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More important, A.I.G. was a much bigger and more complex firm than Lehman Brothers was.
A more complex firm like Goldman, which relies more heavily on fast-moving capital markets for funding, would thus have more to fear from the risk fee.
But it was much better than Morgan Stanley, a much larger, more complex firm, which was then trading at half its net worth.
Usefully, the retail operations and institutional business already use separate brands, trading as Chase and J.P. Morgan respectively.Beyond the risk of breaking up a complex firm, much might be lost in a dismembered JPM.
Today's complex firm may need a new matrix, with one structure for its knowledge workers and another for its more traditional workforce.However defined, the knowledge worker is not exactly a new invention.
The case illustrates how the organizational model of a complex firm is re-designed in response to internal and external changes.
Similar(53)
Banks are opaque and complex firms.
These costs are more significant for smaller firms, for more complex firms, and for firms with lower-growth opportunities.
Even those that have started, such as Metro Bank or Aldermore, are penalised by regulation: rules on capital favour large and complex firms.
"But given the uncertainties, I would probably be inclined to begin with other measures, such as more stringent capital and liquidity requirements for the largest, most complex firms".
"This approach reflects the inaccurate assumption that organizational design does not matter for economic performance and that restructuring complex firms is a 'piece of cake' without the need for careful analysis or any significant economic consequences," he writes.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com