Everything must follow the script set by the head people, random audits occur monthly and every decision must be approved by corporate. The new company is very corporate operated. Different buildings had different rules and achieved different levels of success depending on the managers. The building managers had to report to a city manager, but overall, the buildings were classified as “theirs” and they operated them as such. With the old company, the owners were very distant to the point where I worked for them for two years and never knew their names. I find it interesting that this type of management leads to the managers adapting an “owner-operated attitude.” The business I work for was recently bought out and many changed took place. Thank you for your look into the leadership of Warren Buffet. Buffet has acquired these powers over the course of his life and is looked to for financial and investing guidance and leadership skills. He is an expert in his fields, has built respect and the label of role model to some giving him referent power, and is one of the wealthiest people in the world by his business transactions and is the top level of management giving him legitimate power. Warren Buffet is a wonderful example of expert, referent, and legitimate power. Even though he takes this “hands-off” approach to management, I feel as though his powers of influence keep his clients and employees loyal. Buffet’s sources of power come in every form, I feel. I try to watch any news show where he will be interviewed. I enjoyed reading your analysis of his style, laissez-faire leadership. Retrieved from įor a long time I have been intrigued by Warren Buffet. Why Warren Buffett’s Laissez-Faire Management Style Works. What is Laissez-Faire Leadership? Retrieved from By choosing whom to place his trust in wisely, he is able to afford them the autonomy that they need to be successful.Ĭherry, K. Buffett has the ability to choose highly motivated and capable managers who thrive in a results-oriented environment. Followers that are not highly skilled, competent, or good problem-solvers often end up failing at their tasks or not meeting their deadlines (Cherry). The Laissez-Faire style can work if followers are motivated and highly skilled, but quite often, this is not the case (Cherry). Most managers use the independence we grant them magnificently, by maintaining an owner-oriented attitude (Stern).” In Berkshire Hathaway’s 2010 Annual Report, Buffett states, ” We tend to let our many subsidiaries operate on their own, without our supervising and monitoring them to any degree.
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In Buffett’s case, however, this oft-maligned leadership style has had positive effects by allowing his managers full autonomy, he has created an atmosphere where his employees feel confident and motivated by their extreme latitude (Stern).
Followers are expected to solve problems themselves (Cherry). Needed resources are provided by leaders.Ĥ. Followers have complete freedom to make decisions.ģ. The characteristics of this style of leadership are:Ģ. This style of leadership is referred to as Laissez-Faire, or delegative leadership, and often leads to low productivity levels (Cherry). Buffett employs a “hands-off” management style, which has worked extremely well for him (Stern). He is known for making shrewd and profitable business decisions and for being a suburb manager (Sorkin, 2011).
Photo credit Warren Buffett, the CEO of Berkshire Hathaway and one of the world’s wealthiest people, is widely considered one of the most successful investors of all time.