Strange Bedfellows? Family Business Legitimacy in a Post-Communist Context

As the emergence of family businesses is still relatively fresh in certain transitional settings, their taken-for-grantedness may be contested, as they struggle for legitimacy. Using topic modelling on over 30 years of newspaper articles we uncover four mechanisms shaping a conditional state of legitimacy attained by family businesses in post-communist Hungary. These firms acquire a restricted form of cognitive legitimacy, built on prior associations related to the entrepreneurial activity conducted within the “second economy” under socialism. The resulting definition of what constitutes a family business works to limit the legitimacy of larger and more successful ones going beyond the expected attributes. This conditional state of legitimacy is maintained through a political discourse weaponizing delegitimizing connotations, placing political opponents with visible family business ties under suspicion of corruption and embezzlement. In turn, family businesses may draw on beneficial associations to resolve cognitive dissonance contributing to the conditional state of legitimacy.