Semco - A 'Maverick' Organization
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Case Details:
Case Code : HROB060
Case Length : 10 Pages
Period : 1953-2004
Pub Date : 2004
Teaching Note :Not Available
Organization : Semco
Industry : Diversified
Countries : Brazil
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Introduction Contd...
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Wrote Semler, "If you ask me to describe it in conventional business terms, I'd
have to admit I have no idea what business Semco is in.
For years, I have resisted defining Semco for a simple reason: once you say what
business you're in, you create boundaries for your employees, you restrict their
thinking and give them a reason to ignore new opportunities."5
Semler's way of
thinking resulted in an organisation which had no conventional structure, no
organisational chart; no fixed CEO, no VP's, CFO's, COO's or CIO's.
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There were no long term strategic business plans, no career plans, no job
descriptions or dress codes for the employees. Some of the important
organisational decisions like relocating a unit or acquiring a company were
taken on the basis of employees' votes.
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Background Note
Semler's father, Antionio Curt Semler, an Austrian-born engineer,
migrated to Argentina in 1937. A visit to Brazil in 1952 prompted
him to think about the prospects a "vast, undeveloped country"6 like
Brazil presented. During this time, he was working on a centrifuge
technology capable of separating oil from vegetables. With an urge
to start his own business, he selected the city of Sao Paulo to
start his venture, Semco, a contraction of Semler & Co, in 1953.
Soon after, he obtained a patent for his technology. |
Through the 1960s and 1970s, Semco was mainly a manufacturer
of marine pumps. In the late 1960s, ninety percent of the sales of Semco were to
the Brazilian shipbuilding industry. Semco was a hierarchical organization with
twelve layers of management.
According to a Fortune article, "Fear was the governing principle. Guards
patrolled the factory floor, timed people's trips to the bathroom, and frisked
workers as they left the plant. Anyone unlucky enough to break a piece of
equipment would replace it out of his own pocket."7
According to Semler it was a company "with a pyramidal structure and a rule for
every contingency."8
Enter Semler
In 1980, at the age of 21, Semler took over as the CEO of Semco. Semler's views
on running the company were completely different from those of his father. He
felt that the company in its existing form was too rigid. He wanted to replace
the old way of doing business and planning with a participatory style of
management. But the old guard at Semco was not open to this, with the result
that Semler fired two thirds of the top management...
Excerpts >>
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