INDIVIDUAL ASSIGNMENT

OF
INTRODUCTION TO MANAGEMENT

* * *

SUBJECT
WARREN BUFFETT – THE TALENTED CEO OF
BERKSHIRE HATHAWAY

Full name : Dang Quynh Trang

Class : IB16007
Roll number : HS163435
Table of content    
I. Introduction:
1.1. Purpose of the assignment……………………………………………....3
1.2. The manager’s biography……………………………………………….4
1.2.1.The personal life……………………………………………………….4
1.2.2.The career path………………………………………………………....5
1.3. The company/ organization’s information
II. Literature Review & Critical Analysis
III. Recommendation
IV. Conclusion
Reference List
I.Introduction
1. 1. Purpose of the assignment
Management is one of the most basic human activities, from the level of an
individual, a corporation to a country or a group of countries. This is also an
activity that is decisive to the survival of the participants, society and humanity.
Right management leads to success, stable existence and sustainable development,
while wrong management leads to failure, degradation, dependence, decay and
breakdown. Management science as we see it today is the result of a multi-year
process of summarizing management practices and constantly being supplemented
and enhanced to meet the requirements of socio-economic development. It is a
science that is always creative, applied in accordance with the economic, political
and cultural characteristics of each country in different periods. Not only
businesses but even economics students need to learn about the management chain
and skills, as well as academic knowledge and empirical knowledge to prepare
well for the knowledge base of academic management. Therefore, learning about
managers is also a way to increase motivation and accurate analytical thinking,
helping students have an accurate, comprehensive, specific, profound and clear
vision of academic management. In general, having a small research paper on a
manager is a good method to supplement the learning process and help economics
students understand the learning process and prepare for the first step in the career
path.
One of the top 10 most influential managers in the world according to
Forbes - Warren Buffett - 90-year-old billionaire - CEO of Berkshire Hathaway.
[1]Warren Buffett is known as a conservative trader, in difficult economic times,
everyone around is looking for another direction, he is looking for ways to adjust
profits and huge losses. Warren Buffett is a perfect example of patience, he has
proven that "slow and steady" often wins the business race.[2]Moreover, his
perseverance, smart risk-taking and hard work, healthy lifestyle and way of
inspiring people make up his excellent management style and talent. With the
research and learning about the talented businessman and manager Warren Buffett.

I hope to bring profound management knowledge and experience by this

researching, helping myself to better understand the process and management
knowledge in economics in general and businesses in particular.

1.2 The manager‘s biography

1.2.1. The personal life [3]
Warren Edward Buffett (born August 30, 1930 in Omaha, Nebraska, United
States.
Although Buffett was once the top student in the class that Benjamin
Graham taught, Graham refused to accept a job at his company.
So, after earning his master's degree, Buffett returned to Omaha and
worked at Buffett-Falk & Co. by his father from 1951 to 1954.
In 1952, he married Susan Thompson and had three children: Susan Alice,
Howard Graham and Peter Andrew.
Here, the reason Buffett changed jobs in 1954 was because Graham
changed his mind and suggested Buffett to the company he worked for.
So he went to New York with his family and worked at Graham's company
for two years.
In 1956, Graham dissolved the company to take a break. At this time,
Buffett returned to his hometown and started a business with an account capital of
140,000 USD.
Mr.His private companies as Buffett Partnership Ltd.
By 1957, he had bought a house for 31,500 USD, which is the same house
he is currently living in.
By 1960, Buffett owned seven companies. Also thanks to the profits from
these companies, in 1962 he officially became a millionaire.
Buffett then merged these seven companies and invested in a textile
company called Berkshire Hathaway, by buying so large a quantity of stock that he
could complete a full audit of the company.
Initially he applied Ben Graham's valuation theory, as the business grew, it
became long-term consulting.
Profits from the business of producing goods can be used to invest in other
accounts.
In the late 1960s, he changed the company from manufacturing textiles to
an insurance business.
In 1967, Berkshire paid its first and only dividend of 10 cents.
In 1969, Buffett liquidated the partnership and transferred his assets to the
partners.
The 80s are considered the explosive period in Buffett's career.
His net worth as of 1982 was $376 million, and it even nearly doubled,
reaching $620 million in just one year.
Despite becoming a billionaire at the age of 56, Buffett maintains a freelance
salary of $50,000 per year at Berkshire Hathaway.
In 1988, Buffett invested in Coca-Cola and quickly owned a 7% stake in this
large corporation.
After 27 years, this account investment has grown 16 times, which equates to
an average annual return of about 11%.
Buffett officially Bill Gates and became the richest man in the world in 2008.
His net worth is now estimated at $62 billion.
This natural position was regained by Bill Gates the next day, bringing him
down to 2nd place.
1.2.2. The career path of Buffet
Warren Edward Buffett is an American investor, businessman, and
philanthropist. He is the world's most successful investor, largest shareholder and
director of Berkshire Hathaway, [4] and is ranked by Forbes magazine as the sixth
richest person in the world with a fortune of approximately 88.6 billion USD up to
the present time. November 2020. [5] He is known as "The Legend of Omaha"[6]
or "The Sage of Omaha"[7], and is well known for his steadfastness in his value
investing philosophy as well as a thrifty lifestyle despite having a large amount of
money and huge assets. [8] For example, his 2006 salary was only $100,000, a
very small number compared to managers at companies the size of Berkshire
Hathaway. In 2007 and 2008, he only received a total of 170,000 USD per year, of
which the basic salary was 100,000. [9] He now lives in a house he bought in 1958
in Omaha for $31,500 (now worth about $700,000), although he also owns a home
another $4 million in Laguna Beach, California. In 1989, he used $9.7 million of
Berkshire's budget to buy a private-class jet and jokingly named it "Irresistible"
(English: "The Indefensible") because of the old plane. He often criticizes the
director of any company that does this.
Warren Buffett also has a famous list as a philanthropist who has donated 99% of
his fortune to the activities of the Gates Foundation founded by Bill Gates, and is
on the Grinnell university board. [10] He also actively contributed in main
activities, supporting Democratic candidate Hillary Clinton in the 2016 US
Presidential election; [11] he has openly criticized the major policies, actions, and
statements of the current president of the United States, Donald Trump. [12] In
1999 he was included in the list of the 20 best financial managers in the world
compiled by Carson, ranked above Peter Lynch and John Templeton. [13]; in 2007,
Time magazine included it in the list of "100 most influential people in the world".
[14]
1.3. The organization’s information – Beskshire Hathaway
Berkshire Hathaway Inc. is a multinational corporation holding company
headquartered in Omaha, Nebraska, United States. The company wholly owns
GEICO, Dairy Queen, BNSF Railway, Lubrizol, Fruit of the Loom, Helzberg
Diamonds, Long 26.7% shares of Kraft Heinz Company, and the rate of small part
but American Express (17 17). .16%), The Coca-Cola Company (9.4%), Wells
Fargo (9.9%), and Apple (3.3%). Since 2016, the company has acquired major
stakes in major US airlines, and is currently the largest shareholder of United
Airlines and Delta Air Lines, and a top three shareholder of Southwest Airlines and
American Airlines. Airlines. Berkshire Hathaway has had an average annual
increase in book value of 19.0% for shareholders since 1965, when it owned a very
large amount of capital, with negligible debt. [15]
[16]Subsidiaries: Berkshire Hathaway Energy, NetJets...
Total assets: US$552.26 billion (2015)
Chairman: Warren Buffett
Country: United States
Stocks traded: New York Stock Exchange, New York Stock Exchange
Number of employees: 361270 (2015)
II. Literature Review & Critical Analysis
2.1. Technical skill
Warren Buffet is one of the most successful investors of all time. His sharing of
experience, knowledge and investment strategies is known to many as technical
analysis such as peaks and troughs.
[17]However, what Warren Buffett shares there are many signs that he is an
extremely good expert at using technical analysis.
- Buffett is known for taking advantage of opportunities during and after the Great
Recession. In his latest annual letter, Buffett shared that “Every decade, dark
clouds fill the sky. But surely after that, the sun will shine again.”
Every 10 years there is a recession, Warren Buffett will increase his wealth x2 x 3
times. And he is buying both near the bottom and selling near the top. Warren
Buffett is both good at value investing and very good at trend investing.
Warren Buffett is a master of Technical Analysis but has never mentioned
Technical Analysis directly. Let's go back in history:
Warren Buffett has been investing in stocks since he was 11 years old. He made a
little profit and sold it, then he saw the stock go up many times over after that. And
from there he decided to study methodically.
- He learned from his mentor about value investing, Benjamin Graham. So, Warren
Buffett's school of investing is also based on the following foundations:
Benjamin Graham studies corporate finance
Graham instead of buying cheap stocks like the crowd to get high profits, he
chooses to buy stocks of good companies
Graham buys when stock drops 30-50% in value
- In the 40s or 50s of the 20th century, when Warren Buffett was in his 20s. You
note that it was a time of strong development of financial market theories such as
Dow Theory (50 years ago), Elliott wave theory, efficient market theory, random
walk theory, etc. and even mathematical and computer applications have been
studied into financial forecasting and trading.
- Warren Buffett's friend is very good at analytical techniques based on
mathematical quantification: Read Edward Thorp's book "The Market Beater". He
was also friends with Buffett in the 1970s and 1980s. Thorp used math to win the
casino. He uses quantitative mathematical models to solve financial markets.
The technique that Buffett uses here is learning from friends, gurus, investing
early, sensitive to market fluctuations, his technical analysis is based on science
like quantitative math is an example. It is these acumen that have made Buffett the
head of Berkshire Hathaway and one of the most talented managers.
2.2. Conceptial skill of human management [18]
“We rely primarily on codes of conduct rather than management systems,” said
Warren Buffett. Uwith a hugge number of staffs – 360.000, it seems so difficult for
him to find the effective way to manage them. But Buffett did it very well and his
management based on his special principles His principle is always to protect his
employees first, this has created a professional and extremely pleasant working
environment, All mistakes are not disclosed to the communication and are always a
matter of concern discuss and resolve internally within the company's board of
directors.
1. Unified Action
The investment legend once said: "It takes 20 years to build a reputation and only 5
years to destroy it. If you think so, you will act differently." He argued that people
should act ethically. Because otherwise, a company or an entire career can easily
be ruined by one wrong decision.
2. Don't overdo it
Buffett also advises people not to try to do it all. Because then, they will not
achieve the desired results. “The difference between successful people and really
successful people is knowing how to say no to almost anything,” he said.
3. Equip yourself with knowledge before taking risks
Omaha Wise has always advocated learning as much as possible about trading and
calculating risk before investing. "Risk comes from not knowing what you're
doing," he said. Buffett is also famous for another piece of advice: "never put your
money in an area you don't understand".
[19] Professor Munger of Stanford University once said: “Trust” is one of the
most powerful motivating factors in the work environment.
And Warren Buffett has always believed that, with a little oversight, giving
his employees the freedom to act as they please will bring more value than just
watching every action and evaluating every move their results.
In a shareholder meeting, Warren Buffett once said, "While we're sitting
here, perhaps a Berkshire employee is making a mistake."But when they feel
uncertain about their decision, every employee remembers the "survival" principle
of boss Warren Buffett: "... I want everyone to ask themselves, do you want the
next action to be? Become headlines tomorrow or not? Are you willing to let your
spouse and children read what you do through the critical tone of journalists?"Both
Munger and Buffett acknowledge that such a work culture is fraught with risks.
"We're definitely going to have some problems," Warren Buffett admitted to
shareholders, adding: "You can't make all 300,000 people not make a single
mistake."
Berkshire Hathaway's managers know that when something goes wrong,
shareholders and the media are immediately blamed for the "lack of oversight" that
the company culture creates.
2.3. Leadership skill [20]
Leadership Qualities: Styles, Skills, and Traits of Warren Buffett
Leadership Qualities of Warren Buffett: There are certain qualities that
reflects on the personality of the business leader, Warren Buffett. These leadership
qualities makes the man invincible in his respective field and people should take
vital lessons from the man’s skills and dedication. Here are some of his skills:
Optimistic: An Optimistic leader always brings a positive vibe to the
team. Positive attitude and never giving up behavior does takes the moral of the
team on a higher note. Despite his aging, Warren Buffet is a very jolly personality.
He brings a significant sense of humor and eases the nerves of his employees. This
makes him a good leader, always up for anything.
Great Mentorship: A leader’s first and foremost quality should be that he
will have to have the ability to guide his troops to the right path. In order to
achieve a certain goal, the team leader should be one of the greatest influencer for
the employees. Fortunately, Warren Buffet is a great mentor and influencer to his
company and employees. Thus making proper decisions and leading the company
towards greatness has been the sum up of his life.
Deep Thinker: Warren Buffett is known to be a critical analytic and a deep
thinker. He is often seen thinking about something with a composed approach.
Thus he can see the hidden potential of a certain business venture. For example, he
has dropped a huge amount of hare in IBM and considered to increase the share by
3% in Apple Inc.This truly reflects that he observes the market pretty up-close and
acts according to it.
Adaptive Nature: Speaking of adaptive nature and approach in the
business, Warren is a quick learner who learns from his mistakes and changes
according to that. That reflected when he failed in various ventures like investing
in Waumbec Textile Company. This was a failure, which taught him and he
embraced it gladly.
Appreciates People’s Efforts: Warren Buffett has the most unique
character in the business. Despite being the 4th richest man in the world, he is still
down to earth and often seen appreciating his employees and associates for their
triumphs and achievements.
Leadership Style of Warren Buffet – Transformational Leader
Judging by the traits and the style of approaching his employees in, the
leadership style of Warren Buffett is considered to be a transformational
leadership. A transformational leader is a strong leadership style. This type of
leader always walks ‘with’ the employees. They motivates and encourages the
employees to make a call. He even celebrates the achievements of his employees
and comforts them in their failures. All these qualities adds up to be evident in the
characteristics of Warren Buffett. Warren Buffett is supportive and a thinker who
always pushes his employees to be successful in their respective working sector.
Leadership Characteristics and Traits of Warren Buffett
There are several traits that successfully portrays the true leadership of
Warren Buffet. These are describes as follows:
Confidence: Confidence is the main weapon of any leader. He should have
the belief that he can achieve the goal. He should have the faith in his employees
and associates. This reflects on the business tycoon’s character.
Thinks Ahead of Time: A good leader should have a vision that will allow him to
see the future. He should have the sense to judge the outcomes of his business and
work according to that. Berkshire Hathaway has been such an investing company
that thinks ahead of time. Thanks to the leadership of Buffett.
Being Accountable & Responsible: There will be countless times where you
will make mistakes. But a great leader accepts his mistakes and learn from it. He
takes the full responsibility of his teams and also faces the consequences with a
cool head. Buffet has been one of them.
Other Leadership Traits and Characteristics of Warren Buffet: A true and
successful leader has to have all the qualities that takes to be a worthy pathfinder.
He should have the power to influence his associate to the similar passion and run
towards the goal. Qualities like acting swiftly, appreciating innovation, be creative,
be an effective communicator, have a healthy relationship with the associates are
some of the good leadership traits that are present in Warren’s leadership.
Leadership Skills of Warren Buffet – What He Achieved and What
He Applied
Warren Buffett has always been one of the most shining stars in
leadership. But what made him so desirable? Simple Answer. Honesty and
dedication. He was a leader from an early age. But what he did and how he did
made him the man who he is today. These are the four accomplishments or
learnings that made him the business role model:
Hiring People with Potentials: He always sees three things before hiring
someone; “Integrity, intelligence and Energy”. This has made him successful in
choosing the right man for the right position.
III. Recommendation
Reference List:
[1] Forbes 2018
[2] Article: Warren Buffett and Bill Gates: The mentor and the mentee: 2019
[3] Govalue.vn
[4] The Greatest Investors: Warren Buffett 2009
[5] which billionaire surpasses Bill Gates in the richest billionaire in the world?
11/2020
[6] Markels, Alex (29/7/2007). “How to Make Money the Buffett Way”. U.S.
News & World Report.
[7]Sullivan, Aline (20/12/1997). “Buffett, the Sage of Omaha, Makes Value
Strategy Seem Simple: Secrets of a High Plains Investor”. International Herald
Tribune.
[8] Gogoi, Pallavi (8/5/2007). “What Warren Buffett might buy”MSNBC.
[9] 2008 CEO Compensation for Warren E. Buffett
[10] Warren E. Buffett 1968; Life Trustee 1987
[11] Warren Buffett Endorses Hillary Clinton and Calls for Higher Taxes on
Wealthy
[12] PBS NewsHour (26/6/2017). “America should stand for more than just wealth,
says Warren Buffett”
[13] “Warren Buffett and Peter Lynch Voted Top Money Managers of the
Century”. Business Wire. 22/11/1999.
[14] Cramer, James J. “Warren Buffett”. Time.
[15] Wikipedia
[16] berkshirehathaway.com
[17] Article: Warren Buffett didn’t use the technical in management?
[18] Megatest.com
[19] Article: Learning the human management of Warren Buffett
[20] thestrategywatch.com [Article: Leadership Qualities: Styles, Skills, and Traits
of Warren Buffett by Richard Andrew]