Berkshire Hathaway is known by many as the investment vehicle of Warren E. Buffett. To some extent, this reputation is well founded, given the success of the investment the company has grown under his leadership. Less attention, however, was given to the successful management of Berkshire Hathaway. In 2008, the network of companies that Berkshire Hathaway property was unique in its diversity. Even more unique is the operational structure that the company uses to manage these operations. It was based on the extreme decentralization of authority operations, responsible for business performance fully placed in the hands of local managers model. While many set? PART strict controls and monitoring mechanisms to ensure performance management and regulatory compliance, Berkshire Hathaway moved in the opposite direction of public enterprises. Many of the operating principles of the company were the opposite of those generally used by most public companies. Company’s shareholders decide for themselves whether these operating principles represent a risk to the long-term performance or if, contrary to the opinion of experts, which were a source of competitive advantage that could be supported in the future.
by
David F. Larcker,
Brian Tayan
Source: Stanford Graduate School of Business
30 pages.
Publication Date: January 1, 2009. Prod #: CG16-PDF-ENG
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