Disorganization at Semco: Human Resource Practices as a Strategic Advantage

<< Previous

Semco was established in 1953 in Sao Paulo, Brazil, by Antonio Curt Semler (Antonio), an immigrant from Austria. The company was most popular for the marine pumps that it manufactured. Nine-tenths of these pumps were supplied to Brazil's shipbuilders.6 Semco was a strictly hierarchy-based company, which had regulations and policies governing every issue. Fear was the overriding maxim of the company at that time. Guards scouted the shop floor, regulated workers’ visits to the washroom, and checked workers when they exited the factory premises.7

In 1982, Antonio's son, Semler, aged 24, took charge of Semco. At the time of Semler's entry, the company was financially in dire straits. Semler started his stint as the new CEO by dismissing around 66% of the company's executives, many of them his father's confidants.⁸ Initially, he focused on ensuring that the company remained solvent. After the company's financial condition improved, he moved to purchase other companies and explore new businesses.⁹ To begin with, Semler too followed authoritarian practices, appointed managers who pushed the employees hard, and put in long hours himself. Despite Semco's speedy expansion, the overwhelming stress on output and on reaching stiff expansion targets exhausted the organization and had negative repercussions on management's relations with employees.¹⁰ The hectic schedule also took its toll on Semler. On a particular day, while touring a pump factory near New York, he fainted on the shop floor. The doctor declared that he was essentially healthy but more mentally strained than any person aged 25 years that he had previously encountered.¹¹ After that incident, Semler resolved to harmonize his office and personal life better and to refashion his employees’ lives similarly. Primarily, this entailed their enjoying their work lives.

At Semco, Semler started by clipping what he termed 'corporate oppression'. Sign-ins and sign-outs, attire rules, security checks, hierarchically reserved work areas and allowances, were all removed. The posts of receptionists and personal assistants/ aides were done away with. All the employees had to receive their visitors themselves, fax their messages themselves, and prepare their own coffee.¹² The number of administrative staff was reduced by three-fourths. The top management was no longer entitled to exclusive dining halls or reserved parking lots.¹³ Semler also allowed all his office employees to work flexible hours. To his pleasant surprise, he realized that the greater the autonomy that was bestowed upon Semco's employees, the greater was the adaptability, output, and trustworthiness that they displayed, and the more efficient Semco became.¹⁴ Semler pushed further to democratize Semco, and according to experts, finally created an organization where employees were free to decide when, where, and how they worked and how they got paid for it.

Excerpts - Next Pages >>

6] Ekaterina Zakomurnaya, "Semco SA: Brazilian Miracle where Employees Set their Salaries and Sleep in Hammocks," www.good2work.com, August 8, 2007.
7] Jaclyn Fierman and Therese Eiben, “Winning Ideas from Maverick Managers Unconventional Leaders Share an Ability to Stun the Competition with their Personal Brand of Can-Doism...," http://money.cnn.com, February 6, 1995.
8] "The Journeys of 2nd Tier Leaders over Time," http://integralleaderhipreview.com, March 2008.
9] Darrell Mann, "Ideality and 'Self-X'," http://www.triz-journal.com/archives/2003/04/f/06.pdf.
10] Lawrence M. Fisher, "Ricardo Semler won't Take Control," www.strategy-business.com, November 29, 2005.
11] Jaclyn Fierman and Therese Eiben, "Winning Ideas from Maverick Managers Unconventional Leaders Share an Ability to Stun the Competition with their Personal Brand of Can-Doism...," http://money.cnn.com, February 6, 1995.
12] Charles Handy, "The Handy Guide to the Gurus of Management: Programme 11 - Ricardo Semler," http://downloads.bbc.co.uk/worldservice/learningenglish/handy/semler.pdf.
13] Ricardo Semler, Maverick!, (Arrow Books, 1999).
14] Brad Wieners, "Ricardo Semler: Set them Free," www.cioinsight.com, April 1, 2004.

---

Custom Search

---

Introduction to Human Resource Management Textbook Textbooks Collection	Introduction to Human Resource Management Workbooks Collection	Case Studies in Human Resource Management Volume V Case Study Volumes Collection