Case Study on Semco Group

Case Study on Semco Group

Abstract

Ricardo Semler is a Brazilian who redefines business by encouraging people to discover their own destinies and find their true talents. His company, Semco, has become world-famous and financially successful, by his revolutionary management philosophy and style. This paper aims to first describe the company’s organizational objectives and innovative programs, and then analyze the potential problems that might occur due to these policies. Lastly, recommendations on how these potential problems can be undermined will be provided.

Semco’s Background

After graduating from Harvard Business School at the age 20, Ricardo Semler returned to Sao Paulo to work for his father. In 1982, at the age of 24, Ricardo Semler took control of Semler & Company, which organizational structure, like many traditional Latin American enterprises, was a “paternalistic, pyramidal hierarchy led by an autocratic leader” (Killian & Perez, 1998). However, Ricardo advocated a management style that promotes “freedom, equity, engagement, and passion” (LaBarre, 2012), instead of the company’s initial top down approach. Upon taking office, the younger Semler began dramatic organizational restructuring. He immediately renamed the company Semco, eliminated all secretarial positions, fired two-thirds of the top management of Semler & Company, and began implementing an aggressive product diversification strategy for Semco (Killian & Perez, 1998).

Under Ricardo’s leadership, Semco has created immense market success with an average annual revenue growth at 40% (LaBarre, 2012). Semco has become one of the

most sought-after employers in Brazil, manufacturing over two thousand different products, including marine pumps, commercial dishwashers, digital scanners, filters, and mixing equipment, and diversified into banking and environmental services. Over 150 Fortune 500 companies visited Semco in an...