STRATEGIC LEADERSHIP, THINKING AND

DECISION MAKING
(Term VI)

Case - Infosys Limited: Governance Imbroglio

Submitted to: Prof. Diptiprakash Pradhan

Submitted by: Group 3

2022MBA007 Aman Sahu

2022MBA009 Arin Agrawal
2022MBA099 Viraj Purohit
2022MBA134 Asad Azam
2022MBA179 Sadde Sri Lakshmi Prasanna

Master of Business Administration

Indian Institute of Management Sambalpur
Odisha – 768025

IIM Sambalpur | 2022-24 | Strategic Leadership, Thinking and Decision Making | Group 3
Q1. Was Dr.Sikka , the first outsider CEO of the company, the “right choice”?

Dr.Sikka was the first outsider to become the CEO. He was chosen to bring in revenue to the company.
He brought about cultural changes to Infosys. These cultural changes were different from the brand image
created by Infosys over years. His choices were ahead of time for the company leading to a negative
impact on the organization.

Positive Effects of Dr.Sikka’s Choices:

 Stricter compliance controls were put in place by Dr. Sikka to enhance ethical behavior and
transparency. As a result, unethical activities like deal manipulation were found and addressed,
which contributed to some investor confidence being restored.

 Emphasis on corporate governance: In order to increase responsibility and decision-making, he

highlighted bolstering corporate governance through internal process and committee redesigns.
This helped allay some of co-founder Narayana Murthy's fears regarding governance.

 Investing in digital transformation: In order to set Infosys up for future growth in these cutting-
edge fields, he gave top priority to investments in digital technologies like cloud computing and
artificial intelligence. In the long run, this action might have been advantageous to the business.

Negative Effects of Dr.Sikka’s Choices:

 Authoritarian leadership style: Some people viewed his forceful and decisive leadership style as
autocratic, which caused tension with co-founders and top management. This resulted in internal
disputes and resignations. Team relationships and staff morale were also affected.

 He implemented aggressive cost-cutting measures, such as freezing wages and reducing travel
allowances, which negatively impacted the company's culture and loyalty and caused employee
unhappiness and protests.

 Abrupt alterations: Changes were rolled out quickly without adequate stakeholder buy-in or
communication, which led to resistance and misunderstanding that hampered acceptance and
might have had an impact on productivity.

At Infosys, Dr. Sikka's choices had a conflicting effect. Although his emphasis on digitalization,
governance, and ethics had promising long-term effects, his implementation strategies and leadership
style alienated certain stakeholders and sparked internal strife. These elements ultimately played a role in
his resignation in 2017, which left the business in a precarious position and necessitated further work to
reestablish stability and trust.

IIM Sambalpur | 2022-24 | Strategic Leadership, Thinking and Decision Making | Group 3
Q2. Assess Mr. Murthy's performance and conduct during the period in the case (2002-18).

Positive Acts:

 Promoting Corporate Governance: Mr. Murthy is mostly acknowledged for having helped Infosys
build a solid corporate governance framework in its formative years, which helped the company
gain a reputation for ethics and openness.

 Raising Concerns: He publicly expressed his worries about potential flaws with governance or
unethical actions under the new CEO, which sparked investigations and conversations aimed at
resolving these issues.

 Stakeholder Interests’ Protection: It might be argued that Mr. Murthy acted in the best interests of
stakeholders who depend on good governance, such as employees and investors, by voicing these
concerns.

Controversial Acts:

 Vocal Criticism: Some people believed that his vocal criticism of the company's board and
leadership would harm Infosys' brand and cause internal strife.

 Motives Questioned: Some speculated that he was upset with the CEO personally or that he was
trying to take back control of the business as the reasons behind his concerns.

 Impact on Stability: Infosys had a period of unpredictability and instability possibly as a result of
the public debate surrounding his conduct.

Mr. Murthy's involvement in the Infosys events is still intricate and varied. His techniques and their effect
on the stability of the corporation are questionable, even though his worries regarding governance and his
actions in voicing them may have been reasonable.

Q3. Who/How could have bridged the gap between Dr Sikka and founders?

People who could have bridged the gap:

 Board members: They may have served as mediators, encouraging polite dialogue and looking
for common ground, if they were independent, well-respected, and trusted by both parties.

 Senior management: Dr. Sikka and the founders both trusted respected senior executives, who
may have assisted with communication and finding workable solutions.

 External advisors: Having experience in corporate governance and dispute resolution, outside
consultants or advisors may have offered unbiased advice and promoted fruitful discussion.

IIM Sambalpur | 2022-24 | Strategic Leadership, Thinking and Decision Making | Group 3
Challenges and Considerations:

 Power dynamics: It could have been difficult to close the gap given the considerable power
differential between Dr. Sikka, the company's CEO, and the founders who moved into advisory
positions.

 Emotional undertones: It's possible that open discussion and compromise were hampered by
personal conflicts and emotional tensions.

 Interests of various stakeholders: Any solution would have needed to strike a balance between the
interests of various stakeholders, such as investors, employees, and the company's future.

How could the gaps be bridged:

 Resolving the fundamental causes of conflict: It would have been crucial to comprehend and deal
with the underlying problems that gave rise to the dispute, such as divergent management
philosophies or concerns about governance.

 Developing mutual respect and trust: Open and fruitful communication between Dr. Sikka and
the founders would have required the cultivation of these qualities.

 Finding common ground: By recognizing areas of agreement and shared objectives, it may have
been possible to reach concessions and solutions that satisfied all parties.

IIM Sambalpur | 2022-24 | Strategic Leadership, Thinking and Decision Making | Group 3