Satyam Computer Services had been the fourth largest provider of information technology

services in India, based on the amount of export revenues generated. In 2008, Satyam
claimed topline growth of 40% to $794 million at 36% gross margin.
In 2009, as the infamous Satyam scandal broke in the media, Chairman Ramalinga Raju
confessed that he had manipulated the accounts by US $1.47 Billion. He resigned on 7
January 2009. Indian media reported that financial reporters had dispatched investigators to
Hyderabad to launch a formal investigation into the case. PricewaterhouseCoopers was the
statutory auditor of Satyam Computer Services when the report of scandal in the account
books of Satyam Computer Services broke. The Indian arm of PWC was fined $6 million by
the SEC (US Securities and Exchange Commission) for not following the code of conduct
and auditing standards in the performance of its duties related to the auditing of the accounts
of Satyam Computer Services. This scandal shocked the global corporate community.
Leading members of Indian Industry also expressed their shock and disappointment that such
an audacious act of deception could take place.
Satyam's shares plummeted on the news by 75% dragging down Indias stock market by 7%.
Shares fell to 11.50 rupees on 10 January 2009, their lowest level since March 1998,
compared to a high of 544 rupees in 2008. Indians main stock exchange had announced they
were removing Satyam Computers from their indices as of January 12 because of the
stunning revelations.
On 13 April 2009, via a formal public auction process, a 46% stake in Satyam was purchased
by Mahindra & Mahindra owned company Tech Mahindra, as part of its diversification
strategy. Effective July 2009, Satyam rebranded its services under the new Mahindra
management as "Mahindra Satyam". After a delay due to tax issues Tech
Mahindra announced its merger with Mahindra Satyam on 21 March 2012, after the board of
two companies gave the approval.

The companies are merged legally on 25 June 2013.
Anuj Sachdeva who was working as a software engineer in Satyam, started feeling very
insecure due to the blatant fear of losing his job. The company was about to reach insolvency
and employees were being laid off.
Rahul Paranjpe is the Senior Project Manager of the Finance and Insurance Unit at Mahindra
Satyam Ltd. Anuj Sachdeva now directly reports to Rahul after the takeover of Satyam. After
observing Anuj for several days, Mr. Paranjpe comprehended that there was a vivid lack of
motivation and noticed some amount of vulnerability in Anuj. He approached Anuj and
discussed what was keeping him from delivering his best work. After much deliberation and
resistance, Anuj insinuated the sudden change in management; unfamiliar policies and an
alien work culture had put him in a very ambivalent state and lost the zest for work because
of his insecurities. These insecurities stemmed from the very beginning even when Satyam
became Mahindra Satyam bearing testimony to the fact that Anuj was extremely sceptical
about the future of Mahindra Satyam because even after the acquisition, share prices had not
recovered as was expected to. The Global Recession which had set in 2009 had already set
the ball rolling in instilling fear in the minds of the employees worldwide and was a massive
de-motivation catalyst.
Discussion Questions :
1. Bearing in mind the gravity of Anujs situation, what are the responsibilities of the
manager in this regard so that Anujs insecurities and apprehension about his job can
be addressed?

Facilitators guide :

This case is a classic example of how employee motivation follows a downward spiral as
companies face recession, are on the brink of bankruptcy or are acquired by a new company.
Here we have discussed doomed company Satyam Computer Services ltd. which had
followed a similar pattern following fraudulent activities by its founder. In this scenario, the
tough task which lies ahead is to regain investor confidence, win back the trust of existing
clients and scout for new clients. The faith of employees also has to be restored to ensure
sustained productivity and it is at the discretion of the respective managers how to tread this
path and foster a positive atmosphere in the workplace.

Bearing in mind the gravity of Anujs situation, what are the responsibilities of the manager
in this regard so that Anujs insecurities and apprehension about his job can be addressed?
1. The manager inorder to alleviate the messy situation and salvage Anujs confidence,
should convince him of the bright future that lies ahead and talk of new projects that
are in the pipeline. He could also lay out the prospective clients which are ready to
associate with the company.
2. The merger and acquisition policies should also be explained in detail so that Anuj is
not oblivious to the new policies which has currently placed him in a classic catch-22.
3. Thirdly, it is also imperative to clarify that Mahindra is already a huge player in the
market and with this acquisition, the company will go to greater heights and future is
well secured for employees, thus relieving Anuj of any inner turmoil or anxiety about
his own personal growth in the company.
4. Finally, talking about the global recession, the manager should logically point out that
this economic catastrophe has hit each and every company on the map and thus
Mahindra-Satyam is no audience to this epidemic. As the global economic condition
improves, Mahindra-Satyam would also see a marked metamorphosis only for the
better.