1 Markets,Organizations,andOrganization
NilsBrunssonandMatsJutterström
Marketshavebecomepopularinrecentdecades morepopularthan organizations.Politicians,managementexperts,andotheropinionbuilders haveemphasizedtheadvantagesof ‘marketsolutions’,whichtheyhave contrastedwithactivitieswithinlarge,allegedlybureaucraticandinflexible organizations.Largecorporationshaveoutsourcedfunctions:formerdepartmentssuchasIToperations,forinstance,havebecomeindependentcompanies thatcompetewithothervendorstoselltheirservicestothecorporation. Equivalentchangeswithinstatesaretermedprivatization:insteadofbeing government-run,operationshavebeenfarmedout,withmanycompanies biddingforcontractsorcompetingdirectlyforthepublic’schoice.New marketshavebeenorganizedforsuchpreviousstatemonopoliesasschools, eldercare,motorvehicleinspections,andtherailservice.Relationships amongpeopleanddepartmentswithinlargeorganizationshavebeen replacedbyrelationshipsamongmultiplesmallerorganizationsorpeople invariousmarkets.
Marketshavenotalwaysbeenthispopular.Theywerelessbelovedafterthe financialandeconomiccrisisofthe1930s,whereastheWorldWarIIyearsand followingdecadessawanupturninsupportfortheideaoftheorganization overthemarket.Myriadactivitieswereincorporatedintoburgeoningstates. Largecorporationsgrewbysubsumingoftenunrelatedbusinessesintotheir organizations theconglomeratewasapopularmodel.
Attemptstoputloftyideasintopracticeoftenconstitutethemostserious threattothoseideas.Recentdevelopmentsmaybeseenpartlyasareactionto long-standingexperiencewiththeproblemsofinefficiency,inadaptability, andgovernability,towhichlargeorganizationsareproneandwhichmany peoplehopedcouldbeavertedinmarkets.Likewise,manypeoplearenow gainingextensiveexperiencewiththedifficultiesofmarketsolutions,which
hasledtomanyrequestsforandattemptsatreform.Andintheperhaps not-so-distantfuture,organizationsmayonceagainappeartobethemore attractivesolution.
Ontheotherhand,proponentsofmarketscanwithstandcriticism becausetheirideaisembeddedinwidernotions.Withtheirimageryof sovereignmarket ‘actors’ freelychoosingwhattobuyandsell,markets fi t contemporaryimagesofindividualsandorganizations.Atthesametime, suchcontemporaryindividualsandorganizationsarenotlikelytoaccept passivelyanyfeatureoroutcomeofmarketprocesses.Rather,theytendto airopinions,tointervene,ortosuggestthatothersshouldinterveneinorder toorganizemarketsinwaysthatprotectsocialvaluesorspecialinterests. Inthisrespect,marketsdonotdifferfromcontemporaryorganizationsthat arealsoobjectsofextensiveinterventions(MeyerandBromley2013).Such interventionsfromsellers,buyers,andothersconstitutethethemeofthis book,bothwhentheyareattemptstocreatemarketsandwhenthepurpose istochangethem.
Markets or Organizations
Fluctuationsinthepopularityofmarketsandorganizationsarefacilitatedby theideathatmarketsandorganizationsaredifferentsocialformswithvery differentcharacteristics whichmakesitseemlikelythattheproblemsdiscoveredinoneofthemwillbesolvedbyexchangingitfortheother.
Thedistinctionbetweenmarketsandformalorganizationssuchasstates or fi rms fi ndsagreatdealofsupportinsocialscience.EconomistAlfred Marshall(1920)arguednearlyahundredyearsagothatmarketsandorganizationsconstitutethetwofundamentalsocialformsofaneconomy.In contemporarysocialscience,thedifferentiationbetweenmarketsandorganizationshasbeenasharpone.Traditionally,marketsandorganizations haveevenbeenanalysedwithindifferentdisciplines.Marketshavebeen theprimarysubjectforstudiesinthedisciplineofeconomics,whereasthe studyoforganizationshasexpandedenormouslysincetheearly1960sin otherdisciplinesandnowconstitutesalmostadisciplineinitself.
Economistshaveoftentreatedtheorganizationasanexceptiontothemore orlessnaturalmarkets,alastresortsolutionwhenmarketsdonotfunction wellenough.OliverWilliamson(1975)believedthat ‘Inthebeginningthere weremarkets’ (p.20).Theorganizationisseen,atmost,as ‘themeansof achievingthebenefitsofcollectiveactioninsituationsinwhichtheprice systemfails’ (Arrow1974,33).Theideaofasharpdifferencebetweenmarkets andorganizationsisalsoatthecoreofso-calledtransactioncosttheory,by
whichonetriestoexplaintheconditionsfortheappearanceoforganizations (inthetheorycalled ‘hierarchies’)ratherthanmarkets,aswellastheotherway round(Coase1937;Williamson1975).
Inorganizationstudies,ontheotherhand,marketshavemostoftenbeen treatedastheenvironmentoforganizationsandthereforeonlyindirectly relevant.Andmarketshavegenerallybeenseenasaphenomenonoutside thescopeoftheoriesoforganization,tobehandledbytheoriesandconcepts otherthanthoseusedforanalysingformalorganizations.
Inshort,therehasbeenagreatdealofdiscussionaboutmarkets or organizations.Itisrarelyuseful,however,toregardmarketsandorganizations asverydifferent,orasopposites.Thisperspectivemayevenbemisleading. Thesharpdistinctionbetweenmarketsandorganizationscommoninsocial scienceseemsexaggerated.Wearguethatmarketsandorganizationsshareat leastonecharacteristic:theyarebothorganized.Inthisbook,wediscussthe organization of markets.
Weseeorganizingasanactivitythatneednotresultinortakeplaceina formalorganization.Furthermore,webelievethattheviewofthemarketand theformalorganizationastwoready-madeformsofcoordinationisinaccurate.Likeformalorganizations,marketscanbemoreorganized,lessorganized, ordifferentiallyorganized.Andtheorganizationofmarketsmaychangeover time:Reorganizationisnottypicalmerelyoflargeorganizations(Brunsson 2009);aswedemonstrateinthisbook,itisalsocommoninmarkets.Reorganizationoffersalessradicalsolutiontopracticalproblemsinbothformsthan doesashiftfromonetotheother.
Thesimilaritiesbetweenmarketsandorganizationsmakeitlikelythat theories,concepts,andexperiencesfromthestudyoforganizationsareuseful foranalysingmarkets.Expandingthe fieldoforganizationstudiestoinclude thestudyofmarketsseemstobeapromisingproject.Economistshavesometimesusedmarkettheoriesandconceptsoriginallydevelopedformarketsfor analysingformalorganizations.Inthesamespirit,wedotheoppositeinthis book.Weinvestigatehowandtowhatextentmarketscanfruitfullybeanalysedwiththesameconceptsthatstudentsoforganizationuseforanalysing formalorganizations.
Markets and Organizations:Definitions,Connections, andSimilarities
Ratherthanfurtherdiscussingmarkets or organizations,wenowturntothe issueofmarkets and organizations,howtheyconnecttoeachotherandwhat similaritiestheyhave.Westartbydefiningthesetwoforms.
De
nitions
Whatdowemeanby organization and market? Thesearebroadconcepts,the meaningsofwhicharefarfromself-evident.Ofthetwo,itseemseasierto agreeonthemeaningoforganization:anorganizationisastrongandwell developedinstitution,notonlyinpeople’smindsbutalsoinlaw.Thereis conspicuousagreementwithinorganizationalresearchaboutwhatconstitutes anorganization,andthereislittledifferencebetweenthisscholarlydefinition andthepopularnotionoforganization(Strang2017).Itistellingthatinone ofthemostinfluentialclassicbooksinorganizationtheory, Organizations (MarchandSimon1958),theauthorsdidnotdefinetheconceptoforganization,countinginsteaduponthereaders’ understanding,bymerelyenumeratingacoupleofempiricalexamplesofformalorganizations.
Uncertaintyanddiscussionaboutwhatconstitutesanorganizationare relativelyrareinorganizationstudies.Oneuncertaintyconcernsstates. Therearestrongargumentsthatstatesareaformoforganizationjustlike firmsandassociationsare;yetscholarsintheorganization fieldhaveseldom analysedstatesasorganizations.Furthermore,therearesometimesdoubts aboutwhatanorganizationisandwhatconstitutespartofanorganization. Shouldbusinessgroupswithmanysubsidiariesorstateswithmanyadministrativeunitsbeconsideredasoneorseveralorganizations?Andasforunits withoutlegalstatus,itissometimesunclearforbothpractitionersandscholars whethertheyshouldbeclassifiedasorganizationsornot(Taylor2011; DobuschandSchöneborn2015).Buttheseuncertaintiesareexceptionsrather thantherule.
Theconceptof market assumesmoremeanings.Journalistsoftenrefertoa groupofbuyersandsellersinstockmarketsanddescribemarketsaspersons: themarketcanbeoptimistic,pessimistic,depressive,orambivalent.Inother cases,theconceptofmarketisconfusedwithcompetitionorwithpeople’s freedomofchoice muchbroaderphenomenathanmarkets.Situationsin whicheitheroneofthesephenomenaexistsarecalledmarkets,irrespectiveof othercharacteristics.Peopletalkaboutthe ‘marriagemarket’,evenincultures whereneitherbridesnorgroomsareboughtorsold.Oronereferstoa universitymarket,evenincountrieswherehighereducationisfreeofcharge.
Manyscholarstaketheoppositestance,definingmarketinanextremely narrowway,assomethingthatworksaccordingtoahighlystylizedmodel (Williamson1975;Powell1990;Walsh1995;HåkanssonandJohanson1993).
Theterm ‘market’ isthenusedtodescribeanidealtypeinclosecorrespondencewithwhateconomistshavecalled ‘highlyorganizedmarkets’ (Marshall 1920;Walras1954)or ‘perfectlycompetitivemarkets’ (Samuelson1969):an exchangesystemwithcharacteristicssuchasclearandhomogeneousproductsandtransitorycontactsamongbuyersandsellers,limitedtoexchangein
whicheachpartyisimmediatelywillingtochangepartnerswhenbetteroffers appear.Thisidealtypeisoftencomparedtoanotheridealtype—‘thehierarchy’—thatisassumedtomirrorsomeaspectsofformalorganizations.Asis usualwhencomparingidealtypeswithempiricaldata,one findsthatalarge partofsocialrealityfallsbetweentheforms,callingfornewconceptsfor describingreality: ‘hybrids’ (Williamson1991), ‘networks’ (Powell1990; HåkanssonandJohanson1993),and ‘quasi-markets’ (Walsh1995),for instance.Iftheterm ‘market’ weretobedefinedinthiswaytherewouldbe fewmarkets:primarilycertainstockexchangesandexchangesofstandardized rawmaterial.Andbecausemarketstudiesusingthisdefinitionwouldcover fewempiricalphenomena,theywouldbeofrelativelylimitedinterestto socialscientistsingeneral.
Inthisbook,wedefine ‘markets’ notasanidealtypebutasanempirical phenomenonhavingonlytwodefiningcharacteristics:marketsinvolvethe exchange ofgoodsorservicesthatoccursunder competition,meaningthat sellersorbuyersorbothcanchooseamongmorethanonecounterpart. Amarketisasocialstructurethatcanbedefinedanddelimitedbytheproducts exchanged(suchasthemarketforshoesorsteel)orbytheplacewhere productsareexchanged(suchasthetownmarketoramarketontheWeb, suchaseBay).Withthisdefinitioninmind,itisclearthatwhereasthereisa greatdealofcompetitionoutsideofmarkets(tosaytheleast),thereareno marketswithoutcompetition.Wehavenoprejudicesthatamarketmustbe likeanelaborateidealtypeinordertobecalledamarket.Therearemarkets withsomesimilaritiestothecommonidealtype.Buttherearemanymarkets inwhichtheproductsarenothomogeneousandarelessclear where sellersandbuyershavelong-lastingrelationshipsthatincludemuchmore thanexchange,andinwhichtheyseldomandunwillinglychangepartners (Håkansson2009).
Connections
Eveniforganizationsandmarketsrepresentdifferentsocialforms,they coexistandarecloselyinterrelated.Althoughitiscommontotalkabout mostcontemporary,developedeconomiesas ‘marketeconomies’,they couldequallywellbecalled ‘organizationeconomies’.Interactionswithin marketsarecommon,butinteractionswithinorganizationsareevenmore so;individualsspendmuchmoretimeasemployeesthantheydoasmarket actors,andmostofa fi rm’sactivitiesdonotrevolvearoundsellingorbuying (Simon1991).
Modernmarketsdonotexcludeorganizations;rather,theypresumetheir existence,afactthatcanbedemonstratedinatleastfourways.Organizations arekeymarketactors,marketreorganizationtypicallyinvolvesattemptsat
reorganizingformalorganizations,formalorganizationsarethemainorganizers ofmarkets,andformalorganizationsandmarketsareoftencombined.
First,organizationsare keymarketactors.Onlyindividualsandorganizations canbuyandsellinmarkets.Itistheywhoareequippedwiththeidentity, rightsofownership,autonomy,andresponsibilitythatmarketactorsmust have.When firmsinthe19thcenturywereascribedtraitssimilartothoseof individualsandweredefinedaslegalpersons,onepurposewastomakethem capableofperformingtheroleofamarketactor(Djelic2013).Incontemporarymarketsindevelopedcountries,organizationsserveasbothbuyersand sellers,whereasinalmostallmarketsotherthanthelabourmarket,individualsaremerelybuyers.Inanoverwhelmingmajorityofmarketrelationships, organizationsarepresentonatleastoneside.
Thecreationofvirtuallyallmarketsisthuspredicatedoneitherthepreexistenceoforganizationsorthepotentialtocreatethem.Therecentformationofmarketsthroughoutsourcingandprivatizationhasbeenaccomplished throughtheformationofmoreorganizations.Thefundamentalideaofthe NewPublicManagementmovementtotransformunitsinthepublicsector intomorecompleteandautonomousorganizationswasnecessaryforachievingitspreferenceformarkets.Differentfromformeradministrativeunits, theseneworganizationshadtheautonomy,localresponsibility,clearboundaries,andownershiprightsthatenabledthemtoactasbuyersandsellersin internalandexternalmarkets(BrunssonandSahlin-Andersson2000).
Second,thesignificanceoforganizationsinmarketsisdemonstratedbythe factthat marketreorganizationtypicallyinvolvesattemptsatreorganizingformal organizations. Peoplewhoareintentonreorganizingmarketscannotdoso directly;marketsarenotactorsthatcanchange.Themarketreorganizermust induceoneormoreindividualsororganizationstochange,whetherdirectlyor indirectly,andmoreoftenthannotitisorganizationsthatmustchangetheir behaviour.Reorganizerstrytomake firmsactinnewwaysassellersorbuyers, orinfluencewhatproductstheysellandbuy,orarrangetheirproduction oraccountingsystemsinnewways,tomakethemcooperatewitheachother more,less,orindifferentways.Ororganizationssettingrulesformonitoringor sanctioningsellersandbuyershavetobeformedorbegivennewtasks.
Third,asdemonstratedinthisbook, formalorganizationsarethemainorganizers ofmarkets.
Fourth,formal organizationsandmarketsareoftencombined.Stockexchanges andotherexchangesconstituteobviousexamples;theyareformalorganizationswithinwhichmarketsareorganized.So-calledinternalmarketsarranged withinlarge firmsorstatesconstituteanotherexample.Theinclusionof marketswithinformalorganizationsisnotathreattoeitherform.Indeed,as describedinthenextchapter,itseemsdifficulttoachieveanythinglikea ‘perfect’ marketwithoutsubsumingitwithinaformalorganization.
Similarities:MutualAdaptation,Institutions,andOrganization
Formalorganizationsandmarketsrepresentdifferentsocialforms,andasideal typestheyhavebeendescribedasverydifferent.Butacloserlookathowthey workinpracticerevealssimilaritiesaswell.Marketsandorganizationsare orderedbythesamefundamentalprocesses:mutualadaptation,institutions, andorganization.
Thequestionofhowmarketscomeintoexistenceandchangeisanoldone. Economistscommonlyemphasizespontaneityandgradualemergencewhen describingmarkets,oftencitingAdamSmith’s(1779/1981)formulationofthe ‘invisiblehand’ guidingthemarket.Aselleroffersagoodforexchange,which thenattractscustomersandcompetitors,andamarketarises.Marketsand howtheydeveloparedescribedasanaturalconsequenceofpeople’smutual adjustment(Lindblom2001).Inmarkets,economicmenandwomensignal theirpreferencesthroughprices,andtherewillbesupply-and-demandequilibriumineachmarket(Hayek1973,1988).Marketorder oligopolies,for instance canariseasaresultofsuchadaptations(Tirole1988).Theideathat marketsarespontaneouslyorderedasaconsequenceofmutualadjustmentis notmerelyastandardthemeineconomics;manysociologistssharethe emphasisonspontaneityandmutualadjustment(e.g.Luhmann1982; Smith2007;White2008).
Inresearchonformalorganizations,ontheotherhand,thereisalong traditionofemphasizingtheoppositeofmutualadaptationandspontaneity: planning,management,anddecisionmaking.Formalorganizationshave beendefinedassystemsofdecisions(Luhmann2000).Anorganizationis createdbydecisions,andmoredecisionsarenecessaryinorderfortheorganizationtopersist.Anetworkorspontaneouscollaborationissometimes reshapedintoanorganization,butthisreshapingrequiresadecision.And newdecisionsaremadeabouthowtheorganizationshallbestructuredand howitshallfunction.Whendifferentiatingorganizationsfromothersocial systems,suchearlytheoristsasMarchandSimon(1958)highlightedthe importanceofdecisionsinorganizations.Butseeingindividualorganizations andtheirdesignastheoutcomeofdecisionsisalsoaneveryday,institutionalizednotionoforganizations.
Morerecentresearchonorganizationsandmarketshasproducedamore complexpicture,however apictureinwhichthedifferencesbetweenmarketsandorganizationsarelessdramatic.
Theearlyemphasisonorganizationalorderascreatedbydecisionshas givenwaytoamorecomplexviewoforganizationallife.Scholarsnoted earlyonthatdecisionsdonotnecessarilycreateanintendedorder.Decisions aremerelyattemptstocreateanorder attemptsthatoftendonotsucceed. Earlyresearchinthistraditiondemonstratedproblemsofimplementing
decisionsinorganizationalactionandunintendedconsequencesofdecisions thathaveactuallybeenimplemented(Merton1936;PressmanandWildavsky 1973).Furthermore,morethan50yearsofstudyingorganizationalpractice demonstratesthatorganizationalorderresults,toaconsiderableextent,from morespontaneousprocessesofmutualadaptationamongorganizationmembers(Czarniawska2008;Weick1979).
Furthermore,sharedbeliefsandnormsmaygraduallyemergeamong themembersoforganizations institutions thataredif fi culttoovercome throughcentraldecisionmaking(Selznick1949).Also,muchorganizationalorderisnottheresultoflocaldecisions,butratherofwidersocietal institutions(MeyerandRowan1977).Processesofmutualadaptationand institutionsmayformanobstacletodecisionsandtheirimplementation, buttheycanalsomakedecisionsunnecessary;ahighdegreeoforderand coordinationmaybecreatedwithoutdecisions.Infact,itisdif fi cultto imaginehowalargeorganizationcouldfunctionwithoutallthesetypes oforderingprocesses.
Likewise,inthecaseofmarkets,morerecentworkineconomicsociology hasstressedthefactthatbehaviourisformednotonlybymutualadaptation; itisalsoformedpartlybysharedbeliefsandnormsamongmarketactors.Such institutionsincludenotonlypropertyrights,butalsotheveryconceptionof whatamarketisandwhatmarketactorsaresupposedtodo ideasthatare partoftheearlysocializationofyoungpeopleinadvancedmarketeconomies andthatmakepeoplebehavesimilarlyinvariousmarkets.Buttherearealso institutionsthatemergeinspecificmarketsandmakedifferentmarketsfunctiondifferently(Aspers2011).
Finally,marketsareformedbyprocessesof organization.Theyaretheobjects ofdecisions.Therearepeopleandorganizationsthatdecidenotonlyontheir ownactionsinmarkets,butalsoontheactionsofothers.Inthenextchapter wesuggestadefinitionoforganizationthatallowsustodiscussorganization notastheoppositeofmarkets,butassomethingthatexistsbothwithin marketsandwithinformalorganizations.Organizationinvolvesdecisions abouthowothersshallbehave.Themostfundamentalorganizationaldecisions arethoseaboutmembership,hierarchy,rules,monitoring,andsanctions. Manytypesoforganizationsareinvolvedinmakingsuchdecisions;theycan bedirectedatbothsellersandbuyersandcanconcernsuchdifferentaspectsof marketsasgoods,transactions,prices,andcompetition.
TheIntricaciesofMarketOrganization
Althoughorganizationisanelementalsourceofmarketorder,thestudyof marketorganizationislessdevelopedandlesswellrecognizedthanare
approachesbuildingonmutualadjustmentandinstitutions.Inthisbook wedevelopanorganizationperspectiveonmarketsbyinvestigatingan extensivenumberofempiricalcasesofmarketorganizationandreorganization.Weraisefourfundamentalquestionsabouttheorganizationand reorganizationofmarketsanda fifthquestionregardingthespecificityof marketorganization.
The firstquestion concernsthedriversofmarketorganizing.Whatproblems andsolutionsmotivateandcanbeusedasjustificationformore,less,or differentmarketorganization?Wehaveseenthattherelevantperceived problemsmaybeexistingones,suchasuninformedandirrationalconsumers, orfutureproblems,suchastheriskoffuturepowerimbalancesbetweensellers andbuyers.Acommonproblemjustifyingreorganizationissubtler:aperceiveddifferencebetweenidealisticmodelsofmarketsandhowtheyworkin practice.Throughouttheempiricalcases,theexpansionoforganizationhas beenviewedasasolutiontoperceivedmarketproblems;insomecases,the amountandothercharacteristicsofmarketorganizationincreasedradically overtime.
Thesecondquestion concernstheorganizationsthatinterveneinmarketsas organizers.Whichorganizationsinterveneandwhy?Wedemonstratehow industryassociations,stateauthorities,localgovernments,civilsociety associations,andsellersandbuyersareactiveinmarketorganization the oppositepictureofoccasional ‘state’ interventionsinmarketsonly.Itisnot uncommonfororganizationstobecreatedwiththesolepurposeoforganizingoneorseveralmarkets.Sellersmaybecomeactiveorganizersofmarkets otherthantheoneinwhichtheyhavetheirownbusinesses.Wealsodemonstratehoworganizationmaybeusedasanattemptatlimitingthenumberof organizationsinamarket.
Thethirdquestion concernsthecontentofmarketorganization:What decisionsaremadeandhowcantheybeexplained?Oneexplanationis theorganizers’ sourceofinspiration.Sometimesabstractideasaboutmarkets ingeneraldeterminethechoiceoforganizationcontent,whereastheorganizers’ experienceswithaspecificmarketsometimesplayalargerrole.We demonstratethatsuchexperiencemayimplysignificantchangeinthe contentofmarketorganization intheorganizationalelementsused,andin themarketaspectstargeted.Recurrent,almostperpetualchangeinmarket organizationwasacommonphenomenonintheempiricalcases.
Thefourthquestion concernstheeffectsofmarketorganization.Fromstudies offormalorganizations,weknowthatdailypracticetendstodeviatefromthe decidedorderofmanagement oftenconsiderably(MeyerandRowan1977). Butwhataretheeffectsofmarketorganization?Weprovideexamplesofthe intricaterelationshipbetweenmarketorganizationandmarketpractice.In severalcases,marketactorsdidnotbehaveasexpected;theywereless
interestedinseekingpersonalbenefitsandlessrationalthantheorganizers hadassumed,forexample.Thoseorganizedcouldalsoactivelyresistorquietly avoidattemptsatorganizing.Marketproblemswereoftendifficulttosolve withorganization.Thiswasadriverfornewreorganizations,butalso anincentivetosupportorganizationeffortswithinformationactivitiesor newtechnology.
Theanswerstothesefourquestionsprovidethebasisfora fifth question aboutsimilaritiesanddifferencesbetweentheorganizingofmarketsand formalorganizations.Towhatextentcanweuseinsightsfromtheorganizing oforganizationstounderstandtheorganizingofmarkets,andinwhat respectsaretheconditionsandprocessessodifferentthatthestudyofmarket organizationcanproducenewinsightsforthoseinterestedinorganizationin general?We findsimilaritiesaswellasdifferences.Thedifferencesprovetobe mattersofdegreeratherthanfundamental.Andinsomerespects,thedifferencesamongmarketsandamongorganizationsareasprominentastheyare betweenthesetwoforms.
StudyingtheOrganizationofMarkets
Aperiodofmarketizationoffersanexcellentopportunityforconducting empiricalstudiesoftheorganizationandreorganizationofmarkets.Inthis book,wereporton14suchstudies.AsarguedbyMises(1963,257),webelieve thatanempiricalanalysisofmarketsmustbeorientedtoprocessesratherthan endstates.Thecurrentorderinamarketcanbepartiallyexplainedwith referencetoorganizerswhohaveappearedandmetwithresistanceand supportandbythefactthatoneorganizationhassucceededandanother hasfailed.Andthecurrentorganizationisunlikelytorepresentastable state:Neworganizerscanchallengeit.Thereforetheempiricalstudiesinthis bookexemplifyandanalyseprocesses howmarketsbecomeorganizedand reorganized.
Bystudyingprocesses,wecanseechangesovertimeinmanyrespects:how constellationsofactiveorganizerschange,forinstance,becauseinitiativesby someorganizersactivateotherorganizerstointervene.Further,wesee changesinthekindandamountoforganizationusedandthemarketaspects dealtwith.Andweseewhethertheeffectsoforganizationchangeovertime. Thefollowingsixcriteriahelpedusinourselectionofcasestudies.
First,wehavechosen marketsoutsideformalorganizations.Givenour approach,marketswithinformalorganizationssuchasexchangesofvarious sortsarelessinterestingbecauseitisobviousthatthesemarketscanbefruitfullyanalysedusingtheoriesoforganization.Furthermore,becausemarkets
outsideorganizationsarefarmorecommonthanmarketswithinthem,their organizationisofgreatestpracticalinterest.
Second, thecasesrepresentavarietyofmarkets,rangingthroughandbeyond marketsforcomputersoftwareand financialinstrumentsforpensionsavers, railwaypassengertransportation,publicrelationconsultancyservices,child insurance,andsnowclearance.Wetherebyavoidthedevelopmentofresults basedonstudiesofonetypeofmarket,thusavertingthecriticismthatgeneral conclusionsaboutmarketsareoftendrawnfromasignificantoverrepresentationof financialmarketstudies(Aspers2011).
Third,atthisstageoftheresearchwegave prioritytodifferences oversimilarities.Thecaseswerechoseninordertoillustrateawidevarietyoforganizers, problems,solutions,andprocesses.
Fourth,whereasmanyofthestudiescoverlongitudinalprocessesofcontemporarymarketorganization,someoftheauthorswentfurtherbytakinga historicalperspective.Inthehistoricalstudies,so-calledformativephaseshave beensought phasesofsignificantrelevancetothecharacteristicsofindividualmarkets.Theprocessesofmarketorganizationfeaturedagreatdealof action,withmanychangingconditionsandreorganizations.Studyingthese processeswithprimarilyqualitativemethodsallowedustodevelopanuanced understandingoftheintriguingandoftensurprisingaspectsoforganizingand reorganizingmarkets.
Fifth,althoughwehaveincludedcasesfromothercountriesandfromthe internationalscene,mostofourcasesaretakenfromthe Swedishcontext.This choicehasmethodologicaladvantages.Swedenisknownforitscomprehensivewelfarestate,butitisperhapslesswellknownthatitisasocietywithhigh toleranceandunderstandingofmarketsandmarketsolutions,perhaps becauseofacombinationofitshighscoresonindividualism(Berggrenand Trägårdh2006)andthefactthattheeconomyhasbeenextremelydependent forcenturiesoninternationalmarketsforitsproducts.Theideasofmarketizationhavebeenrelativelyeasilyandwidelyadopted,thusprovidingmany casesoforganizationandreorganizationofmarkets.Furthermore,Swedish organizationsaregenerallyeasiertoaccessthanareorganizationsinmany othercountries,thusfacilitatingthekindofqualitativecasestudiesthat constituteourreports.Wedonotbelieve(althoughwecannotfullyexclude thepossibility)thatthereareSwedishidiosyncrasieswiththeoreticalimplicationsfortheissuesofinteresttous.Theseconcernsrequiremorestudiesofthe organizationofmarketsthanwecanprovideinthisbook,buthopefullywe caninspiremanyfuturesuchstudies.
Finally,thechangefulnessofmarketorganizationandthechangefulness andinterrelatednessofproductsrenderitdifficulttomakeacleardistinction betweentimeswhenamarketis firstorganizedandwhenanexistingmarket isbeingreorganized.Westartedthisbookprojectwithaninterestin
