assignment

1. Table of contents
S.No Topic Page
1 Introduction of Barren Buffet 1
2 Awards 1
2 Leadership styles 2
3 Important leadership lessons 4
4 Leadership qualities of Warren Buffet 5
5 Motivation 6
6 Management styles 7
7 Leadership grid 8
8 Powers used by Buffet 8
9 Buffet changing use of power 9
10 Burlington Northern Airways 10
11 Conclusion 12
12 References 13

2. Introduction:
There are many leaders in the world contributing in different fields. In our opinion Warren
Buffet posses the most distinguishing characteristics of a dynamic leader. He got special type of
expertise in different fields, which became the cause of his boom throughout his entire life. He
was born on August 30, 1930, in Omaha Nebraska to Howard and Leila Buffet. His father
Howard worked as a stockbroker and also served as a US congressman. His mother was a stay at
home mom. Nick named: “the oracle of Omaha”.
Warren Buffet is the chairman, CEO and the largest shareholder of Berkshire Hathaway, a
multinational conglomerate holding company headquartered in Omaha. He is much respected by
his peers and the world alike for his personal frugality and adherence to ethical principles when it
comes to successful business management. Called the ‘Oracle of Omaha’, Buffett rose from a
modest beginning to become one of the richest men on earth through his sheer hard work and
keen sense of investing. He started demonstrating his financial abilities from his early years
when he would go from door to door selling candies and soft drinks. He began investing as a
teenager and had saved almost $10,000 dollars by the age of 20. He had great business acumen
and started out on his career as a stock broker. He developed his own investment principles
which helped him acquire a lot of wealth; he was already a millionaire by the time he was in his
early thirties. As his wealth grew, so did his desire to give back to the society—he is a notable
philanthropist and has pledged to give away a significant portion of his fortunes to charity. Even
from an early age Buffett showed that he had interest in stocks and an Entrepreneurial spirit. He
often spend time in his father's brokerage company trying to learn all that he could about stocks,
finally pulling the trigger on his first stock investment at the age of 11.. (The World's
Billionaires : Warren Buffett, 2015)
Awards:
 He was presented with the Presidential Medal of Freedom by President Barack Obama in
2011.
 He is the chairman and CEO of Berkshire Hathaway and ranks among the world’s wealthiest
people. Considered to be the most successful investor of the 20th century, he is also the
biggest philanthropists of our times and had pledged to donate most of his fortunes to social
causes.

3. Trust Reputation and Integrity:
Valued at the most important aspect by Warren Buffet “we can afford to lose money- a lot of
money. We cannot afford to lose reputation – even a shred of reputation. It can take years to
develop trust, but it can only take one lie to destroy trust and relationship .(Achua, lussier, 2013)
Berkshire Hathaway:
Berkshire Hathaway Inc. (Berkshire), incorporated on June 16, 1998, is a holding company
owning subsidiaries engaged in a number of diverse business activities. The Company is engaged
in the insurance businesses conducted on a primary basis and a reinsurance basis, a freight rail
transportation business and a group of utility, and energy generation and distribution businesses.
Berkshire also owns and operates a number of other businesses engaged in a variety of activities.
In October 2012, HomeServices acquired a 66.7% interest in the residential real estate brokerage
franchise network in the United States. In May 2013, Berkshire acquired the remaining 20%
stake in IMC International Metalworking Companies BV.(McGregor,2015)
Berkshire Hathaway Statistics
Fortune 500 Rank 7
Total no. of employees 260,519
Total no. of brands 53
Price of 1 Berkshire Hathaway stock 128.224
Companies owned by Berkshire Hathaway:
Gecko (insurance)
General Re (insurance)
NRG (Insurance)
Berkshire Hathaway assurance (Insurance)
Approx 84 % of mid American holding company (energy)
Union Underwear corp. Fruit of the loom (Textile)
Garran (Textile)
Russell Corporation (Textile)

4. H.H brown shoe group (Footwear)
Acme Boots (Footwear)
Warren buffet’s leadership style at Berkshire Hathaway:
The leadership style warren buffet has adopted at Berkshire Hathaway is:
1. Laissez faire style
2. Democratic style
Laissez faire style:
Laissez-faire is a hands-off management style that allows employees or group members to carry
out a specific task given. This management styles requires very little guidance from leaders,
which the leader has also provided freedom for the employees to make the decision. Employees
are expected to solve problems by themselves.
Democratic:
Democratic is a management styles where mangers in a company listens to their employees and
share responsibilities among the team for decision making. In this management style, employees
are encouraged to voice out their ideas and opinions. These way employees would feel more
engaged into their work
Warren Buffett has adopted the laissez-faire and democratic style in managing his
employees. Warren Buffett recruited honest, skillful and likable people to work and run his
various businesses in Berkshire Hathaway. Buffett has put in full trust with the Berkshire’s
employees that he leaves his managers alone to work his jobs; Buffet would only intervene
whenever it is required to. He often monitors how his employees work, but he doesn’t interfere
that much.
In Buffett’s case, however, this 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. In Berkshire Hathaway’s 2010 Annual Report, Buffett
states,” We tend to let our many subsidiaries operate on their own, without our supervising and

5. monitoring them to any degree. Most managers use the independence we grant them
magnificently, by maintaining an owner-oriented attitude.
The Laissez-Faire style can work if followers are motivated and highly skilled, but quite often;
this is not the case .Followers that are not highly skilled, competent or good problem-solvers
often end up failing at their tasks or not meeting their deadlines . It would seem that Mr. Buffett
has the ability to choose highly motivated and capable managers who thrive in a results-oriented
environment. By choosing whom to place his trust in wisely, he is able to afford them the
autonomy that they need to be successful.
By using democratic leadership style warren buffet had empowered his management team to
make the decision they need to make without his approval.
Empowerment Leadership Style:
Intrinsic motivation and self-efficacy of people are influenced by leadership behavior, job
characteristics etc. Transferring authority to sub-ordinates. The style of Warren Buffet is
empowerment that is to transfer the powers to grass root level. It is difficult to be the boss of all
companies so the only solution is empowerment. Warren Buffet, “I know when to get out the
way and let people get on with it.” The advantage of this style is that the work is meaning full,
develop self-determinationand self-efficacy because they have a significant impact on work.
Three most important leadership lessons:
Stick to fundamental values – go with what you know and trust your instincts
Live simply- Don’t be distracted by the ‘things’ and other possessions they can have a leaders, so
much so that it sometimes that the motivation of leadership can become clouded.
Give back – Remember the purpose by which one is a leader; not to take from the world; but to
be an asset and a person of value.
Rule no 1: Never lose money. Rule no 2: never forget rule no. 1.

6. Leadership qualities of Warren Buffet:
Risk Seeking and Innovative:
Warren Buffet is Risk seeking and Innovative in every aspect of life. He tried out every mean to
promote his business and investments. Bought a company in the mid-'90s called Dexter Shoe and
paid $400 million for it. And it went to zero. And he gave away about $400 million worth of
Berkshire stock, which is probably now worth $400 billion but it's part of the game."
No successful person is mistake-free, and that's a good thing. Each stumble is a chance to learn
and a warning when you're tempted to do something similar in the future.
People Oriented:
His belief People Come First “People Include Employees and Customers”. For customers, he
tries to keep them paying the lowest price for their products as long as he can cover the cost and
earn some profit. Believes in keeping faith with the employees, no matter in good times or bad.
Determined and Optimistic:
Always looked into the positive side.Master motivator and pushing employees into their limits.
Took immediate action in every matter and seeks optimistic in every matter, try to motivate
employees at grass root level and brings positivity in every matter, gives courage to his people in
every aspect of life and seeks optimism in every challenge and face it with courage and boldness.
Circle of Competence:
“Selecting individuals with whom you work – individuals with whom you trust”
Surround yourself with ten or eleven individuals that you genuinely like and enjoy working with
can lead to a more fulfilling career as a manager.
Down To Earth:
Even though Warren Buffett is the fourth richest person in the world, he doesn't show it. He still
lives in the house he bought back in 1957 and is not known to splurge on luxury. He lives a
simple life to the point where you wouldn't be able to guess that he is even a millionaire if you
see him walking down the street or eating in one of his favorite restaurants in Omaha.

7. Hard Working:
Officially Warren Buffett has been working since 1951 without taking (as far as I know) any
real time off. Unofficially, he has been hustling since the age of 8 or for 75 years. Yet, he doesn't
call it work. He has famously said that he tap dances to work every day. Simply put, he loves
what he does and its more of a play than work for him.
Fair & Honest:
Warren Buffett is famous for saying that rich should pay their fair share of taxes (arguing that
they should pay more). He even lobbied the congress to increase taxes. You see the same
consistency throughout his business career. He puts a significant amount of premium on his own
reputation and believes the only way to get a good one is too be fair and honest in all of his
business dealings.
Courage:
I think I developed courage when I learned I could deal with hardship. You need to get your feet
wet and get some failure under your belt. Courage does not grow on its own. Just like a muscle,
it must be constantly worked out and developed. Life begins outside your comfort zone and
that’s where courage is developed. Most people don’t succeed because they’re afraid to fail.
Failure isn’t that bad anyway. It will make you tougher and more likely to win the next time
around. If I had a dime for every time I heard someone tell me about an idea they wanted to
pursue or how much they would like to give blogging a shot, without an ounce of action to
follow…well, I might own a few more shares of Berkshire Hathaway stock. No one has
succeeded without going through their own failures at some point. To try and to fail is much
better than to never try. Why not get started early and get some of them out of the way! What’s
the worst that could happen? As big wave surfer Laird Hamilton says “If you’re not falling then
you’re not learning.( Torbert, Fisher, 1992)
Motivation:
Motivation is basically about the ways a leader can do to encourage their employees to put in all
their effort into the company. Motivated staff mostly cares about the business and can co-operate
with the leader to make things better. If there is motivated staff in a company, it would definitely
result in having an improved quality as employees put in more effort than they usually do. But
how do we motivate our employees to make them work more efficiently? There are ways such as

8. offering a higher pay to the employees or either that the employees get a
promotion.(Cheah,2013)
Leaders can use several motivational theories to help encourage their employees including:
 McGregor's Theory X and Theory Y
 Maslow's Hierarchy of Needs
Management Styles:
Choosing the right employees:
Buffett has delegated his managers and focused mostly on the people who stand out from
the group by his or her performance in the company. As I have mentioned, his style is to
pick the right people and give them as much freedom as possible to get the job done.
Whenever his business leaders or representative makes a mistake, Buffett doesn’t scold or
fire anyone from his team but instead he encourages them to do better. This is where he
has put his trust in his employees to take care of his business.
Pick the manager with the right qualities:
Buffett seeks for managers and representatives that have integrity, intelligence and
passion to be a part of the business. According to Buffett, “In the management of our lives,
the rule is: Love what you do. In the management of our businesses, the rule is: Hire
people who love what they do.”
Motivate the team:
Buffett has investigated various ways to motivate his employees. He has encouraged his
people to not be afraid to speak up to him or the group, and give in creative ideas for the
company.
Managing pitfalls and facing challenges:

9. Buffett has said that we should learn from our mistakes instead of leaving our problems
aside. If we faced difficulties, it is better to seek for the better path to god
Leadership grid
Leadership grid can be applied to warren buffet because of his high concern for both
employees and production. He follows the middle of the road characteristic from that grid.
He possessed the qualities of producing the most with satisfying employees upto the most
appropriate level.
(Achua,Lussier,2014)
Powers Used By Warren Buffet
Coercive Power

10. It is where a person leads threats and force. It is unlikely to win respect and loyalty from
employees for long. Sometimes Buffet used powe by firing some of the non performing
employees.(Giang,2013)
Expert Power
It is the perception that one possesses superior skills, expertise or knowledge. In order to keep
their status and influence, however, experts need to continue learning and improving. Buffet was
very much concerned about using his expert power in an effective manner. (Giang,2013)
Informational Power
It is where a person possesses needed or wanted information. This is a short-term power that
doesn't necessarily influence or build credibility.Buffet was working in about 53 different
companies .his boundary of knowledge was very much explored as compared to other typical
leaders. (Giang,2013)
Reward Power
It is where a person motivates others by offering raises, promotions, and awards. Bonuses and
incentives were offered to employees in accordance with performance. (Giang,2013)
Buffett’s Changing Use of Power
In the earlier examples from Buffett’s life, i.e., those that match with the Opportunist, Diplomat,
Expert and Achiever action-logics, Buffett exercises a kind of ‘unilateral power’ which ensures
that he gets what he wants. In the later examples from Buffett’s life, i.e., those that match with
the Individualist, Strategist and Alchemist, he exercises a kind of ‘mutual’ power that ensures
that others get what they want as well. This shift from a ‘unilateral’ to ‘mutual’ use of power lies
at the heart of the main transformation in Buffett’s life and is key to appreciating the leadership
culture he and Munger have created at Berkshire.

11. Example Period in Buffett’s career Use of power
. Dempster Mill Buffett the investor Transactional
.National Furniture Market Buffett the business leader Transformational
Burlington Northern Railway Buffett the elder statesman Mutually transforming
Burlington Northern Railway
Fast forward another 25 years to 2009 and Buffett is making the largest investment of his career,
i.e., a $33 billion acquisition of Burlington Northern Railway. Buffett paid full price, i.e., 18
times BNSF’s earnings and said the acquisition was “an all-in-wager on the economic future of
the United States” to which he added “I love these bets” (Berkshire Hathaway press release, Nov
3, 2009). Later in an interview with Charlie Rose on the PBS Network , Buffett said that, “I felt
it was an opportunity to buy a business that is going to be around for 100 or 200 years” (Buffett,
1977).

12. .
Buffett’s Changing Use of Power
From a development perspective, a mindset that ordinarily uses unilateral power to get what they
want could not have created the kind of mutual leadership culture that we now see at Berkshire.
There is no doubt that Buffett’s changing circumstances demanded a change in his leadership
approach but it still required that he change his mind as well. Just because we need to change
does not mean we will. We may also observe that while we can temporarily change our behavior,
we need to change our minds before it can be made permanent. Recall the big shifts in Buffett’s
thinking and behavior from owning lots of small stocks for the short-term (during the Buffett the
investor period) to owning few businesses for the long-term (starting with the Buffett the
business leader period). These weren’t short-term behavioral changes; rather they represented a
fundamental change in his mindset which was then reflected in what interested him.

13. “I don’t believe in fear as a manager. I don’t operate like that. I don’t like this life. Probably
certain circumstances call for it: operate this way for a policeman. I believe the most powerful
force is love and that is the most effective way of dealing with people. I would not want to live a
life where people are afraid of me. People don’t operate well under fear. Some circumstances
where mutually assured destruction is the end result, fear is good. But not at Berkshire
Hathaway, love is way better to operate. By the way, how did Machiavelli do? There is no
religion of Machiavelli 500 years later, is there”? (Gad, 2007).
Conclusion
Warren Buffett's success is very difficult to analyze. First, he wasn't involved in one company
that made him rich. He has built his fortune over the last 57 years, one day at a time and through
acquiring over 50 companies that now reside under Berkshire Hathaway. He did have major
scores, but a steady annual compounding of his money is what really did it for him. Second, most
of his work is analytical in nature and out of the public eye. He spent most of his time analyzing
companies and making investment decisions. That in itself is very difficult to pinpoint. Luckily
for you, I do something very similar. Here are the factors that contributed directly to his success.
Warren Buffett plays to win. It is no accident that he was named the most successful investor of
the last century. Yes, investing provides his with a way to show off his intelligence, but it goes
much deeper than that. Warren Buffett has also redefined the game and has shown everyone that
it is possible to take it easy and be nice to people while at the same time being one of the most
coldblooded capitalist on the face of this earth. All things are interrelated and so perhaps it is
unwise to isolate one factor, such as Buffett’s development, and say that is the primary factor in
explaining his success as a leader. Non-developmental factors were considered equally as
important and in some cases more important. And yet it is through the development in Buffett’s
meaning-making that Buffett was able to create the kind of leadership culture that now exists at
Berkshire and which is fundamental to Berkshire future success in the post-Buffett era.

14. References
Achua, Lussier.2013.Leadership Grid. Effective Leadership.5e.printed in India.p.74
Berkshire .2009. Berkshire Hathaway To Acquire Burlington Northern Santa Fe Corporation.
Retrieved from ‘News Releases’. www.berskhirehathaway.com , January 2010.
Cheah.2013.Retrieved from http://agnescheah.blogspot.com/p/motivational-style.html
Gad.2007. Retrieved from http://www.intelligentinvestorclub.com/downloads/Warren-Buffett-
University-Georgia.pdf
Giang.2013.retrieved from http://www.businessinsider.com/the-7-types-of-power-that-shape-
the-workplace-.july 31.12:56 pm
Kegan, R. (1980). Making meaning: The constructive-developmental approach to persons and
practice. The Personnel and Guidance Journal, 58, 373 −380.
McGregor.2015.Retrieved from http://www.washingtonpost.com/blogs/on-
leadership/wp/2015/03/02/the-leadership-wisdom-in-warren-buffetts-letter
"The World's Billionaires : Warren Buffett". Forbes. Retrieved January 1, 2015
Torbert, Fisher, 1992.Autobiographical awareness as a catalyst for managerial and organizational
development. Management Education and Development, 23, 184-198.