Category: Warren Buffett

Leadership, when handled properly, has the potential to influence the way people perceive. It encourages some to pursue the footsteps of others who have shown themselves that they are worthy of bringing progress in matters they are enthusiastic about. This develops the ever-changing topic that leadership is and the ripple impact it generates spreads and changes the life of numerous organizations and individuals all over the globe. This brings out the aim of this article, which is to dissect the leadership style of the incredible Warren Buffet, who is reportedly worth 82.2 billion even after giving away 3.4 billion dollars to charity (Forbes, 2019) USD and has amassed over 100 billion USD worth of stock throughout his whole lifetime. This paper would explore how his upbringing plays a role in his popularity, the attributes he embodies that made him an influential leader, and where he draws his influence.

• How did Warren Buffett’s background prepare him to be the leader he is today?
• Would you describe Warren Buffett as an influential leader? Please explain why or why not.
• What are his major sources of power?
• Which sources of power are used most frequently? Why?

Warren Buffett had problems speaking public at a young age and did not think it his best point. But even when he was young, he knew that overcoming this obstacle was necessary for him to better himself, and that turned out to be the individual, chief, he is today. He took a public-speaking course and created a significant shift in public speaking by the fourth week. He identifies it as one of the most critical obstacles to be met, and his commitment to self-improvement reflects strongly in his performance (Chuang and Kunhardt, 2017).

Warren Buffett is likewise viewed as a powerful pioneer due to how he speaks with everybody around him particularly his representatives. He is known for giving everybody regard and dealing with his representatives like family and extremely transparent about everything in regards to his organizations and circumstances. This is a typical characteristic in a portion of the world’s best business tycoon, for example, Richard Branson, the originator of Virgin Group. He ensures that his regard for other people and genuineness resounds in his work. A fascinating thing to note is that Warren Buffet has no formal and set structure for the jobs allowed at his workplace. Representatives are completely observed as a group and work together as such to arrive at set objectives, which is typically a far-fetched approach with organizations. He once depicted his business as constructed precisely to go for whatever he might prefer.

Additionally, his straightforwardness and genuineness have built up a profoundly established trust inside his friends, representatives, family, and all partners which make them remain by him in any event, when things get troublesome. Quiet mien and being happy during troublesome circumstances truly quiet devotees and investors and the capacity to work however it and discover an answer assembles validity and trust (Radcliffe, 2019).

One point that all the people who met him identified was that Warren was still wondering and that kept him present but alone in his head. Warren has often concentrated on his job and how to utilize the knowledge he receives, develops his company, and make important choices. Warren Buffet invests enormous time working on his job, measuring danger when collecting knowledge from reputable outlets including newspapers and annual reports.

Another source of influence that Warren Buffet had, I think, was the prestige he established himself through hard work and commitment to his art. Reputation requires years and years of effort to make people care for you. In his terms, ‘Building your credibility takes 30 years and destroying it takes 5 minutes. When you consider, you’ll do it differently ‘(Chuang and Kunhardt, 2017). One of the many factors I think credibility is a great source of his influence is that he constantly depended on confidence and contact to create the reputation Warren had. Trust in himself and his ability certainly brought him self-confidence and stability, making him both effective in his endeavors and the leader he is today.

Conclusion

Today’s administrators and future executives will benefit from Warren Buffett’s acts. He showed strong leadership by self-improvement, learning from his failures, developing a reputation as a trustworthy companion, accepting accountability for his mistakes, and knowing that there was an answer to any dilemma that still held him moving and never gave up. He was polite, committed, and concentrated on his objectives. He viewed people with dignity and guided by instances. That is why Warren Buffett is still recognized not only as a billionaire philanthropist and investment consultant but also as a positive active leader.

Warren Buffett sends an open letter each year to owners in Berkshire Hathaway. Over the last 40 years, these letters have become a regular standard for reading throughout the investment world, providing insight into how Buffett and his colleagues are talking about everything from investment strategy to stock ownership to corporate culture, and more.

Save your money in peacetime so that during the war you can buy more. In 1973, Buffett made in the Washington Post one of his most profitable investments ever.

At the moment, the Post was generally regarded as having a valuation anywhere between $400 million— $500 million— placing it at only $100 million through its stock ticker. To Buffett, that was a warning to purchase. He was able to acquire more than 1.7 million securities for just $10M.

The underlying philosophy here is simple: hang on to your capital when it’s inexpensive, and invest freely when it’s expensive.

The world was still in the midst of a stock market crash that began in January 1973. The slow-motion collapse produced a two-year bear market— the Dow Jones opened at 1020 in 1973 and finished at 616 in 1974. One of Buffett’s big investments, Coca-Cola’s shares plunged from $149.75 to $44.50. Industries whose conditions had not improved were significantly underpriced across the board, according to Buffett’s assessment.

The portfolio of the Washington Post also fell after the sale of Buffett. The Post became technically a loss for Berkshire Hathaway after the end of 1974, slipping from a valuation of $10.6 million to $8 million. Yet Buffett had a belief that the fortunes of the firm would change, so he realized that the stock had been picked up at a great price, despite the fact that it had sunk even more.

In his 2016 letter, Warren Buffett wrote,

“Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold”.

“When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons.”

By the time Jeff Bezos purchased the paper in 2013, the 1.7 million share interest of Buffett was worth around $1.01B— a return of over 9,000 percent.

When others are greedy, be fearful and when others are fearful, be greedy.

Following the financial crisis of 2007-2008, few economic dogmas have been hit harder than the theory of efficient markets, or the notion that an asset’s price represents the market’s fair assessment of available information about it.

When it became apparent that managers at some of the world’s largest banks routinely overlooked the risks inherent in the commodities they dealt with, it became difficult to defend the notion that rates were ever really rationally set.

Retail and institutional investors sold massive numbers of assets of weak and strong companies amid the recession. Nevertheless, Buffett went on a personal binge of purchasing, even penning an impassioned New York Times op-ed entitled ‘Buy American’ about the billions he had spent buying up marked-down stock.

On the topic of efficient markets and moral actors, Buffett is mild. In 2017, commenting on the financial crisis, its implications, and its benefits, he said,

‘Though markets are generally rational, they occasionally do crazy things. Seizing the opportunities then offered does not require great intelligence, a degree in economics or a familiarity with Wall Street jargon.”

Buffett is generally of the opinion that markets are efficient. That’s why he typically warns against bargain-hunting or ‘timing’ your entrance into a market: it’s nearly impossible to try and outsmart the crowd’s consensus that sets prices.

Buffett also suggests that there are world-historic periods in which all that falls out of the window — natural disasters, fires, and other times in which passions seize over and rationalism spills out of the window. He goes on to further say,

“What investors then need instead is an ability to both disregard mob fears or enthusiasm and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period – or even to look foolish – is also essential.”

Buffett argues that savvy investors will continue to look at the fundamental value of firms in unpredictable or turbulent times, finding businesses that can maintain their competitive advantage for a long time, and buying with the mindset of an individual. Obviously, because buyers can do that, they would continue to go in the herd’s opposite direction—to “be fearful when others are greedy and greedy only when others are fearful,” Warren Buffett wrote in his 2004 letter to Shareholders.

The reasoning is simple: if others are scared, prices will fall, but in the short term, prices are likely to remain low. Buffett is optimistic about any company that creates great goods, has good management, and offers great competitive advantages over the long term.

Buffett reportedly made $10B by 2013 by pouring capital into struggling American companies including General Electric, Goldman Sachs, and Bank of America during the financial crisis of 2008.

It is like playing Russian roulette to raise debt.

Managers use leverage to boost profits throughout the business world, from large corporate boardrooms to venture capital departments. Whether it’s a business like Uber raising $1.5B to re-energize its declining development or a venture like ModCloth requiring $20 M to follow the initial growth path, leverage gives businesses a way to raise money without giving up space on their cap table or diluting the current stock.

According to Buffett in his 2018 statement, debt even pushes creditors into a Russian roulette game. So ‘a Russian roulette equation — usually win, occasionally die — may make financial sense for someone who gets a piece of a company’s upside but does not share in its downside. But that strategy would be madness for Berkshire, “ says Warren Buffett.

Because of the incentive structure involved, the venture capital paradigm where the costs of a hundred mistakes can be offset by one major investment achievement is particularly prone to suggest debt usage.

Buffett declared in his 2018 letter that stock prices are currently too big and that Berkshire will continue to invest in shares while hoping for another ‘elephant-sized’ chance.

Equally likely, a market speculator would encourage the use of leverage to maximize returns because they can create investments where they do not have to think about the downside risk. It may make sense for them to do so, because, as Buffett points out, they usually won’t get a ‘bullet’ when they pull the ‘trigger.’ But, for Buffet, who holds so many businesses outright and intends to keep them for the long term, it doesn’t make sense to get an outcome of ‘always living, often losing.’

A company’s risk of failure and a large amount of debt being called back is too great a risk, so Buffett and Berkshire Hathaway share equally with their owners in that danger.

Berkshire uses interest, but primarily through its affiliate railway and service. For these highly asset-laden companies with endless infrastructure and maintenance requirements, leverage makes more sense, and even in an economic downturn, they can produce plenty of cash with Berkshire Hathaway.

Final Thoughts

The biggest lesson from his letters to the shareholder is how Buffett has changed over time. We see him talking about buying a big business at the right price on CNBC. Sure, it’s very necessary, but it’s not how he’s doing 40% a year. What is most important for the small investor in the early years, and how he used Ben Graham’s overall philosophy but tailored it to small shares, risk arbitrage, takeover securities, etc.

The average investor won’t get amazing results when they look at it, say, BNSF and then go out and purchase another railway. If only a couple of million individuals were handled by Buffett, he would do completely different things. Reading the shareholder letters gives you a glimpse back in time to grasp this with incredible depth.

You don’t have to be a genius to know how to spend your money wisely. Saving and investing your hard earned income can get you amazing results. Similarly if you own a business or want to start one, the use of capital is one of the key issues you need to consider. And what better person than Mr. Warren Buffett to help you out in this regard. Warren Buffett is like an institution when it comes to giving people advice about investment and how to conduct business. The stocks he buys and the companies in which he invests becomes hot commodities all over the world. That’s the reason why each word from him is regarded as the authority on the subject. According to Mr. Buffett, if you want to run a business the following factors will you help you out greatly. While some of the points are written with respect to stocks and investment, they can be applied to running any business too. Keep Calm in the Face of Volatility People usually panic in the wake of an adverse event and haphazardly do things that usually make things worse for them. Warren Buffett once told his shareholders that he don’t bother much when price of his company’s share fluctuate sharply.

The above quote literally means that an adverse situation is actually an opportunity to make investment, although a calculated one. While you need to refrain from investment as much as you can when there is a buying spree going on as the bubble will burst anytime. Similarly you need to tackle bad or favorable scenarios keeping in mind the above quote. Keep Good Company This doesn’t mean that you need to have good friends involved in your business or do business with just people you know. Instead it is all about sticking to your investments in the long term rather than just going after every business prospect that looks lucrative. Starting a business is no ordinary feat as you have to burn the midnight oil to make it successful. Even a minor distraction towards this task can be fatal for your business. Similarly if you are dealing in stock market, you need to hold back big-valued stocks to reap benefits from them. Keep Costs Low Starting a business is a costly affair for sure. Even if you put in the entire capital in the product development and marketing phase, one can still be not sure whether the product will hit the bull’s eye or not. So keeping costs low at all levels is the basic necessity for a business to succeed in these testing times. And surely you would like to hear something from Mr. Buffett to offer you some advice in this regard.

Warren Buffet once elaborated the fact of keeping costs low at the success bash of Berkshire’s GEICO auto insurance subsidiary by saying, And when those customers referred their friends and relatives back to the company, it was an even greater success story for Berkshire giving it Keeping Employee Incentives Simple Many companies these days offer their employees incentives and bonuses in the form of stock option other than cash. The employees may not be totally satisfied with this practice as the value of a stock can go down in a matter of few days. So a company should make arrangement in this regard to facilitate people according to their performance by not making stock option as the only way to praise the performance of their employees. Warren Buffet can give you life-long lessons in this regard with his letters to his shareholders always a classic when it comes to getting solutions. About this scenario, Mr. Buffett tell employers not to give employees stock options that are Keep out of Trouble While no one can predict the future with cent percent success rate, proactive measures can make sure to avert adverse scenarios happening regularly. Businesses can get into trouble easily with internal and external threats playing a major role. You can easily guess Warren Buffett has something special in this regard too to save the employers and the employees too. According to Mr. Buffett, There is no rocket science involved in this theory. You just need to be extra-cautious while looking at the industry trends and the results of the other companies’ strategies. In this way, you can plot your future path with cent percent accuracy. Keep Your Undervalued Stocks for Future A quite common practice for several companies these days is that they use whatever option they have to buy in dire need. Using the undervalued stock is perhaps the first thing they use to sell as they try to save the cash and other valued stocks.

Warren Buffett gets very angry when companies practice this as he is always critical of using undervalued stocks which are not fully valued by the market. This is what he always tell his employees and the shareholders which is pretty much self-explanatory. Keep it Small Small businesses started to make a kill in the market right around the early 70’s. These businesses are easier to manage with not many employees to look after and the ROI is pretty much in line with the expectations of the investor. But big businesses attract big investors as they look for higher margins of profits in quick time. Warren Buffett is not that hopeful in this regard. The working of Berkshire Hathaway has always followed this principle with its unit managers handling all of the work instead of the headquarters doing the bulk of the tasks. That’s why Warren Buffett shed some more light on this issue, Keep your Reputation It take ages for the companies to make a reputation for themselves in the market. To create the goodwill, the product needs to be satisfying the requirements of the end user with quality at its core. The recent incidents at United Airlines with the passengers didn’t go well with the airline’s clients as well as general public. Their reputation nose-dived at an all-time low and it will take quite some time for them to recover from this. The blunders from their PR department made the matters worse for them. Maintaining the reputation of the product or service is one lesson on which Warren Buffett lays so much emphasis. It is perhaps the most important piece of advice for new businessmen and aspiring entrepreneurs.

Abstract

I do not attribute the long term financial performance based on the different styles of leadership between General Electric and Berkshire Hathaway. The main difference that could explain the performance differences is how future-oriented Berkshire Hathaway is. Berkshire Hathaway outperformed General Electric over the past 30 years. The differences between the core values of the culture between GE and Berkshire Hathaway is the freedom to make decisions. Jack Welch became the youngest CEO in GE’s history in 1981. Berkshire Hathaway’s CEO is Warren Buffett, and he takes a flat 100k salary every year with no bonuses. At GE decisions are made through a chain of command while Berkshire Hathaway gives autonomy. Yes, GE focuses on being lean but not to the extent of Berkshire Hathaway. I contribute this directly to the financial performance of the two companies because Berkshire Hathaway is it for the long hall. The culture of Warren Buffett’s Berkshire Hathaway is very simple. The CEO of GE’s salary is based on performance. Approach to Acquisitions Berkshire Hathaway has a unique six tier criteria in their ways of acquiring companies

General Electric Company is a multinational conglomerate in the United States headquartered in Boston. General Electric’s broad range of business ventures includes additive materials, healthcare, aviation lighting, oil, power, renewable energy, and venture capital financing. Berkshire Hathaway is another multinational conglomerate company based in Omaha, Nebraska. It is known for its chairman and chief executive Warren Buffett. Berkshire Hathaway outperformed General Electric over the past 30 years. Key differences will be looked at organizational leadership, company culture, compensation of CEOs and executives, management oversight, as well as the approach to acquisitions to see if any specific difference leads to Berkshire Hathaway financially outperforming General Electric Company.

Leadership

Leadership in the business world is a trait that cannot be dormant. With strong leadership, goals can be achieved, and productivity can be maximized. Without leadership, efficiency will be at low, and the business will be put at jeopardy. A leader must provide guidance, motivate employees, initiate action, build morals, coordinate employee and organizational needs, as well as delegate responsibilities. Jack Welch became the youngest CEO in GE’s history in 1981. Welch not only was considered a strategic manager but as a leader. He made his employees see his vision and become passionate about it. Welch wanted to break the chains of formality in business. He encouraged employees to lighten up. Meetings are informal not requiring ties or dress clothes. They would brainstorm and hear ideas from all employees no matter the rank in the company. Welch avoided bureaucracy like the plague. He believed that when there are many layers of management tasks cannot be done efficiently. This allows General Electric to be agile and responsive. Berkshire Hathaway is the 11th largest company in the world. It is led by Warren Buffett. Buffett’s leadership style goes against the norm. Buffett employees are not forced into meetings or pressured about results. Warren does not meet with the staff collectively, but he responds with only specific people annually for reports. These particular people will do whatever it takes to please Buffett. A trait that Warren Buffett has is that he will take ownership of the company’s mistakes rather than pawning them off on someone else in the company. His style of leadership allows employees to complete tasks without guidance from superiors. Warren Buffett’s leadership strategy is built upon nine doctrines, “1. Focus on the business, and not on growing staff. 2. Ensure that board members relate to shareholders. 3. Benefits come from splitting the CEO and chairman role. 4. Think of the company and not yourself. 5. There is no room for arrogance, bureaucracy, and complacency. 6. Trust is important. 7. Experience is perhaps the only best teacher. 8. Admit mistakes yet stay humble. 9. Praise the people who work for you.’ (Joseph Chris 1) There are many differences between the styles of leadership between these two companies. I do not believe either one style of leadership is better or worse. There is more than one way to skin a cat. It has been proven in many other companies that each version of management has yielded success. I do not attribute the long term financial performance based on the different styles of leadership between

General Electric and Berkshire Hathaway.

Culture

Organizational culture is defined as the underlying beliefs, assumptions, values, and ways of interacting that contribute to the unique social and psychological environment of an organization. General Electric culture is rooted by 5 core values: “Customer centricity (highest priority) Leanness Learning and adaptation Empowerment and inspiration Results orientation.” (Thompson 1). Customer centricity is rooted in customer satisfaction directly correlates to success. Leanness is the way GE simplifies processes allowing them to be rapid and responsive. Learning and adaptation encourage the improvement of employees’ capabilities to remain competitive. Empowerment and inspiration go beyond the walls of General Electric. GE involves employees in empowering and inspiring communities. The last core culture value is being results-oriented. GE is always conducting research on the market as well as future demands. They see their current results but strive to surpass them. The culture of Warren Buffett’s Berkshire Hathaway is very simple. It starts with the autonomy to run the business. Buffett gives each of his business units to run as they best seem fit. Buffett does not interfere with the company as long as financial targets are hit. The leader of the business can operate, and resources and support will be provided with little question. Another culture aspect of Berkshire Hathaway is being long-term oriented. Warren Buffett once said “’Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant.'(Buffett 1) Buffett knows success doesn’t happen overnight and is focused on sustainable long-term growth whether it’s acquiring new businesses, growth initiative from inside the company or entering new markets. The most important part of a company’s culture according to Buffett is being honest and ethical. No one wants to do business with someone that isn’t trustworthy. Berkshire Hathaway has a close-knit company culture “a strong corporate culture is vital to us at Volaris. We strive to put our employees first because of people matter. You can have the greatest strategies in the world, but if you don’t have the right people in place to execute those strategies, then it’s all for nothing. We also believe in focusing on the customer because solving their problems and listening to their needs is what drives the business forward. That, along with our long-term orientation, has created a winning culture” (Motley 1). The differences between the core values of the culture between GE and Berkshire Hathaway is the freedom to make decisions. At GE decisions are made through a chain of command while Berkshire Hathaway gives autonomy. Yes, GE focuses on being lean but not to the extent of Berkshire Hathaway. The main difference that could explain the performance differences is how future-oriented Berkshire Hathaway is. Warren Buffett is seen as a superhero in the business world about his knowledge and consistent, sustainable growth over the years. GE often gets into business deals that do not withstand for the long hall but look intriguing at the time.

Compensation

General Electric’s CEO is reeling in a huge page check, and it is based upon if the stock price is growing. According to the Wall Street Journal, “WSJ calculates a 50% rise would push GE’s share price to $18.60 and bring the new CEO 2.5 million shares, which would be worth about $46.5 million. If the share price rises at least 150% for 30 trading days, to about $31 a share, Mr. Culp will receive 7.5 million shares or $232.5 million at that price.”(Fortune 1). According to Glassdoor, an average executive makes 250k a year. Berkshire Hathaway’s CEO is Warren Buffett, and he takes a flat 100k salary every year with no bonuses.

An executive in this company makes an average of 230k a year. The main difference in reading the difference between the 2 companies is CEO compensation. By Warren Buffett taking 100k in compensation sends a message to Berkshire Hathaway saying that he is not in it for the money but as a company. The CEO of GE’s salary is based on performance. From the outside, it looks like the CEO of GE is living in the present just hoping the stock market is up 1 day time. The executives are paid about the same, so there is no difference. I contribute this directly to the financial performance of the two companies because Berkshire Hathaway is it for the long hall. Buffett is not chasing a paycheck. He is exceptionally future-oriented which plays a role in performance for a company.

Management Oversight

Berkshire Hathaway’s unique way of operating and managing their operations is different than the competitors in that their model of operating their operations is based on extreme decentralization of operating authority. According to Stanford Business Journal, their description of Berkshire Hathaway’s management oversight is that “ It was a model based on extreme decentralization of operating authority, with responsibility for business performance placed entirely in the hands of local managers”( Larcker, Tayan 1). The types of management styles that Berkshire Hathaway was enforcing were those that had two distinct requirements; for managers to submit financial statement information on a monthly basis and to also send free cash flow generated by operations to the headquarters( Larcker, Tayan 1). Unlike other Fortune 500 companies, Berkshire Hathaway entrusted their operating managers to simply manage their distinct sections of the company without corporate control or supervision. GE on the other hand is organized and run by their board of directors. The GE homepage describes their management process as, “The primary role of GE’s Board of Directors is to oversee how management serves the interests of shareowners and other stakeholders”( GE 1). They do this by having adopted cooperate governance principles in that they strive to have their entire board of directors being classified as independent. They do this to allow the board members to have an outside look into the ways the organization is being run, rather than having inhouse executives. An interesting point that GE has made is that “Each independent director is encouraged to visit at least two GE businesses each year typically without corporate management being present”( GE 1). GE in doing this allows these executives to see how day-to-day operations are being conducted and allowing them to look for changes from the outside. The differences between the management oversight of these distinct companies is that Berkshire Hathaway has entrusted their own local managers to conduct day-to-day operations whereas GE has gone a different route. GE has a Board of Directors made up of independent individuals striving to have an outside look into ways that they can improve. The differences between the management styles cannot be compared in which one is better or worse. Although the numbers that Berkshire Hathaway has put up in recent years portrays that their management oversight and process in terms of numbers and production is better. But there is truly no exact way to compare these companies. So in terms of which one is better, I would argue that both are great ways in their oversight of their separate entities.

Approach to Acquisitions

Berkshire Hathaway has a unique six tier criteria in their ways of acquiring companies. The list includes, “Large purchases (at least $50 million of before-tax earnings), demonstrated consistent earning power (future projections are of no interest to us, nor are ‘turnaround’ situations), businesses earning good returns on equity while employing little or no debt,

management in place (we can’t supply it), simple businesses (if there’s lots of technology, we won’t understand it), an offering price (we don’t want to waste our time or that of the seller by talking, even preliminarily, about a transaction when price is unknown)”( Berkshire Hathaway 1). Another interesting thing that Buffet himself has said that plays into his decision-making is that you wants to look into the CEO or owners eyes to see what he/she has to say about their organization. This is interesting in that Buffet wants to be one-on-one with the person in charge to truly see and hear what they have to say about their organization. Buffett has also been on record saying, “We basically do no due diligence”( Udland 1). This basically means that Buffett has no financial figures beyond those that are publicly available at the time of purchases. GE’s criteria for acquiring companies is unlike Berkshire Hathaway’s in that they have BDs, also known as business development employees that work under each board of director. “These professionals, many from consulting firms, focus on finding, analyzing, and negotiating acquisitions that will contribute to GE Capital’s growth”( Francis 1). The difference between these two companies is that with Berkshire Hathaway, it is mainly Buffet and his partner Charlie Munger who oversee the acquisitions and they are the ones who are mainly looking into ways of investing. Whereas with GE, it is the board of directors and their BDs that are associated in the process of approaching companies to be acquired. A similarity between the two companies is that both want the companies that they acquire to be run correctly as well as they both want managers that can be involved in the proper running of the organization for the long haul. Although they have different criteria’s when it comes to acquiring companies, the affect that their individual approaches have on the affect in terms of the long-term financial performance is very similar in that they both are looking for companies to acquire that will, in the end, positively affect the pockets of their stockholders.

Conclusion

Summary

The differences between the core values of the culture between GE and Berkshire Hathaway is the freedom to make decisions. By Warren Buffett taking 100k in compensation sends a message to Berkshire Hathaway saying that he is not in it for the money but as a company. From the outside, it looks like the CEO of GE is living in the present just hoping the stock market is up 1 day at a time. I contribute this directly to the financial performance of the two companies because Berkshire Hathaway is in it for the long haul while GE is just working to stay even.

Works Cited

1. Berkshire Hathaway Inc. Acquisition Criteria. (2014, July 17). Retrieved April 8, 2019, from http://www.berkshirehathaway.com/20 00ar/acq.html
2. Chris, J. (2015, September 14). 9 Warren Buffett Leadership Style Doctrines. Retrieved from http://www.josephchris.com/9-warren-buffett-leadership-style-doctrines
3. Dzombak, D. (2014, September 28). 25 Best Warren Buffett Quotes. Retrieved from https://www.fool.com/investing/general/2014/09/28/25-best-warren-buffett-quotes.aspx
4. Francis, R. A. (2019, April 04). Making the Deal Real: How GE Capital Integrates Acquisitions. Retrieved April 7, 2019, from https://hbr.org/1998/01/making-the-deal-real-how-ge-capital-integrates-acquisitions
5. GE Has a New Turnaround Plan: Make the CEO Incredibly Rich If Its Stock Finally Rises. (n.d.). Retrieved from http://fortune.com/2018/10/05/ge-ceo-compensation-lawrence-culp/
6. Governance. (1970, January 01). Retrieved April 9, 2019, from https://www.ge.com/investor-relations/governance
7. Investopedia. (2019, March 12). Why Doesn’t Berkshire Hathaway Pay a Dividend? Retrieved from https://www.investopedia.com/ask/answers/021615/why-doesnt-berkshire-hathaway-pay-dividend.asp
8. Larcker, D., & Tayan, B. (2009). The Management of Berkshire Hathaway. Retrieved April 9, 2019, from https://www.gsb.stanford.edu/faculty-research/case-studies/management-berkshire-hathaway
9. Structured for Success: Berkshire Hathaway. (n.d.). Retrieved from https://www.volarisgroup.com/blog/article/structured-for-success-berkshire-hathaway
10. Thompson, A. (2017, October 20). General Electric’s (GE) Organizational Culture for Customer-Centric Simplification. Retrieved from http://panmore.com/general-electric-ge-organizational-culture-customer-centric-simplification
11. Udland, M. (2015, October 13). WARREN BUFFETT: We don’t do due diligence – we just look into your eyes. Retrieved April 7, 2019, from https://www.businessinsider.com/warren-buffett-on-berkshires-acquisition-process-2015-10