Frank Quattrone, Tom Cruise and Ronald Coase
Rob Cox at breakingviews.com draws an interesting parallel between two stars of risky business: basically does the business environment of the 21st century inexorably tip the balance of power away from the infrastructure and distribution of large corporations (in this case banks and media companies respectively)? Increasingly the answer seems to be yes. Now for truly exceptional ‘star’ talent this has probably already been the case for some time, more interestingly will be how far down the Long Tail will this phenomenon propagate?
Both Quattrone and Cruise enjoyed great privileges and enormous pay packets at their former paymasters. But they will probably do just as well on their own. So while the banks and studios may still be vital for distribution – whether securities or movies – the balance of power lies with the star talent.
Rob’s article caught my eye because I am fascinated by the possibility of the disaggregation of the (20th Century) ‘firm’ through the application of Coase’s transaction cost theory of the firm in a world where transaction costs are largely or in some cases effectively completely eliminated by technology. (Indeed I snuck this meme into AmazonBay, albeit admittedly somewhat awkwardly – the ‘ad hoc’ deal team assembled as a one-off to execute the public-to-private buyout of IBM.)
