ORGANIZATIONAL

PSYCHOLOGY

GROUP ASSIGNMENT

Ricardo Semler Case Analysis

MBA HR (Division B)
Trimester – I

SUBMITTED TO: DR. GEETA D’SOUZA

SUBMITTED BY: Group number – 8

Student names and roll numbers-

Aditya Desai – B008
Chetna Jhamb – B045
Deepanshu Jain – B047
Mrinal Prabhu Desai – B011
Pragati Mimani – B048
Sparsh Mundepi – B013

1
 Table Of Content
TOPIC PAGE NO.
Executive Summary 3
Introduction 4
Background 5
Analysis 6
Analysis of Solution 10
Recommendation 12
Conclusion 14
References 15
Appendix 16
Plagiarism Report 17

2
 Executive Summary

This report evaluates Ricardo Semler, a Brazilian business leader’s revolutionary model of

leadership and overarching leadership philosophy. Examples primarily drawn from Semler's

self-reported experience suggest that managers should consider removing some of the

hierarchical control imposed by the company from the workforce in order to allow workers'

own self-ordering behavior to affect the process and the distribution of the factors of

production. Employees were allowed to dress however they wished and weren't checked in at

the beginning or end of shifts, according to the competency value framework analysis.

Furthermore, parking spaces were no longer designated based on rank. These initiatives were

started in an effort to influence an organizational culture shift that envisioned a company with

democratic leadership and a management style that empowered employees. This led us to

analyze Semco's case in depth, gaining more understanding of its democratic practices and

figuring out how workplace democracy can affect an organization. Also realizing the

importance of building positive emotions in the organization, we tried to explain those using

Job Characteristics and Vroom’s expectancy model. Following that we compared Ricardo

Semler’s unconventional model to traditional management practices and also recommended

solutions for the issues Semco faces. Further, we also identified all the practices emerging in

ESG (Economic, Social, and Governance) context and how these can be implemented in Indian

organizations. It's crucial to emphasize the ideals that motivate work in order to formalize new

advances within the business. In light of the new leadership, workplace policies were designed

to encourage employee flexibility and autonomy. Accordingly, a purpose statement was built

to support Semco’s core mission and reinforce the company culture for enhanced growth.

3
 Introduction

The Semco case is a well-known instance of how the generational gaps and differences in

approach toward work can cause trust issues and conflicts amongst family members. The ways

in which Antonio and Ricardo managed their vast empire were totally different. Both wanted

to develop, expand and achieve success but took different stances on business and workplace

culture. Antonio preferred specialization and believed it to be their greatest asset while Ricardo

advocated diversification, flexibility, and workplace democracy. Eventually, Antonio takes a

leap of faith and gives Ricardo control over their company. Semco’s culture initially was very

toxic, it followed an autocratic style of leadership that did not take employee well-being into

consideration and this resulted in burning stress for the employees as well as Ricardo. But after

his health started getting affected, Ricardo started making necessary changes. Presently, he has

retired and is majorly focusing on family time, philanthropy, and reigniting his passion for

music. This report will examine the case, the main challenges faced, and the solutions to these

challenges.

4
 Background

Some relevant facts that were observed in the case:

• Antonio Curt Semler built the company Semco from scratch by taking advantage of

Brazil’s first “economic miracle” in the 1950s & 60s. His company was a major supplier

of marine pumps to the shipping industry, but he desired to do more and leave a lasting

legacy.

• Antonio’s son Ricardo was a mediocre student in his school and preferred playing guitar

to reading books. However, he demonstrated a passion for entrepreneurship. After a

few years at law school, Ricardo decided to give the family business a shot. Things

were not smooth at the beginning. Antonio did not like his son’s laid-back attitude. The

issue over diversification vs specialization focus of the business started showing up and

the end result was Antonio taking a leap of faith and handing over the entire business

to Ricardo.

• As soon as Ricardo took ownership, he started firing employees and hired new blood

which turned around the company. He highlighted the importance of maintaining

metrics across all business areas to identify where Semco is succeeding vs those that

require adjustment or improvement. All this increased overall productivity and

efficiency.

• Everything seemed highly organized from the outside but the toxic work culture and

the autocratic leadership style at Semco made the employees feel suffocated and less

enthusiastic about their work. They always felt burdened with work and being watched

upon.

Hence the most important issue was Semco’s work culture; it was a trust deficit environment,

driven by tight control and measures. The turning point was Ricardo’s health which brought in

a lot of changes.

5
 Case Analysis

A positive of the Semco model is that the leadership model used by Semler worked in all the

businesses. Greater autonomy and flexibility provided to the employees helped in getting better

results and increased their productivity and motivation level. By implementing the profit

sharing model the company accumulated profits even when it was suffering from losses during

the economic downfall of Brazil. But the previous leadership style had caused a variety of

issues that resulted in financial and non-financial losses for Semco. The internal control system

in place was weak which provided numerous opportunities for employees to commit fraud.

With so much decision-making power given to employees, the scope of work of the HR

department reduced. This kind of work culture may not suit employees who believe in

traditional ways and they might quit. These could be employees with high experience and

losing them would be harmful to the company. Furthermore, employees may recruit family or

friends who are incompetent to perform the task, or the selection may not be based on merit,

which may result in reduced financial benefits. If not addressed properly, these effects can

seriously jeopardize Semco's future.

Job Characteristics Model and Expectancy Theory Framework to explain Ricardo

Semler’s motivational practices and their outcomes.

Job Characteristics Model

This Model says that rather than having extrinsic motivators we should provide employees with

more intrinsic motivators, they seem to work much better (Exhibit 1). We will discuss this

keeping in mind the Semler case study and discuss how the given case fits/doesn’t fit into the

model.

The job characteristic model has five traits as mentioned below:

6
Skill Variety: Defines how many domains of work an employee is integrated into. The model

says that if the work is mundane and repetitive then an employee is more likely to get bored,

and performs well when given several tasks. Semco had given people more control over the

process by incorporating them into each part of the project. This way the employees knew what

was happening in each phase of the project, giving them more things to learn and thus making

their work less mundane.

Task Identity: This shows that the task has a clear beginning and end, allowing the employees

to work on the entire job rather than small tasks. In Semco, the employees were allowed to

work on the entire task to enhance their learning. This created a better sense of what the work

is and made them more responsible.

Task Significance: The degree to which the work employees do is significant to the

company. At Semco, the employees were given the right to do research and make decisions.

This gave them a sense of how significant their work was.

Autonomy: The degree to which an employee can work independently. It increases an

employee’s sense of responsibility by allowing job freedom. This in turn increases

motivation. To improve employee autonomy, Semco allowed them to dress how they wanted,

removed, beginning and end shift surveillance and allowed workers to work at their

convenience. This acted as a huge motivation.

Feedback: The effectiveness of the employees' most recent performances must be

communicated to them in order for them to perform better. Additionally, receiving feedback

helps increase motivation toward work. A proper feedback system was missing at Semco.

Although employees were allowed to rate the managers, there was no mention of employees

being given feedback from the top management.

7
Expectancy Theory Framework

This model says that an individual selects an action based on how it will give them the expected

rewards or not (Exhibit 2). This theory has 3 variables:

Expectancy: The potential that performance will improve given the amount of work done by

the employees. Semco didn't fire their employees often, which gave them time to learn and

develop new skills. Gaining more skills gave them more confidence in their jobs. Further, being

in the company for a long time would make them more familiar with the systems in place thus

giving them more confidence in executing the tasks. However, having no past external

motivators can be demotivating to the employees.

Instrumentality: This is the variable that shows whether you will receive rewards for hitting

a target. External motivation might have been lacking externally at Semco, as they did not

provide their employees with external rewards (other than monetary benefits which were

transparent and democratic) on completing a task. However, they did have intrinsic rewards in

place like getting to learn more, having a say in the process cycle of work, etc.

Valence: This is how you perceive the rewards, whether it is good which will further help to

be motivated. A clear valence was also lacking in the organization. The employees did not

have any clear motivation to keep working for rewards. The motivation if any, was abstract

and ambiguous (other than the salary benefits) like learning, etc. SEMCO could have had more

motivators to provide valence to its employees.

Comparing the Ricardo-Semler’s practices with traditional management practices

In traditional management, managers restrict freedom but Ricardo Semler did things

differently. He adopted a culture of democracy, providing employees with freedom of

thought and decision making. A traditional company works on its policies and acts according

to its written code of conduct while Semco didn’t have any rigid policies. There was no

8
organizational structure and subordinates had the autonomy to choose their managers. Old

mundane performance management systems were bygone. Instead, the employees gave their

managers feedback, thus helping both managers and employees to improve their skills and

capabilities with managers getting the same level of bonus as lower staff.

Semco differentiates itself from other traditional practices of work culture by building trust in

employees and by giving them the flexibility and ownership of their work. Further

comparison highlights how a conventional organisation tries to control its employees whereas

Semco challenged its employees to lead from the front by giving them additional

responsibilities, a variety of tasks, cross-functional liberty, and independence to set their own

salaries. By ensuring such a democracy Semco not only ensured coherence but also paved the

way to create a future that brings change and innovation.

9
 Analysis of Solution

Semco is an industry pioneer who implemented its own style of working philosophy.

They were the first to popularize the concept of workplace democracy. According to the

expectancy theory, we know that any employee increases his/her performance while expecting

some rewards. Ricardo Semler has earned the trust of his employees by delegating the

responsibilities to his employees and making them owners of their respective areas. Semco was

one of the well known companies in which employees handled all the activities on their own.

Following are some of the activities that were mentioned in the case which can be implemented

as solutions.

• Changes in policy: Earlier Semco had a uniform dress code policy for the employees

but Semco wanted to diversify the culture and employees were allowed to wear jeans

and t-shirts to their workplace. Earlier employees' expense reports were analyzed by

the higher authorities in the organization for compensation. But this report itself was

eliminated later by Semler.

• Cost Cutting: Most of the HR employees were not needed and were cut down to 2

personnel. All the hiring was entrusted to employees of the respective departments.

• Worker led hiring for their own teams: When the hiring was carried out by the

workers leading the team they knew exactly which requirements needed to be fulfilled

and a sense of trust was created between employees and the higher authorities.

• Democracy in their organization or workplace democracy: One of the major

aspects of Semco was to integrate democracy and the workplace. It gave its employees

the right to make decisions on their own. Whether it be compensation or hiring or be it

rules and regulations everything was decided by the people for the people making the

organization of the people.

10
• New job rotation plan: Employees would frequently rotate inside the organization in

various departments. It also encouraged people to spread diverse personalities and

outlook backgrounds and techniques injecting new blood and fresh vision throughout

the company.

• Profit sharing with the employees: The employees were given an equal share of

profits from the organization’s revenue. A major part of ESG is giving back to society.

An organization’s employees are a part of the society and giving them an equal share

in the profits will surely earn their loyalty.

• New territorial plan for its office: The parking space was divided into different

departments in proportion to the department size in the organization.

• Opened environmental NGO SOS Mata Atlantica: This was done to protect and

handle the ecosystem of Mata Atlantica in Brazil.

11
 Recommendations

Most of the steps taken by Ricardo Semler and his organization Semco were radical in making

and shaping the organization one of Brazil’s most successful ones.

Following are some of the steps which we can undertake as part of ESG if we had a similar

organization in India:

1. We can implement workplace democracy and earn employee's loyalty

2. In ESG Environment is one of the crucial components and we can undertake activities

like tree plantations, waste management, sewage processing, saving water, etc in an

organization to make it more environmentally friendly

3. To help support diversity in the workplace we can have gender-neutral restrooms

4. Campaigns and general awareness about LGBTQ could be done

5. Various CSR activities are to be undertaken in order to stress social responsibilities.

For example, we can conduct a workshop on maintaining basic financial accounting in

excel for poor people in the society who are sole earners in their families.

6. Like Semco we can ingrain some kind of sports example: cricket in the organisation’s

culture. Conduct various events where employees come together and have a game of

cricket.

7. Like Semco we can also implement various policies such as flexible work, internal job

rotation, profit sharing, etc.

All these activities will not only strengthen the employee and employer relationship but also

will create a sense of community between the organization and its employees.

12
Some of the other recommendations for the given case could be:-

• Better Structure for meetings - In the given case, employees are given the freedom to

enter and leave any meeting at any time. This could lead to chaos and mismanagement

and could delay/hamper the decision making process.

• Need for well established Performance Management System - There should be a better

performance management system wherein the employees are rated as per their

performance and the High performing employees be rewarded for their efficiency. This

will also help in better implementation of the Expectation Theory.

This also highlights the issue of instrumentality as the employees were deciding their

own salaries so the difference could not be established between high and low

performing employees.

• Need for well established performance based rewards - According to expectancy theory

valence is the degree to which employees receive satisfaction based on rewards offered

by the organization. In Semco, the middle management was already frustrated because

of their lack of control over the employees working in their team, their rewards/non-

monetary benefits equal to that of their subordinates could have added to the decreased

valence among the management.

13
 Conclusion

Profitable businesses with market dominance appear to have a better public reputation than

quaint and unattractive businesses. During Antonio's period of work, and at the beginning of

the Semler Company, government tenders and contracts enabled the Semler Company's

growth, while management issues appeared unimportant. Everything in Semler and other

organizations, including the employees' livelihood, was comforted by Brazil's rapidly

expanding economy. However, the economic stress that weakened Brazilian economic stability

signaled the start of problems that demanded sobriety in organizational management. Ricardo's

transition from authoritarian governance to participatory democratic leadership appeared to

have an impact on the overall development of the organization. For any change to be effective

in an organization, it is necessary to destroy status quos. Based on the findings of this study, it

is critical for managers to maintain a flexible and creative leadership style in order to control

the nature of business. In the said case, the new management style of Ricardo which involved

greater emphasis on workplace democracy and flexibility proved to be very efficient and

effective.

14
 References

Behling, O., & Starke, F. A. (1973). The postulates of expectancy theory. Academy of
Management Journal, 16(3), 373-388.

Barakat, A., & Moussa, F. (2017). Using the expectancy theory framework to explain the
motivation to participate in a consumer boycott 1. Journal of Marketing Development and
Competitiveness, 11(3), 32-46.

Wall, T. D., Clegg, C. W., & Jackson, P. R. (1978). An evaluation of the job characteristics
model. Journal of Occupational Psychology, 51(2), 183-196.

Chun-FangChiang, SooCheong(Shawn) Jang (2008). An expectancy theory model for hotel

employee motivation. International Journal of Hospitality Management. 27(2), 313-322

15
Appendix

Exhibit 1:

Exhibit 2:

16
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Summary
 ORGANIZATIONAL
PSYCHOLOGY

GROUP ASSIGNMENT

Ricardo Semler Case Analysis

MBA HR (Division B)
Trimester – I

SUBMITTED TO: DR. GEETA D’SOUZA

SUBMITTED BY: Group number – 8

Student names and roll numbers-

Aditya Desai – B008
Chetna Jhamb – B045
Deepanshu Jain – B047
Mrinal Prabhu Desai – B011
Pragati Mimani – B048
Sparsh Mundepi – B013

1
 Table Of Content

6
TOPIC PAGE NO.
Executive Summary 3
Introduction 4
Background 5
Analysis 6
Analysis of Solution 10
Recommendation 12
Conclusion 14
References 15
Appendix 16
Plagiarism Report 17

2
 Executive Summary

This report evaluates Ricardo Semler, a Brazilian business leader’s revolutionary model of

leadership and overarching leadership philosophy. Examples primarily drawn from Semler's

self-reported experience suggest that managers should consider removing some of the

hierarchical control imposed by the company from the workforce in order to allow workers'

own self-ordering behavior to affect the process and the distribution of the factors of

production. Employees were allowed to dress however they wished and weren't checked in at

the beginning or end of shifts, according to the competency value framework analysis.

Furthermore, parking spaces were no longer designated based on rank. These initiatives were

started in an effort to influence an organizational culture shift that envisioned a company with

democratic leadership and a management style that empowered employees. This led us to

analyze Semco's case in depth, gaining more understanding of its democratic practices and

figuring out how workplace democracy can affect an organization. Also realizing the

importance of building positive emotions in the organization, we tried to explain those using

Job Characteristics and Vroom’s expectancy model. Following that we compared Ricardo

Semler’s unconventional model to traditional management practices and also recommended

solutions for the issues Semco faces. Further, we also identified all the practices emerging in

ESG (Economic, Social, and Governance) context and how these can be implemented in Indian

organizations. It's crucial to emphasize the ideals that motivate work in order to formalize new

advances within the business. In light of the new leadership, workplace policies were designed

to encourage employee flexibility and autonomy. Accordingly, a purpose statement was built

to support Semco’s core mission and reinforce the company culture for enhanced growth.

3
 Introduction

The Semco case is a well-known instance of how the generational gaps and differences in

approach toward work can cause trust issues and conflicts amongst family members. The ways

in which Antonio and Ricardo managed their vast empire were totally different. Both wanted

to develop, expand and achieve success but took different stances on business and workplace

culture. Antonio preferred specialization and believed it to be their greatest asset while Ricardo

advocated diversification, flexibility, and workplace democracy. Eventually, Antonio takes a

leap of faith and gives Ricardo control over their company. Semco’s culture initially was very

toxic, it followed an autocratic style of leadership that did not take employee well-being into

consideration and this resulted in burning stress for the employees as well as Ricardo. But after

his health started getting affected, Ricardo started making necessary changes. Presently, he has

retired and is majorly focusing on family time, philanthropy, and reigniting his passion for

music. This report will examine the case, the main challenges faced, and the solutions to these

challenges.

4
 Background

Some relevant facts that were observed in the case:

1
 Antonio Curt Semler built the company Semco from scratch by taking advantage of

Brazil’s first “economic miracle” in the 1950s & 60s. His company was a major supplier
8
of marine pumps to the shipping industry, but he desired to do more and leave a lasting

legacy.

 Antonio’s son Ricardo was a mediocre student in his school and preferred playing guitar

to reading books. However, he demonstrated a passion for entrepreneurship. After a

1
few years at law school, Ricardo decided to give the family business a shot. Things

were not smooth at the beginning. Antonio did not like his son’s laid-back attitude. The

issue over diversification vs specialization focus of the business started showing up and
1
the end result was Antonio taking a leap of faith and handing over the entire business

to Ricardo.

 As soon as Ricardo took ownership, he started firing employees and hired new blood

which turned around the company. He highlighted the importance of maintaining

metrics across all business areas to identify where Semco is succeeding vs those that

require adjustment or improvement. All this increased overall productivity and

efficiency.

 Everything seemed highly organized from the outside but the toxic work culture and

the autocratic leadership style at Semco made the employees feel suffocated and less

enthusiastic about their work. They always felt burdened with work and being watched

upon.

Hence the most important issue was Semco’s work culture; it was a trust deficit environment,

driven by tight control and measures. The turning point was Ricardo’s health which brought in

a lot of changes.

5
 Case Analysis

A positive of the Semco model is that the leadership model used by Semler worked in all the

businesses. Greater autonomy and flexibility provided to the employees helped in getting better

results and increased their productivity and motivation level. By implementing the profit

sharing model the company accumulated profits even when it was suffering from losses during

the economic downfall of Brazil. But the previous leadership style had caused a variety of

issues that resulted in financial and non-financial losses for Semco. The internal control system

in place was weak which provided numerous opportunities for employees to commit fraud.

With so much decision-making power given to employees, the scope of work of the HR

department reduced. This kind of work culture may not suit employees who believe in

traditional ways and they might quit. These could be employees with high experience and

losing them would be harmful to the company. Furthermore, employees may recruit family or

friends who are incompetent to perform the task, or the selection may not be based on merit,

which may result in reduced financial benefits. If not addressed properly, these effects can

seriously jeopardize Semco's future.

Job Characteristics Model and Expectancy Theory Framework to explain Ricardo

Semler’s motivational practices and their outcomes.

Job Characteristics Model

This Model says that rather than having extrinsic motivators we should provide employees with

more intrinsic motivators, they seem to work much better (Exhibit 1). We will discuss this

keeping in mind the Semler case study and discuss how the given case fits/doesn’t fit into the

model.

The job characteristic model has five traits as mentioned below:

6
Skill Variety: Defines how many domains of work an employee is integrated into. The model

says that if the work is mundane and repetitive then an employee is more likely to get bored,

and performs well when given several tasks. Semco had given people more control over the

process by incorporating them into each part of the project. This way the employees knew what

was happening in each phase of the project, giving them more things to learn and thus making

their work less mundane.

Task Identity: This shows that the task has a clear beginning and end, allowing the employees

to work on the entire job rather than small tasks. In Semco, the employees were allowed to

work on the entire task to enhance their learning. This created a better sense of what the work

is and made them more responsible.

7
Task Significance: The degree to which the work employees do is significant to the

company. At Semco, the employees were given the right to do research and make decisions.

This gave them a sense of how significant their work was.

Autonomy: The degree to which an employee can work independently. It increases an

employee’s sense of responsibility by allowing job freedom. This in turn increases

motivation. To improve employee autonomy, Semco allowed them to dress how they wanted,

removed, beginning and end shift surveillance and allowed workers to work at their

convenience. This acted as a huge motivation.

Feedback: The effectiveness of the employees' most recent performances must be

communicated to them in order for them to perform better. Additionally, receiving feedback

helps increase motivation toward work. A proper feedback system was missing at Semco.

Although employees were allowed to rate the managers, there was no mention of employees

being given feedback from the top management.

7
Expectancy Theory Framework

This model says that an individual selects an action based on how it will give them the expected

rewards or not (Exhibit 2). This theory has 3 variables:

Expectancy: The potential that performance will improve given the amount of work done by

the employees. Semco didn't fire their employees often, which gave them time to learn and

develop new skills. Gaining more skills gave them more confidence in their jobs. Further, being

in the company for a long time would make them more familiar with the systems in place thus

giving them more confidence in executing the tasks. However, having no past external

motivators can be demotivating to the employees.

Instrumentality: This is the variable that shows whether you will receive rewards for hitting

a target. External motivation might have been lacking externally at Semco, as they did not

provide their employees with external rewards (other than monetary benefits which were

transparent and democratic) on completing a task. However, they did have intrinsic rewards in

place like getting to learn more, having a say in the process cycle of work, etc.

Valence: This is how you perceive the rewards, whether it is good which will further help to

be motivated. A clear valence was also lacking in the organization. The employees did not

have any clear motivation to keep working for rewards. The motivation if any, was abstract

and ambiguous (other than the salary benefits) like learning, etc. SEMCO could have had more

motivators to provide valence to its employees.

Comparing the Ricardo-Semler’s practices with traditional management practices

In traditional management, managers restrict freedom but Ricardo Semler did things

differently. He adopted a culture of democracy, providing employees with freedom of

thought and decision making. A traditional company works on its policies and acts according

to its written code of conduct while Semco didn’t have any rigid policies. There was no

8
organizational structure and subordinates had the autonomy to choose their managers. Old

mundane performance management systems were bygone. Instead, the employees gave their

managers feedback, thus helping both managers and employees to improve their skills and
1
capabilities with managers getting the same level of bonus as lower staff.

Semco differentiates itself from other traditional practices of work culture by building trust in

employees and by giving them the flexibility and ownership of their work. Further

comparison highlights how a conventional organisation tries to control its employees whereas

Semco challenged its employees to lead from the front by giving them additional

responsibilities, a variety of tasks, cross-functional liberty, and independence to set their own

salaries. By ensuring such a democracy Semco not only ensured coherence but also paved the

way to create a future that brings change and innovation.

9
 Analysis of Solution

Semco is an industry pioneer who implemented its own style of working philosophy.

They were the first to popularize the concept of workplace democracy. According to the

expectancy theory, we know that any employee increases his/her performance while expecting

some rewards. Ricardo Semler has earned the trust of his employees by delegating the

responsibilities to his employees and making them owners of their respective areas. Semco was

one of the well known companies in which employees handled all the activities on their own.

Following are some of the activities that were mentioned in the case which can be implemented

as solutions.

 Changes in policy: Earlier Semco had a uniform dress code policy for the employees

but Semco wanted to diversify the culture and employees were allowed to wear jeans

and t-shirts to their workplace. Earlier employees' expense reports were analyzed by

the higher authorities in the organization for compensation. But this report itself was

eliminated later by Semler.

 Cost Cutting: Most of the HR employees were not needed and were cut down to 2

personnel. All the hiring was entrusted to employees of the respective departments.

 Worker led hiring for their own teams: When the hiring was carried out by the

workers leading the team they knew exactly which requirements needed to be fulfilled

and a sense of trust was created between employees and the higher authorities.

 Democracy in their organization or workplace democracy: One of the major

aspects of Semco was to integrate democracy and the workplace. It gave its employees

the right to make decisions on their own. Whether it be compensation or hiring or be it

rules and regulations everything was decided by the people for the people making the

organization of the people.

10
 New job rotation plan: Employees would frequently rotate inside the organization in

various departments. It also encouraged people to spread diverse personalities and

1
outlook backgrounds and techniques injecting new blood and fresh vision throughout

the company.

 Profit sharing with the employees: The employees were given an equal share of

profits from the organization’s revenue. A major part of ESG is giving back to society.

An organization’s employees are a part of the society and giving them an equal share

in the profits will surely earn their loyalty.

 New territorial plan for its office: The parking space was divided into different

departments in proportion to the department size in the organization.

 Opened environmental NGO SOS Mata Atlantica: This was done to protect and

handle the ecosystem of Mata Atlantica in Brazil.

11
 Recommendations

Most of the steps taken by Ricardo Semler and his organization Semco were radical in making

and shaping the organization one of Brazil’s most successful ones.

Following are some of the steps which we can undertake as part of ESG if we had a similar

organization in India:

1. We can implement workplace democracy and earn employee's loyalty

2. In ESG Environment is one of the crucial components and we can undertake activities

like tree plantations, waste management, sewage processing, saving water, etc in an

organization to make it more environmentally friendly

3. To help support diversity in the workplace we can have gender-neutral restrooms

4. Campaigns and general awareness about LGBTQ could be done

5. Various CSR activities are to be undertaken in order to stress social responsibilities.

For example, we can conduct a workshop on maintaining basic financial accounting in

excel for poor people in the society who are sole earners in their families.

6. Like Semco we can ingrain some kind of sports example: cricket in the organisation’s

culture. Conduct various events where employees come together and have a game of

cricket.

7. Like Semco we can also implement various policies such as flexible work, internal job

rotation, profit sharing, etc.

All these activities will not only strengthen the employee and employer relationship but also

will create a sense of community between the organization and its employees.

12
Some of the other recommendations for the given case could be:-

 Better Structure for meetings - In the given case, employees are given the freedom to

enter and leave any meeting at any time. This could lead to chaos and mismanagement

and could delay/hamper the decision making process.

 Need for well established Performance Management System - There should be a better

performance management system wherein the employees are rated as per their

performance and the High performing employees be rewarded for their efficiency. This

will also help in better implementation of the Expectation Theory.

This also highlights the issue of instrumentality as the employees were deciding their

own salaries so the difference could not be established between high and low

performing employees.

 Need for well established performance based rewards - According to expectancy theory

valence is the degree to which employees receive satisfaction based on rewards offered

by the organization. In Semco, the middle management was already frustrated because

of their lack of control over the employees working in their team, their rewards/non-

monetary benefits equal to that of their subordinates could have added to the decreased

valence among the management.

13
 Conclusion

Profitable businesses with market dominance appear to have a better public reputation than

quaint and unattractive businesses. During Antonio's period of work, and at the beginning of

the Semler Company, government tenders and contracts enabled the Semler Company's

growth, while management issues appeared unimportant. Everything in Semler and other

organizations, including the employees' livelihood, was comforted by Brazil's rapidly

expanding economy. However, the economic stress that weakened Brazilian economic stability

signaled the start of problems that demanded sobriety in organizational management. Ricardo's

transition from authoritarian governance to participatory democratic leadership appeared to

have an impact on the overall development of the organization. For any change to be effective

in an organization, it is necessary to destroy status quos. Based on the findings of this study, it

is critical for managers to maintain a flexible and creative leadership style in order to control

the nature of business. In the said case, the new management style of Ricardo which involved

greater emphasis on workplace democracy and flexibility proved to be very efficient and

effective.

14
 4
References

Behling, O., & Starke, F. A. (1973). The postulates of expectancy theory. Academy of
Management Journal, 16(3), 373-388.
2
Barakat, A., & Moussa, F. (2017). Using the expectancy theory framework to explain the
motivation to participate in a consumer boycott 1. Journal of Marketing Development and
Competitiveness, 11(3), 32-46.
5
Wall, T. D., Clegg, C. W., & Jackson, P. R. (1978). An evaluation of the job characteristics
model. Journal of Occupational Psychology, 51(2), 183-196.
3
Chun-FangChiang, SooCheong(Shawn) Jang (2008). An expectancy theory model for hotel
employee motivation. International Journal of Hospitality Management. 27(2), 313-322

15
Appendix

Exhibit 1:

Exhibit 2:

16
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