Trust, Ethics, and Storytelling: Legitimate Leadership in Companies, Tequila Makers of the Agave Route, Jalisco

1. Introduction

Micro and small enterprises (MSMEs) are essential drivers of employment, economic dynamism, and cultural continuity, particularly in rural and culturally significant areas. In Mexico’s Agave Route—designated as a UNESCO World Heritage Site—the legitimacy of business leadership cannot be reduced to formal authority or financial performance alone. Instead, it is anchored in ethical consistency, community rootedness, and narrative coherence. In such contexts, the entrepreneur is not only an economic agent but also a symbolic figure who represents tradition, local identity, and interpersonal trust.

Leadership studies have increasingly emphasized the role of ethical leadership, prosocial values, and symbolic communication. The literature on ethical leadership (Brown & Treviño, 2006; Resick et al., 2006), organizational trust (Godfrey & Mahoney, 2014), and storytelling in business (Boje, 2014; Clark & Rossiter, 2008) has advanced our understanding of how legitimacy is built in organizations. However, empirical research remains scarce in culturally embedded MSMEs operating in rural or semi-informal settings, where legitimacy is negotiated not through bureaucratic systems but through relational, ethical, and symbolic means (Guinot et al., 2020; Liao, 2022).

Diverging perspectives exist in the field. Some scholars emphasize formal, legal-rational structures and top-down systems of compliance to ensure leadership legitimacy (Weber, 1947; Williamson, 1995). Others contend that in culturally dense or institutionally fragile environments, leadership is legitimized from the bottom up through moral congruence, shared narratives, and community validation (Barnard, 1938/2002; Boje, 2014; Ramachandran et al., 2023). This study builds on the latter approach.

Drawing on Chester Barnard’s theory of accepted authority and constructivist theories of organizational storytelling, this research explores how small tequila entrepreneurs in the Agave Route articulate and sustain their leadership legitimacy. Using a qualitative, interpretive methodology based on semi-structured interviews, this study examines how ethical practices, conscious cooperation, and narrative expression function as tools of symbolic leadership and trust-building.

The study proposes an interpretive model in which legitimacy emerges at the intersection of practiced ethics, narrative construction, and collective recognition. In doing so, it contributes to the understanding of moral and symbolic leadership in territorially grounded micro and small enterprises (MSMEs). It offers insights into how trust-based leadership can support sustainable development in culturally significant regions.

2. Materials and Methods

This study employed a qualitative, interpretive approach based on semi-structured interviews to explore how microenterprise leaders in Jalisco’s Agave Route, specifically in the tequila industry, construct and sustain legitimate leadership. The research design was grounded in constructivist epistemology, which is particularly suitable for understanding meaning-making processes in culturally embedded contexts.

2.1. Sampling and Participants

The sampling strategy was purposive and theoretical. Ten tequila entrepreneurs were selected from municipalities officially recognized as part of the Agave Landscape and Ancient Industrial Facilities of Tequila (UNESCO, 2006). Selection criteria included formal registration of the enterprise, operation within the local supply chain (production, packaging, or tourism), and demonstrated leadership role in the organization. Efforts were made to ensure variation in business size and years of operation.

2.2. Data Collection

Data were collected through in-depth semi-structured interviews conducted between January and March 2024. Each interview lasted between 45 and 70 minutes and was conducted in Spanish, the participant’s native language. All interviews were audio-recorded with informed consent and later transcribed verbatim. A flexible interview guide was developed to explore ethical leadership practices, narrative forms of communication, and sources of perceived legitimacy.

2.3. Data Analysis

The data were analyzed using thematic coding and constant comparison methods guided by grounded theory techniques (Charmaz, 2014). Initial open codes were generated from the transcripts and grouped into axial categories, allowing for the emergence of conceptual patterns. Coding was performed using MAXQDA 2022 software.

2.4. Ethical Considerations

This study was approved by the Research Coordination Office of the Centro Universitario de los Valles (University of Guadalajara) under the official letter CI-FI/17/2024. All participants were informed about the purpose of the study, their right to withdraw at any time and the anonymity of their responses. Pseudonyms were used to protect identities.

2.5. Availability of Materials and Data

All data generated or analyzed during this study are available from the corresponding author upon reasonable request. Due to confidentiality agreements with participants, raw interview transcripts will not be publicly deposited.

2.6. Use of Generative AI

Generative AI tools were used exclusively to improve the English-language clarity and structure of the manuscript draft. No AI was employed for data generation, analysis, or interpretation.

3. Results

This section presents the core findings from ten semi-structured interviews with tequila entrepreneurs from the Agave Route in Jalisco, Mexico. The results are organized into three analytical categories: (1) ethical consistency as the root of legitimacy, (2) trust-based leadership through cooperative action, and (3) storytelling as a symbolic anchor of organizational identity. Representative quotes are included to highlight the voices of participants.

3.1. Ethical Consistency as the Root of Leadership Legitimacy

All participants emphasized that legitimacy is not granted by formal titles or institutional credentials but is earned through consistent ethical behavior. Respondents described leadership legitimacy as a function of “living your values” daily.

• Several entrepreneurs mentioned that their employees and clients expected “coherence between speech and action.”
• Ethical attributes such as honesty, reliability, and responsibility were often cited as pillars of credibility.
• In rural settings, reputation functions as an informal mechanism of accountability, reinforcing the expectation that business leaders act as moral agents.

“Here, titles do not matter as much as keeping your word. That is what builds trust.” (Participant 4)

“I prefer to lose a sale rather than deceive a client. That is leadership to me.” (Participant 9)

Some also linked their ethical position to intergenerational responsibility, viewing the business as a legacy that must be preserved with integrity.

3.2. Trust-Based Leadership and Cooperative Engagement

Leadership was consistently described as relational and collective. Entrepreneurs emphasized that legitimacy stems from being present, accessible, and engaged, rather than issuing orders.

• Participants reported that working alongside employees was critical for earning respect and trust.
• Cooperative relationships extended beyond the firm, including local producers, community organizations, and tourism alliances.
• Trust was seen as reciprocal: leaders trusted their people and expected that trust would be returned through commitment and shared effort.

“People follow you when they feel you are walking with them, not above them.” (Participant 1)

“If there is no trust, there is no business. We lead with example, not with authority.” (Participant 7)

Participants also reflected on crisis scenarios (e.g., agave shortages and tourism declines during the COVID-19 pandemic), where trust built over time enabled them to sustain operations through informal agreements, shared sacrifices, and transparent communication.

3.3. Storytelling as a Tool for Symbolic and Commercial Legitimacy

Entrepreneurs described storytelling as an organic practice embedded in their daily interactions with clients, partners, and community members. These narratives served to communicate values, heritage, and the distinctiveness of their tequila.

• Stories often included family origins, ancestral techniques, or the founder’s struggles and triumphs.
• Some entrepreneurs reported incorporating storytelling into tourist visits, guided tastings, and social media marketing.
• Others acknowledged its potential but admitted they had not yet formalized or digitalized these narratives.

“Telling our story makes the client feel part of it. We are not just selling tequila—we are sharing who we are.” (Participant 2)

One notable pattern was the use of emotionally charged or moralized anecdotes, which served to position the business as both authentic and trustworthy. Several participants framed storytelling as a way of “educating” the visitor about cultural identity and ethical production.

3.4. Visual Synthesis

Figure 1. Emergent Model of Legitimate Leadership in Rural Tequila Microenterprises.

This figure synthesizes the findings into a three-dimensional model where ethical consistency, trust-based cooperation, and symbolic storytelling intersect to generate leadership legitimacy.

4. Discussion

This study examined the construction of legitimate leadership among tequila entrepreneurs operating in rural microenterprises along Mexico’s Agave Route. The emergent model—centered on ethical consistency, trust-based cooperation, and symbolic storytelling—offers a novel lens through which to understand how legitimacy is negotiated in culturally embedded contexts with limited formal institutional oversight.

4.1. Interpreting the Findings in Light of Theory

The results reaffirm the relevance of Chester Barnard’s (1938/2002) foundational concept of authority, which is rooted in acceptance rather than position. In these microenterprises, leadership legitimacy is built not through hierarchical imposition but through demonstrated ethical conduct, sustained relational trust, and culturally resonant communication.

This supports and extends recent leadership theories that emphasize moral credibility and follower alignment (Brown & Treviño, 2006; Treviño et al., 2014). Unlike approaches grounded in transactional logic or organizational formalism (Weber, 1947; Williamson, 1995), the leaders in this study operate through relational-symbolic authority, validated daily through their interactions and alignment with community values.

Interestingly, legitimacy is constructed performatively: entrepreneurs are continuously evaluated by employees, clients, suppliers, and neighbors based on their perceived congruence between discourse, values, and action. This dynamic is consistent with constructivist theories of leadership (Uhl-Bien, 2006) that view leadership as a socially constructed and reciprocally enacted phenomenon.

4.2. Storytelling as a Mechanism of Legitimacy

One of the most distinctive findings is the role of storytelling not only as a communication strategy but also as a symbolic mechanism for legitimacy formation. This confirms Boje’s (2014) argument that narratives are central to organizational sensemaking but extends it by demonstrating how, in rural entrepreneurial contexts, storytelling is interwoven with moral authority and cultural identity.

These stories—family legacies, struggles to start the business, or moments of moral decision-making—serve multiple functions:

• They communicate authenticity to visitors and clients.
• They educate about local traditions and ethics.
• They reinforce internal cohesion by grounding the business in a shared narrative.

In line with organizational storytelling theory (Gabriel, 2000; Denning, 2011), these narratives become “moral performances” that authenticate the entrepreneur’s position and affirm the business’s purpose beyond profit.

However, many participants reported that they had not formalized this practice, instead relying on spontaneous or oral forms of communication. This presents an opportunity for training and digitalization to enhance both internal identity and external market positioning.

4.3. Trust and Cooperation in Contexts of Informality

The cooperative dimension of leadership reflects principles from stakeholder theory (Freeman, 1984) and recent studies on compassionate and inclusive leadership (Ramachandran et al., 2023; Liao, 2022). Trust in these firms is not a byproduct of policies or control systems—it is a prerequisite for survival in uncertain, low-infrastructure environments.

This relational dynamic is especially significant in the tequila industry, where community-based supply chains, seasonal work, and reliance on family labor are the norm. The entrepreneurs interviewed emphasized “walking alongside” workers and partners, which resonates with the servant leadership perspective (Eva et al., 2019) and with culturally rooted forms of Latin American leadership that emphasize care, mutual respect, and consistent presence (Dávila & Elvira, 2012).

Thus, leadership legitimacy is sustained through ethical engagement and emotional proximity rather than through technical expertise or strategic abstraction.

4.4. Theoretical Contributions

This study contributes to leadership theory in four specific ways:

• It contextualizes ethical leadership within rural, culturally embedded microenterprises —a field underrepresented in the literature.
• It introduces storytelling as a core mechanism for legitimacy construction, not merely as a means of communication.
• It validates a relational trust model of leadership for informal economic settings.
• It offers a visual, conceptual model that integrates symbolic, ethical, and cooperative dimensions.

4.5. Practical Implications

The findings are highly relevant for rural economic development, entrepreneurship training, and leadership formation programs. Rather than importing managerial models designed for large firms or urban settings, training in these regions should:

• Encourage leaders to explore and articulate their ethical narratives.
• Formalize storytelling practices as tools for transmitting value and branding identity.
• Promote cooperative leadership practices that align with cultural expectations of proximity and humility.

Additionally, public policy aimed at developing rural enterprises should recognize informal legitimacy mechanisms—such as narrative credibility and moral reputation—as equally important as financial metrics or formal registration.

4.6. Limitations and Future Research

Like all qualitative studies, this research is contextually bounded. The focus on a single industry (tequila) within a specific cultural-geographical region (the Agave Route) limits generalizability. However, the proposed model may be adapted and tested in other settings with a strong cultural identity (e.g., mezcal, coffee, indigenous crafts).

Future research could pursue:

• Comparative studies across industries and regions.
• Mixed methods are designed to quantify the impact of perceived legitimacy on employee engagement or customer loyalty.
• Longitudinal studies track how legitimacy narratives evolve with business growth or generational change.

5. Conclusions

This study aimed to understand how leadership legitimacy is constructed and sustained within rural microenterprises operating in Mexico’s tequila sector, specifically along the Agave Route. In contrast to dominant models that conceptualize leadership as the exercise of formal authority or the implementation of strategic competence, this research reveals a more situated and morally grounded reality: legitimacy emerges through the ethical, relational, and symbolic practices of local entrepreneurs.

Three central dimensions were identified: (1) ethical consistency, understood as the alignment between discourse and action; (2) trust-based cooperation, expressed through participatory engagement and mutual responsibility; and (3) storytelling, functioning as a vehicle of cultural continuity and symbolic anchoring. These elements coalesce into a contextual model of legitimate leadership, distinct from traditional bureaucratic or transactional paradigms.

Theoretically, this work contributes to the ongoing redefinition of leadership in management literature. It challenges the applicability of standardized frameworks in culturally rich and informally structured settings. By integrating perspectives from ethical leadership, organizational storytelling, and stakeholder trust, it offers an interpretive model rooted in lived practices and territorial belonging. This is especially relevant for rural development contexts where leadership is enacted not only through decision-making but also through moral authorship and cultural stewardship.

Practically, the findings underscore the need to design leadership development strategies that are culturally responsive and ethically oriented. For institutions promoting entrepreneurship in rural regions, it is not enough to teach business models or financial literacy; it is essential to recognize and cultivate the symbolic, emotional, and ethical dimensions that sustain social legitimacy. Storytelling emerges as a high-potential, low-cost tool for reinforcing organizational identity, communicating purpose, and engaging stakeholders.

Moreover, the study has implications for policymakers, educators, and NGOs working in line with the Sustainable Development Goals (SDGs), especially SDG 8 (Decent Work and Economic Growth), SDG 11 (Sustainable Cities and Communities), and SDG 12 (Responsible Consumption and Production). Supporting rural entrepreneurship requires not only infrastructure and capital but also a deep understanding of local values and the mechanisms through which legitimacy and trust are built.

In conclusion, this research affirms that leadership in rural microenterprises is not simply a managerial function—it is a moral and symbolic practice shaped by culture, proximity, and community. The entrepreneurs studied here are led not only by directing operations but also by embodying integrity, sustaining relationships, and narrating a collective story of identity and purpose. Future research would benefit from expanding this approach across industries and territories to explore further how localized leadership models contribute to broader processes of sustainable territorial development.

6. Patents

There are no patents resulting from the work reported in this manuscript.