Monday, June 23, 2014

SEMCO Business Model and Catholic Social Thought: A bibliography

Last year I read the book by Ricardo Semler about his company, SEMCO.  The book is entitled, Maverick: The Success Story Behind the World's Most Unusual Workplace.  After reading the book, I said to myself: "Wow.  This man has applied the principles of Catholic Social Teachings to his own business." I wrote a short article about this months ago: Book Review of Ricardo Semler's "Maverick": The glory of a company is man fully alive. When I heard from a friend that the 9th International Conference on Catholic Social Thought and Business Education: Prosperity, Poverty, and the Purpose of Business will be held next year in the Philippines, I realized that this may be a wonderful opportunity to study SEMCO in more detail in the light of Catholic Social Thought.

I have been reading lots of business books for more than a year now--books on management, marketing, copy writing, advertising, graphic design, and many others.  I usually have a budget for two business books a month.  This is the main reason why I made a separate blog for my business interests: Quinori Business Blog.  In that blog I try to apply all the theories I read in books by studying how actual businesses processes through personal observations as a customer.  I already have several articles in that blog, with Rebranding the Filipino domestic helper as home manager: a response to a textbook depiction in Hong Kong as the most read article.

So I guess this business background, albeit in theory, coupled with my deep interest in our Catholic Faith, compels me to submit an abstract to this conference.  As my boss always tells me: "The worst that they can do is to say, 'No'."  But before I submit an abstract, I need first to make a survey of related literature to see if other authors have done similar studies of SEMCO in the light of Catholic Social Thought.  Below is my bibliographic list together with my comments.  Note that I shall only list those whose full papers are freely available:


1. Semco & Freys: A multiple-case study of workplace democracy

"This case study aims to find out what characterizes the Brazilian company Semco and the Swedish company Freys hotels as private owned democratic companies, and whether the mechanisms used to apply and carry on the democratic process are sufficient or not to truly make the workplaces democratic. The way this study is conducted, is by analyzing the definition of workplace democracy and its managerial approaches. To be able to map and study the democratic process in the companies, the authors chose to analyze the parts of the organization that sustain democracy. These parts are structure, information/communication process, individuals and decision-making. The theories applied, are theoretical thoughts and definitions of the managerial approaches (empowerment and participation) used to introduce democracy at the workplace. In addition a political framework for analyzing democracy is used. Five previous studies were also highlighted in the theory chapter, in order to reinforce the authors’ choice of theories and give a broaden understanding of the subject studied in this essay. For analysis, seven hypotheses characterizing a democratic company and the use of workplace democracy were tested. The analysis was carried out using collected primary and secondary data from books, articles, interviews and inquiries with employees from Semco and Freys Hotels. Another interview was conducted with Professor Carl Von Otter at the National Institute for WorkDemocracy at Work: A Cure for Capitalism tring Life, who explained the meaning of a democratic corporation..."

2. Alternative Organizational Design and Its Impact on the Future of Work

"The second exemplar is maverick Ricardo Semler (1993, 2004), the CEO of Brazilian marine equipment factory SEMCO. His rotating, concentric circle organizational design not only saved his failing company and his failing personal health but also spawned a dozen or so subsidiaries all of whom epitomize employee empowerment. SEMCO, decades later, is still a major player in several industries – a testament to their unique, forward-thinking organizational architecture. How soon will other companies start to follow suit? What conditions are necessary to create these revolutionary redesigns? How will alternative organizational design affect the way we work? These questions, as well as Peter Drucker’s prediction that the future organization will be patterned after symphony orchestras, and Cloke and Goldsmith’s (2002) “organizations as organisms” designs (originally introduced by Morgan, 1997, the metaphor master), will be expounded and explored."

3. Non-linear Thinking and Humanistic Management: ViewsColombia against high GINI Index in Colombia

"Joâo Vendramim, partner and former counselor of the Brazilian company SEMCO, acknowledged that 100 years ago slavery was seen as ‘normal’, but today almost nobody will frame it as acceptable. His vision is that in 10 to 20 years command & control Submission number: 15161 2 management techniques—Theory X—would be seen as unacceptable too1 .SEMCO is one of the 19 companies selected2 by the Humanistic Management Network as best practices of companies that puts human at the center of their business while having good financial returns (von Kimakowitz et. al., 2010). These companies probably are part of a global group of the most sustainable ones."

4. Lessons from Oz: balance andwholeness in organizations

"Robbins (1992) suggests how a balanced firm might look with semi-autonomous units of limited size, minimal coercive pressures, recognition of error as a source of learning and other characteristics.  The Brazilian firm, Semco, which fits many of these characteristics, went from near financial disaster in 1980 to a position as Brazil's largest food-process machinery manufactureer and one of Brazil's fastest growing companies in 1988 and, despite recent difficulties in Brazil, continues to thrive (Semler, 1989, 1995). Spirituality seems based more on questions than on proscriptive answers--the normative purpose of business is profit.  If we choose to develop more spiritual organizations, we must use multiple criteria such as those suggested in Ackoffs model and develop organizational designs which support such criteria.  This new paradigm contains many of the features of the Oz story in which all the characters have an awakening."

 5. Why My Former Employees Still Work for Me

"Ever since I took over the company 12 years ago, Semco has been unorthodox in a variety of ways. I believe in responsibility but not in pyramidal hierarchy. I think that strategic planning and vision are often barriers to success. I dispute the value of growth. I don’t think a company’s success can be measured in numbers, since numbers ignore what the end user really thinks of the product and what the people who produce it really think of the company. I question the supremacy of talent, too much of which is as bad as too little. I’m not sure I believe that control is either expedient or desirable. I don’t govern Semco—I own the capital, not the company—but on taking over from my father, I did try to reconstruct the company so that Semco could govern itself on the basis of three values: employee participation, profit sharing, and open information systems. We’ve introduced idiosyncratic features like factory-floor flextime, self-set salaries, a rotating CEO-ship, and, from top to bottom—from the owner to the newest, greenest maintenance person—only three levels of hierarchy. You might say that what we practice is an extreme form of common sense: “common” because there’s nothing we do that thousands of other people didn’t think of ages ago, “extreme” because we actually do it. Another way of looking at Semco is to say that we treat our employees like responsible adults. We never assume that they will take advantage of us or our rules (or our lack of rules); we always assume they will do their level best to achieve results beneficial to the company, the customer, their colleagues, and themselves. As I put it in an earlier article in HBR, participation gives people control of their work, profit sharing gives them a reason to do it better, information tells them what’s working and what isn’t."


I guess these are all for now.  I haven't yet seen an article relating SEMCO's business models to Catholic Social Thought.  But it is interesting to note that Ang Kapatiran Party (Alliance for the Common Good), the political party that I support, had incorporated some principles of Catholic Social Thought in their Passport to a New Philippines:

6. Dignity of Work and Rights of Workers. The economy must serve people, not vice versa. Work is a form of continuing participation in God’s act of creation. Work is a way of fulfilling part of our human potential given to us by God. If the dignity of work is to be protected, then the basic rights of workers, owners and managers must be respected – the right to productive work, to decent and fair wages, to organize and join unions, to economic initiative, and ownership and private property.

7. Solidarity. Because of the interdependence of all members of the human family around the globe, we have a moral responsibility to commit ourselves to the common good at all levels: in local communities, in our nation, in the community of nations. We are our brothers’ and sisters’ keepers, wherever they may be.

8. Subsidiarity. It is a fundamental principle of social philosophy, fixed and unchangeable, that one should not withdraw from individuals and commit to the community what they can accomplish by their own enterprise and industry (Pope Pius XI, Quadregesimo Anno). The principle of subsidiarity holds that the functions of government should be performed at the lowest level possible, as long as they can be performed adequately. Otherwise stated, subsidiarity means decisions being taken close to the grass roots.

9. Common Good. The common good is the “sum total of social conditions which allow people, either as groups or individuals, to reach their fulfillment more fully and easily.” 17 (#74 Pastoral Constitution on the Church in the Modern World.) “The principle of the common good, to which every aspect of social life must be related if it is to attain its fuller meaning, stems from the dignity and equality of all people. The common good is the reason that political community exists. The State is an expression of civil society, and as such must guarantee its unity, coherency and organization in order that the common good may be attained.” (Compendium of the Social Doctrine of the Church.) Elements of the Common Good: a) respect for, and promotion of, the fundamental rights of the person; b) prosperity, or the development of the spiritual and temporal goods of society; and c) the peace and security of the group and its members. (#1925, Catechism of the Catholic Church)

So what I shall do in my proposed paper is to analyze SEMCO's business model in the light of Catholic Social Teaching as summarized by the Ang Kapatiran Party.
Maverick: The Success Story Behind the World's Most Unusual Workplace
Maverick: The Success Story Behind the World's Most Unusual Workplace
The Seven-Day Weekend: Changing the Way Work Works
The Seven-Day Weekend: Changing the Way Work Works
Democracy at Work: A Cure for Capitalism
Democracy at Work: A Cure for Capitalism
The Cooperative Workplace: Potentials and Dilemmas of Organisational Democracy and Participation (American Sociological Association Rose Monographs)
The Cooperative Workplace: Potentials and Dilemmas of Organisational Democracy and Participation (American Sociological Association Rose Monographs)
The Practice of Management
The Practice of Management
Organization Theory and Design
Organization Theory and Design
Productive Workplaces: Dignity, Meaning, and Community in the 21st Century
Productive Workplaces: Dignity, Meaning, and Community in the 21st Century
The Power of Symbols Against the Symbols of Power: The Rise of Solidarity and the Fall of State Socialism in Poland
The Power of Symbols Against the Symbols of Power: The Rise of Solidarity and the Fall of State Socialism in Poland
Global Perspectives on Subsidiarity (Ius Gentium: Comparative Perspectives on Law and Justice)
Global Perspectives on Subsidiarity (Ius Gentium: Comparative Perspectives on Law and Justice)