Berkshire Hathaway is a company that was initially set up as a textile manufacturer in 1839 by Oliver Chace. During that time, the company was based in Valley Falls, Rhode Island and operated under the name Valley Falls Company. It eventually merged with and used the name of another textile manufacturer, Berkshire Fine Spinning Associates (originally Berkshire Cotton Manufacturing Company, which was based in Massachusetts).
The Hathaway name became part of the company in 1955, when a merger between the Hathaway Manufacturing Company and Berkshire was successfully agreed on. The Hathaway Manufacturing Company was then a textile business that successfully recovered from the textile decline and the Great Depression. The merger resulted in the company relocating its headquarters to New Bedford, Massachusetts and installing 15 factories that employed over 12,000 labourers. However, as the demand for textile continued to dwindle, seven of these locations eventually closed down with huge layoffs but not before it surpassed $120 million in revenue.
Warren Buffett, the man who would become Berkshire Hathaway’s CEO, came into the picture in 1962, when he started purchasing Berkshire Hathaway shares. He was eventually able to buy enough shares to allow him to change the management and eventually gain control of the company.
During Warren Buffett’s time, he still kept the company’s textile milling business but eventually, the company started investing in the insurance industry among other things. His purchase of the National Indemnity Company marked the company’s first venture into the insurance market, which proved to be very successful. The last Berkshire Hathaway plant was closed in 1985. Buffett continued to direct Berkshire Hathaway into other investments, which led them to owning brands such as Dairy Queen, Clayton Homes and MidAmerican Energy Holdings.
Currently, Berkshire Hathaway stands as the most respected company (Forbes 2007) and currently has the world’s richest man as its CEO and largest shareholder. Berkshire Hathaway is also one of the few companies that have reached the $100,000 share price.
Note as of 2012:
Berkshire Hathaway (Berkshire or the group) is diversified holding company engaged primarily in the provision of insurance and reinsurance products and services. Additionally, the group is engaged in non-insurance businesses including utilities and energy, finance, manufacturing, service and retailing. Berkshire has overall 76 operating businesses. The group primarily operates in the US. It is headquartered in Omaha, Nebraska and employs 270,858 people. The group recorded revenues of $143,688 million in the financial year ended December 2011 (FY2011), an increase of 5.5% over FY2010. The operating profit of the group was $15,314 million in FY2011, a decrease of 19.6% over FY2010. The net profit was $10,254 million in FY2011, a decrease of 20.9% over FY2010.
The organisational chart is as follows:
Company: Viet Tien Garment Joint Stock Corporation Vtec (Vietnam) Founders: Sam Bao Tai
Originally, the company was a private garment factory for ‘Thai Binduong Engineering Company@ – trading as Pacific Enterprise. There are 8 shareholder capital contributions by Mr. Bao Tai Ginseng – a Chinese businessman who acts as director. The factory area of 1,513 meter square with 65 sewing machines and about 100 workers.
After the complete liberation of the south, the state takeover, nationalised and then assigned the Ministry of Light Industry (now the Ministry of Industry) to manage. In 1977, the Ministry of Industry recognized as state-owned enterprises and renamed the Viet Tien Garment Factory.
In 1979, the factory burn and was a total loss. Getting help from other units, enthusiasm attached to workers and with the leadership of Viet Tien, the business was put back into operation and increasingly asserted its position on the market.
Thanks to great efforts, the 103/CNN/TCLD discretion was given by the Ministry of Industry Enterprise. The Ministry of Industry Enterprise accepted and upgraded Tien garment company statues. In 1991, the Ministry of foreign economic relations of import and export license directly with foreign name is VIET TIEN GARMENT IMPORT-EXPORT COMPANY, abbreviated as VTEC (by license number on 102570 05/02/1991). In 1993, the company establishment licensing number 214/CNN-TCLD was given.
Before 1995, the direct management the company is producing the nation’s garments. In May 1977, it was rename Viet Tien Garment Enterprise. With the development of the garment sector, the enterprise was change into a company and later a corporation. The name Viet Tien (Vietnam advancing forward) was kept under the wishes of the staff.
At the request of the Vietnam Textile and Garment Group in Report No. 01 28/TDDM-TCLD in 2007 and the scheme of establishment of the company’s proposed May Vietnam Tien.Theo Organization Department – Personnel decisions to: Establish Vietnam Tien Garment Corporation on the basis of reorganisation Vietnam Tien Garment Company under the Vietnam Textile and Garment Group.
Vietnam Tien Garment Corporation operating as a parent company – subsidiary located in the structure of the Vietnam Textile and Garment Group. The Vietnamese name given as Corporations Vietnam Tien Garment Joint Stock and the International Trade name: Viettien Garment Corporation (VTEC). At present VTEC has six enterprise and 14 affiliates over 20,000 workers. It specialises in the manufacturing of garments and the trading of maters and accessories for the garment sector, equipment and components, and import-export services. Its products are diverse and are sold at over 20 shops and 300 agents throughout the country.
Note: As of 2012:
Viet Tien garment Joint Stock Company established since 1976, is presently a production and trade company belonging to VINATEX, specialising in garment manufacture, trade of equipment, materials & accessories for garment industry. The company presently carries out business transactions with more than 60 customers in 20 countries over the world: Asia, Europe, USA, Australia and North America, etc.
Specialises in shirts, trousers, suit, blouses, jackets, denim suits, coats, sweaters, trading in industrial garment Trading in electric, audio, light equipment, Forwarding, Shipping agency.
http://www.thehistoryofcorporate.com/companies-by-industry/finance/berkshire-hathaway-corporations-history/ http://www.marketline.com/ ref 07E69A79-DC43-4A40-B015-C2C489E9E28F
With reference to the above case (you are strongly advice to research into the above company), you are to research and correlate to Viet Tien Garment. Prepare a brief report, citing relevant research, which addresses the following tasks:
Compare and contrast the different organisational structures and culture between Berkshire Hathaway and Viet Tien Garment1.1
Explain how the relationship between Berkshire Hathaway structure and culture can impact on the performance of the business1.2 Discuss the factors which influence individual behaviour at Berkshire Hathaway OR Viet Tien Garment.1.3
This part of your report should not exceed more than 1,000 words. Diagrams, charts, tables and appendixes are not to be included in the word count.
Using research and the facts presented in the case:
Compare the effectiveness of different leadership styles with Berkshire Hathaway and to Viet Tien Garment2.1
Explain how organisational theory underpins the practice of management for with Berkshire Hathaway2.2
Evaluate the different approaches to management used by two organizations (Berkshire Hathaway and to Viet Tien Garment).2.3
This part of your report should not exceed more than 1,500 words. Diagrams,
charts, tables and appendixes are not to be included in the word count.
Passis achieved by meeting all the requirements defined in the assessment criteria. (Refer page 2 of the assignment brief)
MeritIdentify and apply strategies to find appropriate solutions. (M1)
Characteristics / Possible Evidence – Use of comparative charts and sufficiently detailed to show that an effective approach to study and research has been applied to Berkshire Hathaway.
Select and apply appropriate methods. (M2)
Characteristics / Possible Evidence – relevant theories and techniques have been applied in leadership style and approaches to management especially related to Berkshire Hathaway sources sources are justified.
DistinctionUse critical reflection to evaluate own work and justify valid conclusions (D1)
Characteristics / Possible Evidence – creation has been used to generate and justify valid comments on approaches to different management and style of leadership of Berkshire Hathaway.
Demonstrate convergent, lateral and creative thinking (D3)
Characteristics / Possible Evidence – report has been prepared with care and clearly demonstrates the learners thinking, innovation and creative thought used.
1. The assignment should have a cover page that includes the assignment title, assignment number, course title, module title, Lecturer/tutor name and student’s name. Attach all the pages of assignment brief/cover sheet with your report and leave them blank for official use.
2. Ensure that authenticity declaration has been signed.
3. This is an individual assignment.
4. Content sheet with a list of all headings and page numbers.
5. A fully typed up professionally presented report document. Use 12 point Arial or Times New Roman script.
6. Your assignment should be word-processed and should not exceed from 2,500 to 3,000 words in length.
7. Use the Harvard referencing system.
8. Exhibits/appendices are outside this limit.
9. The assignment should be not contain a bibliography – but should contain a list of any references used in the assignment.
NOTES TO STUDENTS for summission
Check carefully the submission date and the instructions given with the assignment. Late assignments will not be accepted. Ensure that you give yourself enough time to complete the assignment by the due date. Do not leave things such as printing to the last minute – excuses of this nature will not be accepted for failure to hand-in the work on time. You must take responsibility for managing your own time effectively. If you are unable to hand in your assignment on time and have valid reasons such as illness, you may apply (in writing) for an extension. Failure to achieve a PASS grade will results in a REFERRAL grade being given. Take great care that if you use other people’s work or ideas in your assignment, you properly reference them in your text and any bibliography. NOTE: If you are caught plagiarizing, the University policies and procedures will apply.
Prepared for: Ms. Le Thu Hanh
The lecturer of ITP- F06B
Course no: F06
Banking Academy, Hanoi Vietnam
Hoang Nang Le Minh
Registration No.: ITP F06-090
Submitted Date :
Word Count : 3361
Table of content
1.1 Compare and contrast different organisational structures and culture…………………………15
1.2 Explain how the relationship between an organisation’s structure and culture can impact on the performance of the business………………………………………………………………………..17
1.3 Discuss the factors which influence individual behavior at work……………………………….20
2.1 Compare the effectiveness of different leadership styles in different organizations…..21
2.2 Explain how organizational theory underpins the practice of management………………..22
2.3 Evaluate the different approaches to management used by different organizations……24
Viet Tien Garment Joint Stock Corporation Vtec and Berkshire Hathaway company is two big organisations with many organisational factors , have established for a larger number of purposes , they have many same points or other points in their structures , their ways of working . Viet Tien Garment produce clothes ( pants , shirts , sportswear , suits … ) , in addition this company supply services of accessories and materials for garments . For a long time served Viet Nam customers with their products , Viet Tien Garment have built a famous situation and reputation in its own country . About Berkshire Hathaway company : in past Berkshire Hathaway produced textile fabrics , but after Warren Buffett became its CEO , this company started working on many various fields as insurance , financial services , jewellery … Till now , Berkshire Hathaway is very famous not only because of its CEO (Warren Buffett ) but also because it worked probably very efficient , bring a lot of benefits to its employees .
Purposes / goals of doing this organisations and behaviour assignment : Practically find and analyze information about both companies ( Berkshire Hathaway and Viet Tien Garment Joint Stock Corporation ) which really exist in other countries , act at other fields ; to understand the relationship between organisational structures and culture , in addition we can comprehend different approaches to management and leadership , also gain knowledge from all outcomes in the textbook . For exp : Explain how the relationship between an organisation’s structure and culture can impact on the performance of the business , or compare the effectiveness of different leadership styles in different organisations … Information and news in this assignment have given from trustable web sites which are official or popular with people . Berkshire Hathaway and Viet Tien Garment are so popular in its own country but it is not easy to collect all true information about them , or really understand their business clearly . Therefore any comments / reports in this assignment may be right or wrong base on reader ‘s experience . This assignment just only cover a small part of Organisations and Behaviour textbook with a wider range when mentioned two big companies ( Berkshire Hathaway company and Viet Tien Garment ) as prime examples .
1.1 Compare and contrast different organisational structures and culture
Each organisation have its own structure , culture which affect how it works and why it become a successful organisation or not . Structures and culture are very important with organisations because they have an impact on the way people look at each organisation , the adaptability of each organisation … About Viet Tien Garment Joint Stock Corporation Vtec and Berkshire Hathaway company , both of them are successful when they chose their organisational structures and culture then apply it efficiently to their ways of working . Their organisational structures and culture are showing in the chart below :
Viet Tien Garment
Berkshire Hathaway company
Compare and contrast – about organisational structures :
Berkshire Hathaway have been controlled by CEO Warren Buffett and other directors as the highest level of management . They give orders to other subordinates . According to the 2010 Berkshire Hathaway Annual Report : “ Berkshire’s operating businesses are managed on an unusually decentralized basis . There are essentially no centralized or integrated business functions ( such as sales , marketing , purchasing , legal or human resources ) and there is minimal involvement by Berkshire’s corporate headquarters in the day-to-day business activities of the operating businesses ” . So their structure is flat and decentralisation – opposite with Viet Tien Garment Joint Stock Corporation . Nowadays , many organizations have an enhancement in their average span of control , diminishing management levels and then become flatter , so as that they can reduce demand for middle managers to handle or analyse information … Berkshire Hathaway are going on this way very early , that ‘s true decision . Any costs , expense for middle process will be removed . The boss will have maximum benefit , and employees too . But this kind of organisation can make many people become the unemployed because they just use a small number of staffs / key employees who are skilled as their high requirements . The high amount of delegation the organisation have , more good qualities their employees must have . Viet Tien Garment , with their centralisation structure , can’t have some advantages as Berkshire Hathaway company , but they make many people have jobs . Viet Tien have a lot of branches , regular foreign customers and outlets ( inside and outside Viet Nam ) with many workers / employees in their factories . They really help Viet Nam government prevent the unemployment – not so efficient but that ‘s enough at this time . Therefore we can realize that Berkshire Hathaway and Viet Tien Garment Joint Stock Corporation have different structures , with many advantages and disadvantages … In my opinion , if they can combine all kind of structures to balance the amount of advantages and disadvantages , then find out a suitable structure which increases their maximum proceeds , it will be very good for their organisations . Have too much ( or too low ) the amount of delegation , it isn’t stable ; should keep it in an average amount .
Compare and contrast – about organisational culture :
Berkshire Hathaway have task culture in some cases . When Berkshire Hathaway employees work in specific fields like insurance industry , they must do many short term and long term missions or projects so as that they can earn money from each finished products / accomplished missions … Employees work with team mates in a group to finish their tasks on time . In addition , this company (Berkshire Hathaway ) have role culture . As a large company with many types of jobs and the work is predictable , role culture is very suitable for doing their business . CEO Warren Buffett had chosen this reasonable culture which agreeable to this company , he did many things in order to gradually made it become “ the most respected company ” (Forbes 2007) . Viet Tien Garment have role culture with the same reasons like Berkshire Hathaway . In a big organization with a lot of factories ( like Viet Tien Garment ) , task cultures are not suitable because of many reasons . Factors in task cultures are not suited to Viet Tien labours ( their behavior , their habits , … ) and the way this company work .
1.2 Explain how the relationship between an organisation’s structure and culture can impact on the performance of the business
How the relationship between Berkshire Hathaway’s structure and culture can impact on their performance of the business Organisation’s structures is the manifestation of ways that a company arrange itself and show its mode of working , so it can impact on the performance of organizations . Berkshire Hathaway’s structures are flat and decentralisation , that make this company may have many advantages or disadvantages when perform their business . To using these types of organisational structures , board of directors in Berkshire Hathaway company have chosen skilled employees / directors who can create true decisions when it is suitable , and understand all anything they must do for their company . “ Berkshire Hathaway’s divisions and subsidiaries are, by Buffett’s admission, run with little or no oversight by Omaha headquarters. Each year he sends the CEOs a general letter outlining high-level goals and requires very few reports or status updates. One-way communication of monthly and quarterly financial results is the primary method used by most of the business units to report to headquarters ” ( Francine , 2011 ) . Organisation’s culture is the style and the main image of an organisation , it shows us what the organisation aimed at and what are the special characteristic of that organization … Therefore organisation’s culture always affect the performance of organizations . By using task culture and role culture , Berkshire Hathaway company can work easier than use any other types of culture . CEO Warren Buffett “ said that Berkshire has created a strong “culture” over the years that would reject any attempt by an outsider to make changes that don’t reflect his way of doing business . ” ( Alex Crippen , 2013 ) . Each year this company with its culture has been widening so much , not only its size or number of employees but also its quality and quantity of productivity , revenue … “ Berkshire, of course, owns subsidiaries across a wide range of industries, from insurance to candy and beyond. It also holds investments in numerous companies . ” (William L. Watts , 2013 ) .
How the relationship between Viet Tien Garment’s structure and culture can impact on their performance of the business Viet Tien Garment’s structure always have an impact on their performance of the business like Berkshire Hathaway company . Viet Tien Garment’s structures are tall and centralization , so this company have been affected by its ways of arrangements . The performance of Viet Tien Garment ( especially their production capacity ) is showing in charts below :
By using their organizational structures ( tall and centralization ) and organisational culture ( role culture ) , till now Viet Tien Garment have many employees , factories and departments in Viet Nam , with high production capacity , as the huge system which usually work hard under the terms of covenants and severe rules . If Viet Tien Garment haven’t arranged like that , this company can’t reach achievements currently . Because labour costs are low , they aren’t able to recruit talented employees or skilled workers who graduated from famous universities , therefore flat organization is not suitable for Viet Tien Garment ( in this company , just only people on the highest level of management can make decisions ) . They can’t choose a wide span of control . And of course , in fact they have not chosen . Using tall and centralization structure is the true way for Viet Tien to develop in future . With role culture , their workers are capable of producing goods together in factories – that ‘s reasonable method for a big company in garment industry like Viet Tien .
1.3 Discuss the factors which influence individual behavior at work
Have a lot of factors which influence individual behavior at work because individuals are very various . Firstly , perception is the important factor which always affect individual behavior . For example : If a worker think that his job is very good and his average wage is adequate ( although some other workers said that it isn’t true ) , he will do his affair in a merry mood , so he can reach excellent results easier than others . Each organization have its own culture and structures , therefore their employees must have suitable perception . If the perception of employees in the organization is fit for their jobs , their ways of working will have more originality , positive innovation … After read many employee reviews of Berkshire Hathaway company , we can understand reasons which made this company successful : “ I worked at Berkshire Hathaway as an intern . Very relaxed working environment . Management cares about new hires and tries to help .” – A former employee . “ Nothing negative to share , one of the best work environments I have encountered in my career ” – a former employee in San Francisco . Secondly , attitude is the conspicuous factor that usually influence individual behavior at work . When an employee go to work with a positive attitude , he can make other employees have good mood to do their jobs better . A positive attitude also create a cordial atmosphere in workplace , so all employees in a organization should have an active attitude while they work . But if an employee don’t know how to have an active attitude , what must he do ? His managers or directors have to solve this problem by suitable ways with each case . Buffett’s 2012 annual report have a paragraph : ” Most of our managers are independently wealthy, and it’s therefore up to us to create a climate that encourages them to choose working with Berkshire over golfing or fishing. This leaves us needing to treat them fairly and in the manner that we would wish to be treated if our positions were reversed ” . Managers in Berkshire Hathaway company have been treated very kind , therefore they worked efficiently , make their company more successful day by day .
2.1 Compare the effectiveness of different leadership styles in different organizations
Each leadership style have the effectiveness that always affect its organization . Warren E. Buffett is CEO of Berkshire Hathaway , in addition he is the famous billionaire investor in the world . Under control of this talented CEO , Berkshire Hathaway steadily become the successful company which works on many fields . Firstly , we can easily see that Warren Buffett inspires his employees to work hard . His subordinates usually think about how to earn money and become a famous billionaire investor like him . When CEO Warren Buffett manage Berkshire Hathaway company , “ The share price of Berkshire Hathaway has grown from about the approximate range of $14 to $18 (of 1965) to $152,000 (in early 2013) in the 48 years that Warren Buffett has been in charge. Book value per share has grown by a staggering 587,000%. This immense success has included enormous success in both stock investing and in the management of the numerous businesses that Berkshire owns. It is therefore evident that Warren Buffett has been an absolutely extraordinary corporate manager, motivator and leader . ” ( Shawn C. Allen , 2013 ) Another famous CEO in the world is Michael Dell . “ He filled a void in the market that would change how people buy computers and all the accessories. At the age of twenty-seven, he was the youngest Fortune 500 CEO. True, it was the company he founded, and not one where he climbed the ranks, but making the Fortune 500 list is an incredible accomplishment for long standing companies, let alone one that was barely eight years old. People close to Michael Dell say he is quite shy, which makes his rise to super-entrepreneur that much more incredible. In the early days, he was the only one doing the marketing and promotion, and he obviously served both the customers and the company well. And, even though he had retired from the company a few years ago, the board encouraged him to return ” ( Profile : Michael Dell , 2013 ) . In periods that Michael Dell is CEO , his corporation have been widening a lot and help many people have modern jobs .
2.2 Explain how organizational theory underpins the practice of management
The practice of management can be predicated by many organizational theories . Berkshire Hathaway company executed two theories : Frederick Taylor theory and Henri Fayol theory . Henri Fayol theory :
The scalar chain of command : Follows Henri Fayol theory , Berkshire Hathaway arranged their organizational structures by the way in this theory as the chart below
Division of work ( specialization ) : Each of Berkshire Hathaway employees have to focus on their jobs to be more efficient . More hard working in the same job , correspondingly more productive . We can see an employee review on Internet to comprehend these points : Name / function : Maintenance (Current Employee)
I have been working at Berkshire Hathaway
Pros – They really care about their employees. They listen to their employees. Benefits are great, management and front office go above the norm in making it an enjoyable place to work. Very happy here!! Cons – The working conditions are not exactly ideal. It is very loud, but appropriate ear protection is worn. The chemicals that are in the air, can’t be that good for your health in the long run, but it could be much worse. Advice to Senior Management – I wish I could come up with something, but I truly do think that the management is really on the right path in all that they are trying to accomplish. ESPIRIT DE CORPS : Berkshire Hathaway employees have been treated impartially and their managers usually create good feelings among employees . According to an analysis on Internet , 86% of employees recommend this company to a friend . Therefore we can see that Henri Fayol theory have a lot of principles which underpin the practice of management .
Frederick Taylor theory :
Employees , directors in Berkshire Hathaway clearly have their responsibility to do their work closely . Directors and managers help subordinates understand how to complete their tasks , and subordinates will do . Subordinates have to learn new methods from other employees then try to
perform better . So that’s right ways to apply Taylor theory into workplace .
2.3 Evaluate the different approaches to management used by different organizations
Berkshire Hathaway company
1. Structure : With its structures ( flat , decentralization ) , Berkshire Hathaway can save costs , expense from some middle processes , then use this money for doing other things . At the moment , many organizations are steadily changing their structures to become more flatter in order to gain more benefit .
2. Culture : Each organization have its own culture . With task culture and role culture , Berkshire Hathaway employees can complete tasks better because these types of culture really suitable for any fields which their company are controlling / working . If they use power culture , the boss will be very tired to manage the whole company , and all employees can’t meet their boss at the same time to take missions ( What should they do if their company have more than 5000 employees ? ) . So their organizational culture are task culture and role culture , that ‘s obvious .
3. Leadership : under control of CEO Warren Buffett and other skilled directors , Berkshire Hathaway became the most respected company (Forbes 2007) . Their decisions in management are punctual and rational , their employees have been trained to be more productive . Their employees also have been treated very kind . “ During the 2012 fiscal year, Berkshire Hathaway held one annual directors meeting, one special meeting, and met twice by the directors’ unanimous consent. Each director attended all meetings of the board and all committee meetings on which he or she served. Directors received $900 for each meeting they attended in person and $300 for each meeting they attended by telephone ” ( Meredith Kliewer , 2013 ) . Berkshire Hathaway board of directors is very good at their leadership , therefore this company is successful till now .
Viet Tien Garment
1. Structure : With its structures ( tall , centralization ) , Viet Tien Garment can’t have some advantages as Berkshire Hathaway company , but they make many people have jobs . Viet Tien have a lot of branches , regular
foreign customers and outlets ( inside and outside Viet Nam ) with many workers / employees in their factories . They really help Viet Nam government prevent the unemployment . Their structures are very suitable with their ways of working and selling goods .
2. Culture : Their organisational culture ( role culture ) is the true decision , because this company have a lot of factories and workers in Viet Nam , and role culture can help its directors to control all of them .
3. Leadership : This company is still perform well without any scandals , so their leadership is good enough for working in future .
After analyses two big companies ( Berkshire Hathaway and Viet Tien Garment ) , we can comprehend about main ideas as the relationship between organisational structures and culture , or different approaches to management and leadership . Base on information about Viet Tien Garment and Berkshire Hathaway company , this project can analyse primary principles in factors of organisations , as the linkage between organisational culture and structure , or the effectiveness of different leadership styles in different organisations , how organisational theory underpins the practice of management … Moreover , using information in many sources as articles , books and websites that have been recognised or found on Google Scholar , this record help us understand the relationship between organisational structure and culture , understand different approaches to management and leadership , have a lot of useful knowledge for using in real life , and comprehend many outcomes in the textbook .
2010 Berkshire Hathaway Annual Report . 2010 . From http://retheauditors.com/2011/09/02/the-berkshire-hathaway-corporate-governance-performance/
Alex Crippen . 2013 . Warren Buffett: Berkshire Will Be the ‘Same’ Without Me . From http://www.cnbc.com/id/100707968