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Changes in Leadership and CEO Succession - Essay Example

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For most organizations, succession plans entail either grooming a senior executive or recruiting an exemplary leader from another…
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Changes in Leadership and CEO Succession
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Download file to see previous pages Founded in 1839 by Oliver Chace, the Valley Falls Company specialized in textile manufacturing. Its 1889 merger with Berkshire Cotton Manufacturing saw the company’s name change to Berkshire Fine Spinning Associates. The company’s final merger then followed this in 1955 with Hathaway Manufacturing Company, which resulted in its new name Berkshire Hathaway. Initially, the company had been successful expanding its operations across the US. However, after the World War I, a decline in the textile industry led the company shutting down several of its mills. This was when (1962) Warren Buffet began buying stock in the company. By 1964, Buffet had acknowledged that the waning textile industry would not lead to an improvement in the company’s finances; therefore, he agreed to sell his shares when he received an oral tender offer from Seabury Stanton (the company’s owner). Stanton’s failure to uphold his end of the bargain rendered the deal void, which motivated an aggrieved Buffet to purchase more shares from the company to become majority shareholder. In 1967, Buffet set his sights on insurance, and decided to purchase the National Indemnity Company. Since then, he shut down the remaining textile mills and continued to acquire subsidiary companies while investing in the stock market. Currently, Forbes magazine ranks Berkshire Hathaway as the fifth biggest public company in the world.
Presently, Buffet serves in the capacity of CEO, Chairman, Chief Investment Officer (CIO) and majority shareholder. As such, the company must find an individual or group of individuals with the expertise required to perform the diverse functions. The proposed succession plan is split into five parts whereby three parts focus on personnel, one on corporate culture and the last on institutional ownership. The company’s Board of Directors proposes that ...Download file to see next pagesRead More
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