Professional Documents
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Personalities of Ajim Premji and Narayana Murthy
Personalities of Ajim Premji and Narayana Murthy
LEADERSHIP STYLES OF Mr. NARAYAN MURTHY AND Mr. AZIM PREMJI - IMPACT ON THEIR FIRMS
Submitted By
V. Vamsi Krishna (10148) M.V. Krishna Rao (10147) V.V. Ravi Lochan (10149) Vikram Shah (10150)
Table of Contents
Objectives................................................................................................................................................ 3 LEADERSHIP ............................................................................................................................................. 4 STYLES OF LEADERSHIP ............................................................................................................................ 5 Autocratic Leadership Style .................................................................................................................. 5 Bureaucratic Leadership Style .............................................................................................................. 5 Democratic Leadership Style ................................................................................................................ 6 Laissez-Faire Leadership Style .............................................................................................................. 6 Varying Leadership Style ...................................................................................................................... 7 INFOSYS ................................................................................................................................................... 7 Mr. NARAYAN MURTHY ........................................................................................................................... 8 LEADERSHIP STYLE OF NARAYAN MURTHY............................................................................................... 9 IMPACT OF NARAYAN MURTHY ON INFOSYS ......................................................................................... 13 THE STRATEGIST ................................................................................................................................ 13 PEOPLE MANAGEMENT ..................................................................................................................... 14 CORPORATE GOVERNANCE AND INFOSYS .......................................................................................... 15 WIPRO ................................................................................................................................................... 15 Mr. AZIM PREMJI ................................................................................................................................... 16 LEADERSHIP STYLE OF AZIM PREMJI ...................................................................................................... 16 IMPACT OF AZIM PREMJI ON WIPRO ..................................................................................................... 19 CONCLUSION ......................................................................................................................................... 21 REFERENCES .......................................................................................................................................... 21
Objectives y To understand the leadership style of Narayan Murthy and Azim premji. y To understand the contribution of leadership styles to successes of Infosys and Wipro. y To understand the managerial practices of Infosys and Wipro.
LEADERSHIP
Leadership is about ascertaining a method for people to contribute so that it can result in a significant achievement. It is a process that enables a person to influence others to achieve a goal and directs an organization to become rational and consistent. Leaders carry out these processes by leveraging their leadership traits such as values, ethics and knowledge. A nation cannot achieve leadership unless we have leadership at every level of the organization. Ultimately it comes down to the individual. In an era of competitive change it becomes imperative for leadership to understand the responsibility thrust upon them and adequately address it with respect to clients and employees Good leaders are not born. They are made. If a person has the willpower and the ability to learn, he can become a successful leader. A good leader engages in a continuous process of education, experience and training. He studies to improve his leadership skills and does not rest on past glory. Ones position as a manager or supervisor gives one the authority to handle responsibilities and achieve the desired results making him the boss. Leadership is different. It inspires the followers, makes them raise the bar and set themselves higher goals. When a person respects an individual as leader, he does not take into account the leaders attributes but rather valuates his actions and makes an assessment. This observation helps him learn if he is a trustworthy leader or a selfish individual. Serving selflessly and taking everybody along in his stride in developing an organization makes a person an acceptable leader. In the opinion of the employees, leadership is that which advances the organizational goals, while taking care of employees well being. People like to be led by those whom they respect. To earn respect, leaders have to be moral and principled. They can provide a powerful vision of the future with the sense of proper direction to the followers. According to experts, there are two very important components of effective leadership. One is belief and confidence in leadership, which is an indicator of employee satisfaction in the organization. The second is effective communication by the leadership in making the employees understand the business strategy, helping them understand and contribute to the achievement of the organizations business objectives and sharing information about the organization with the employees for their benefit and guidance. A leader should know what he is, what he knows and what he does. He should incessantly seek self-improvement. He should be familiar with the tasks and environment of employees. He should set an example to the rest of the employees. Inspiring, encouraging and enabling followers to share his vision and improve the organizations performance are the tests of successful leadership.
STYLES OF LEADERSHIP
In the past several decades, management experts have undergone a revolution in how they define leadership and what their attitudes are toward it. They have gone from a very classical autocratic approach to a very creative, participative approach. Somewhere along the line, it was determined that not everything old was bad and not everything new was good. Rather, different styles were needed for different situations and each leader needed to know when to exhibit a particular approach. Four of the most basic leadership styles are: --Autocratic --Bureaucratic --Laissez-faire --Democratic
This style can be effective when: --Employees are performing routine tasks over and over.
--Employees need to understand certain standards or procedures. --Employees are working with dangerous or delicate equipment that requires a definite set of procedures to operate. --Safety or security training is being conducted.
INFOSYS
In February 2001, Infosys technologies Ltd were voted as the best managed company in Asia in the information technology sector, in leading financial magazine Euro moneys fifth annual survey of best managed companies in Asia. Infosys was started in 1981, by seven professional entrepreneurs led by Narayan Murthy chairman and CEO of Infosys with an equity capital of Rs.10000.By 2000, Infosys market capitalization reached Rs.11.million and by 2001infosys was one of the biggest exporters of software from India, Narayan Murthy had built an organization that respected across the country, with very strong system, high ethical values and a nurturing working atmosphere. With his sound management skills, Narayan Murthy seemed to have taken Infosys to the pinnacle of success in two decades. From a turnover of Rs.1.16 million in 1981, Infosys had growth to a Rs.19 billion company in 2001. There were many firsts to Narayan Murthys credit. Infosys was the first company to push for off-shore software development as against body shopping that was coming during the 1980.he championed corporate governance in India. Infosys was the first Indian company to follow the US generally accepted accounting principles (GAAP) disclosure names before going for a Nasdaq listing in 1999. In late 2000, Infosys became totally software Service Company. It had set up a software development centre at a Toronto as part of its globalization strategy. Analysts tell that Narayan Murthy had not only managed his company well, he talked about the company at every opportunity that came his way. In the process he had built brand equity for his company. Infosys with its subsidiaries have103,905 employees as on June 2009. Infosys with a turnover of $753 million in the last financial year, has a market up of $12.13 billion, by 2009
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Business Leader of the year award for 1997 from business barons. Ratna Vibhushan award for 1997 by FIE foundations. In 2000, he received Padma Shri, a civilian award by Indian govt. in 2001 ,he received Deans Medal award by Wharton school. In 2008,he received Padma Vibhushan, a second highest civilian award by Indian govt. France government awarded him as officer of Legion of honor. Order of the British Empire award from the government of British. In 2001 he w named by the TIMES/CNN as one of the twenty five most influential global executives, a group selected for their lasting influence in creating new industries and reshaping markets. He was one of the two people named as the Asian business man of the year for 2003 by fortune magazine. In 2005, he was voted as the 7th most admired CEO /chairman in the world in global study conducted by Burson-Marsteller with economist intelligence unit. He was voted world entreprunr of the year -2003 by EMT & YOUNG. In 2005,Economist ranked him8th among the 15 most admired global leaders. In 2005, He was ranked 28 among the world most respected business leaders by financial times. Topped the Economic times corporate dossiers list of Indias most powerful CEO for two consecutive years 2004-2005. Times magazines Global tech influential list named Murthy as on the ten leaders who are shaping the future technology in Aug-2004. Times magazine again voted him as one of the Asian heroes who have brought about revolutionary changes in Asian in the last 60 years in Nov-2006. In 1999,business week named him as one of the nine entrepreneurs of the year and he was also featured in the business week The star of the Asia for three successive years.(1998,1999,2000). Indo-French forum award from indo-French forum, Murthy was the first Indian to receive that award in recognition the role in promoting indo French ties. In 1998, the Indian institute of Kanpur conferred on him the Distinguished Alumnus Award.
Two mottos Mr. Narayan Murthy always says to keep in mind two Sanskrit sentences: Sathyannasti Paro Dharma (there is no dharma greater than adherence to truth); and Satyameva jayate (truth alone triumphs). Let these be your motto for good corporate leadership.
Adversity A leader has to raise the confidence of followers. He should make them understand that tough times are part of life and that they will come out better at the end of it. He has to sustain their hope, and their energy levels to handle the difficult days. Never is strong leadership more needed than in a crisis. In the words of Seneca, the Greek philosopher, According to Mr.Murthy Fire is the test of gold; adversity, of strong men. Values Mr. Murthy always believes that values are more important than money in an organization. The leader has to create hope. He has to create a plausible story about a better future for the organization: everyone should be able to see the rainbow and catch a part of it. This requires creating trust in people. And to create trust, the leader has to subscribe to a value system: a protocol for behavior that enhances the confidence, commitment and enthusiasm of the people. Compliance to a value system creates the environment for people to have high aspirations, self esteem, and belief in fundamental values, confidence in the future and the enthusiasm necessary to take up apparently difficult tasks. Leaders have to walk the talk and demonstrate their commitment to a value system. As Mahatma Gandhi said, We must become the change we want to see in the world. Leaders have to prove their belief in sacrifice and hard work. Such behavior will enthuse the employees to make bigger sacrifices. It will help win the teams confidence, help leaders become credible, and help create trust in their ideas. Enhancing trust Trust and confidence can only exist where there is a premium on transparency. The leader has to create an environment where each person feels secure enough to be able to disclose his or her mistakes, and resolves to improve. Investors respect such organizations. Investors understand that the business will have good times and bad times. What they want you to do is to level with them at all times. They want you to disclose bad news on a proactive basis. At Infosys, his philosophy has always been, When in doubt, disclose. Keep Renewing Yourself This prepares you to anticipate change and be ready for it when it comes. Constantly ask yourself what new skills and competencies will be needed. Begin working on them before it becomes necessary and you will have a natural advantage. The greatest benefit of your education lies not only in what you have learnt, but also in working how to learn. Formal education is the beginning of the journey of learning. Yet I do meet youngsters who feel that they have already learnt all there is to learn. You have to constantly learn about people and how to interact
effectively with them. In the world of tomorrow, only those individuals and organizations will succeed who have mastered the art of rapid and on-going learning. Governance Good corporate governance is about maximizing shareholder value on a sustainable basis while ensuring fairness to all stakeholders: customers, vendor-partners, investors, employees, government and society. A successful organization tides over many downturns. The best index of success is its longevity. This is predicated on adhering to the finest levels of corporate governance. At Infosys, Mr. Murthy has consistently adopted transparency and disclosure standards even before law mandated it. In 1995, Infosys suffered losses in the secondary market. Under Indian GAAP (generally accepted accounting principles), we were not required to make this information public. Nevertheless, we published this information in our annual report. Fearless environment Transparency about the organizations operations should be accompanied by an open environment inside the organization. You have to create an environment where any employee can disagree with you without fear of reprisal. In such a case, everyone makes suggestions for the common good. In the end everyone will be better off. Managerial remuneration According to Mr. Murthy Managerial remuneration should be based on three principles:
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Fairness with respect to the compensation of other employees; Transparency with respect to shareholders and employees; Accountability with respect to linking compensation with corporate performance.
Thus, the compensation should have a fixed component and a variable component. The variable component should be linked to achieving long-term objectives of the firm. Senior management should swim or sink with the fortunes of the company. Senior management compensation should be reviewed by the compensation committee of the board, which should consist only of independent directors. Further, this should be approved by the shareholders. Once he was asked How can he ask for limits on senior management compensation when he has made millions himself? His reply was a straightforward answer: two systems are at play here. One is that of the promoter, the risk taker and the capital markets; and the other is that of professional management and compensation structures. One cannot mix these two distinct systems, otherwise entrepreneurship will be stifled, and no new companies will come up, no progress can take place. At the same time, there has to be fairness in compensation: there cannot be huge differences between the top most and the bottom rung of the ladder within an organization.
PSPD model A well run organization embraces and practices a sound Predictability-SustainabilityProfitability-Derisking (we call this the PSPD model at Infosys) model. Indeed, the long-term success of an organization depends on having a model that scales up profitably. Further, every organization must have a good derisking approach that recognizes, measures and mitigates risk along every dimension. Integrity He always believes that strong leadership in adverse times helps win the trust of the stakeholders, making it more likely that they will stand by you in your hour of need. As leaders who dream of growth and progress, integrity is your most wanted attribute. Mr. Murthy also says to lead your teams to fight for the truth and never compromise on your values. I am confident that our corporate leaders, through honest and desirable behavior, will reap long-term benefits for their stakeholders.
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Invest in well understood, proven products and not just R&D. When dealing with investors, always under-promise and over-deliver. Give stakeholders bad news proactively and early. Obsolete innovations before the competition does it for you. Have a healthy sense of paranoia and respect for the competition. Markets come and go but as long as the three attributes speed, imagination and Excellence are alive, you have a future. This is what made Infosys stand way ahead of the competeitors. Everybody needs incentives but not just money. People want challenges, opportunity, dignity, respect intense competition, and quality time. For long-term success, you need to surround yourself with people who are smarter than you. Put public good ahead of private good as it leads to private good in the long term. Cynacism has no place in the organization. Any idea is great, deserves cheers and shouldbe encouraged. Opt for higher revenues always instead of depending on controlling costs. Controlling costs is easier if people own stock and know the power of P the priceearnings ratio. Be transaction-based to avoid groupism. The organization vision.
successfully. By mid-1990s, Infosys was competing not only with Indian software majors like Tata Consultancy Services, and Wipro, but also with overseas players like Cambridge Technology Partners and Sapinet, which offered software solutions. Narayan Murthy believed that Indian software professionals had the ability to deal with complex projects. Analysts felt that unlike elsewhere, Indias sharpest minds were heading for a career in software, and the best of these aspired to be at Infosys. Infosys also competed with consultancies as Anderson Consulting and Ernst & Young, which positioned themselves as information management specialists. In 1994, the joint venture with KSA was dissolved. In 1995, Narayan Murthy created Yantra Corp in Acton, Mass. US. Around the same time, Infosys entered into a joint venture with Satyam Computers and DCM. During 1998-99, Narayan Murthy planned to position Infosys as a true global company global clients, global operations, global staff and a global brand image. In 1998, to support his global ambition, Narayan Murthy listed the shares of Infosys on Nasdaq through American Depository Receipts (ADR) issue worth US$75 million. With this, he took the Indian software industry global.
PEOPLE MANAGEMENT
Narayan Murthy believed that employees created wealth and unless Infosys had a mechanism to make them principal shareholders, it was unlikely to grow. By 1997, 500 employees were awarded stock under the ESOP. By 2001, Infosys had about 2000 rupee millionaires on its staff and more than 213-dollar millionaires. Analysts felt that Infosys had one of the best reward systems in the industry. Most employees in Infosys were paid high salaries by industry average for software companies. Narayan Murthy said, My employees seek challenging opportunities, respect, dignity and the opportunities to learn new things. I keep telling them that my assets are not this building, the business or foreign contact. My assets all 8000 of them walk out of the gate every evening and I wait for them to come back to me the next morning. Employees were encouraged to communicate with each other and with the higher management about interesting ideas and ways of solving problems through the electronic bulletin boards. To improve communication, the managing director sent mails every fortnight. There was also a concept called the Chairmans List and an annual excellence award. However, groupism was not encouraged. Narayan Murthy explained, Everything is judged on merit. Ego doesnt come into the picture. Our transactions are zero-based so there is no history sheet. Different people compete, then they have a discussion, one solution is accepted, one person wins, they smile and go out to
lunch. Because the group of people is very smart, there has to be a uniform distribution of wins. There are no overt or covert prejudices.The turnover rate at Infosys was around 11% as opposed to industry average for software companies of over 25% during the 1990s. Infosys retention capability was a function both of its rigorous selection procedures as well as proactive HRD practices.
WIPRO
Wipro Limited is the first PCMM Level 5 and SEI CMM Level 5 certified global IT Services Company. Wipro is one of the largest product engineering and support service providers worldwide. Wipro provides comprehensive research and development services, IT solutions and services, including systems integration, Information Systems outsourcing, package implementation, software application development and maintenance services to corporations globally. In the Indian market, Wipro is a leader in providing IT solutions and services for the corporate segment in India offering system integration, network integration, software solutions and IT services. Wipro also has profitable presence in niche market segments of consumer products and lighting. In the Asia Pacific and Middle East markets, Wipro provides IT solutions and services for global corporations. The Capability Maturity Model for Software describes the principles and practices underlying software process maturity and is intended to help software organizations improve the maturity of their software processes in terms of an evolutionary path from ad hoc, chaotic processes to mature, disciplined software processes. The CMM is organized into five maturity levels: 1) Initial. The software process is characterized as ad hoc, and occasionally even chaotic. Few processes are defined, and success depends on individual effort and heroics. 2) Repeatable. Basic project management processes are established to track cost, schedule, and functionality. The necessary process discipline is in place to repeat earlier successes on projects with similar applications. 3) Defined. The software process for both management and engineering activities is documented, standardized, and integrated into a standard software process for the organization. All projects use an approved, tailored version of the organization's standard software process for developing and maintaining software. 4) Managed. Detailed measures of the software process and product quality are collected. Both the software process and products are quantitatively understood and controlled. 5) Optimizing. Continuous process improvement is enabled by quantitative feedback from the process and from piloting innovative ideas and technologies
It is a necessary aspect of good leadership as well, and Premji doesnt believe this is possible if the leader doesnt do so with honesty and integrity. He always advises never to sacrifice integrity for short-term results. Striving for excellence It is also a Premji standard, and he realizes that he, and leaders like him, set the tone for their organizations. During his lecture at Goizueta, he touched on several things he believes Wipro can improve upon and talked about the steps being taken to make such improvements. According to him Excellence is not an act, its a habit. To aid in this accomplishment, Wipro leadership must be globalized. This requires a huge adjustment, notes Premji. With 80,000 employees15,000 of them located outside of India leadership needs to be culturally sensitive. Working in teams is also an integral part of how Wipro does business, and an employees ability to be a contributing member of a crosscultural team has become increasingly important to the companys success. Ability to recognize Talent: It is one of Premjis greatest talents. Hes just like a good coach. Good coaches can get more potential out of an athlete than the athlete realizes. Not surprisingly, Premji believes selfconfidence is a necessary part of good leadership. That confidence allows leaders to take risks and learn from them, including lessons gleaned from the occasional failure that accompanies risk taking.
According to Ajim Premji there are 10 steps to leadership which goes as below: Leaders must develop powerful personal credibility This means they should not only be consistent in what they say and do -but must deliver on their commitments. The leader has to generate a collective enthusiasm for the team, and the team must have faith in the leader before they commit to his or her dream. All research shows today that personal credibility-is the most important ingredient of leadership. Great leaders tell people clearly what they expect from them It may be in terms of performance or values. The more that is expected from people, the more they tend to deliver. Low expectations can lead to low ambition and hence low performance. Winning leaders are demanding leaders. They demand discipline, accountability and continuous increase in performance and productivity.
Great leaders are great teachers and coaches Expectations alone are not enough. Neither rare rewards nor punishments. People need guidance on the path they need to follow. This does not mean that the leader should spoon-feed his people. It only means that the leader must have the capacity to look ahead and give the right amount of guidance at the right time. At Wipro, he encourages top management to address high potential managers. He personally invests half-a-day of his time in every leadership development program in Wipro. Leaders do not always have to be in the limelight According to Premji, One has to realize that leadership is not privilege but a responsibility. Think of birds flying in a formation. At different times, different birds lead the formation. The leader must know where to lead and where to step back.
Winning leaders face reality They do nut dither. Leadership is about making tough yes-no decisions. Winning leaders are willing to decide with imperfect data, if needed, because leadership is about making judgments that others, are either unwilling or unable to make. Leaders keep renewing themselves. They constantly learn from their own experiences and those of others. They constantly learn from their own experiences and those of others. They create knowledge capturing and sharing processes and methods in the organization. Leaders surround themselves with people who err on the side of optimism If people are always in the company of cynics, they will soon find themselves becoming like them. A cynic knows all the reasons why something cannot be done. Instead, leaders spend time with people who have a "can-do" approach. They choose their advisors and mentors correctly. Pessimism is contagious, but then so is enthusiasm. In fact, reasonable optimism can be an amazing force multiplier. Leaders play to win
Playing to win is not the same as cutting corners. When you play to win, you stretch yourself to your maximum and use all your potential. It also helps you to concentrate your energy on what you can influence instead of getting bogged down with the worry of what you cannot change. Leaders do their best and leave the rest. Leaders respect themselves Without self-confidence, it is impossible to lead. This is needed even more in conditions of uncertainty and change. In Wipro, one of the leadership qualities on which we measure our leaders year after year is self-confidence. Finally, leaders have the ability to preserve when all odds are against them. This is especially important when the leader chooses to do something innovative or take a path not travelled before. The first reaction to this is usually criticism, not applause. But if the leader preserves, he may attract many others to follow.
Commitment to Quality A companys commitment to quality can be truly successful only when it starts at the top of the organization and employees and managers alike believe in the vision of quality for the company. The objectives of quality must be ingrained within the culture of the company, which is, in turn, passed on to customers and ties back to business objectives. Highly Skilled Employees A strong attention to training employees on a companys quality processes, whether directly or indirectly, can result in a highly cohesive workforce. A rigorous training program can be a catalyst for consistency throughout the company. Additionally, it may provide a standard approach to software engineering, from requirements gathering through release and acceptance testing. Furthermore, having a structure in place to manage skill competencies with market demand is essential to getting the right people placed on the right projects.
Lastly, having the processes in place to acquire new competencies and stay ahead of the learning curve will be a key asset to clients, who look to services firms to understand the latest technology trends. Responsiveness and Flexibility While it may be harder to measure the benefits of responsiveness and flexibility and their relationship with quality, the team believes that these attributes can largely contribute to the overall success of a services engagement. Having the tools necessary to support employees in their daily interactions with customers can go a long way toward empowering them to respond quickly to clients needs and provide workarounds to problems in a timely manner.
Strong Work Ethics Although work ethic is largely a subjective criterion, it can be supported through a companys overall attitude toward quality and attention to customer satisfaction.
Lower Turnover of Employees A strong attention on employees and their training can result in a lowered rate of employee turnover. This is of significant importance to customers, who invest a lot of time and energy in educating service providers about their businesses. Lower turnover of employees can also contribute to faster completion of projects because many employees will have the accumulated synergies from working together and with the client. Robust Project Management Processes Solid project management expertise and its supporting tools and applications are a critical success factor for the smooth completion of any project. This has become even more important as large, enterprise-wide projects may be composed of multiple subprojects and may involve geographically dispersed resources. Strong Communication Flow between Client and Services Firm Another benefit of an integrated quality system is the continuous monitoring of current projects. This may take the form of customer visibility tools that allow customers to keep track of a projects progress, particularly when projects are done remotely from the clients site. It may also help to keep the communication flow open and direct, which may assist the meeting of tight project deadlines.
Anticipate change even when things are going right
Most people wait for something to go wrong before they think of change. It is like going to the doctor for a checkup only when you are seriously sick or thinking of maintaining your vehicle only when it breaks down. The biggest enemy of future success is past success. When you succeed, you feel that you must be doing something right for it to happen. But when the parameters for success changes, doing the same things may or may not continue to lead to success. Guard against complacency all the time. Complacency makes you blind to the early signals from the environment that something is going wrong.
CONCLUSION
Leadership is the key dynamic force that motivates and co ordinates an organization to accomplish its objective. Effective leadership helps our nation through times of peril. It makes a business
leadership is equally dramatic in its effects. Without leadership, organizations move too slowly, stagnate, and lose their way. Much of the literature about organizations stresses decision-making and implies that if decision-making is timely, complete, and correct, then things will go well. The two great leaders Mr.Narayan Murthy and Azim Premji are an example of perfect leader leading their organizations in critical times, and rose to the position what they are today by hard work, dedication and unmatchable leadership qualities.
REFERENCES
http://www.infosys.com/ http://www.india-today.com/itoday/20000306/cover.html http://www.indianmba.com/Newsflash/News257/news257.html http://www.youtube.com/watch?v=c6psSmzIXOw&p=17FF514A6A77BB50&playnext=1&index=3 http://www.essortment.com/all/leadershipstyle_rrnq.htm http://www.nwlink.com/~donclark/leader/leadstl.html http://en.wikipedia.org/wiki/Leadership