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Semler's Leadership Style Essay

2788 words - 12 pages

CASE STUDY

SUBJECT: PRINCIPLE OF MANAGEMENT

GROUP MEMBERS DETAIL AND THEIR PART:
* FAHAD ISLAM (27372) Question # 1
* ANEELA MUMTAZ (28799) Question # 2
* MUHAMMAD MADNI () Question # 3
* AMIR JAMIL (28801) Question # 4

Submit to: WaqasRana

BRIEF INTRODUCTION OF SEMCO GROUP OF SAO PAULO:
Semco was founded in 1953 in Sao Paolo (Brazil) by Antonio Curt Semler, an Austrian-born engineer. It was rigidly hierarchical company with rules and policies for everything. The company made several products, but was mostly known for its marine pumps. 90% of the sales were to the Brasilian shipbuilding industry.
Antonio’s son Ricardo joined the company when he was 19 and ...view middle of the document...

Annual revenues from the Semco group total more than $240 ml. The company employs more than 3000 workers.
LEADERSHIP
Ricardo Semler once said:
"The purpose of work is not to make money. The purpose of work is to make the workers, whether working stiffs or top executives, feel good about life."
Under Semler’s ownership, the company’s revenue has grown from $4 million in 1982 to $212 million in 2003. But still the major stockholder of Semco, he does not have a current title. The company recently brightly celebrated the 10th anniversary of the last time he made any decision.
SEMLER's RULES OF MANAGEMENT
* Forget about the top line.
* Never stop being a start-up.
* Let talent find its place.
* Make decisions quickly and openly.
* Partner promiscuously.

QUES NO 02:

What challenges might a radically hands-off leader face how those challenges could be addressed?

Leadership styles range from the radically hands-off, which means micromanaging even the smallest operational detail. Although a hands-off management style can empower employees to adapt quickly to changing business conditions.

CHALLENGES OF SEMCO GROUP OF SAO PAULO:
Semco is often called one of the most interesting companies in the world. And it is actually so. There are no job titles, no written policies, no HR department, or even, the present time, no headquarters. There is still a CEO, but half a dozen senior executives pass the title every six months. All other employees are Associates. People set their own salaries and working hours. Everybody shares in the profits. Everyone in the company knows what everyone else does. Every employee receives the company's financial statements and can take classes on how to read them. Subordinates choose their managers by vote and evaluate them with the publicly posted results. Meetings are voluntary, and two seats at board are open to the first employees who turn up.
Let us go back to the company’s history. In 1985, one of Semler’s managers suggested creating self-managed teams of 6 to 8 workers who would be entirely in charge of all aspects of production. They set their own budgets and goals. Compensation was tied to budget and productivity. Costs went down; and profits - up. Semler liked that. Many workers liked that as well. It was the middle managers who did not like a new idea. They thought they were losing their power and rights. During a year, one third of them left.
In the late 1980s, three engineers at Semco proposed setting up so-called Nucleus of Technological Innovation to develop new businesses and product lines. At the end of the first 6 months, NTI had identified 18 such opportunities. Satellite units were encouraged throughout Semco. By the late 1980s, these units accounted for two-thirds of its new products and two-thirds of its employees.
One more thing has to be mentioned to draw the picture of Semco we see today - autonomous teams. During the crisis the company cut costs in just about every...

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