between legalizing entrepreneurship to outright forbidding it; yet, the paladares thrived. This work explores and documents how different stakeholder evaluations of legitimacy of an entrepreneurial endeavor change over time and how these endeavors shape stakeholder’s evaluations of legitimacy. Utilizing archival data, in addition to firsthand interviews with various stakeholders, this paper documents key stakeholder evaluations of legitimacy in an endeavor’s context, the differences in these evaluations, how they change over time, and how these endeavors responded to and shaped these conflicts. The endeavors in our context shaped stakeholder views of legitimacy in ways that enabled them to gain access to the resources they needed to survive and prosper. This work brings a nuanced understanding of how stakeholders evaluate the legitimacy of entrepreneurial endeavors in contexts that are changing and emerging and how these evaluations are co-created in an iterative process between stakeholders and the endeavor.