Competitive advantage as a legitimacy‐creating process

Purpose – The purpose of this paper is to explore how small firms in the tattooing industry actively shape institutional expectations of value for consumers in a changing industry. Design/methodology/approach – The paper draws upon interviews with key actors in the firms under study to explore their experiences with consumers and other constituents in determining how competitive advantage is constructed in this environment. These data are complemented data with interviews with governmental representatives and material from secondary sources. Findings – The results reveal efforts of firms to construct and increase organizational legitimacy through the prominence of discourses of professionalism based on artistry and medicine/public health. These bases of competitive differentiation are not the clear result of exogenous pressure, rather they arise through the active efforts of the firm to construct value guidelines for consumers and other constituents. Practical implications – Strategic management in small firms is a complex and dynamic process that does not necessarily mirror that of large organizations. Constructing competitive advantage is an interacting process between key actors of small firms and various constituents. Originality/value – The paper extends the application of institutional theory in strategic management by illuminating the active role that firms play in creating industry norms, especially in industries where norms are not well established or no longer entrenched. Moreover, exploring an alternative site of study offers a means through which to see well‐studied issues in new ways.