Bibliography

References

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Reflection of the whole Blog

Reflection

        Over all, i think that Mr. Buffett portrays good principles of an efficient leadership. However, there are some parts where he should improve on. He should have more training activities but one of the articles stated that he wants to spend minimum time on training as according to my opinion, he believes that his corporate culture will be able to shape his employees into how he wants them to be trained. Training activities can not only allow the employees to acquire more knowledge but it could also benefit as a team building activity. Warren is an expert at being at the right place at the right time, he always knows how to deal with unfamiliar situations professionally.

         I believe that the best moment of Warren's career is when he started to lead, is leadership skills are massively outstanding. Despite all of that, Warren is an incredible investor as well. One of the best things that has ever happened to him would probably be his first investment when he was 11. That was how he was introduced into the business industry and he worked his way up to his position today.

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How does Warren train his employees?

Warren Buffett’s Training Management

Kinds of job trainings:

From my point of view, Warren has a unique way of training his employees. It depends on how we look at it, once again. As we know, he focuses much on the corporate culture, communication, structure of organisation and other leadership factors within the company. Through all the systems, he manipulates his employees in making them adapt into his work culture, gradually training them without them realising. It’s sort of on-job training, they’re being trained daily and regularly. They’ll improve when they fully adapt the culture and can afford to take their training up to a higher level by changing the corporate culture. Slight changes of course, major changes in a corporate culture may be too risky. It’s kind of like investing in people, training requires times and money but it would produce a return an outstanding outcome at the end of the day.

Why do we need trainings? :

•       Bring the structure of organisation up to standard
•       Make sure to fully comprehend job requirements
•       Receive teachings of new skills
•       To be able to change the working skills

Does a corporate culture affect the success of a company?

Warren Buffett’s corporate culture

• “Hire well and manage little” was stated in his shareholder letter
• This culture practice is to expel and repel managers of a different bent.
• His company now has more than 250,000 employees and it’s impossible to pass a day without a bad behaviour occurring around.
• He says that the company can afford to loose money; lots of it but it certainly can’t loose its reputation.
• Attitudes and expressions by behaviours such as words is one of the most important factors in the development of a business culture. 
• A self- propagate culture
• "You shape your houses and then they shape you." 
• The same applies for business. 
• Organisational procedures produce more organisations, and magnificent corporate strongholds stimulate authoritative behaviours.
• A company's culture consists of:
• Creativity
• Collaborations 
• Hierarchical systems
• Competition

The reason why Mr. Buffett doesn't practice the most common corporate cultures is because the theories are not suitable for his structure of organisation, so he decided to create and practice his own culture, for the sake of the company's better future.
A corporate culture strongly determines how an organisation behaves. The corporate culture affects the fundamentals of a company’s success as it plays a huge role in collaborating with the communications among the teams and we all here know that communication is the real key of leadership and without a good leadership, the company won’t be heading towards success. Warren's creation has truly brought the company up to standard.

Is the Organisational Structure effective?

Warren Buffett’s Structure of Organisation

• There are several foundations/ organisations, which were created by the Buffett family:
•   The Susan Thompson Buffett Foundation
•   Howard G. Buffett Foundation
•   The Susan A. Buffett Foundation
•   The Novo Foundation
• The Susan Thompson Buffett foundation was formerly named The Buffett Foundation but was then changed in honour of Warren Buffett’s wife in 2004 after she had passed away.
•   Something really special about the organisations is that, they do      not accept voluntary requests; instead they seek out worthy            beneficiaries on their own.
•    All the donations made by Warren Buffett are from his personal      holdings in Berkshire Hathaway.
• Besides working in Berkshire Hathaway, Warren has also been involved in other various organisations and the all have their own corporate culture.
• Berkshire Hathaway, the company which Warren Buffett has committed so much over the years, has their own corporate organisation structure:

Based on the chart above, it’s clearly shown that the organisational structure of the company was properly managed and that Warren Buffett would obviously have his own corporate culture in managing and organising this company’s structure of organisation. It is well sectioned and that his employees are segregated accordingly to their professions and accountabilities in those different departments. I would say that this organisational structure is pretty effective and efficient. According to this structure, the employees would be able to proceed with their assignments more easily and organised. It is said that most CEO’s expand their business whenever they can after allocating their own capital and but Berkshire Hathaway has created a unique management to centralise this function and it has proven to be Warren's best cultural and structural organisation/ strategy. This chart is definitely very detailed; it is designed in a way that the employees are clear with their positions and also to allow others to understand the system or management of the company.

Why is Communication fundamental and does it affect a leadership?

Warren Buffett’s Communication
       Communication is one of the important traits of becoming an effective leader; it is sort of the real key of leadership. Warren buffet is a well skilled communicator in all aspects of life, he is an expert in always positioning himself at the right place at the right time.

• Warren has built and practised a consistently strong communication style over the years.
• This makes him a stabilised communicator, as he is aware of his own style of managing.

• Traits of skilled communication:

As we can see, the above diagram shows us the characteristics of communication. The stronger the connection with a symbol, the better the meaning will be shared. Every member of a group will surely share the same way of encoding and decoding a message and we must understand that there are things and words that will mean differently in different cultures. Everything is communicated through different ways with a purpose, by words, body language and in many other ways in different contexts. Communication intervenes though a 3rd party, for instance, via Internet, mobile phones and social network cites/apps. The messages sent are dependent on the opposite person sending one back.

ü Warren doesn’t simply just make a report on the subsidising profits of their insurance businesses; he explains the terminology, the meanings of the numbers and how he and his business partners think of it.

ü The metaphor he uses does a better explanation that all the terminology jargon does, though there might be misunderstanding sometimes, when the audience/ listeners don't receive the message of certain metaphors.

ü Warren refreshing sincerity and honesty makes the audience build the trust in whatever he says, after all, he has proved that he isn’t hiding anything.

ü After explaining how bad an economic situation was, Buffett would often give a fact-based context to view these realities and to persuade the audience with the facts, allowing them to get into a relieved position and that takes us back to the characteristic of a servant leader, it’s his job to ensure that the people involved in the economic situations feel secure about their investment and business activities.

There are many kinds of communications in the business industry and whether be it financial communication, communication among teammates or even general communications in life, they are all important. An effective communication is essential to team engagement, operational efficiency and, most importantly, high quality performance. That’s the reason why open, honest communication is the marker of so many great employers, just like Warren Buffett. Without communication, the team managements will be out of control and the sociability level won’t be up to standards.

What was his recruitment style and how was it effective?

Warren Buffett’s Recruitment         
         Warren Buffett is genuinely serious when it comes to hiring the right people for the company. He is known for his no-nonsense attitude when it comes to business, businessman to possibly future businessman kind of conversation only. As a result to that, his application qualifications are sensible and simple.

• The 3 main qualifications:
• Integrity
• Intelligence
• Energy

As we can see above, the qualifications are arranged in a flow; integrity comes first, intelligence second and energy is placed last.

For Warren, the recruitment process is simply complete, having all these three qualifications. The combination of these three characteristics plays an important role in a successful organisation. The determination on whom to hire makes a world’s difference. 

Job Adverts

• Media used to advertise job vacancies: 
• Website (External recruitment)
• Example of Job Advertisement for Berkshire Hathaway:
• Executive Assistant 

• Chief Financial Officer

The Job advertisements above are set by Berkshire Hathaway and from there, we can observe that their descriptions and requirements strongly reflect on the company’s corporate culture. It is according to the culture around the company, the culture of the leadership managements. I personally think that this recruitment system is great, as it is all in clear-cut; it specifies clearly on what they really require around the company. Despite having a clear recruitment requirement, their way of organising the job advertisement is fantastic too! Their description and requirements clearly show the corporate culture of the company, which allows applicants to understand the system around the company and that they can assure themselves whether or not they qualify to work in that kind of situations. If I were to be an applicant and I am interested and have all the requirements they need, I would happily apply for that job as I clearly understand what they truly want in a professional employee and everybody should have the confidence of trying out something new, something like being a leader and being trained.

Was his Motivation Management Style successful?

Warren Buffet Motivation

• The process of arousing and sustaining a goal-pursuing  behaviour.
• Warren motivates his employees by applying the Theory Y

• His essential task of management is to arrange conditions and methods of operation so that people can achieve their goals best by directing their own effort toward organisational objectives.
• Motivate people with respect and showing them trust & forgiveness.
• Build an emotional bond to the company and make them feel connected and appreciated.

o   Make the employees become strongly identified to the company and allow them to create a more affective commitment.

• He doesn't value spontaneous decision- making, but a rational approach that encourages flexibility & open mindedness.
• He has the ability to influence situations and values personal responsibilities & accountabilities.

     His successful motivation management style has led his employees into a good shape.  With those kinds of motivational methods, the leader personally would definitely motivate me. There are ways to get more of the commitment out of the employees; make the company a family, where everybody feels connected and that politics in the company is shallow. Having each other taking falls of another would help to improve their flaws in the future. As the face of Warren Buffett was valued as a professional investor and the representative of Berkshire Hathaway, the company had less competition with other companies. There was no need for increasing the competitive spirit among the company, the employees felt included; therefore, they work for the company with passion. I think that the way Warren motivates his employees is extremely effective as the work given to the employees are according to their ability and accountability. That way, employees wouldn’t have much to complain about, the superior has spoon-fed them so much. They would be keen to pursue their job and work their way up in the company with enthusiasm.

      

What was his leadership style and was it effective?

Warren Buffett’s Leadership Style

• Displays the behaviours of a democratic leader.
• He also displays the role of a self-empowered leader as well as a servant leader; he is loyal, sets goals, plans a strategy for achievement, and stays committed until an objective is accomplished. He empathises his employees; he may critique one’s performance but may not criticise that person as a whole.
• Idealises interaction and collaboration.
• Focuses on the importance of communication, mutual trust and interpersonal respect.
• Personal thoughts: “You must do what you love, but be patient and disciplined.”
• Instrumental values that shape leadership styles are:

o   Forgiveness

o   Honesty

o   Ambition

o   Responsibility

o   Rationality

• He uses humour to motivate and lead his manager/staffs.
• Decision making

o   Produces a final choice

o   Output consists of:

§  Action

§  Opinion

o   Process of selecting from several choices, products/ideas

§  In order to make a decision desired by everyone.

 The 6 c’s of decision-making

Factors of making effective decisions

Characteristics of an effective leader:

     

Servant leadership

o  Warren’s approach that pursued to serve employees, customers and the community.

o  He grants the community with a higher priority than himself.

o  Traits of a servant leadership:

There are many perspectives on how we can look into Warren Butler’s leadership style. His leadership style is somewhat a combination of democratic leadership, servant leadership and self- empowered leadership. The reason behind this is that he plays the role of a democratic leader, discussing with his employees about the topic or assignment that needs to be accomplished and when communication is two-way. As for the practice of a servant- leader, he practices the principles of a servant leader and for example, he empathises his employee. He may judge an individual based on their mistakes and faults but never would he judge the individual as a person. Lastly, he is a self-empowered leader because he is loyal, plans strategy for achievement, put in commitment and will always pursue till the end. There are many ways of engaging employees in a company, and above shows a list of employee engagement tips which are similar to Warren Buffett’s style of leading and engaging his employees. Different people have different beliefs on various kinds of employee engagement and I think that Warren’s style is actually quite effective, he shows significant focuses in involving his employees. This will help increase the motivation level of the employees and also, it shows how an effective leader he is. These leadership styles have benefited him, his employees, the company and the community, that’s why it is effective. However, every leadership style will always have its flaws and for a democratic leader, it might be time consuming when making decisions and it may lead to disagreements among group members but to gain, you need to loose so it’s all a win-win situation. Different leadership styles have given different impacts towards the community, a leader’s leadership influences the company as a whole. It is important that a leader practices the traits and characteristics of a good leader but everybody has their own beliefs on their way of leading. We can’t judge whether that certain leadership style is good or bad but all I can say is that, based on my researches, I think that Mr. Buffett is a really committed and effective leader.

Introduction

Warren Buffett

Warren Buffett, one of the wealthiest, successful businessman and investor alive. He is the Chairman and CEO of Berkshire Hathaway- an American multinational conglomerate holding company; he is also the largest shareholder in that company. Warren is known for his economical plain lifestyle.  Everybody wants to know how Warren Buffett is so successful. It all started with his leadership style. He has the capabilities of leadership change to fit the evolving world. He is always prepared for what the future holds for him; there’s always a long-term plan set out when it comes to Warren. Some people ask, is Warren Buffet born to be a leader? An individual who comes to power may be a “born leader”. We are all born to be someone, something but it’s our choice to make ourselves into who we truly want to be. It’s obvious that Mr. Buffett has true passion for business, he always turn his mistakes in a positive lesson, always aiming towards the positive direction in all the aspects of life.

How do we consider a good leader?

•  Basically, to have a leader with good leaderships skills, these are the general important keys:

•     Self- Awareness
•     Self- Direction
•     Vision
•     Ability to motivate
•     Social Awareness
•     Emotional Intelligence 
•     The ability to LEAD