Sub-theme 49: Organizing in the Shadow of Financial Markets
Call for Papers
Financial markets are central in our society and their powerful, yet subtle influence affects organizing in all
spheres of life (Davis, 2009). This has been especially vivid after the recent global financial crisis and the consequent
unrest and austerity that still plague societies and economies across the globe (Lounsbury & Hirsch, 2010). Organizational
scholars and economic sociologists have contributed to our understanding of how financial markets and the financial sector
operate, and how their practices affect in turn all other types of organizations. Scholars working within different theoretical
traditions (institutional theory, structural sociology, performativity) have contributed to these efforts. This sub-theme
will offer an opportunity to scholars to take stock of what we have learned so far, and develop a common agenda for the future.
Given their Weberian concern for the spread of modernity and calculative practices, it is perhaps not surprising that institutional theorists have been at the forefront of this movement. The emergence and diffusion of market logics, for instance, has been a core focal point in institutional logics research (Lounsbury, 2002, 2007; Marquis & Lounsbury, 2007; Thornton et al., 2012). Institutionalists more rooted in a political economy perspective have explored the political antecedents of what they refer to as financialization (Krippner, 2011), and have focused more on understanding the role that the state has played in unleashing markets (Fligstein, 1996).
The embeddedness perspective (Granovetter, 1985) has also provided important insights in the working of financial markets, by studying the way in which concrete social relationships affect market behavior, with studies ranging from trading floors (Baker, 1984) to bank lending (Stearn & Mizruchi, 1993; Uzzi, 1999). Also rooted in a structural sociological perspective of markets (White, 1981), the categorization perspective have shown how industry classification systems impinge upon evaluation processes of market actors (Lounsbury & Rao, 2004; Zuckerman, 1999; Bishop Smith, 2011) and on the strategic decisions of publicly listed firms (Benner, 2010).
Finally, scholars drawing on the performativity perspective (Callon, 1986; MacKenzie and Millo, 2003), have focused on the role of calculative devices in formatting how markets operate, and have suggested the controversial idea that financial markets are performed by the theories, models, algorithms, and tools that market actors use in their daily work (Beunza & Stark, 2012). In a similar vein, others have focused on how economic theory might become a self-fulfilling prophecy (Ferraro et al., 2005) and the role that the economics profession played in the transition towards the global neoliberal financial order (Fourcade-Gourinchas & Babb, 2002).
We encourage papers from these and other theoretical perspectives that further our understanding of the following questions and themes:
- Financial markets as sources of institutional pressure for firms: How do financial markets shape strategies, practices and structures of organizations? How do they promote isomorphism or drive heterogeneity in organizational fields?
- The emergence and evolution of new institutional forms in financial markets: How do new logics of investment emerge and evolve? How do new organizational forms overcome their lack of legitimacy?
- The impact of social structures on financial markets: how do categorical affiliations affect the valuation processes in financial markets? How do social networks affect the diffusion of practices and models of evaluation in markets?
- Resistance to financialization: what organizational vehicles and strategies are followed by the increasing public resistance to financialization? How can this resistance respond to the increasingly central role that sovereign debt plays globally and especially in the Euro zone (ie in relation to the Greek crisis)?
- As more social actors (governments, civil society, social movements, labor unions) increasingly leverage financial processes to achieve their goals, what are the strategies of engagement they employ? And how effective are they in achieving their objectives?
- What are the consequences of the recent financial crisis? What possibilities are there to reconfigure financial markets and social organization? What kinds of socio-economic structures are more resilient to global capital flows?
- Baker, W.E. (1984): "The Social Structure of a National Securities Market." American Journal of Sociology, 89 (4), 775–811.
- Benner, M.J. (2010): "Securities Analysts and Incumbent Response to Radical Technological Change: Evidence from Digital Photography and Internet Telephony." Organization Science, 21 (1), 42–62.
- Beunza, D., & Stark, D. (2012): "From dissonance to resonance: cognitive interdependence in quantitative finance." Economy and Society, 41 (3), 383–417.
- Bishop Smith, E. (2011): "Identities as Lenses: How Organizational Identity Affects Audiences' Evaluation of Organizational Performance." Administrative Science Quarterly, 56 (1), 61–94.
- Davis, G.F. (2009): Managed by the Market: How Finance Re-Shaped America. Oxford: Oxford University Press.
- Ferraro, F., Pfeffer, J., & Sutton, R.I. (2005): "Economics Language and Assumptions: How Theories can Become Self-Fulfilling." Academy of Management Review, 30 (1), 8–24.
- Fourcade-Gourinchas, M., & Babb, S.L. (2002): "The Rebirth of the Liberal Creed: Paths to Neoliberalism in Four Countries." American Journal of Sociology, 108 (3), 533–579.
- Fligstein, N. (1996): "Markets as Politics: A Political-Cultural Approach to Market Institutions." American Sociological Review, 61 (4), 656–673.
- Lounsbury, M. (2002): "Institutional Transformation and Status Mobility: The Professionalization of the Field of Finance." Academy of Management Journal, 45 (1), 255–266.
- Lounsbury, M. (2007): "A Tale of Two Cities: Competing Logics and Practice Variation in the Professionalizing of Mutual Funds." Academy of Management Journal, 50 (2), 289–307.
- Lounsbury, M., & Hayagreeva, R. (2004): "Sources of Durability and Change in Market Classifications: A Study of the Reconstitution of Product Categories in the American Mutual Fund Industry, 1944–1985." Social Forces, 82 (3), 969–999.
- Lounsbury, M., & Hirsch, P.M. (eds.) (2010): Markets on Trial. Research in the Sociology of Organizations, Vol. 30. Bingley: Emerald Group Publishing Limited
- Marquis, C., & Lounsbury, M. (2007): "Vive la Résistance: Competing Logics in the Consolidation of Community Banking." Academy of Management Journal, 50 (4), 799–820.
- Stearns, L.B., & Mizruchi, M.S. (1993): "Board Composition and Corporate Financing: the Impact of Financial Institution Representation on Borrowing." Academy of Management Journal, 36 (3), 603–618.
- Thornton, P.H., Ocasio, W., & Lounsbury, M. (2012): The Institutional Logics Perspective: A New Approach to Culture, Structure and Process. Oxford, UK: Oxford University Press.
- Uzzi, B. (1999). "Embeddedness in the Making of Financial Capital: How Social Relations and Networks Benefit Firms Seeking Financing." American Sociological Review, 64, 481–505.
- White, H.C. (1981): "Where Do Markets Come From?" The American Journal of Sociology, 87 (3), 517–547.