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Prior research found that SMG’s application helps an organization handle various evaluators with conflicting interests
and mitigate the risk from the disappointment of evaluators that might lead to an organizational de-legitimacy (Etter
et al., 2019). With the benefit of encouraging members’ participation and transparency (Dreyer & Ziebarth, 2014), a
better social media practice draws favorable judgment in public discourse (Schultz, Castelló, & Morsing, 2013) and then
improve organizational reputation and legitimacy (Carroll & McCombs, 2003). Thus, a better implementation of SMG is
expected to improve organizational legitimacy by encouraging positive sentiment on social media.

H : Organizations with a higher social media governance score have better legitimacy than those with a lower
1
score.

2.3 Institutional Theory
According to Meyer and Rowan (1977), the social context where firms operate influences organizations’ behavior.
Therefore, it leads organizations to adopt a similar practice and become isomorphic with each other, for example,
when organizations are exposed by similar regulations, threats, and social pressure (Bretschneider & Parker, 2016). In
contrast, the organization that is in the opposite type will be expected to behave differently. Similarly, organizations
that adopt different cultures might act differently. For example, small businesses that usually adopt clan culture
(Zammuto & Krakower, 1991) are expected to have a different perception of public disclosure than listed companies.
In this research, the inclusion of organizations’ internal characteristics, such as organizational types and cultures, as
moderating variables, are based on this theory.

2.4 Organizational Cultures
Organizational culture is a set of shared values and norms that influence members’ behavior and interactions toward
each other and their environment (Dyck et al., 2019). Schein (2010) suggests that organizational culture is a social force
that is mostly invisible, yet very powerful to push an organization towards specific goals or in a particular direction.
Organizational culture is an internal factor within an organization that playing phenomena for understanding the
effect of governance on organization performance where differences in organizational culture will result in different
effectivities (Baird, Su, & Tung, 2018).

Dyck et al. (2019) differentiate the culture using the Competing Value Framework by Cameron and Quinn (2011). This
framework derived and validated the most critical element that shaped how people think, organize their values and
ideology, and process information (Linnenluecke & Griffiths, 2010). It has four areas separated by the x and y-axis. Y-axis
represents the member’s value; the X-axis represents the member’s prioritization. However, Jones, Jimmieson, and
Griffiths (2005) state that an organization cannot be classified in only one culture because it is not mutually exclusive.
It might be classified in more than one category (R. Quinn, 1985).

Change
(Flexibility and Adaptiveness)

Clan Adhocracy
Culture Culture

Internal External
Hierarchy Market
Culture Culture

Stability
(Predictability and Control)

Figure 1
Competing Value Network
Source: Cameron and Quinn (2011)

International Conference on Sustainability 117
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