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Equality

Democratization of Power

Accountability

Semco

Innovation

Ownership

Participation

Figure 1: Culture at Semco

Semco’s transformation came during a dramatic economic crisis in the Brazilian economy. Could it have come if things were going well? The Semco of 1987 tried to do away with the hierarchy and the autocratic decision making. In a bid to create self-managed teams, charged with complete ownership and accountability created an organizational culture where the middle managers perceived sudden loss of power and the factory workers dithering to accept increased responsibility and accountability. The deeply rooted cultural values in the paternalistic Semco proved hard to dispense with. Transformation during the economic crisis in the Brazilian economy which saw currency devaluations, record unemployment, hyperinflation, and halted industrial production was the only way of survival through the crisis. Thus it was inevitable and resulted in major cultural shift towards democratic worker management. The core cultural values of democracy, accountability, ownership, participation, innovation and democratization of power that emerged in the organization was a result of the economic crisis and would not have been possible had the course been normal. The information flow mechanism, worker’s empowerment, and the culture of accountability and innovation became the pillars on which the productivity and profitability of the organization thrived.

Were Semco’s changes too drastic? How far should corporate democracy be carried?