Strategic Management and leadership Skills analysis

Identify the direction and leading manners adopted by Ricardo Semler. What impact do you believe these manners have had upon the company ‘s strategic determinations?


Relationship between Strategic Management and Leadership:

Strategic direction trades with be aftering a concern with way and range where, Leaders play an of import function by constructing a solid underlying construction through the constellation of resources, with common attempts of persons in the company to run into the disputing environment.

“ Management is about get bying with complexness. Leadership, by contrast, is about get bying with alteration ” .


Therefore, direction trades with dealing and complexness, while leading is concerned with alteration and transmutation. The director Organises, plans, directs and controls ; Leaders aligns people and establishes way.


Leadership and direction are two distinguishable and complementary systems of action necessary for success of an administration.

Table 1: Effectss of Leadership and Management Styles on Strategic Decisions:




Consequence on Strategic Decisions:




Leader dominates team members and takes determinations.

Effective in little houses with fast determination devising.

Can be corrupting for employees.


Participative leading, as leaders takes determination after confer withing the squad.

Workers feel motivated.

Making relation within the squad ensuing in better public presentation.

Decision devising slows, as staff needs to be consulted.


Little or no intervention of directors.

Workers get motivated.

Might non accomplish aims within specified period.


Introduction to SEMCO:

“ Semco ” , a non-descript industrial composite on the outskirts of Sao Paulo Brazil is a function theoretical account in the new universe of concern. Founded by, Antonio Curt Semler in 1952 and being initiated by the laminitis ‘s boy Ricardo Semler in 1980 has turned into one of the universe ‘s most unusual and admired workplace. In 80 ‘s, it started up with Naval Industry and within 30 old ages, the company went far from alien in what it makes and does. It is now one of the most preferable companies in Brazil, fabrication over two thousand different merchandises, including Marine pumps, digital scanners, blending equipment, etc.

Leadership at Semco:

Ricardo involved people in taking determinations. He eliminated gratuitous beds of hierarchy. Directors were elected by employees harmonizing to their public presentation. One director had experience, after happening his married woman had unwellness. “ He was depressed and the system still expelled him. There is no room for compassion when the underside line has taken its topographic point ” . This was a participative determination being taken by the employees at Semco.

The company ‘s policy manual is a 20 page brochure filled with sketchs and brief description of the organizational civilization, with regard to engagement and provinces that,

“ Our doctrine is built on engagement and engagement. Do n’t settle down. Give sentiments, seek chances and promotion, ever say what you think. Do n’t be merely one more individual in the company ” .

An indicant of Semco ‘s acceptance of a democratic direction is, associates were encouraged to openly oppose and reject proposals by upper direction, and were comfy making so.

Therefore, at Semco it is a “ Democratic or Participative Leadership.

Ricardo believes, people crave to accomplish excellence but can non win under force per unit area. He initiated ‘Corporate Oppression ‘ by maintaining aside working hours, frock codifications, security processs, privileged office infinites and fringe benefits. SEMCO leaves employees mould it through their attempts, involvements and enterprise, by puting their thoughts, doing the feel of a Individualistic Management.

“ Give people the freedom to make what they want, and over the long draw their successes will outnumber their failures. ”

-Ricardo Semler.

Effectss of Leadership on Semco:

Ricardo ‘s participative and free-reign leading drove SEMCO to 900 per centum growing in twenty old ages with merely 3000 employees of the universe and made it one of Brazil ‘s fastest turning companies. Its one-year turnover for 2009 is about US $ 38 Million which was US $ 4 Million in 1980. SEMCO Group has proven itself as an “ Active Portfolio Manager ” with proven records which acts as a enormous way for transnational companies to unify with it in future and the SEMCO Holding division looks for new concern groups to back coactions amongst them.

Q-2. Explain the nexus between selected strategic direction and leading theories. What impact do these theories have had on organizational and leading scheme?


McKinsey 7S Model by, Peters and Waterman: To guarantee, all parts of the administration works in harmoniousness, we use McKinsey 7S Model. Its seven internal factors need to be aligned to do an administration successful.

2.1.a Figure 1: McKinsey 7S Model


The theoretical account involves seven mutualist factors: Strategy, Structure, Systems, Skills, Style, Staff and Shared Values. Hard elements are scheme statements, administration charts, describing lines, IT systems, carried out by the directors. Soft elements are hard to depict and are more influenced by civilization and merely leading abilities can alter these. For doing the administration successful, soft elements are every bit of import as the difficult elements.

2.1.b Table 2: Hard and Soft Elementss:

Difficult Elementss:

Soft Elementss:







Shared Valuess


In an administration, alterations can be achieved through concern leaders and director ‘s determinations, actions, attitudes and motive, achieved through multiple theories and constructs. Leadership and direction theories go good with moralss, values and determination devising, impacting Customer service of the concern in long footings.

Effectss of Leadership and Management theories on Company ‘s Scheme:

Ethical motives, Valuess and Decision Making

Customer Service

Theoretical Model

Leadership Theories

Management Theories

2.2.a Figure 3: Model of Management and Leadership Theories:

Beginning: OpenAIR at Robert Gordon University, Aberdeen

Leadership Theories:

Leading determination shapers have the cardinal influence on explicating societal duties of their administrations. A brief treatment of leading theories is presented below:

2.3.a Table 3 Leadership Theories



Traits Approach

McCall and Lombardo ( 1983 )

Surveies into leader ‘s public presentation and behavior sing success and failure, interpersonal accomplishments, emotional stableness and admitting mistakes.

Situational Theory:

Hersey and Blanchard ‘s Situational Leadership Theory ( 1988 )

Explains the behavior of the followings on the willingness to execute actions and formalises the leading manners: Telling, Selling, Participating, Delegating.

Continuum Theory:

Tannenbaum and Schmidt Theory

Positive manner for squad and directors to develop, as director delegates duty to the group. Team makes determination harmonizing to their abilities.

Contingency Theory:

Fiedler ‘s Contingency Theory:

Group public presentation is the consequence of interaction between Leadership manner and situational favorableness.

Vroom and Yetton ‘s eventuality theory:

Depends upon the state of affairs: the importance of the determination, the sum of relevant information, and the likeliness if subsidiaries would accept and collaborate in doing determination.

Path-Goal Theory:

House ‘s



Focuss on state of affairs and leader ‘s behavior: directive, supportive, participative and achievement-oriented.

Charismatic Leadership:

Leaderships possess vision and articulation, personal hazard ; environmental sensitiveness, understand follower ‘s demand, assurance and have strong strong beliefs about the behavior.

Transactional Leaderships:

Transformational Leaderships:

Use vision and passion ;

Deals with Long term ends ;

Motivates people through inspiration by making trust ;

Engages bosom and head of others for accomplishment of end.

Manages and controls processs, procedures, regulations and takes determinations ;

Deals with Present state of affairss ;

Motivates people by promising wagess ;

Use power for accomplishment of end.

Leadership Manners:




Leader takes determination.

Leader delegates work to subsidiaries.

Workers take ain determinations.

Beginning: ; ;

Resemblance in Leadership Theories:

Contingency Theory, Situational Theory and Path-Goal Theory: Leader has to move harmonizing to the state of affairs.

Trait Theory and Behavioural Theory tells about Leader ‘s behavior ;

Transformational and Charismatic Leadership speaks about Charisma of Leaders ;

Transactional Leadership and Democratic Leadership: Deputation of authorization to workers.

Table 4: Management Theories:

Management Behavior:

Henry Fayol

( 1916 ) :

F W Taylor ( 1881 ) :

Peter Drucker ( 1954 ) :


( 1973 ) :


Making a co-ordinated program of action

Plans information


Supplying resources

Resource allotment


Scientific methods to develop workers

Training and Coaching

Novices, supervise and control alteration


Geting the best out of staff

Using SMART Techniques for measuring

Interpersonal function of leader with complete authorization and position


Wagess for run intoing outlook.

Puting assessments through MBO



Resemblance in Management Theories:

Planning: Henri Fayol and Mintzberg.

Training and actuating people: Taylor, Drucker and Mintzberg.

Commanding: Fayol, Drucker and Mintzberg ; and

Controling: Fayol and Mintzberg.

Shared Objectives of Leadership and Management Theories:

House and Taylor ( Path-Goal Theory ) : Accomplishment of end is a common facet.

Vroom and Yetton: Choosing the best option ;

Fayol and Mintzberg: Making a co-ordinated program.

( Planning is common in both ) .

Fredrick and Taylor: Motivation people through wagess.

Emotional Intelligence:

“ All acquisition has one emotional base ” .


It is the ability that a Leader possess to supervise ain ‘s and manage others emotions.

Five spheres of Emotional ( Daniel Goleman,1995 ) :

Knowing ;

Managing ;

Motivation ;

Acknowledging ; and

Managing one ‘s emotions.

Higher Levels of Emotional Intelligence are repeatedly linked to better better end product from the company as:

2.6.1.a Figure 4: Accomplishments through Emotional Intelligence


Requirements of a Leader for Company ‘s approaching scheme:


Leaderships and Managers implementing peculiar theories, with personal accomplishments, including Emotional Intelligence when every bit tailored into McKinsey 7S Model, meet the company needs and improves effectivity of the person, squad and of the Organisation.

Q-3.Utilise appropriate techniques to reexamine Semco Leadership demands.

Ans-3. Directors or Leaderships of a company practises STEEPLE to cognize the Strength, Weakness, Opportunities and Threats in which a concern operates and entree better alterations to vie with rivals.

Analyzing SEMCO utilizing STEEPLE:

Sociable: ( freedom, coloring material marks, flexibleness in occupation hours )

Employees are given flexibleness in occupation hours and location. They put temper tickets ( Green-Good Mood, Yellow-Careful, and Red-Not Today ) to show emotions. At Semco, there are no formalities and the doors are ever unfastened for sentiments. Unionization is free within the company as Semco believes that changeless relationship with brotherhoods is healthy for company and employees.

Technological: ( Network Technology )

While unifying with International companies, Semco looks for the technological promotion in engineered merchandises and complex services.

Environmental: ( Marine and bio-fuel )

Semco started up with Naval Industry but combined with Tarpon Investments and Brenco bring forthing bio-fuels.

Economic: ( Profit border and Growth )

Semco maximizes value of its concerns by concentrating more on profitable growing and less on acquisitions. E.g. : NATCOMM ( The technology and building concern section of SEMCO ) focuses on internal growing through enlargement of its geographic range and client base. Political instability causes economic fluctuation within the state set uping concern worldwide.

Political and Legal: ( Taxation )

Semco trades with transporting Naval Merchandises and hence, revenue enhancement has been implemented by the Government. Political instability creates instability between the portions and the companies.

Ethical: ( Value for work than money )

As per Zero Tolerance, Ricardo says, “ You can run a successful concern or be ethical, take your choice ” . Thus, ethical consequence provinces, to make the right thing as Semco does n’t value for money.

Analyzing Semco, here employees work with ample freedom deprived of formalities, working hours, regulations and ordinances and with regard for each-other, where work is given precedence and everyone feels content at work. There is a immense technological growing with wings spread in different waies supplying client service worldwide. Semco does n’t follow the regulations of other corporates holding bureaucratisms and the bing Leadership used at Semco tells about the Democratic or Participative manner of Leadership, ’employees working together with freedom to take the company ‘ .

Required Skills for Leaders of Semco:

Companies have leaders with Compelling Vision, Threshold/Core Competencies and Networking accomplishments. But, Semco being a reengineered and fast growth industry, with wings of: Railway, Forging, Industrial Equipment, Real estates, etc. and making partnership with universe leaders: Pitney Bowes, Brenco, Tarpon Investments, etc. for its growing, needs leaders with nucleus ( alone ) competences with the abilities to join forces with taking companies, organize Joint Venture, Controlling budget and assets and Alliancing with other companies to maintain the company off from bankruptcy. Hence, the future leader for Semco should be Innovative, originative and passionate with flexibleness to different environment, promoting workers with threshold accomplishments, assisting in advancing thoughts with passion for set uping an inordinate Semco in front.

Analyzing GAP at Semco ( 2010-2015 ) :

GAP Analysis defines the present province, the mark province and the spread between them.

Semco Maritime Joint Venture with Conoco Philips for oil and gas production



Semco Energy Inc. confederation with and Enstar confederation for ‘Pad Gas ‘


2009 2010 2011 2012 2013 2014 2015

Old ages

3.3.1 Figure 5: Gap Analysis at Semco from 2010 – 2015

Beginning: ;

GAP Analysis at Semco:

GAP – 1: The Norse Oil Industry Association has estimated 3 billion Euros can be made before 2015 by concentrating on new engineerings and by join forcesing. So, Semco Maritime is fixing the proficient specifications for communicating solutions for Ekofisk field, Norway. An American oil company, Conoco Philips has collaborated and had made a trade for 5 old ages with Semco Maritime, assisting to future proof the oil and gas production in Ekofisk an Eldfisk Fieldss. [ 1 ]

GAP – 2: Semco Energy Inc. has filed for licenses to build $ 200 Million natural gas storage installation in the Cannery Loop gas. Enstar and two regional electric public-service corporations, Chugach Electric Association and Anchorage ‘s city-owned Municipal visible radiation and power have contracted with Semco Energy Inc. The installation will be able to run into all of Enstar ‘s demands to supplement supplies from bring forthing Wellss through winter 2012 and 2013. About 4 billion three-dimensional pess of “ tablet gas ” will hold to be kept in the reservoir to prolong force per unit area. Semco and Enstar had been working with TransCanada subordinate ANR storage on the undertaking, but when ANR withdrew, Semco took it over. [ 2 ]

Scoping and Planning Leader/Manager Acquisition:

Organisation short and long term ends, range, comprehensiveness and flexibleness.


Diagnostic Assessment Centres

Preferable Attitude, Skills

and Behaviour

Outline occupation description and individual specification

3.4.1 Fig 6: Scoping and Planning of Leader/Manager acquition

Beginning: brochure provided by STC on “ Planning for Leadership ”

Taking work-force into consideration, we expect the future Leader of Semco to be Transactional, with effectual people direction accomplishment, actuating people for advanced thoughts, be able to portion feedback and manage undertaking and squad efficaciously and put mileposts. He should besides be a skilled negotiant, hazard analyzer, good versed in finance to acquire the company expanded in assorted sectors with the taking engineering suppliers with the ability to execute confederation and joint ventures, distributing the wings of Semco globally.

Q-4. Produce a future leading accomplishments program for Semco. Report on how utile was the methods used to be after the development of leading accomplishments. Ensure you evaluate each method and discourse what you think of each method.

Ans-4: Leaderships are people who think and act creatively in non-routine state of affairss, puting to act upon the actions, beliefs and feelings of others to accomplish their end.

Essential sections for crafting an high leader:

Organisational Development ;

The Learning Organization ;

Development Planning ;

Skills Development ;

Execution Plan.

Organizational Development:

“ It is the systematic attack of behavioral scientific discipline cognition at assorted degrees such as group, inter-group, organisation, etc. to convey about a planned alteration. ”

-Newstrom, Davis, 1993.

4.1.1.a Table 5: Features of Organisational Development:



Humanist Valuess

Way in which human diverseness is respected and tolerated, enabling and encouraging persons to maximise their possible without favoritism, with freedom by believing the potency of employees.

Systems Orientation

All parts of the administration: administration, construction, engineering and people must work together.

Experiential Learning

Geting experience through preparation with practical exposure.

Problem Solving

Research jobs by roll uping informations and taking disciplinary actions against it.

Eventuality Orientation

Actions carefully chosen and adjusted to suit the demand.

Change Agent

Encourage, Organise, Assist alterations.

Degrees of Interventions

Complications may originate at any degree and so the scheme involves more intercessions.


At Semco, the regulations created with respect to brotherhood dealingss are humanistic and takes earnestly the place that the determinations of brotherhoods are to be respected. E.g. :

Do n’t fire anyone during the work stoppage, but do certain everyone sees that a walkout is an act of aggressiveness. ( Semler, 1993, p.103 )

Work civilization at SEMCO demonstrated typical marks of weariness. Therefore, Ricardo developed a humanistic attack heightening employee ‘s committedness, morale and motive by three cardinal values: Employee engagement, Net income sharing and Information-dissemination. Employees are originative and inventive, seeking duty with committedness to work through participative job work outing proficiency. Therefore, director at Semco should hold “ humanistic values ” for his subsidiaries.

The Learning Administration:

Harmonizing to Senge ( 1990 ) , people expand their thoughts of create aspiring consequences, fostering new thoughts with shared aims to accomplish a specified end.

4.1.2.a Table 6: Models of Organisational acquisition:




Study, Observe and Change Human Behaviour.

Active hearer and direct supporters.

Operant Conditioning

Performing occupation undertakings consecutive, with wagess for actions.


Using experience, having information and implementing, with dynamic building of cognition in head.

Social Learning Approach:

Incorporates societal and cognitive procedure for understanding emotion and action with sharing and building of cognition.

Beginning: Booklet provided by STC on “ Developing Management and Leadership accomplishments ”

Due to bankruptcy in 1990 in Brazil, bank seized 80 per centum of people nest eggs to reorganize the economic system. Most of the Brazilian Company about collapsed, where Semco suffered a 40 per centum bead in gross revenues therefore, shuting workss and puting off workers from 830 to 300. Ricardo took over the circumstance by using cognitive ideas to last from complete prostration. He started up with little units of orbiter workss with little groups of employees in participative manner, where employees choose their portions and repair their wages harmonizing to company ‘s net income, and from so, it became the company ‘s trademark. Therefore, “ Cognitive attack ” as Ricardo ‘s would be unflawed for choosing a at hand leader on behalf of Semco.

Development Planning: Consists of:

Object Setting ;

Performance Prosodies ;

Wagess ;

Short Term Training.

Object Setting:

“ Puting aims ” , what a concern wants to accomplish. This has two degrees: Corporate degree and Functional degree. Both the degrees should maintain an oculus on the SMART standards, conveying the specific aims to be accomplished within a important clip frame.

Performance Prosodies:

Way of pull stringsing things brings important consequences in the concern public presentation, measured by Key public presentation Indexs ( KPI ) . KPI emphases on Outputs, Quality and Culture of the Organisation, where end product of a company is good if it is measured decently with regard to quality. This can be done by bettering Technical or specializer accomplishments and movable accomplishments.

Employees at Semco expand their acquisition and public presentation through creativeness, innovativeness and job resolution accomplishments. Semco introduced a work unit, “ Nucleus of Technological Innovation ” , with three members for planing advanced merchandises, bettering old 1s, polishing market schemes, bring outing production inefficiencies, and visualizing new lines of concern. They pick their thoughts, put their ain ends and have freedom to change determinations. Semco ‘s doctrine is built on engagement and engagement of employees in supplying sentiments, doing us to experience that the future leader of Semco should hold good “ movable accomplishments ” , “ negociating accomplishments ” and better “ public presentation matrices ” .


Leader should besides hold the quality of “ actuating ” employees by supplying wagess through publicities, acknowledgment, duty, fillip for their better public presentation.

Balanced Score Card used for Organisational Development:

4.2.a Figure 7: Balanced Score Card


By using vision, Leaders should be able to command and maintain path of the internal concern activities being executed by subsidiaries and proctor effect on the market scheme originating due to varied grounds, Check the fiscal budgets and assets and larn the overall concern position by utilizing a balanced score-card for measuring of public presentation within the administration.