Sunday, January 5, 2014

Business Management Controls


Companies can be managed in two ways. The public is not aware of the difference.

One: Very strongly, or centralized, where the CEO is completely in control of the company’s daily operations. Many executives prefer this approach.

Two: Loosely and decentralized, where more local control is allowed. Warren Buffett operates his different companies in varying industries on a decentralized basis. He has his individual companies perform without very strict daily direction from his headquarters.

I prefer centralized, hands-on oversight, which I believe is better from the operational standpoint.

On the other hand, if your goals are primarily that of an investor, you never have the time, nor the inclination, to cope with daily administrative duties. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

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