Reason for Selection of That Particular Leader
Company’s survival is greatly influenced by the individual temperament and abilities of its leader. There is probably a more exemplary illustration of this idea than Berkshire Hathaway. The most substantial investor in the entire globe is credited to Warren Buffett. In Omaha, Nebraska, on August 30, 1930, Warren Edward Buffett was brought into the world (Tyma, 2021). He is the child of Leila and Howard Buffet, who for a long time worked as a financial analyst. Buffett made his investment decisions based on value rather than popularity. He picked up this tactic from Professor Graham: buy a company’s stocks as long as it is trading below their intrinsic value. He purchased controlling shares and minority stakes in several public and private enterprises. He started investing in Berkshire Hathaway, a struggling textile producer, in 1962.
In the early 1960s, when the firm was on the verge of going bankrupt, Warren Buffett was brought in to restore it, gaining a public image as a wise, intelligent, and capable manager. The reason for choosing Warren Buffett as the leader to discuss in this essay is because he is regarded as one of the most successful entrepreneurs of modern times. His quotes are used around the world, researchers have written autobiographies and articles analyzing his accomplishments, and random interested people have discussed his personality qualities on online discussion boards.
Leadership Theory That Best Describes Warren Buffet
The type of leadership approach that Warren Buffett employs is among his most prominent qualities. Laissez-faire is a management technique that only a few companies practice. The phrase “laissez-faire” is French and was first used to allude to mercantilism (Soll, 2020). Laissez-faire describes a system where the state does not influence economics and politics. In essence, the laissez-faire model forbids any intrusion on the part of the leader. This leadership method is sometimes known as the “hands-off” model, where the leader serves as a mentor rather than the staff’s supervisor. A laissez-faire leader allows employees to be creative and autonomous in their decision-making.
Warren Buffet Greatest Career Achievements
One of Warren Buffet’s outstanding professional accomplishments was securing a majority ownership position in Berkshire Hathaway. Buffet, encouraged by his partnerships’ accomplishments, made significant investments in Berkshire Hathaway, which dominated the American media, power, food, and drink industries. He had taken over the company by the middle of the 1960s and even named Ken Chace as its executive. After Buffet’s appointment, Berkshire Hathaway, which was initially a textile company, progressively exited the industry. Following that, Buffett would direct the company into the insurance industry. In 1973, Berkshire Hathaway also began purchasing the Washington Post Corporation shares. Due to his position as chairman and CEO, he was competent to turn around Berkshire Hathaway’s declining fortunes and convert it into the largest holding corporation in the United States regarding resources.
Career Challenge Faced by Buffet and How He Handled the Encounter
Buffet’s most significant vote of no confidence was the global recession. International markets were in trouble in the autumn of 2008. On September 15 of that year, Lehman Brothers, a financial institution with $600 billion of assets, applied for insolvency protection, marking a turning point in the economic (Chen & Ran, 2021). Berkshire Hathaway Warren Buffett approached the issue from a different angle. Buffett continued to invest heavily in American equities throughout the crisis, supporting General Electric and Goldman Sachs.
Buffett was aware of the crisis’ seriousness; he told CNBC that same year that it was comparable to a “financial Pearl Harbor. Even though everyone else was stuffing their pillows with cash, Buffet continued to buy equities whose prices were plummeting quickly. Buffet’s maxim was “be greedy when other people are scared and afraid when other people are greedy (Yang & Thøgersen, 2022).” The Buffet could sell every share of stock he had purchased later, and as a result, he became the second-wealthiest individual living in the United States. His response aligns more with the leadership role since Buffet used his critical thinking and applied the headship character of a good planner, which later brought success to the company.
Power Base Utilized In Handling or Resolving the Challenge
Buffet’s strategy for resolving the financial meltdown involved finding businesses that could increase costs during times of more significant inflation. He stated to the Financial Crisis Investigation Commission in 2010 that a company’s product price is the most crucial factor in appraising it. A company has a significant benefit when inflation is high if it can raise prices because it can balance its rising costs. According to Buffett, an unrestrained toll bridge would be the best asset in an inflationary environment because an individual could have built the bridge previously and increased the cost to counteract inflation. Buffet sought out larger businesses, such as Texas, which helped him during those difficult times. This power base positively impacted Buffet since he did not let the company collapse during those financial crises.
Comparison between Leadership Used By Buffet and Al Gore
Al Gore is a lawmaker, an internationally renowned environmental campaigner, the millionaire CEO of Berkshire Hathaway, and a famous investor. Al Gore is a compelling transformative leader in his roles as a legislator and a global warming activist. The leader and subordinates’ objectives are frequently unclear when a leader uses this leadership style. This indicates that both the leader and the followers benefit when the goals of a specific endeavor are met. Because of this, the position of the leader is not, in this instance, superior to the followers. Al Gore can be included in this group of leaders if his actions and the way he performs his duties are taken into account.
Al Gore strives to persuade, inspire, and urge for the change of his supporters to band together and address a problem that imperils their well-being, as shown by the innumerable speeches he has given. Al Gore, for instance, reminded his supporters during his victory speech for the Nobel Peace Award in 2007 that they had a job to complete and that the fight would only succeed when they stood up and took action (Al-Malki & Juan, 2018). Al Gore’s drive to motivate people and promote consciousness is one of the characteristics that set him apart as an environmental crusader. Al Gore wants to change his followers by developing a positive example. Al Gore, for instance, used the prize money he received after winning the Nobel to advance his cause. He acts as a servant leader and contributes to the organization’s general manager. Al Gore is a strong leader and orator who used this to sway his followers’ opinions further and build a sense of resolve in them.
The allied leaders have embraced two different leadership philosophies, but despite this, they have successfully motivated and satisfied their people. Al Gore’s approach may be participative, whereas Warren Buffet could be called moral. However, it should be noted that the two leaders have demonstrated, in their unique ways that the two leadership philosophies are influential for both the leader and the subordinates. Unlike Warren Buffet, who provides his associates the space they require for the growth of a feeling of accountability and self-worth, Al Gore directly impacts the productivity of his adherents by encouraging them. Compared to Al Gore, Warren Buffett’s leadership style requires less active participation from the leader.
Nevertheless, there are some circumstances where combining the two types to work as one in various events is appropriate. For instance, there have been instances where Buffet has indirectly influenced his subordinates’ productivity. Al Gore has also been known to take a backseat to encourage initiative in his supporters. This demonstrates that a leadership style or conduct cannot exist independently of others.
To this extent, I have to embrace this as a basis for defending my selection of Warren Buffet’s democratically oriented management and leadership style as the most effective. This is since this leadership style has several advantages. These include taking obligation and developing trust, acting responsibly and independently, and delegating work or taking risks. Warren Buffet allows his management group to make investments anytime they see a chance, with or without first getting his approval. The managers ensure they do their homework before giving them these responsibilities to verify that they choose the best possible decision. Giving the employees such a weighty responsibility makes them feel as though they are the owners of the company. It makes sense because accountability is based on when a person has this kind of attachment to the company.
Behaviors That a Leader Should Demonstrate To Be Successful
As learned from Warren Buffett, all strong leaders should govern with empathy. To maintain employee engagement, a leader must demonstrate empathy. Investing in members of the team as individuals and paying attention to and responding to employees’ welfare are both examples of empathic leadership. Employee participation, however, may suffer if managers lack the knowledge and skills to identify and meet these demands. A leader needs to be present to assist and support the workers. Managers’ responsibility is to assist in removing any obstacles in the way of employees’ ability to perform at their best. Consider the overwhelming anxiety and tension that employees have experienced as a result of the epidemic, racism, social instability, and our nation’s political career before blaming underachievers.
One of the critical factors in Warren Buffet’s accomplishment is his outstanding personality. This also links to behavior theory as a personal characteristic in the leadership skill paradigm. Warren Buffet became one of the wealthiest persons in the world as a result of the actions and behaviors he demonstrated. Warren Buffet gradually shaped the way he would transact for the rest of his life by using his crystallized cognitive abilities from an early age. In addition to the talents theoretical model, Warren Buffet used his skills over the years to advance his knowledge and problem-solving abilities to grow his company. Warren Buffet once faced a significant financial loss as a result of poor financing. His leadership results and capabilities taught him how to cope with businesses that might commit fraud or go bankrupt.
References
Al-Malki, M., & Juan, W. (2018). Leadership styles and job performance: a literature review. Journal of International Business Research and Marketing, 3(3), 40-49.
Chen, Y., & Ran, M. (2021). Supply-demand of financial asset and China’s economic development：from the perspective of financial assets shortage. Applied Economics Letters, 35(6), 1-5.
Soll, J. (2020). For a new economic history of early modern empire: Anglo-French Imperial Co-development beyond Mercantilism and Laissez-Faire. The William And Mary Quarterly, 77(4), 525-529.
Tyma, A. (2021). The other side of 2020: Questioning everything—doing something. Journal of Communication Pedagogy, 5(35), 25-30.
Yang, X., & Thøgersen, J. (2022). When people are green and greedy: A new perspective of recycling rewards and crowding-out in Germany, the USA and China. Journal Of Business Research, 144(5), 217-235.