ABSTRACT
This chapter seeks to shed light on the psychological mechanisms underlining employees' attribution of legitimacy to an external buyer. As recognised in the literature, the ‘human’ factor is important in the successful transfer of business operations, especially when an external buyer takes over a firm. Legitimacy is traditionally linked to the notion of power, and it concerns one of the most political and foundational dimensions of a company—namely, the right to govern it and to be recognised as its leader by corporate stakeholders. The word ‘legitimacy’ comes from the Latin term lex or legis, which is the root of words such as ‘legal’ and ‘legitimate’, as well as ‘loyal’. Succession by a person with no prior connection to the company is defined as “a process, which through a buyout transaction, leads to the continuation of the life of a company, in difficulty or, and of all that it contains.
