This chapter discusses Berkshire’s hands-off management approach that stresses decentralization and individual autonomy. This approach was made by choice but became necessary by default—with such a large number of subsidiaries in such a broad range of businesses, strict hands-on control would not be feasible. The choice to operate in a decentralized manner from the beginning reflected a belief in the value of autonomy and a conviction that people properly entrusted with authority will generally exercise it faithfully. And just as Berkshire Hathaway takes a decentralized approach, so do many of its subsidiaries. Every two years, Warren Buffett issues written instructions that reflect a balance between autonomy and authority. The missive states the mandates Berkshire places on subsidiary CEOs and these are: to guard Berkshire’s reputation; to report bad news early; to confer about post-retirement benefit changes and large capital expenditures (including acquisitions, which are encouraged); to adopt a fifty-year time horizon; (to refer any opportunities for a Berkshire acquisition to Omaha; and to submit written successor recommendations.
University Press Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.
If you think you should have access to this title, please contact your librarian.
To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us .