Essay on Warren Buffett

Background

Warren Buffett demonstrated early on that he was a capable businessman. Buffett launched Buffett Partnership Ltd. in 1956, and after the company took roots, he had acquired another big company. After supervising the creation of a multinational with assets in the broadcasting, cover, petroleum, and foodstuff and drink industries, he converted to one of the world’s wealthiest individuals and a well-known humanitarian (Hagstrom,2013).

Warren Edward Buffett was born on August 30, 1930, in Omaha, Nebraska. Buffett’s forefather, Howard Buffett, was an investment analyst and a member of the United States Congress. His mum, Leila Stahl Buffett, was a house wife. Buffett was the second born in a family of three. He exhibited a talent for money and business things as early as boyhood, according to colleagues and acquaintances: the youngster was a scientific genius who could mentally add huge columns of figures, an ability he continued to demonstrate in his later years.

As a child, Buffett would go to his father’s stock brokerage firm and write the securities prices on the office chalkboard. He completed his foremost deal when he was 11 years old, acquiring shares of Cities Service Preferred for $38 each. The securities sank to barely $27 in a matter of weeks, but Buffett held on till it reached $40. He got a tiny profit when he sold his securities, but he later lamented it when Cities Service rose to around $200 per segment. He later referred to this incident as an early lesson on the value of patience.

Buffett began running his own enterprises and selling his own horseracing tip sheet when he was just a teenager. He filed his first tax return the next year, claiming his bike as a $35 tax deduction. Buffett’s father was elected to the United States House of Representatives in 1942, and his family relocated to Fredricksburg, Virginia, so that he could be closer to his new job. Buffett went to Washington, D.C.’s Woodrow Wilson High School, where he continued to think of new methods to make money. He and a friend spent $25 for an old pinball machine when they were in high school. It was placed in a barbershop, and the profits allowed them to purchase additional machines within a few months. Prior to selling the company,

Achievements

Warren’s company, Berkshire Hathaway, is the topmost achievement. This corporation also owns over 50 other industries. Dairy Queen, Duracell, and Geico are just a handful of the companies involved. Heinz, Bank of America, and Coca-Cola are just a few of the corporations in which he has invested heavily. Buffett’s general philosophy is that it is advantageous to invest in companies that appear to have “well-performing” stock and have consistent (assured) profit over time. His investment strategy has resulted in a net worth that exceeds Uruguay’s GDP.

Net worth

Buffett’s net worth in 2016 was $60.8 billion dollars. His net worth increased steadily from October 2016 to October 2018. His net worth had risen to $88.3 billion by October 2018. Due to declining stock market prices, his net worth fell to $67.5 billion in April 2020. Buffett’s net worth, on the other hand, began to rise again in September 2020, hitting over $70 billion.

Philanthropy

Warren Buffet has made major contributions to charities and charitable organizations. He has given around $46 million to several causes in particular.

Buffett’s primary method of “spending” his money has been donating to charity. In 2016, he gave $2.9 billion to a variety of nonprofits, containing the Bill and Melinda Gates Foundation. In 2018, he gave money to the Foundation once more.

He also made significant contributions to the Susan Thompson Buffett Foundation, which was established in honor of his wife Susan. He was able to donate tens of millions of dollars to Planned Parenthood and the National Abortion Federation through this organization.

Warren Buffett’s Leadership Qualities: Styles, Skills, and Traits

There are several aspects that characterize Warren Buffett’s personality as a business leader. These qualities of leadership make the individual unstoppable in his field, and others should take note of his ability and commitment. Here are some of his skills:

Optimistic: A positive attitude is instilled in his or her team by an optimistic boss. Their upbeat approach and never-say-die attitude improve the team’s spirit. Despite his advanced age, Warren Buffet maintains a positive outlook. He has a wonderful sense of humor and puts his employees at ease (Mauri, 2017.)

Great Mentorship: The ability to lead one’s troops in the right direction should be a leader’s first and most significant trait. In order to achieve a given goal, the team leader should be one of the strongest influences among the workforce. Warren Buffet is a fantastic mentor and motivator, which is fortunate for his company and his employees. As a result, he has dedicated his life to making wise decisions and leading the organization to success.

He is also known for his ability to analyze critically and deeply. He is typically observed with a serene demeanor contemplating things. As a result, he can recognize a company’s untapped potential. For example, he just sold a big portion of his IBM stock and is considering boosting his Apple Inc. stake by 3%. This shows that he pays close attention to the market and responds appropriately.

Warren Buffet’s Leadership Style

Based on his personality traits and attitude toward his employees, Warren Buffett’s leadership style is classified as transformative leadership. A transformational leader has a powerful leadership style. This type of leader is always in the company of his or her subordinates. They motivate and entice employees to call. He even congratulates and soothes his coworkers on their successes and failures. Warren Buffett’s personality is made up of all of these characteristics. Warren Buffett is a thinker and a motivator who encourages his employees to succeed in their respective industries.

Leadership Characteristics and Traits

There are various characteristics that accurately depict Warren Buffet’s actual leadership. The following is a list of these:

Self-confidence is a vital tool in the arsenal of any leader. He must believe in his ability to achieve the goal. He should have faith in his employees and subordinates. This reflects on the business magnate’s personality.

Thinks a Long Way Ahead of Time: A capable leader should be able to see into the future. In this light, he should be able to assess the results of his business and effort. Berkshire Hathaway has always been a forerunner in terms of investing. Warren Buffett’s foresight is to thank for this.

Being Accountable and Responsive: You will inevitably make mistakes. On the other side, a great leader accepts and learns from his mistakes.

Leader sources of power

Buffett’s management style is known as laissez-faire, or “delegate leadership,” and it is known to result in lesser output but higher other resources for individuals and teams.

Under this leadership style, employees who are skilled and motivated can thrive, but those who aren’t are more likely to fail and miss deadlines. Buffett hires staff that are highly driven and skilled in this case because he is relying on the output.

The following are the Laissez Fairy’s four main characteristics:

Workforces do not receive much assistance from their managers. Workers are free to experiment and solve problems on their own to learn what works and what doesn’t. As a result, workers may feel more accomplished.

Bosses also delegate decision-making responsibility to their employees. Employees do not ask their boss what they should do; instead, they make their own choices. Employees develop this ability through experimenting with which decisions are good and which are not (Mooers,2020).

While leaders do not interfere with employees’ work, they do give the resources necessary for them to succeed. Employees are expected to do the best they can with what they’ve been given. Employees are encouraged to make the best use of and save resources possible. Employees are also required to tackle problems independently. They do not receive assistance from the leader, nor do they receive approbation if they make a good judgment.

Conclusion

Warren Buffet has chosen a management style that precludes him from having a direct role in the company’s management. As a result, Buffet has entrusted Berkshire Hathaway’s top executives with the responsibility of autonomously operating the company. This leadership style is democratic in the sense that it stimulates competition among the numerous heads of independent businesses. This benefits the leader since the followers are motivated to work hard in order to gain attention and be rewarded.

Buffet’s leadership style is less engaging than other leaders’, but it works in a huge way since the subjects have to fight for the inspiration they get at the end of the day. Because the subjects are not constantly disturbed by the owner, this model emphasizes accountability and responsibility among the subjects. Buffet does not enter the picture until one is evaluating the performance of individual enterprises. His workers’ sense of freedom makes them feel as though they are running their own business, which increases their accountability and honesty.

References

Buffett, W.E., 2021. The Essays of Warren Buffett: Lessons for Corporate America. Cardozo Law Review’s.

Hagstrom, R.G., 2013. The Warren Buffett Way. John Wiley & Sons.

Mooers, J. (2020). Review and analysis of all shareholder letters from Warren Buffett and Jeff Bezos. Rock Center for Corporate Governance at Stanford University Working Paper, (243).

Mauri, T., 2017. Why leadership styles matter. Strategic Direction.