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Case 9.1 Infosys Leadership Crisis With Top Management FInal
Case 9.1 Infosys Leadership Crisis With Top Management FInal
1
Infosys: Leadership Crisis
with Top Management
By
Arun Chandran
Vatsal Gupta
E P Harish
Parthapratim Sarma
Prateek Giria
Raja Ratna Reddy
FY11
FY12
FY13
FY14
FY15
24.85
24.90
23.36
21.26
23.20
N.R.Narayana
Murthy
Stepped down as
executive
chairman in June
2014 after
placing Sikka as
the new CEO
Declined the title
of Chairman
Emeritus as he
wanted to evade
any possible
conflict of
interest
Rohan Murty
Was Narayana
Murthys
executive
assistant
There is a talk of
him opening a
startup in Boston
Vishal Sikka
Infosys
Sikka continued
as a whole-time
director of the
Board, and Chief
Executive Officer
& Managing
Director of
Infosys
Freedom to Vishal
who could now
rebuilt the
organization
according to his
vision.
Infosys
performed better
in FY15 than in
FY14 as its PAT
rose from
Rs.10,656 crore
to Rs.12,372
Its Profit/Revenue
in percentage
increased from
21.26% to
23.20%.
AOL-4
The Theory of Ethical and Moral Leadership
Hollander 1978: While the leader
is the central and the most
important part of the leadership
phenomenon, followers are
important and necessary factors in
the equation
Robert Greenleaf
1997: Servant
Leadership
The CEO was not
chosen not because
they are proven and
trusted as servants
(employees) but
because they were the
co-founder of the
Company.
Properties: Appointment of CEO within the circle of founding members; top management
positions were closed to others.
Events: Narayana Murthy, the former CEO was brought back to turn around the fortunes of
the company. He appointed his son as an executive assistant which was approved by the
Board of Infosys. This event highlighted brazen nepotism while scores of senior managers
were not given their due opportunities to grow and occupy positions in top management.
Moral Standards: Virtue based ethics focuses on the person who acts
Moral judgments
Opportunism is placing ones own or the groups interest as against the rest.
Top management acted in its own vested interest. When Rohan Murthy was
appointed as executive assistant, there was not dissonance at the Board and was
ratified very easily. Top management and Board colluded to have a control over
Infosys.
High attrition was noticed among employees and senior managers due to lack of
opportunities for growth.
Synthesis of findings
It is clear that consensus , collaboration and consideration for the followers was missing in
Infosys
The leader Narayan Murthy and the followers (the managers who left) clearly had different
commitments and means to fulfil them, the reason for high attrition
The worthy employees were not rewarded (Transactional leadership missing) and selection of
leaders were based on founder criteria (Transformational leadership missing)
The morality of Mr. Murthy comes into question when he explicitly promotes his son over
other capable managers.
Ethical fading was taking place, became difficult to predict whether contextually ethics are
not being observed, V . Balakrishnan demonstrated moral courage.
The subjects (Infosys Top Management ) have ignored the consideration of the objects
(Shareholders, employees, govt. etc.) in the process of making appointments highlighted by
events like favoring of son by Narayana Murthy and ignoring worthy employees
Thank You