What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

In this article, we make sense of financial algorithms as new objects of concern for organizational ethnography. We conceive of algorithms as ‘objects of ignorance’ jeopardizing traditional ethnogr...

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On Studying Algorithms Ethnographically: Making Sense of Objects of Ignorance

According to portfolio managers, agriculture in general, and farmland in particular, can be considered an emerging asset class. Specialized financial vehicles, such as private equity and mutual funds, are emerging and competing to attract potential investment in this asset class. In recent years, there has been significant development of such vehicles targeting South Africa’s farming sector. These innovations are led by a group of market intermediaries (e.g. asset managers or consultants) who endeavour to “re-shape” South African farmland as an opportunity for institutional investors. These “pioneers” engage in a multifaceted mediation process between global financial investors on one hand, and the South African agricultural sector on the other. Drawing upon an empirical study of such intermediaries in South Africa, this paper analyses the concrete mechanisms that facilitate this particular form of commodification. The paper presents and compares the intermediaries, giving particular attention to their structure, governance mechanisms and asset allocations within this “market in the making”. It describes how intermediaries develop different paths of asset valorization to unlock the “financial value” of South African farmlands (i.e. “liquifying”, standardizing, neutralizing, and depoliticizing agriculture as an asset). But, it also highlights some of the difficulties faced in the process of translating between international investors and local managers, questioning the “land-asset fiction” that is materializing through the subordination of farmland to the needs of financial society.

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Agriculture as an asset class: reshaping the South African farming sector

As part of ongoing work to lay a foundation for social studies of high-frequency trading (HFT), this paper introduces the culture(s) of HFT as a sociological problem relating to knowledge and practice. HFT is often discussed as a purely technological development, where all that matters is the speed of allocating, processing and transmitting data. Indeed, the speed at which trades are executed and data transmitted is accelerating, and it is fair to say that algorithms are now the primary interacting agents operating in the financial markets. However, we contend that HFT is first and foremost a cultural phenomenon. More specifically, both individuals and collective agents – such as algorithms – might be considered cultural entities, charged with very different ways of processing information, making sense of it and turning it into knowledge and practice. This raises issues relating to situated knowledge, distributed cognition and action, the assignment of responsibility when regulating high-speed alg...

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Cultures of high-frequency trading: mapping the landscape of algorithmic developments in contemporary financial markets

This paper contends that carving out pathways to finance the sustainable development goal (SDG) agenda entails to reconsider tacit assumptions regarding the functioning of financial systems. We first use a history of economic thought perspective to demonstrate the flaws of the loanable fund theory, which has come to underlie SDG finance strategies. We then introduce the alternative endogenous money theory using a consistent theoretical and accounting framework. This allows us to identify and discuss a set of financing mechanisms that would permit to bridge the SDG budget gap. These mechanisms include the issuing of sovereign green bonds, the modification of the European Central Bank’s collateral framework, changes in capital adequacy ratios, a market of SDG lending certificates and the introduction of rediscounting policies. We back up the discussion with examples from economic history.

Financing the Sustainable Development Goals

Using a variety of theoretical frameworks drawn from the social sciences, the contributions in this edited collection offer a critical perspective on the dominant paradigms used in contemporary financial activities. Through a detailed study of the organisation and functioning of financial intermediaries and institutions, the contributors to this volume analyse ‘finance in the making’, by shedding light on the structuring of banking and financial systems, on their capacity to prescribe action and control, on their modes of regulation and, more generally, on the process of financialisation. Contributions presented in this volume have been written by authors working within the ‘social studies of finance’ tradition, a research programme that emerged twenty years ago, with the aim of addressing a diversity of financial fieldworks and related theoretical questions. This book, therefore, sheds light on different areas that are representative of contemporary financial realities. Specifically, it first studies the work of financial employees: traders, salespeople, investment managers, financial analysts, investment consultants, etc. but also provides an analysis of a range of financial instruments: financial schemes and contracts, financial derivatives, socially responsible investment funds, as well as market rules and regulations. Finally, it puts into perspective the organisations contributing to this financial reality: those developing and selling financial services (retail banks, brokerage houses, asset management firms, private equity firms, etc.), and also those contributing to the regulation of such activities (banking regulators, financial market authorities, credit rating agencies, the State, to name a few).
Each text can be read without any specific knowledge of finance; the book is thus addressed to anyone willing to better understand the intricacies of contemporary financial realities.

The Making of Finance : Perspectives from the Social Sciences

Le caractere diffus et complexe du phenomene de financiarisation rend difficile son apprehension ainsi que la tracabilite des chemins de causes a effets empruntes Cette recherche tente de retracer la fabrique de dispositifs de financiarisation, en essayant d’isoler les impacts en soi de la financiarisation et d’en montrer leur continuite d’un contexte macro-economique a un niveau micro-economique, de la structuration de l’industrie de la finance a la maniere dont cette derniere peut configurer l’entreprise et marquer le travail dans ses differentes dimensions Elle s’appuie sur une etude de l’industrie financiere du Private Equity, connue pour ses montages financiers par effet de levier (LBO), en raison de son caractere emblematique et des situations de rupture qu’elle engendre lors de l’acquisition des entreprises Cette etude mobilise une serie d’entretiens semi-directifs realises aupres de delegues syndicaux, de representants des salaries et de gerants de fonds

De la finance au travail. Sur les traces des dispositifs de financiarisation

Cet article analyse la maniere dont un modele financier de valorisation conduit a influencer le futur effectif des entreprises dans la perspective de leur revente. Mobilisant deux enquetes de terrain, il montre comment, afin de pallier les risques lies a la volatilite des cours boursiers, le futur financiarise d’une entreprise cotee se concretise au terme d’un jeu perpetuel de renegociation enracinee dans le present. Dans le cas de l’entreprise non cotee, le futur financier, integrant un plus fort taux de rentabilite attendue, scelle a moyen terme le futur productif, en conformite avec les projections de l’investisseur-analyste.

Comment la finance investit le futur des entreprises : une analyse des dispositifs de liquidité à l’œuvre

« Il est difficile de contester le fait que la juste valeur represente la modalite d’evaluation la plus pertinente. En general, pour ceux qui veulent que la comptabilite reflete au mieux la veritable substance economique, la juste valeur apparait, sans aucun doute, comme une meilleure mesure que le cout historique [1] . »

« La “juste valeur ”, enfin une évaluation proche de la réalité »

Although France, unlike the English-speaking countries, came late to the capital market economy, the phenomenon of financialisation of companies - or ‘private equity’ - has now gained considerable ground. Yet the fact that the procedures and choices governing its operation are confined within the managerial sphere makes it difficult to gain any clear idea of how the various dimensions of labour, and in particular the social dialogue, are affected by this new business model. The article sets out to gain deeper insight into this dialectic through a series of semi-directive interviews of worker representatives intended better to understand aspects that are difficult to quantify. Analysis of the interview findings reveals a shared awareness of changes in practices and in the underlying business model that determines corporate operations; the resulting changes in the rules of the game governing interaction between the two sides of industry prompt a serious reconsideration of the methods and purposes of trade u...

Isabelle Chambost

Papers

The Making of Finance : Perspectives from the Social Sciences

De la finance au travail. Sur les traces des dispositifs de financiarisation

Comment la finance investit le futur des entreprises : une analyse des dispositifs de liquidité à l’œuvre

« La “juste valeur ”, enfin une évaluation proche de la réalité »

Social dialogue in France and reactions to the financialisation of the economy