N.R.

Narayana
Murthy
An analysis of his leadership
skills

Group-6 Section-B
Name Roll No.
Devesh Agrawal B19075
Jubin Sharma B19081
Sai Phanindra M B19086
Nivedita Singh B19090
Vineet Singh Rawat B19117
Introduction of Mr.Narayana Murthy
Initial years

Back in the 1960s, a brilliant boy got into IIT but could not join because of his poor financial
condition. But he did not give up and kept faith in his capabilities. A few years down the lane,
this man went on to revolutionize the Indian Information Technology Sector and became an
inspiration for many. This man is none other than Nagavara Ramaroa Narayana Murthy, also
known as NRN or Narayan Murthy. Mr. Murthy was born to a poor school teacher and a
housewife on 20 August 1946 in a small town of Shidlaghatta in Karnataka. He was quite sharp
since childhood and very good at maths and physics. After his schooling, he went on to pursue
Electrical Engineering from the National Institute of Engineering and passed out in 1967. He
further went to IIT Kanpur for his master’s degree and received it in 1969.

Early Career

After completing his education, he went to London and worked in SESA for 3 years. He worked
at the Paris airport and was involved in the software designing of air freight management. He
then came back to India and decided to start his own company. He started an IT consulting firm
in Pune, but unfortunately, that company could not do well. He then went to join Patni
Computer Systems, where he met his future wife, Sudha Murthy, before starting Infosys in
1981.

Journey of Infosys

He is admired as a legendary leader who co-founded one of the largest IT companies in India,
Infosys. He is considered the father of the Indian IT industry because of his massive
contribution to this sector. He founded Infosys in 1981 and served as its CEO until 2000. From
2002 till 2011, he assumed the responsibility of the chairman of Infosys post, which he became
the chairman Emeritus.

Overcoming initial difficulty

Infosys was started in 1981 in Pune by Narayan Murthy, Nandan Nilekani, N S Raghavan, S.
Gopalakrishnan, S.D. Shibulal, K.Dinesh and Ashok Arora. He had met all of them while
working at former employees- Patni Computer Systems. The initial financing of the company
was done with a small initial capital of INR 10,000, which was borrowed from his wife, Sudha
Murthy. Due to the lack of funding and infrastructure, the front room of Murthy's home in Pune
was the company office for the company that we know as Infosys today.

Funding was a huge constraint in the initial days, though his belief in his ability to deliver value
to the client and drive to make an impact ensured that pursued through the initial testing years.
They saved costs in every possible way by staying in inexpensive hotels, traveling in public
vehicles and living an ordinary lifestyle.

Delivering value to the customer

Delivering value for customers has been his mindset from the very start. Their first client was
based out of New York. International boundaries never stopped his commitment to establishing
the company as they were able to serve deliverables around their core competencies.
Overcoming crisis

In 1987, Infosys partnered with Kurt Salmon Associates (KSA)- a leading management
consultancy company through a joint venture. KSA was responsible for sourcing projects while
Infosys provided the software expertise and technical knowledge to complete the project. But
in 1989, the joint venture almost collapsed along with founders like Ashok Arora leaving the
ship. The whole foundation of the business was shaken up as other founders contemplated
leaving. But the leadership of Narayana Murthy shined through, as he famously said that he
would continue the company regardless of the support is received or not, highlighting his
courage and conviction.

Growing business

In 1992, Infosys became a public limited company. The economic reforms taking place in India
played a significant role in accelerating the company’s growth. Traveling abroad became easier
as well as import and export practices became easier. In 1999, Infosys became the first IT
company from India to be listed on NASDAQ. It’s share price of INR 8100 was among the
costliest of that time. Infosys was also among the 20 biggest companies on NASDAQ based
on market capitalization.

Awards and recognition

He was awarded Padma Shree in 2000 and then Padma Vibhushan in 2008. He is also the
recipient of Officer of the Legion of Honor given by France Government and Honorary
Commander of the Order of the British Empire presented by the Government of the United
Kingdom. He was listed among the top 12 “greatest entrepreneurs of our time” by Fortune
Magazine in 2012 alongside the likes of some of the great leaders like Steve Jobs(CEO of
Apple) and Microsoft founder Bill gates. He is a leader that everyone looks up to. He is
respected more for his humble and down to earth nature, not found in people who hold such a
high position. His beliefs and lessons on leadership are widely acknowledged worldwide.

Type of leadership and supporting instances

Before jumping on to decide what kind of a leader Mr. Narayan Murthy is, we should first
understand who a leader is. A leader is a person who inspires a group of people and is followed
by them. Various theories of leadership define different traits of a leader. While Great Man
theory says that a great leader has inherent leadership qualities, Behavioural theory completely
contradicts it and asserts that leaders can be made through experiences and teaching. On the
other hand, contingency theory believes that a good leader is the one who can act according to
the situation and respond to the need of the hour in a balanced way. But there are certain traits
like vision, passion, decision-making ability, which are common to all successful leaders.

There are predominantly three styles of leadership which are as follows:

 Servant Leader: This type of leadership is where the leader puts the team in front of
themselves. They are empathetic and are good listeners. They believe the job of a leader
is to serve their team and not control them. They help their team to develop and learn
and motivate them.
  Ethical Leader: An ethical leader is honest and carries out work with virtue and
integrity. Ethical beliefs guide them and respect others' rights. They are compassionate
and follow the right path no matter what the situation is. This type of leadership creates
a sense of trustworthiness in the team and motivate subordinates to follow the vision of
the organization

 Authentic Leader: This type of leadership is about being self-aware about your
strengths and weaknesses. Authentic leaders are guided more by their values than the
values of their respective organizations. They think from their heart most of the time
and are transparent and positive in their approach. These types of leaders try to do the
right thing and have strong moral values.

A leader can show all the above styles in different situations, but there is mostly one style
which is more evident than the others.

Narayana Murthy’s style of leadership

Authentic leadership
• His own principles and drive
• Never give up attitude
• Clear communication of his
expectations and challenging
decisions against his values

Servant leadership
• Empowering the Ethical leadership
team to take • Non-tolerance for
decisions deviation with
• Leading from the company's policies
front and setting • Respecting the law
examples of the land in letter
• Pioneering and spirit
innovations
Authentic leadership
Key characteristics Brief definition
Self-awareness Self-awareness means to have a
deep understanding of one’s
emotions, have a clear sense of
direction, motivated by his
strengths, and the courage to
accept and build on one’s
weaknesses. One must also have
the ability to express his/her
opinion in an unbiased manner and
with utmost honesty.
Balanced processing It involves analysing and the
of issues quality of accommodating
opposing and differing views, not
letting self-ego hinder the most
efficient decision making
Relational No hidden agenda and
transparency straightforwardness in dealings.
There is no scope for nepotism and
any bias towards relations in the
decision making
An internalized Doing the right thing
moral perspective
Whether attributable to Mr.
Narayana Murthy
He has demonstrated his clear
sense of direction to the co-
founders under challenging
times and has shown
perseverance to overcome the
turbulent times and build an
enterprise reflecting his dream,
in a way the world respects and
admires it.
His colleagues from leadership
team hail Mr.Murthy as the
one, they like to spar with in
terms of idea exchange, he
displayed exceptional attention
to details and questioned every
viewpoint on its meritocracy
and made the best choice.
Mr. Murthy has formulated an
agreement with other co-
founders, to avoid any relatives
working in Infosys and has
resorted to a preventive cure to
nepotism.
Mr. Murthy’s principle of
disclose when in doubt reflects
this principle, he always
emphasized doing the right
thing even if it meant losing
clients, facing regulatory
troubles. His unbending ethical
core is what makes Infosys
stand tall today.
Detailed analysis of his leadership

The leadership style of Mr. Narayan Murthy reflects his authentic inner-self in all the decisions
he made when he was at the head of the affairs for Infosys for over 30 years.
His emphasis on ethics and the highest standards of corporate governance has enabled Infosys
to earn the credibility it garners today and benchmark it with global standards.

The fundamental principles he believed in are :

 Reward the meritocracy

He always believed meritocracy has to be rewarded; It reflected when Infosys had
issued employee stock options, Mr. Murthy insisted that the exceptional performers
receive some shares through the Chairman’s quota.

 Bold decisions
A leader has to have followers to be a leader. That is why I stood by my controversial
decision on CEO's salaries being linked to the company’s earnings. If you want to
enhance the trust of employees in the leader, then the leadership of the company has to
conduct itself in a manner that enhances trust.

Murthy was also one of the first leaders to open up global offices leading Infosys to
become a multinational. Though obstacles like allegations from the Americans about
stealing their jobs came his way but he was able to shove them off. Personal power as
demonstrated by an authentic leader was one key quality visibile here. Dealing with
dualities and paradoxes made him a daunting leader who the employees could believe
in.

 No compromise
In an instance during the early days of the setup of the company, Infosys refused to pay
a bribe to the telephone department, for which they were delayed a telephone
connection for one year. “What drains your energy is not the fiscal problem, but
violating your value system,” said Murthy. “We always believed the softest pillow is a
clear conscience.”

 When in doubt disclose

Murthy's philosophy about being fair, open, and transparent has given the company a
lot of credibilities. He always insisted that "When in doubt, please disclose." This has
made Infosys a pioneer in adopting global reporting standards, surpassing Indian laws
and regulations, and has earned the prestigious golden peacock award for highest
standards in financial reporting for the company.

 Leave the family out

Murthy has told his wife “that only one of them could be with the company.” He, along
with other founders, have mutually agreed that their children would not work for
Infosys, which left no room for nepotism at Infosys.
 Cut yourself a slice not always a large one
When Infosys was set up, Murthy led by example by taking a pay cut while the salaries
of other co-founders were raised by 10 percent. According to him, a leader is one who
demonstrates sacrifice and commitment to his goals.

 Setting an age bar

Murthy has taken a decision not to allow the founders to continue in the company after
attaining the age of 65 and made it a benchmark. His justification was that in this way,
younger talent would be given an excellent opportunity to take up the top
responsibilities and shape the future of the company.

 Right man and for the right job

Mr.Murthy is known to have the unique ability to find the right person and allocating
the right job for his team according to their strengths. For example, Mr.Nandan Nilekani
was given the sales responsibilities, while Kris and Shibu were given the responsibility
for technology. It has worked wonders for the company, and it achieved significant
growth for decades.

 Compassionate capitalism
Mr. Murthy’s corporate journey started in an unusual way as he was a staunch
Communism believer early on. During a train journey in Bulgaria, he was caught and
captivated in a cell for 3 days without any food and drink. This incident pushed him
away from Communism and towards the path of Capitalism (though he still was a
people’s thinker like a Communist is!). He never left hope and like a true capitalist.
used his entrepreneurial skills to the best with a sharp and clear vision, and sowed the
seeds of the building an Indian multinational software company which at that point of
time not many people had thought about. As an authentic leader, he showed self-
awareness and self concordance with respect to opening up his own company. He was
quite clear and had a sense of vision of what he wanted to do. Though it might feel that
his action was more of a knee-jerk reaction, in retrospect, it was an ethical decision
making a tough call (of opening up a company in the 1970s) while being imaginative.

 Mutual trust and co-operation

His leadership style speaks for itself when in 1990, the company was not doing well
and the stock prices were declining, he offered his co-founders to buy out their share
and move out from the company, but all of them refused. This bonding can only be
generated when there is mutual trust and cooperation among people working together.
This culture had been sowed by Murthy from the start of the company and it reaped
him heavy rewards. They infact then worked on striking a deal with Reebok in early
1990s and were able to convert it successfully.

 Visionary and trendsetter

Leader beyond excellence, he knew what action will deliver the most impact and was
able to guide Infosys and the employees through a sea of obstacles. A trendsetter, he
led Infosys to become the first Indian company to be registered on NASDAQ, to be the
first Indian company to get in the top 100 of NASDAQ, to get to the highest level for
quality certification! This shows how determined he was and how his employees’
intentions were aligned with him to attain a higher purpose and position than the one
they were at that point of time.
  Leave but never let go
As Murthy had already set a rule that none of the founders would stay with the company
after going past 65 years of age, he had step aside from the company in 2014. This
paved the way for Sikka to take the helm of Infosys. Mr. Murthy had provided Sikka a
great and stable platform to work on. However, fast forward, 3 years and Infosys was
in turmoil as a whistle blower blew the lid on a burning pot.
Sikka was facing various allegations regarding false payments, serving founders
unequally (going against the values of the company and Murthy), unethical corporate
governance practices. This tarnished the reputation which Infosys and Murthy had built.
The leaders were facing a dilemma about what to do and how to prevent the stock shares
from rallying down.

It was the time for Murthy to step in. And as expected from good companies which
bring about change without compromising on the core values, the same happened.
He brought in a fresh sense of ethicality, he was blunt in accusing Sikka of wrong
corporate governance, differential salary allowance for top leaders etc. He was
instrumental in removing Sikka (infact sacking him!). Another reason why Sikka was
low on Murthy’s ethicality grade was that Sikka was focusing on acquisition based
growth model which Murthy was not in favor of, in turn stamping his authority as an
authentic leader. Murthy knew when to be compassionate and when to be not, he is an
active advocate of ‘Compassionate Capitalism’, this actually stems from his internal
belief in ‘Communism’ before starting with Infosys.

This also compares with the raging story of Salil Parekh, the current CEO of Infosys.
He has also been accused of unethical practices by a whistleblower group on the new
accounting policies and the salaries allocated to the senior leaders. Again, Narayana
Murthy is bound to step in to steer the tumbling ship.

Some instances of ethical & servant leadership style

 Transparency
Narayana Murthy has been an epitome of transparency, correct corporate governance
and following legal path throughout his life. As the saying in the corporate world goes
that ‘Client is the God’, Murthy was an embodiement in following that to the core. He
had built Infosys code by code and he has built the company from scratch. Because of
this experience, he knew where an error can occur and how that can impact the
relationship with the client, thus when an error occured in an application to be sent to
the German client, he went ahead and talked to the client before presenting the
deliverable. He was self aware and acted like an apt ethical leader should, by informing
the client beforehand, setting an example for the workers in the company.

 Lead by example
When America was booming and the software industry was growing leaps and bounds
there, Naryana Murthy had the courage of saying and more importantly standing true
to his words that ‘The action is shifting to India’. He motivated his co-founders and got
them to India to work on this behemoth we know today, by the name of Infosys. This
foresight he showed then was one of a servant leader, he knew he can motivate others
and had a true visionary idea regarding the software world.
Evaluation under ethical theories

S.no. Ethical Theories Definition Applicable to

Mr. Murthy

1 Deontology This theory focuses on how ethical is the action and Yes
gives no importance to the consequences.

2 Ethical Egoism It says that a person should maximize its benefits No

from the action and there is nothing wrong in
working for your self interest

3 Virtue Ethics This theory talks about the presence of particular Yes
virtues like honesty, compassion, integrity that
should drive any action

4 This is a meta-ethical theory which states that God No

Divine Command determines the morality of any action and a moral
Theory person has to follow his commands

5 It is a chinese philosophical theory which preaches No

Taoism living one’s life with harmony and going with the
flow of life

6 Confucianism This theory believes that there is good in every No

human being.

7 This believes that the ethicality of an action is No

Consequentialism determined by its consequences and nothing is
originally good or bad

Learnings from Narayan Murthy

“I believe that we have all at some time eaten the fruit from trees that we did not plant. In the
fullness of time, when it is our turn to give, it behooves us in turn to plant gardens that we may
never eat the fruit of, which will largely benefit generations to come. I believe this is our sacred
responsibility, one that I hope you will shoulder in time.” – Narayana Murthy
Two Sanskrit Shlokas motivate Narayana Murthy that he follows for good corporate
leadership:

 Satyat Nasti Paro Dharma which means there is no duty greater than following the path
of truth.
 Satyameva jayate which means truth alone triumphs.

Some of the life lessons to be learned from Narayan Murthy’s life are:

 Despite being born into a low-income family; it did not stop Narayana Murthy from
following his dreams. This is what can be learned from Narayana Murthy’s willingness
 to succeed: anyone can achieve success whether it is in studies or in future life if he/she
is wholly devoted to their goals and work with complete dedication towards realizing
those goals.

 Lack of resources is not an excuse for an underachieving career/life. Shakespeare once

remarked, “It is not in the stars to hold our destiny but in us.” In the same way, simply
because one is born in a financially underprivileged family doesn't mean that he/she
will not achieve anything in their lives and will stay poor and unsuccessful.

 If we want to make something, if we're going to have a great career/future, we will

realize that dream. We will face many difficulties and challenges while pursuing our
dreams. At the same time, we will also commit mistakes, make wrong decisions, but it
is up to us whether we learn from those mistakes and keep growing academically and
professionally.

 An individual, as long as he/she is alive, should continue to strive to learn. This is the
belief of Narayan Murthy, and he helps people, especially the youth, by investing in
education, skills training, infrastructure for research and overall development of
students/employees. Narayan Murthy considers youth to be an essential part of the
future of India and loves to work with them and welcomes the fresh ideas that the youth
of this country brings to the table.

 Simple living, high thinking is a principle that Narayan Murthy lives by. He leads a
very basic life even today and lives in an average middle-class home. He has always
been available to people close to him. He is not a spendthrift and respects every penny.
But this does not stop him from buying books as he is an avid reader of books specially
literature.
References
 30 lessons from life and career of NR Narayana Murthy. (n.d.). Retrieved November
19, 2019, from The Economic Times website:
https://economictimes.indiatimes.com/management-leaders/30-lessons-from-life-and-
career-of-nr-narayana-murthy/cut-yourself-a-slice-not-a-large-one-
always/slideshow/9656271.cms

 2.Narayana Murthy’s Childhood—TECK.IN. (n.d.). Retrieved November 19, 2019,

from https://teck.in/narayana-murthys-childhood.html

 NR Narayana Murthy | Narayana Murthy Biography And Facts | NR Career. (n.d.).

Retrieved November 19, 2019, from
https://www.karnataka.com/personalities/narayana-murthy/about-narayana-murthy/

 Narayana Murthy: NR Narayana Murthy’s shadow to loom large over search for
Infosys CEO. (n.d.). Retrieved November 19, 2019, from
https://economictimes.indiatimes.com/tech/ites/n-r-narayana-murthys-shadow-to-
loom-large-over-search-for-infosys-ceo/articleshow/60143524.cms

 Narayana Murthy’s battle is for the soul of Infosys. (n.d.). Retrieved November 19,
2019, from
https://www.livemint.com/Opinion/SLYFofbCw4I5XVlqOiFWvK/Narayana-
Murthys-battle-is-for-the-soul-of-Infosys.html

 Narayana Murthy, the fellow traveller who took right turn. (n.d.). Retrieved
November 19, 2019, from https://www.financialexpress.com/archive/narayana-
murthy-the-fellow-traveller-who-took-right-turn/802715/