Management Style

What is management in business?

Management in business means to coordinate the efforts of the employees to accomplish the desired goals for the company using available resources effectively. The activities that is needed to manage a company are leading, monitoring, planning and organizing. However there are different types of management styles that different leaders used. The three types of management styles are autocratic, democratic and laissez-faire, or also known as free rein style.

Figure 1: Management styles

AUTOCRATIC: Autocratic management is more of an individual control over all the decisions. There will be little input from the employees because the leader often dictates the work methods as the employees are rarely trusted with important tasks. 
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. This way employees would feel more engaged into their work.
LAISSEZ-FAIRE/FREE REIN: 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.

What kind of management style did Warren Buffet use?

  • Laissez-faire/Free Rein and Democratic Style
“Honesty is a very expensive gift. Don’t expect it from cheap people.” — Warren Buffett
“I believe in getting things done through other people.” —Warren Buffett
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 book entitled “Management Secrets” has pointed out a few important key points about how Buffett has managed his company:
  1. Choosing the right employees: Buffett has delegated his managers and focused mostly on the people who stands 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.
  2. Pick the a manager with the right qualities: Buffett seeks for managers and representatives that has 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.”
  3. 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.
  4. Managing pitfalls and facing challenges: 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 go.
Comment:
Buffett has shown a nice and humble personality to his employees. Employees would definitely prefer a leader with Buffett’s attitude and personality. This is a good way to approach his employees however I feel that Buffett is being too lenient towards his workers. Some employees might take advantage of Buffett’s act of kindness towards the company and go against Buffett’s decisions.

Overall, Buffett’s approached his employees really well. I personally feel that his method of managing a group of people work on me because I would also prefer a leader with Buffett’s approach. I wouldn’t like a leader who is always rude and harsh towards me or any of my group members.

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