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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"I don't want to know where Semco is headed. It doesn't unnerve me to see nothing on the company's horizon. I want Semco and its employees to ramble through their days, to use instinct, opportunity, and ingenuity to choose projects and ventures."

- Ricardo Semler, CEO, Semco.1

"Admiring though many are, few have tried to copy him. It seems that the way he works, letting his employees choose what they do, where and when they do it, and even how they get paid, is too upside-down for most managers. But, just maybe his is the way for the new world of business."

- Charles Handy, in "The Handy Guide to the Gurus of Management".3

Introduction

Semco SA (Semco), a Brazilian company which manufactures over two thousand different products including industrial pumps, cooling towers etc. and also provides environmental and internet services, saw its revenues growing from $32 million in 1990 to $212 million in 2003 (Refer to Exhibit I).

It achieved this growth rate in an economic environment characterized by staggering inflation, and chaotic national economic policy in Brazil.3 Between 1982 and 1998, Semco's productivity increased nearly sevenfold and profits rose fivefold. Semco was also one of the most sought after Brazilian companies as far as employment was concerned.

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

Turnover among its 3,000 employees was about 1% during the period 1994 to 2004. Repeat customers accounted for around 80% of Semco's 2003 annual revenues.4

The culture at Semco was unique in the sense that there were no power-packed job titles; employees including top managers themselves did the photocopying, sent faxes, typed letters, and made and received phone calls.

There were no executive dining rooms, and parking was strictly first-come, first-served. Organizational profits were shared with the employees and the salaries were set by the employees themselves. Behind this "maverick" organization was Ricardo Semler (Semler), the CEO of the company who referred to himself as the Chief Enzyme Officer.

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1] Ricardo Semler, "The Seven Day Weekend: Changing the Way Work Works", Portfolio 2004.

2] www.bbc.co.uk.

3] Brazil defaulted on its foreign debt in 1981 and the nation's inflation rate touched 3000% in the year 1994. The gross industrial product was down by 14 %, 11 %, and 9 % in 1990, 1991, and 1992 respectively, and between 1990 and 1994, 28 % of Brazil's capital goods manufacturers went bankrupt.

4] Ricardo Semler, "The Seven Day Weekend: Changing the Way Work Works", Portfolio 2004.

 

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