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Semler's Leadership Style

In: Business and Management

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CASE STUDY

SUBJECT: PRINCIPLE OF MANAGEMENT

GROUP MEMBERS DETAIL AND THEIR PART: * FAHAD ISLAM (27372) Question # 1 * ANEELA MUMTAZ (28799) Question # 2 * MUHAMMAD MADNI () Question # 3 * AMIR JAMIL (28801) Question # 4

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BRIEF INTRODUCTION OF SEMCO GROUP OF SAO PAULO:
Semco was founded in 1953 in Sao Paolo (Brazil) by Antonio Curt Semler, an Austrian-born engineer. It was rigidly hierarchical company with rules and policies for everything. The company made several products, but was mostly known for its marine pumps. 90% of the sales were to the Brasilian shipbuilding industry.
Antonio’s son Ricardo joined the company when he was 19 and clashed with his father’s traditional autocratic style of management. The younger Semler thought the company got too much business from one industry, was too rigid, and needed better financial practices. His father refused to allow changes. Ricardo threatened to leave the company. Then Antonio Semler resigned as CEO and vested majority ownership in his 21-year-old son in 1980. One of Ricardo’s first official acts was to fire 60% of the executives, many of whom were his father's friends, and all the secretaries. New CEO began implementing a diversification strategy and changing the way business was done. A fainting spell when he was 25 made him think about a better work-life balance for himself and his employees.
Semco’s workers proposed to take a pay cut, but with three conditions: the profit-sharing percentage would be increased until salaries could be restored; management would take a 40% cut in salary; and the workers would get the right to approve all the expenditures. Semler agreed. As the business climate improved, Semco's revenues and profitability improved dramatically. Today, Semco is a multibillion-dollar company that offers a broad range of products and services from

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