Buffett’s Institutional Imperative

The workings of the institutional imperative are as follows: (1) As if governed by Newton’s First Law of Motion, an institution will resist any change in its current direction; (2) Just as work expands to fill the available time, corporate projects or acquisitions will materialize to soak up additional funds; (3) Any business craving of the leader, however foolish, will be quickly supported by detailed rate of return and strategic studies prepared by his troops; and (4) The behavior of peer companies, whether they are expanding, acquiring, setting executive compensation or whatever, will be mindlessly imitated.

–Warren Buffett