Please join us for the first Winter Quarter meeting of the Money, Markets, and Governance Workshop, on Tuesday, Jan. 26th, at 4:30PM – 6PM, at Social Science Research Building, classroom 401.
PhD Student, The University of Chicago, Department of Sociology
Intraorganizational Conflict and Financialization as a Lubrication Process:
The Financial Revolution of China’s Education and Training Industry
Discussant: Wen Xie
PhD Student, University of Chicago, Department of Sociology
Abstract: This article probes the nature and driving forces of financialization through investigating China’s education and training industry (ETI). In the extant literature, neither the institutional pressure accounts nor the economic version of instrumental rationality accounts can sufficiently explain the financialization of the ETI. I show that the intense intraorganizational conflict in the market leader New Oriental, partly due to its complex partnership, led to a lock-up situation that exhausted all alternative solutions. Intraorganizational conflict in New Oriental also provided the impetus for the professionalization of financial managers, a process that prepared the ground for its financialization. Financialization became the only viable solution to the conflict. After New Oriental’s public listing, financialization was diffused in this industry. Such diffusion is only partly an institutionalization process because New Oriental’s competitors financialized not only to gain legitimacy but also to defend themselves against the cannibalization of New Oriental.
This finding brings back in the intraorganizational conflict as a driving force for financialization. Moreover, this finding enables me to challenge, or at least complement, the existing conceptualization of financialization as either an institutionalization process or a process of material interest maximization. I argue that financialization can act as a lubrication process, providing a way for organizations to transition from one organizational arrangement to another. Finally, I propose that the more complex the entrepreneurial network of an organization, the more likely it will be driven toward financialization. I discuss the implications for institutionalization and organizational adaptation at the end.
Questions about the workshop or accessibility concerns can be addressed to yanivr at uchicago dot edu