Berkshire Hathaway and General Electric Analysis, Case Study Example

Berkshire Hathaway is a listed Company in the New York Stock exchange. This stock exchange is controlled by the Securities and Exchange Commission. The Company pays no more than lip service in its requirements. In most cases it has rejected many other proposed corporate governance calls. Berkshire Hathaway has sometimes been referred to as an investment vehicle of Warren E. Buffet. This comes due to the investment success that has been realized under his management.

In the course of 2008, Berkshire owned an array of companies in a unique and diverse way. Among these were insurance operation run by GEICO Re, Berkshire Hathaway, manufactured housing managed by Clayton homes, wholesale distribution that was mainly delegated to McLane and regulated gas and electric utilities. The latter was managed by MidAmerican. The model that was used by the company to manage all these tasks was based on decentralization of authority to the base levels in these organization. Berkshire’s cash flows originate from the multiple activities that they run, as listed above. From the 2007 report on 21 years of cash flows, most of the sources of Berkshire Hathaway’s cash flows were investment gains and operating incomes from the multiple activities it engages in.

As opposed to Berkshire Hathaway, General Electric has a hierarchical system. The top position is made up of shareholders, Corporate Executive Officer, and the Board of Directors. In the intermediary level are the Chairman and Chief Executive Officer. These are followed by floor employees. Just like the Berkshire Hathaway, the sources of cash flow for this Company are the investment and operating activities.

Berkshire’s net gain from the stock securities was 5.6 billion dollars, comparative to that of General Electric. Later on in 2009, general Electric was ranked second largest company by Forbes. This shows clear consistency from the performance levels in the stock market, both in the current and in the future.