Berkshire Hathaway is known to many as an investment vehicle of Warren E. Buffett. To a certain extent this reputation is justified, as the investment that the company enjoyed success under his leadership. However, less attention has been paid to the management success of Berkshire Hathaway. By 2008, the number of companies that are uniquely owned by Berkshire Hathaway in its diversity. Even more unique was the operational structure, the company will be used to manage these processes. It was a … Read more »

Berkshire Hathaway is known to many as an investment vehicle of Warren E. Buffett. To a certain extent this reputation is justified, as the investment that the company enjoyed success under his leadership. However, less attention has been paid to the management success of Berkshire Hathaway. By 2008, the number of companies that are uniquely owned by Berkshire Hathaway in its diversity. Even more unique was the operational structure, the company will be used to manage these processes. It was a model based on extreme decentralization of operators, responsible for business placed entirely in the hands of local managers. While many public corporations strict controls and monitoring mechanisms put in place to ensure performance management and regulatory compliance, Berkshire Hathaway moves in the opposite direction. Many of the company’s operating principles were in stark contrast to those employed in the rule of most public companies. Shareholders of the company would have to decide whether these principles of action a threat to the long-term performance or whether, in contrast to reports, they were a source of competitive advantage, which could be maintained in the future.
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from
David F. Larcker,
Brian Tayan
Source: Stanford Graduate School of Business
30 pages.
Release Date: 1 January 2009. Prod #: CG16-PDF-ENG
The Management of Berkshire Hathaway HBR case solution