No. of Recommendations: 5
At the risk of revealing my ignorance, wouldn't it be feasible to set up an intelligently designed array of subsidiary domains for the purpose of acquiring and managing sets of smaller companies?
This is such a simple answer that … it was the first thing I thought of too. Clearly there’s something wrong with the idea, though what that obvious defect is escapes me.
I mean, who wouldn’t want to have two half-Berkshires and watch them grow into a 2XBerkshire in a couple decades? The idea shouldn’t be “We can’t consider that because it wouldn’t move the needle”, but “Is this capable of producing the kind of growth (consistent with other values) that a Berkshire shareholder has come to expect?”
Berkshire is already an unwieldy conglomerate, a random assortment of candy & furniture, insurance and truck stops, batteries and railroads; why is anything off the table? I note that GE and Westinghouse, to name two, were conglomerates of disparate industries for more than a century, and they survived pretty well until at last, they didn’t. (I hold no illusion that Berkshire will outlast the sun going super-nova.)
Do I have suggestions on how this might be structured, who would report to who, what should be done to bring it about? No clue. But I fear the paralysis seeming to affect the company may be a result of trying to hew too closely to an outdated concept, the “unitary executive”, you should pardon the expression.
Maybe it’s time for, well, not something different, but something “more the same”, but twice.
