Case Study

Narayana Murthy and Infosys

Organizational Behavior and Human Resource

Prepared By: Aakash Vyas(R31013) Abhi Dinesh Sharma(R31009) Shailee Munje(R31001) Vilas Andil(R31041) 11/30/2011

About Infosys:
Infosys Limited, formerly Infosys Technologies Limited is a global technology services company headquartered in Bangalore, India. It is the second largest IT exporter in India with 133,560 employees as of March 2011. It has offices in 33 countries and development centers in India, China, Australia, UK, Canada, Brazil and Japan. Infosys provides business consulting, technology, engineering and outsourcing services to help clients in over 30 countries. The company also provides software products to the banking industry. Through Infosys Business Process Outsourcing (BPO), it provides business process management services, such as offsite customer relationship management, finance and accounting, and administration and sales order processing. Infosys was founded on 2 July 1981 by seven entrepreneurs: N. R. Narayana Murthy, Nandan Nilekani, Kris Gopalakrishnan, S. D. Shibulal, K. Dinesh,Ashok Arora. According to Forbes magazine, since its 1993 public listing on the Bombay Stock Exchange until the year 2000, Infosys' sales and earnings compounded at more than 70% a year. In the year 2000, US President Bill Clinton complimented India on its achievements in high technology, citing the example of Infosys along with Wipro and Satyam Computers. In 2001, it was rated the by Business Today. Infosys was rated best employer to work for in 2000, 2001, and 2002 by Hewitt Associates. In 2007, Infosys received over 1.3 million applications and hired fewer than 3% of applicants. Infosys was also ranked as the 15th most trusted brand in India by The Brand Trust Report in 2011. The first development center outside Bangalore was setup in the coastal city of Mangalore in the year 1995.

Case Questions:
Q.1. Infosys is one of the worlds top providers of software consulting, from applications development to maintenance. How did Narayana Murthy build one of the biggest IT companies in India? Answer: Following are some of the aspects from the case that show how Narayana Murthy made Infosys one of the biggest IT companies in India 1. Narayana Murthy built an organization that was respected across the country with very strong systems, high ethical values and a nurturing working atmosphere. 2. Infosys was the first company to push off shore software development as against body shopping. 3. He championed corporate governance in India; Infosys was the first Indian company to follow the US Generally Accepted Accounting Principles (GAAP). 4. He had built brand equity for his company by talking about the company at every opportunity that came his way. 5. He believed that the only way to pull India out of poverty was to create more jobs, by setting up new companies. 6. He was well known of the fact that due to low hourly rates and technically well trained programmers, the European and American organisations have their major software
Performance leads to Recognition, Recognition leads to Respect and Respect leads to Power.- Narayana Murthy

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7. 8. 9. 10. 11.

development projects done in less developed countries like India. Hence he focussed on the worlds most challenging market the US as he believed that the companies should export products where they have a competitive advantage. He had a vision from the starting and he pursued his goals in a different way while others followed the traditional ways. Investing in well established products rather than researching on new products. He believed that India software professionals had the ability to deal with complex projects. Always innovate, before the competitor does. Always under-promise and over-deliver to investors.

Narayana Murthys 3-step global strategy:

Global delivery model: Cost effective production(India) and profitable

selling in global markets(US)

Moving-up the value chain: Getting involved in software development

project at earlier stage of life cycle.

PSPD:
o o o o Predictability of revenues Sustainability of predictions Profitability of revenues De-risking: Limiting its exposure on business of various kinds.

Narayan Murthy said Always respect your competition.

INFOSYS way to Success:

1987- Joint Venture with Kurt Salmon Associates (KSA) an already leading global management consultancy firm. 1988-99 bagged the contract and developed DMAP for Reebok (France) and used this package to create a similar standard package for any company. 1990s competed with Anderson consulting and Ernst and Young, Cambridge technology partners and Sapinet. 1994, KSA JV dissolved. 1995, entered into JV with Satyam Computers and DCM. 1998, Listed Infosys in Nasdaq through ADR worth US$75 million, and positioned it as a true global company.

As a result Infosys turnover increased from 1.16 Rs. Million in 1981 to 145.20 Rs. Million in 1992. Net Sales increased from 2.58 Rs. Billion in 1998 to 19 Rs. Billion in 2001.
Performance leads to Recognition, Recognition leads to Respect and Respect leads to Power.- Narayana Murthy

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Q.2 Narayana Murthy has always believd that human resources are the greatest asset of a company. Briefly describe the HR policies of Infosys. Answer: Infosys always had a very low employee turnover rate of around 11% as compared to its competitors which were 25% during the 1990s, this was due to Infosys retention capability due to its rigorous recruitment procedure and proactive HR practices They focused on very intricate personal and professional needs of their employees.(eg. Ranging from Credit cards to Gym at work) Creating additional wealth for employees by adopting Employee Stock Option Plan(ESOP) Paying higher salaries as compared to other companies in the industry. Believing that employees were their biggest Asset not buildings, business or foreign contact. Encouraging the employees to communicate better with each other and higher authorities, also creating ideas for problem solving. Providing incentives that was not monetary but gave employees personal satisfaction. Perceiving a big picture: for long term success you need smarter people around you. Mail by MD every fortnight, awarding excellent performance judged on merit. Believing in commitment to values, ethical practices and inculcated these values in their employees. Not just extracting work but also preparing them to face complexities of the rapidly changing business environment by inducing leadership qualities by setting up a leadership institute in Mysore in 2001. People should be transaction based to avoid groupism. There should be 1 goal 1 vision.

Performance leads to Recognition, Recognition leads to Respect and Respect leads to Power.- Narayana Murthy

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