SEMCO CASE STUDY

OMAR ALALI
2004

[Identify concepts of leadership in the SEMCO case study and evaluation the effectiveness of
Selmer's significant dictions]

Introduction:

Leadership is the person who has the ability to lead others or the way into effect on other people
in order to realize definite goals. Nowadays, leadership is one of the most important subjects
around the world. This in fact not just because the succeed in any company depends on the
level's of its leader and his talent in leading the employees, but also because people need a
leadership in their life everywhere and at any time, for instance, people in any country need a
leader, any family need a leader, any successful sport team require a good leader, also any gang
require a leader, and so on. 'Leadership is the process of motivating other people to act in
particular ways in order to achieve specific goals' (Hannagan, T 2002 pg.37).
Now, from this definition we can remark that the term of leadership consists of three main
elements; first, a group of people working or living in specific place. Second, a person from the
group has the quality of personality which giving him the ability to lead the group. Third, a
specific target which the group strive to achieve it. There are many theories which aim to
recognize the leadership and the most important elements which affect it. The following are
some examples of leadership styles:
The coercive, the authoritative, the affiliative, the democratic, the pacesetting and the coaching
(1). In fact, we are not able to decide which of these kinds or other kinds are the best and
convenient for the benefit of the work. This in fact because each company whether private or
public has different people (employees, suppliers and customers) environments, culture, social,
economic and political conditions which effects on the policy of the company as well as the style
of leadership.
The next case study will explain the importance of leadership and its role toward carrying out the
organization goals. Semco Company is the case study so, what is Semco? Who is the leader of
Semco?

Semco Company
Semco, a successful Brazilian industry in Sao Paolo which specialises in marine and food-service
equipment. This company was established in 1952 by Antonio Curt Semler. In 1980 Ricardo
semler took over the company and since that year Semco considered one of the most successful
firms around the world. In 1980 Semco was ripe for change so what happened or what changed?
First, treating and dealing with employees as responsible adults. Ricardo semler believe that the
situation in companies is not similar to the situation in schools. His opinion based on the idea of
self-control and small hierarchies in the company. For example he removed the security checks
and the rules of dress as a
................................................
(1) For more information see; Hannagan, T (2002) Management: Concepts and Practices pp60-
62.

consequence of self control. In the interview with Ricardo Semler in CNN (Jun 2004) he said: '
the point is that if we do not let people do things they way they want to do them, we will never
know what they are really capable of and they will just follow our boarding school rules'. In
addition, he believes that less hours work with good final results is better than so many hours
without any useful result for the company. Second, profit sharing. Ricardo thinks that employees
should receive a share of the net profits of the company. This will impel them as well as
encourage them to work earnestly for the benefit of Semco. 'I do not govern Semco - I own the
capital, not the company - but on taking over from my father, I did try to reconstruct the
company so that Semco could govern itself...' (Ricardo semler 1994). Third, democratic decision.
In Semco all subordinates participating in the decision-making process. Ricardo Semler believes
that Semco is a big family for every worker, and thus all workers should take part in making the
vast majority of company decisions. For that all employees in Semco do their best to realize the
decision and its objectives. 'As I tell our people constantly: we have learned to answer email on
Sundays, but none of us has learned to go to the movies on Monday afternoon. Until we learn
that, we are email slaves harnessed to the wicked ways of the profit and loss master' (Ricardo
semler 1993). Fourth, open information system. One of the most important principles in Semco
is that information is available to all people who work for Semco. Yes, it is a grave situation.
However, Ricardo Semler believes that system is very significant not only because it save the
time, money and effort, but it also teaches the employee the responsibility and how to use and to
keep it. 'Here at Semco we are doing something else, we are saying everyone is a responsible
adult...we have no control whatsoever' (Ricardo semler 2004). Fifth, regular meeting. Weekly
meetings are started, and these meetings are open which means that any one of Semco
employee's can take a part in, it also not compulsory, and thus the employees have the choice to
attend it or not. According to Ricardo semler (1994), there is a big room in the company where
everyone from the firm has a place for discussion and to exhibit his opinion to solve any problem
as well as to put the new plans. In addition, there are six counsellors in the company who
attempting to advice and guide the employees. Furthermore, instead of the annual budget which
most of the firms around the world following it, Semco has six month budget. This in fact will
motivate the managers of Semco to work earnestly as well as makes them on continual contact.
'...because an annual budget tempts managers to postpone unpleasant decision to the third and
fourth quarters' (Ibid).
Certainly, there is other changing but these last variations were the most important. That was
about the company, now what about its leadership?

Ricardo Semler
Known around the world because of his created and innovated in management leadership. He has
become one of the most significant and effective business advisers around the world. His style in
managing and leading is magnificent and very effective, in fact his idea in management based on
establishing a strong and clear relationships between workers and managers in the company.
According to the World Economic Forum in Switzerland (1998), Ricardo Semler considered one
of the global leaders of tomorrow. Now, what kind of leadership Ricardo Semler following?
The answer without any doubt is not easy, this not just because his style is unusual, but also
because he combining more than one style simultaneously. First of all, in the light of the
Goleman research (2000) we can notice that Ricardo's style approaches from the afflictive style.
This style of leadership works hard to merge with the employees and considers the participation
and communication between the administration and staff in the company is the magic key for
successfulness. In addition, freedom in working and creation are very important elements in this
the style. In general, this style of leadership aims to build a work team to realize the objectives of
organization. As we noted all these components happened in the Semco case study. At the same
time, through a quick look at the Douglas McGregor theories X and Y in the leadership we will
find that Ricardo's style represents the second theory (Y). Theory Y managers are very
optimistic, and thus they believe in their employees and their acceptance of the work
responsibility, also they believe that their employees work for the benefit of the work, and as we
saw Ricardo does this, he said: 'The people who get responsibility are the people who seek it out
and meet it' (Ibid). According to CNN (2004), Ricardo Semler for about 25 years has let Semco
employees to control their work in all things; work hours, wages, their office equipment and so
on.

Conclusion:

To sum up, the succeed of Semco Company started from the leader. However, it is very difficult
to evaluate Ricardo's style in leadership, but in all cases Semco is one of the most successful
companies around the world. This with out any doubt because of Ricardo's significant dictions.
There are many evidences indicate that, for instance, Semco Company has grown from 35
million dollar to 160 million dollar in the past six years. Moreover, in both 1992 and 1990
Semco was elected business leader of the year in Brazil. In addition, there are three types of
employee work for Semco Company; first full-time worker. Second, part-time worker. Third,
self workers. These kinds of workers had worked in the company then they retired and now they
work like suppliers for Semco. In fact, this situation reminds us with business ethics which in a
few words means applying the moral rules in work and business. Therefore, according to
Velasquez (1998), when employees feel that their company's decision-making processes are just,
they will show high levels of loyalty, confidence, obedience, honesty, trust, respect and they will
do the work earnestly for the benefit of their company. Furthermore, Ricardo's book (Maverick)
which published in 1993, has been translated for more than 16 languages and sold over one
million copies, and this admittedly shows the efficiency and importance of his style in
leadership. Lastly, on the one hand his style lead to save three important elements in the world of
business which are; money, time and effort. On the other hand the quality of product is excellent,
the employee's loyalty for the company is strong and the profits are high. My point of view is
that style is significant. So, we need to persuade business people to take it as much as they can.
In addition, we need to teach it at universities. 'We are all one big happy family' (Ricardo Semler
1993). Personally, I admire this person (Ricardo Semler) not only because of his unusual style in
leadership, but also because of his modesty. In fact, he always says (we) when he speaks about
the company.

Reference

1.Hannagan, T. (2002) Management: Concepts and Practices, pp.36-68

2.Potter, J. (2001) Creating a passion for change - the art of intelligent leadership, pp.54-58
3.Velasquez, M. (1998) Business Ethics. New Jersey, Prentice Hall, pp.35-43
4.The Next Century of Work. http://leighbureau.com/lbw/speaker_full.asp?speaker_id=186
5.Interview with Ricardo Semler (CNN 2004).
http://www.cnn.com/2004/BUSINESS/05/19/go.semlar.transcript/
6.Book Review: Maverick by Ricardo Semler (2002).
http://owt.typepad.com/blog/2002/04/book_review_mav.html
7.Episode 11: Ricardo Semler (BBC).
http://www.bbc.co.uk/worldservice/learningenglish/work/handy/semler.shtml