Semco Pumping Success Case Study free essay sample

Conclusion 1. Classical school of management3 1. 1 The Classical Scientific School4 1. 2 Conclusion6 1. 3 The classical administrative school6 1. 4 Conclusion8 2. â€Å"Motivation Theories and SEMCO†8 2. 1 â€Å"McGregor’s theory X and Theory Y†8 2. 2 Victor Vroom’s expectancy theory11 2. 3 Conclusion12 3. Discuss the Concept of Empowerment and Its Relevance to SEMCO13 3. 1 The concept of empowerment13 3. 2 Empowerments Relevance to SEMCO15 3. 3 Conclusion17 4. Centaur Technologies INC Its Success/Failure17 4. 1 introduction17 4. 2 Reason which lead to the success of Centaur Company19 4. Reason that might lead to the failure of the centaur company20 5. Reference22 1. Classical school of management The classical school of management has developed the first formal management theory. This theory was been build up during the Industrial Revolution, the employers and managers had no idea how to provide the training to the workers or the way to decreased labour d issatisfaction. (Cliffs Notes. com, 2000-2011) The company works by itself, it insists to separate from the labour. The classical management theory was invented during this era of revolution to solve new problems which were related to the factory. We will write a custom essay sample on Semco Pumping Success Case Study or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page According to the result, the classical school of management theory was a good solution which was developed from their hard-work of thoughts to look for the â€Å"one best way† to perform and manage tasks. † (Patrick Bruce, Pg. 11 2000) SEMCO achieved its success without the leadership of a charismatic CEO. From my understanding, SEMCO’s management is differing to the classical school of management. There are two different types of the classical school of management which are The Classical Scientific School and The Administrative School. Each theory describes its own principle of management, in short the classical scientific management theory help focused on the productivity of individuals where in administrative management theory concentrates on the overall organization. Here by, we critically evaluate the SEMCO company depend on classical school of management. 1. 1 The Classical Scientific School The classical scientific school theory described the best way to increase productivity and efficiency by discussing the procedure of work process and the training skill for the employees. Judith, Pg. 148; 2008) The classical scientific school theory was developed through the thoughts contributed by Frederick Taylor, Henry Gantt, and frank and Lilian Gilbreth. (Cliffs Notes. com, 2000-2011) SEMCO used freedom as their philosophy which means there is no CEO, no traditional organizational hierarchy for decision making, and to encourage their employees to be more productive and efficient. In classical scientific school theory â€Å"Taylor believed that organization should study tasks and develop precise procedures. † (Cliffs Notes. om, 2000-2011) In SEMCO, the employees decide through themselves about their work task, procedures to complete task and their salaries. The basic idea of the scientific management theory was being developed which was followed by the following principles. Developing standard method: the scientific management theory explains to develop the new standard methods for doing each task with the organization. The new standard methods help the organization in ensuring the task is carried out in appropriate way and there is a highest level of productivity through an every worker performing a task. In SEMCO there is no such standard method or procedure design to perform any task, worker in the company complete the task the way they want. Selecting, training and developing workers: this theory also explains that the organization needs to select, train and develop the employees instead of allowing them to choose their own task and train themselves for that particular task. SEMCO company works on a philosophy which is freedom, where in the employees are allowed to choose their own task to complete and train themselves which motivates them on a regular basis. Developing a spirit of corporation: this is another principle of the scientific management theory which explains that spirit of cooperation should be developed between workers and management that will ensure the work is carried out in accordance with designed procedure. In SEMCO the employees have the responsibility to choose and complete the task in the way they want, so as per their freedom policy they feel there was more cooperation between both. 1. 2 Conclusion If the scientific management theory was being implemented by the SEMCO Company they might had a possibilities of highest productivity from every individual as compared to that. 1. 3 The classical administrative school The classical administrative management theory describes and emphasize on developing the managerial principles rather than work methods. (Tony; Pg. 49; 1986) The administrative approach in this theory concentrates on the overall organization. The classical administrative theory was being developed through the thoughts contributed by Max Weber, Henri Fayol, Mary Parker Follett and Chester I Barnard. Reference for business, 2011) The importance of understanding about how an organization operates and the flow of information was been studied by the above people which helps them to develop the theory of classical administrative. This theory explains that an organization should have the formal hierarchy and general guidelines that will organize the department and manage the s taff. At SEMCO it was different the organization worked on a freedom philosophy which means there wasn’t any formal hierarchy nor a proper guideline to carry out the task. The basic idea of the administrative school was been developed of the following principles. Division of work: division of work and procedure of specializing help produces better and more work with the same effort. In the SEMCO it’s left up to employee to choose the work or the task they want to complete and train them. Authority and responsibility: every organization should be formally structure in order to be managed and organized. Authority is a right and power given to an exact obedience to give orders that will ensure the completion of task in a described manner. The authority to a person should be based on individual personality, intelligence and experience. In SEMCO there is no such authority every employee is responsible for their own task they choose to complete. Unity of command: orders should be imposed by only one superior to an employee who will ensure the staff is organized and also reduces the miss-confusion. The SEMCO doesn’t have a formal hierarchy and it work on freedom philosophy so unity of command is meaningless. Remuneration of personnel: this refers to the salaries of employee which should be fair and satisfy both employer and employee. The salary to a labour should always be decided by the employer which should be fair in the environment. In SEMCO this is totally opposite; the employees decide the rate of pay between themselves and employer agree. 1. 4 Conclusion If the classical administrative school theory was been implemented by the SEMCO Company they might be possibilities of having the control over expenses and highly organized staff in the organization. 2. â€Å"Motivation Theories and SEMCO† 2. 1 â€Å"McGregor’s theory X and Theory Y† Motivation is an important part of human resources. It is used in the organization to arouses staff‘s desire to direct their behaviors and pay effort into organization’s activities, thus achieve organizational goals. A successful motivation will arouse staff’s passion to promote their working motivation more strongly which can be very helpful to produce working efficiency and benefit the organizations (Bloisi, 2003). In a number of motivation theories, â€Å"McGregor’s theory X and theory Y† (McGregor, 1966) and â€Å"Expectancy theory† (Vroom, 1996) these two theories suit to evaluate SEMCOS Company Douglas McGregor suggested that this theory is two different ways to managing people. The X theory was the more popular one been used by many organizations, but usually get the poor results. Enlightened organizations choose the theory Y, which help them get success. Because of X theory and Y theory are totally two different theories. Managers  who  choose  Theory  X  believe  that (McGregor, 1966): 2. 1. 1  Most people are lazy, they avoid to work as much as possible. Work is a burden for them, no enjoyment at all. 2. 1. 2  Most people have no ambition, do not like to take any responsibility. They lack self-confidence, personal safety to see very important. 2. 1. 3  Most people are satisfied by physiological needs and security needs, so they only choose the easy way to get the most profitable thing to do, and they can’t see the long-term profit. â€Å"Theory  Y  Assumes  that† (McGregor, 1966): . 1. 4  Ã¢â‚¬Å"People  seek  responsibility  and  have  the  capacity  to  direct  and  control  organizational  tasks  if  they  are  committed  to  the  objectives. † 2. 1. 5  Ã¢â‚¬Å"People  by  nature  are  not  passive  or  indifferent  to  organiza tional  needs,  for  work  is  as  natural  as  rest  or  play. † 2. 1. 6  Ã¢â‚¬Å"Employees  at  all  levels  have  the  ability  to  be  creative  and  use ingenuity  in  solving  organizational  problems. † SEMCO just use the Y theory to inspirit their employees. Everyone in SEMCO Company has opportunity to be successful, if you want to get more pay, promotion or personal goals, these all decide by themselves. There no CEO, no management, so people don’t have restriction. People know what they needs and they can use any resources in the organization to make them be competed. The employees’ objectives are the SEMCO’s objectives. Semler said they don’t have any marketing plans in ten years, all the strategies plans from their employees who has opportunity or relation any markets. SEMCO provide resources to help them to get fruition. SEMCO Company knows how to motivate their employees to exert their entrepreneurship and engagement maximally. It illustrated SEMCO has the same objective with their employees, thus employees willing to take the responsibility and positive get tasks to be done. SEMCO Company has transparent pay,everyone knows how much pay the other people make, because how much pay they can get decide by how much value they can make for their company. SEMCO encourage their employees to focus on improving a project, a new project, a cost reduction plan, a new business strategy. Every member in this organization can get 23% profit from their business unit’s profits per quarter. Actually how many percent profit pay also they can get depends by how big achievement they received. In these ways, employees are motivated to improve themselves to be more capable, thus attain the purpose. 2. 2 Victor Vroom’s expectancy theory Victor Vroom’s expectancy theory is one of motivation theories. It based on three factors, explain three relationships between people’s needs and objectives. Organizations use the expectancy theory to prompt their employees to understand that: work can provide their needs, their work is connected with performance and they can improve their performance by work (Vroom, 1996). Three relationships of Victor Vroom’s expectancy theory as follow (Arnold, 1981): 2. 2. 1 EffortsPerformance: People always expect that they can achieve a desired objective by their efforts. If they think there is a high probability to achieve the objectives, they will be confidence and inspired to improve their working efficiency. 2. 2. 2 PerformanceReward: People expect that they can get reward as a return from performance. Of course the reward is multifarious,it includes material rewards and spiritual rewards. If they can get what they expected, it will bring more passion for working. . 2. 3 Reward personal objective needs: People always expect to obtain a reward which can satisfy their needs. However the differences between people age, gender, qualifications, social status and economic conditions, the requirements level of their needs are also different. So organizations can’t use one motivation to satisfy them in different levels of needs. SEMCO Company is a succes sful case to prove Victor Vroom’s expectancy theory. Employees can choose the project which they are interested or have an advantage of. If they achieve a success in this project, would get a promotion or more share pay from the profit of the project. 2. 3 Conclusion The X theory believes all the people are passive. But giving people too many regulations, it would make them more negative. It has already been proved by many examples. In SEMCO Company case, Y theory has been used very mature and successful. People are motivated by higher–order growth needs, thus affect their behaviors. Also the expectancy theory is used to evaluate employees’ expectancy in working, thus motivate their employees to achieve organizations’ goal (Vrllere, 1990). . Discuss the Concept of Empowerment and Its Relevance to SEMCO 3. 1 The concept of empowerment Although the normal movement toward the less mechanistic structure and the role of top managements as facilitators, it appears to be some reluctance between top managements to reduce hierarchical control. A UK economy researcher said that there existed some new ideas about management. The concept of empowerment can attract employees, some top managers still like maintaining control over the destiny, role and responsibility of other person. Beneath the trappings of the facilitate-and-empower philosophy the command-and-control system often lives on(Ezzamel, K. , 1993). But, when people are discussing about leadership and management, Gretton said that:Todays leaders understand that you have to give up control to get results. Thats what all the talk of empowerment is about(Gretton, 1995). In general ideas empowerment is explained to allow employees enough freedom and control themselves in their working time and in charge of their decisions. However, there are a lot of different meanings in the literature for empowerment. Empowerment is not independent concept. It should be linked with some concepts like coping skills, personal efficacy, support system, community organization, mutual support, self esteem, and self sufficiency(Keffer,1984). The concept empowerment came from Latin potere that means to be able. Linguistically, the verb word empower was defined to give power or permit, freedom, and so on by an American language organization. This organization defined suffix ment meaning of result. Sociologically, the concept of empowerment is used to improve influences of social organizations and groups. The empowerment is defined as a world outlook which has a method to solve social problems and social policies and support good service. Solomon defined empowerment as a method of social activity. In the social psychology, empowerment means the development of people. And it also means top management, values and personal effort. Empowerment is inherent for people. Browne said managers can use the concept of empowerment to improve employees abilities for work. In addition, Simmons and Persons referred to people can control their environment by empowerment. Empowerment has an influence on the person. The concept empowerment is not univocal nor absolute because of there exist some connections with the individual. It is quite difficult to define a specific meaning for empowerment. The reason is that the concept of empowerment always change. Empowerment broke the rules that rely on situation. There is a certain connection between people and social environment. Of course, there should be a system for understanding empowerment. There are a lot of views about the concept. It cares about solutions not problems. It emphasized peoples human right and ability. 3. Empowerments Relevance to SEMCO An example of full empowerment is when self-directed teams are given the power to hire, discipline, and dismiss team members and to set compensation rates(Richard L. , 2007). In the modern organizations, just a few organizations have moved to full empowerment. For example, SEMCO, a $160 million and about 3000 employees South American manufacturing company. SEMCO S. A. was a traditional managed indus trial firm when it was founded by Semler in 1912. Today Ricardo Semler, president CEO of SEMCO Company, has his unique leadership style. He redefined the concept of empowerment. At 20 years old, he graduated from Harvard Business School as the youngest. He was known for championing his employee’s lovely management style all over the world. At SEMCO, Ricardo Semler allows employees to choose job, what, where and when they want to do. And even how much they want to get paid for the job. Workers can decide the number of products and when is the best time to work. Workers can design products and their working environment. Except these, employees also can make the marketing plan of the company. Managers run business with freedom, and decide companys marketing strategy without interposition of CEO and high management. All departments can build its own salary standard. The finance department of SEMCO discussed financial information total openly. There are some special things. For example, there is reception desk but nobody sitting there. There is no dining room and managers no secretaries. There is also no public place for staff and no parking place. In the SEMCO Company employees and managers make a decision together, not just the top management. The first undertaking of SEMCO is to give up traditional rules. Ricardo Semler dismissed nine layers and decreased the corporate employee by more than 75%. In the SEMCO no policy is the basic policy. For example, employees can go to travel anytime because there is not travel restriction at SEMCO. Actually, there is no rules and managers in the SEMCO. Employees manage themselves and self-governing. SEMCO has flex-time scheduling for employees. Employees work in the different time and in the different way. People can choose any time of day. Normally, people come to work at 9 oclock and work 8 or 9 hours every day. Actually, it is impossible that people work all the time during 8 or 9 hours. Sometimes your work just need few hours and the rest time you break or do some private things. Because of concept of empowerment SEMCO allowed employees to choose their working time. It can improve work efficiency and save time. Semler hopes that everyone can feel well for their working place. There is no unified dress, you can dress what you want. Employees can choose the uniforms design and style if they want. 3. 3 Conclusion SEMCO uses empowerment concept to manage its employees since its inception and achieve great success. Employees can do all things personally. SEMCO shares all information with employees and gives enough freedom to everyone, but it does not mean to break rules. That means supply a chance for employees to work better and better. 4. Centaur Technologies INC Its Success/Failure 4. 1 introduction In 1995, Mr. ‘Glenn Henry’ launched a company named centaur technologies INC in the city of central Texas. The company design and produces the high performance, low cost x-86 compatible processors. The company has no organizational hierarchy in operation, there are no managers, the employee’s reports to the founder and president of the company Mr. ‘Glenn Henry’. The company’s president intention was to reduce the gap between intellectual and physical work within an organization, so that employees feel much closer to the organization and feel satisfied in their job. (Centtech; 2011) The centaur organization always had a success; the reason mentioned by the company’s president was the ability of their talented engineers and the free way of working environment in the company. The company decision making is always being simple as it was been done through considering all the employees in democratic voting. The company is always being an advantage and positive for their employees. It empowers its employees by reducing bureaucracy and benefiting them with the home computers, high speed internet, flexibility to set one’s own working hours, fitness facility, breakfast and lunch on the site. The company employees are ensured about their employment as the company is financially stable and well established. (Centtech; 2011) The centaur company founder and president Mr. Glenn Henry’s plan was to reduce the gap between the employee and owner, this will help the owner and employee to know each other needs and expectation very closely which has lead in the company success. These also help them to reduce the problem and misunderstanding. This gave all employees an equal say in running the organization, and it was also supported by the fact that all the employees were the co-owner of the organization. Every employee was offered a stake after the completion of six month on the job, while the majority of the stakes was retained by the owner. This gave employees a feeling of owning an organization and making the appropriate decision favoring company which also lead to the success. (Centtech; 2011) 4. Reason which lead to the success of Centaur Company There are various advantages of this hierarchy model which has proven a success to the centaur company. Everybody is equally involved as they want to be, nobody is underestimated by thinking that the decision was being made over their head. As every employee is involve in decision making, they take the task responsibly which result in great job and the success to the company. For example in the centaur company decision was been made to develop and produce the new chip-set compact processor, every employee act ery responsibly in their task because they were being the part of decision making and the respective job is taken by the respective employee in their own interest and not burden on them. This results in better and faster outcome which lead to success of the business. Motivation of the employee is also one of the advantages which made the centaur company successful. At Centaur Company the employees are insanely motivated as they are considered co-owner, they just don’t work there they make the things happen in every task and successful running of the operation. Implementing decision is also an advantage of this model as the employees are involved in making decision it becomes much easier for the owner in implementing them. (LA Business Journal 2000) 4. 3 Reason that might lead to the failure of the centaur company As there are always two end, there are the disadvantages of this hierarchy model as well that needs to be considered by the company or it might lead to failure of the business. The founder and president of the centaur company Mr. Glenn Henry had always considered the disadvantages of this model before starting this company. He always put the positive things forward and overcame the disadvantage of this model which might have lead in failure of the business. Time factor is one of the advantages of this model, it might take some time to arrive on a decision as there is lot of people involve. To overcome this time factor president of the centaur company has given the power of leadership to every employee to make a decision which require instant action in this case every employee think of benefiting the company as they are considered to be the co-owners while in major decision making there is always a dead line which is done in consideration of every employee vote. The control of funds and resources is also a disadvantages of this model, as there are no proper managers keeping the control of the funds this might result in lost track on funds and failure of the business, to overcome this president of centaur company have made the accounts transparent where every employee can update and review the funds and budget which will help to be control by every employee. (Peter F. Drucker; 2007) In august 2002 the centaur company was being purchased by the VIA technologies. 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