Ricardo Semler Semco the Self-Managed Entreprise

THE GOOD, THE BAD AND THE UGLY The Good: SEMCO International Management – MSc Organization A.Y. 2009 – 2010 Ettore Penazzato TABLE OF CONTENTS 1. SEMCO in brief 3 2. Reorganization of the company: context, actions impacts 4 2.1 Changing the organizational structure 5 2.2 Profit-sharing program 7 2.3 Participatory decision-making 7 3. Evaluation based on the course material 7 3.1 HRM Practices 7 3.2 Empowerment of the employees 8 3.3 Intrinsic and extrinsic motivation solved by profit-sharing program 8 3.4 Self-determined Salaries: Equity theory 10 4. Considerations based on 7 S model 12 5. Conclusions Recommendations 13 6. Bibliography 14 7. Appendix 15†¦show more content†¦These people have a fundamental role inside the organization, as they allow this structure to work even with the reduction of management levels (Semler, 1989). This change neutralized the problem of hierarchy. [pic] Figure 1. SEMCO’s organization structure Semler also put a ceiling on the maximum level of capacity for each plant, to 150 employees, in order to make the production units more efficient. Despite increased overhead costs it led to a higher degree of collaboration between smaller groups of employees inside each individual part of the facility (Semler, 1989). Thus, the obstacle of size was removed. As a result, the new structure improved the ability of the organization in terms of resource and time efficiency, in fact since its implementation inventory turnover fell greatly (Semler, 1989). Surely the responsiveness and the adaptability have also improved, which represents an important advantage for a company that works in such a fast changing technological environment. In fact, this structure is particularly suitable with a strategy focused on rapid innovation and that has to face a volatile environment (Semler, 1989). SEMCO also developed an innovation structure which was initially a solution based on a cost cutting strategy, but consequently it was implemented at a company level. In the mid 80’s three SEMCO Engineers propositioned a new work unit. These three engineers planned to venture out on their own, as a type of Corporate