Intervention markets and market re-organization

Organizations and markets are more similar than institutionalized ideas have us believe. A generic similarity is that they are both organized forms of co-ordination in society, and as such often subject to re-organization. However, conversely to formal organizations, the topic of why and how markets are re-organized has generally been neglected by organizational scholars. In this article, we 1) adopt an open system perspective on market re-organization, and 2) specifically analyze how other markets drive re-organization of the individual market. Empirically, the article demonstrates how new or existing markets come into close relation to other markets as a response to their perceived failures or other problems. We refer to the prior type of market as ‘intervention markets’, i.e. markets that intervene in the function of other markets. The individual markets studied – a financial market in our first case and, foremost, power production markets in our second case – were all re-organized as a way to manage the pressure of intervention markets. However, the intentions behind the re-organizations differed: exclusion of the intervention-market (an advisory market) in the first study, and adaptation to it (the EU market for emission allowances) in the latter.