Legitimacy in transition: How do family businesses attain legitimacy in a post-communist context?

While family businesses are one of the most ubiquitous organisations around the world, their emergence is still relatively fresh in certain contexts. Consequently, their taken-for-grantedness in transitional settings, may be contested as these organizations struggle to establish legitimacy. Using structural topic modelling on over 30 years of newspaper articles we uncover three mechanisms shaping a conditional state of legitimacy attained by family firms in the Hungarian, post-communist context. Our work showcases how family firms gain a restricted form of cognitive legitimacy, built on prior associations related to the entrepreneurial activity conducted within the “second economy” under socialism. We outline how the resulting definition of what constitutes a family business works to limit to what degree larger and more successful family businesses going beyond the expected attributes may be perceived as legitimate. Counteracting such forces, family businesses may draw on beneficial associations of family business activity both domestically and abroad to expand the restricted definition of what may be considered legitimate. Ultimately, we show how these mechanisms are reconciled into a conditional state of legitimacy, continuously maintained and reinforced through a political discourse actively weaponizing delegitimizing connotations by placing political opponents with visible family business ties under suspicion of corruption and embezzlement.