WARREN BUFFET’S MANEGERIAL SKILLS

After having looked for sources of success in Warren Buffett’s childhood and his earlier career, and further analyzing his successful investment principles its time to find out what kind of corporate culture is needed to manage his empire. In this part the focus will be on Warren Buffett’s managerial skills and how a management team functions optimal according to Warren Buffett. Of course one man can not run companies on his own, but needs to create management teams that will perform according a certain philosophy. This need stems from the fact that Berkshire Hathaway owns 79 subsidiaries with a total of 246,083 employees. For Warren Buffett, “managers are stewards of shareholder capital. The best managers think like owners in making business decisions.” However as economic theory predicts, manager will not always pursue the same interests as shareholders, which is reflected in the classical agent-principal problem. According to Warren Buffett it is important to select employees who are “able, honest and hard-working” Having those people in a management team is more important than “designing hierarchies and clarifying who reports to whom about what and at what times”.