Abstract for: Implementing Electronic Trading at the New York Stock Exchange: A Case of Organizational Change
Over the course of the last few years, the New York Stock Exchange quickly changed its trading mechanisms from floor-based to mainly electronic trading. This paper analyzes the exchange’s move towards electronic trading from an organizational point of view, with particular emphasis on the following three factors. First, two exogenous developments—a change in the customer base as well as technological developments—will be analyzed in their co-action to create pressure for adaptation. Second, endogenous reactions and the impact of trading floor-based stakeholders and their culture will be important. Examining the effects of these stakeholders helps gain a more general understanding about the possibility of internal groups to pressure for the retention of the old system. Third, inertial dynamics of the management and of the whole organization constitute a further crucial factor for the New York Stock Exchange’s adoption manner of electronic trading. Different scenarios are outlined under which the different forces are able to create a smooth adaptation of the organization to external pressures, punctuated equilibrium, and organizational death.