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Berkshire Beyond BuffettThe Enduring Value of Values$
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Lawrence Cunningham

Print publication date: 2014

Print ISBN-13: 9780231170048

Published to Columbia Scholarship Online: November 2015

DOI: 10.7312/columbia/9780231170048.001.0001

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PRINTED FROM COLUMBIA SCHOLARSHIP ONLINE (www.columbia.universitypressscholarship.com). (c) Copyright University of Minnesota Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CUPSO for personal use.date: 21 September 2021

Hands Off

Hands Off

(p.105) 8 Hands Off
Berkshire Beyond Buffett

Lawrence A. Cunningham

Columbia University Press

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.

Keywords:   decentralization, autonomy, management strategy, Berkshire Hathaway

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