Disorganization at Semco 1
Week 2 Assignment
Disorganization at Semco
School of Business, Liberty University
BUSI 735: Strategic Organization Design and Theory
Disorganization at Semco 2
Abstract
Semco was founded by Antonio Curt Semler in 1953 in São Paulo, Brazil, as a company
specializing in the manufacture of marine pumps. At its inception and throughout the first thirty
years of operation, its owner instituted a strict management approach that enforced rigid rules
for its policies and employees. When his son, Ricardo Semler, took charge of the company in
1982, significant financial challenges threatened the company’s continued existence. After
facing personal health challenges and experiencing negative relationships between staff and
management, Ricardo decided to overhaul the way the company was run and how employees
managed their employment in every aspect. Complete autonomy was given to schedule work
trips, set up meetings, take time off, and manage each division’s finances. There was also a
litany of innovative employee programs implemented at Semco to support a healthy work/life
balance. To maintain accountability, employees were reviewed by their peers in a manner that
affected promotions up to continued employment within the company for those who would
take advantage of this new way of self-management. With these new management methods,
the company would see a consistent increase in its value over a 27-year timeframe. The results
yielded significant, profitable, and sustainable growth over time, while raising questions about
whether this type of management model would be effective in other organizations.
Introduction
Successful organizations are comprised of people who share the same driving mindset.
Whether it be a goal of meeting or exceeding revenue or achieving the tenets of the company’s
mission statements, it is the people of the organization who will make this happen by doing
what is necessary to accomplish it. Influencing people to achieve the company’s goals relies
heavily on leadership and the ability to inspire and motivate them.
According to Saputra (2021), “Motivation is one of the most critical factors influencing
human behavior and performance” (p. 65). Although it may sound cliché and expected of
employees who receive a paycheck to do a specific job, being motivated to complete the job,
Disorganization at Semco 3
whether paid or not, provides employees with a sense of accomplishment and a feeling of
completion.
In this research, Semco introduced a unique style of leadership designed to motivate its
employees to achieve the company’s goals. While unique, it is not solely a style created by
Semco, but rather a type of leadership style that many organizations use to influence success.
What was different was the way Semco instituted various programs and the reasoning behind
them.
Relying solely on divine intervention following an unfortunate medical incident, Semco’s
leadership’s implementation of an autonomous employee management system aligns with the
teachings of the Book of Galatians. Galatians 5:13 states, “You were called to be free. But do not
use your freedom to indulge the flesh; rather, serve one another humbly in love” (Christianity
Path, 2025). These actions would not only propel the company to success but also lift the spirits
of employees and motivate them to achieve more than they had before.
Organization Design
Prior to 1982, Semco was run by Antonio Curt Semler, who also founded the company in
1953. From its inception until 1982, Semler employed a rigorous authoritarian leadership style.
Authoritarian leaders tend to use their authority, which is ensured by organizational hierarchies,
to demand absolute obedience from their followers (Pizzolitto et al., 2023). This was evident in
the description of the work environment that was created over time. During Antonio’s tenure as
the head of the company, Semco had regulations governing every aspect, with fear being the
overriding maxim, and guards overseeing all employees' activities during the workday (Daft,
2021).
When the company was handed over to Antonio’s son, Ricardo, in 1982, Semco’s
financial situation was in poor condition. Fortunately, Ricardo began to address issues in his
personal life, and once he had resolved them and felt satisfied, he wanted to make similar
improvements for his employees. Perhaps another verse comes to mind when thinking about
Disorganization at Semco 4
Ricardo’s mindset during this time. Isiah 1:16-17 states, “Wash and make yourselves clean. Take
your evil deeds out of my sight; stop doing wrong. Learn to do right; seek justice. Defend the
oppressed” (kingjamesbibleonline, 2025).
Starting with the removal of a host of items Ricardo deemed “corporate oppression”,
employees’ lives were instantly changed for the better (Daft, 2021). Some of the adjustments
made included eliminating sign-ins and sign-outs, as well as attire and security checks.
Employees were also required to receive visitors themselves and even had to prepare their own
coffee (Daft, 2021). This type of autonomous style implementation yielded immediate benefits
for employees, as it provided them with the freedom to make their own choices and manage
their daily work activities.
Semco vs Holacracy: Similarities and Differences
Holacracy is a self-managing organizational design that utilizes radical
decentralization of authority and eliminates the traditional manager-subordinate
relationship (Schell & Bischof, 2022). While no official title for Semler’s style of leadership
was mentioned in the text, it bears some resemblance to a holacracy as demonstrated in
the following examples (Daft, 2021):
•Self-managed teams responsible for strategies and courses of action
•No managers, informal managers may emerge temporarily for specific products
and tasks
•Both utilized a “circle” structure responsible for aligning the company’s overall
plans and strategies
•Utilization of employees for hiring and recognition of individual employee
achievements
•Promotion of an emphasis on teamwork and cooperation
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As shown above, the list shows similarities in organizational design and the way teams
collaborate to accomplish the company’s goals. Both designs rely heavily on autonomy and the
teams' ability to solve their own issues without the dictatorship of a single manager.
Furthermore, while they both are similar in design and style, the holacracy team structure did
not mention individual autonomy as much as the structure that Semler instituted. Some of
these included (Daft, 2021):
•Flexible work hours, including when, where, and how the employees worked
and got paid
•No compulsion to attend meetings, as well as the ability to leave a meeting if
they lose interest
•The ability to veto the CEO’s decisions, with the added ability to nominate the
corporate executives
•Individual salary determination with various compensation options
•The freedom of each employee to buy their own information technology
equipment
These were just some of the freedoms Semler granted to allow his employees to self-manage
and chart their own courses toward reaching the company’s goals. This list also shows how far
Semler went beyond a traditional holacracy, explaining why no formal title was assigned to this
organizational design.
Human Resource Policy
Interestingly, Semco’s human resource efforts align with their fully autonomous
approach. Traditional human resources within organizations encompass tasks such as HR
planning, personnel management, strategic recruiting, employee training, compensation
management, efficiency, labor relations, healthcare, employee satisfaction, and providing
employee services (Anwar & Abdullah, 2021).
Disorganization at Semco 6
Semco’s approach to human resources differs significantly from the traditional definition
of human resources. A few of the employee-centered advantages included the choice of attire,
the ability to set their own wages, and the option to relax on Monday mornings… at the beach!
(Daft, 2021). Semler’s goal in these employee benefits was to spark the creative thought
process. Employees were still expected to complete their work, but even the process of
monitoring their work was not an official function at Semco.
Additionally, the company policies were also lax and unconventional. Semco did not have
any official policies or regulations, and no one at the company had a permanent workstation
(Daft, 2021). Travel policies were left to the employees’ discretion regarding the arrangement of
travel, the specific classes on the airplane in which they sat, as well as the type of hotel and
room rates they chose. The expectation was that an employee traveling on behalf of the
company would exercise discretion and act as a good steward of the company’s finances.
Ricardo Semler’s approach to managing employees was based on trust and his personal
experiences. These experiences gave him the wisdom to, like Solomon, bless the powerless and
lead faithfully and skillfully (Merida, 2015). All of this with the hopes of sparking that
fundamental urge of his employees to be productive, to strive for a better tomorrow, and to
contribute to an endeavor of significance (Daft, 2021, p. 626).
Downsizing
Like most companies, there comes a time in its life cycle when the economy worsens.
CEOs and financial leaders must adapt to navigate these temporary challenges. Due to the
pressure to reduce costs while maximizing productivity to survive in today’s competitive
environment, organizations are often forced to balance their payroll costs with favorable
employee work attitudes (Yoon & Sengupta, 2024). This implies that these cuts will come from
the top down, but that was not the case at Semco.
What was unique about Semco’s actions during the economic crisis, and probably due
to its positive work environment, was that the workers took the initiative and suggested a 30
Disorganization at Semco 7
percent reduction in their salaries (Daft, 2021). The staff also performed some duties that had
traditionally been outsourced, in a further effort to save money.
Another unique tactic Semco implemented was enabling employees who might face
termination to stay financially solvent by converting to contractors. In this role, the employees
established their own satellite firms and received subcontracts from Semco (Daft, 2021). They
were permitted to lease the company's machinery and operate from its factories. This strategy
was an effective way to retain current talent and motivated the newly hired contractors to be
even more dedicated to the company’s success.
Conclusion
Semco is a uniquely designed company strategically positioned for success. To meet the
demands of the ever-changing economy and market, the company has invested heavily in its
employees, yielding impressive results year after year. The leadership style employed here may
not be suitable for every organization, but it is the style of choice that works well at Semco.
Disorganization at Semco 8
References
Anwar, G., & Abdullah, N. N. (2021). The impact of human resource management practice on
organizational performance. International Journal of Engineering, Business and
Management (IJEBM), 5. https://dx.doi.org/10.22161/ijebm.5.1.4.
Daft, R. L. (2021). Organization theory & design (Thirteenth ed.). Cengage.
King James Bible Online (2025). Isaiah 1:16-17. https://www.kingjamesbibleonline.org/Isaiah-
Chapter-1/.
Merida, T. (2015). Exalting Jesus in 1 & 2 Kings. B&H Publishing Group.
Saputra, F. (2021). Leadership, communication, and work motivation in determining the success
of professional organizations. Journal of Law, Politic and Humanities, 1(2), 59-70.
Schell, S., & Bischof, N. (2022). Change the way of working. Ways into self organization with the ‐
use of Holacracy: An empirical investigation. European management review, 19(1),
123-137. https://doi.org/10.1111/emre.12457.
Pastor David (2025, May 2). 45 Top Bible Verses About Autonomy (with Related Verses).
Christianitypath.com. https://christianitypath.com/bible-verses-about-autonomy/.
Pizzolitto, E., Verna, I., & Venditti, M. (2023). Authoritarian leadership styles and performance:
a systematic literature review and research agenda. Management Review Quarterly,
73(2), 841-871.
Yoon, Y., & Sengupta, S. (2024). Can cutting pay be an alternative to cutting people when
maintaining work attitudes is a concern? It can be if employees trust you. Journal of
General Management, 49(2), 81-101. https://doi.org/10.1177/03063070221091227.
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