Chapter 13
Management Principles and Practices
Every day, in countless ways, the competitive position of each of our businesses grows either weaker or stronger. If we are delighting customers, eliminating unnecessary costs and improving our products and services, we gain strength. . .. On a daily basis the effects of our actions are imperceptible; cumulatively, though, their consequences are enormous.1
. . . Berkshire’s ownership may make even the best of managers more effective. First, we eliminate all of the ritualistic and non productive activities that normally go with the job of CEO. Our managers are totally in charge of their personal schedules. Second, we give each a simple mission: Just run your business as if: 1) you own 100% of it; 2) it is the only asset that you and your family have or will have; and 3) you can’t sell or merge it for at least a century.2
We regard product quality as sacred.3

Long-Term Economic Goals

In good years and bad, Charlie and I simply focus on four goals:
1. Maintaining Berkshire’s Gibraltar-like financial position, which features huge amounts excess liquidity, near-term obligations that are modest, and dozens of sources of earnings and cash;
2. Widening the “moats” around our operating businesses that give them durable competitive advantages;
3. Acquiring and developing new and varied streams of earnings;
4. Expanding and nurturing the cadre of outstanding operating managers who, over the years, have delivered Berkshire exceptional ...

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