CASE STUDY- Narayana Murthy and Infosys'- strategic leadership and corporate culture Summary:

The case study Narayana Murthy and Infosys' describes how Narayana Murthy, set up India's leading software company - Infosys. Infosys grew rapidly throughout the 1990s and distributed the company's profits among the employees through a stock-option program, and adopted the best corporate governance practices. The company became the first Indian firm to be listed on the Nasdaq Stock Market & one of the biggest exporters of software from India. Narayana Murthy had built an organization with very strong systems, high ethical values and a nurturing working atmosphere. Infosys Technologies Ltd. (Infosys) was voted as the Best Managed Company in Asia in the Information Technology sector. The key factors that led to the success of Infosys are: Leadership team, Well-conceived business plan, A strong product, Scalability, Adequate capital. Narayana Murthy straytegy was to focus on the world's most challenging market - the US. He had two reasons for this. First, there was no market for software in India at the time. He believed that Indian software companies should export products in which they had a competitive advantage. Another success factor was the adoption of good HRD practices. Infosys became one of the most respected companies in India, through its corporate governance practices. Narayana Murthy's move to adhere to the best global practices was driven by his vision to become a global player. Narayana Murthy set up a Leadership Institute in Mysore, India, to manage the future growth of Infosys which aimed at preparing Infosys employees to face the complexities of a rapidly changing marketplace and to bring about a change in work culture by instilling leadership qualities.

Q1. Explain the concept of Strategic Leadership and corporate culture? Strategic Leadership: The process of using well considered tactics to communicate a vision for an organization or one of its parts. Strategic leadership typically manages, motivates and persuades staff to share that same vision, and can be an important tool for implementing change or creating organizational structure within a business. Strategic leadership provides the vision and direction for the growth and success of an organization. To successfully deal with change, all executives need the skills and tools for both strategy formulation and implementation. Managing change and ambiguity requires strategic leaders who not only provide a sense of direction, but who can also build ownership and alignment within their workgroups to implement change.

The most important aspects of strategic leadership are shared values and a clear vision, both of which will enable and allow employees to make decisions with minimal formal monitoring or control mechanisms. With this accomplished, a leader will have more time and a greater capacity to focus on other, ad hoc issues, such as adapting the vision to a changing business environment. In addition, strategic leadership will incorporate visionary and managerial leadership by simultaneously allowing for risk-taking and rationality.

Corporate Culture: Its the beliefs and behaviors that determine how a company's employees and management interact and handle outside business transactions. Often, corporate culture is implied, not expressly defined, and develops organically over time from the cumulative traits of the people the company hires. A company's culture will be reflected in its dress code, business hours, office setup, employee benefits, turnover, hiring decisions, and treatment of clients, client satisfaction and every other aspect of operations.

Corporate culture, in essence, comes down to the way you do things in your company. In reality though, its so much more than that. Corporate culture includes a shared set of values and beliefs embraced by everyone in the company. Values and beliefs that ought to be reflected in a companys HR practices, from performance programs to the way projects are coordinated. It even goes right down to the way meetings are conducted.For some organizations their corporate culture may derive from the story of how they were created and might define the symbols used in their logo. Its essentially the glue that holds your organization together, and can be a big reason people want to work for you and with you.Yet corporate culture is often so little-understood and rarely front-of-mind for many business leaders, but we cant stress how incredibly important its role is within your organization.

Q2. How is strategic leadership applicable in the given case? The most important aspects of strategic leadership are shared values and a clear vision, both of which will enable and allow employees to make decisions with minimal formal monitoring or control mechanisms. With this accomplished, a leader will have more time and a greater capacity to focus on other, ad hoc issues, such as adapting the vision to a changing business environment. In addition, strategic leadership will incorporate visionary and managerial leadership by simultaneously allowing for risk-taking and rationality. In the case, one of the key success factor was leadership team & well conceived business plan. The leadership team needs to balance vision with practical experience. A technology start-up will have a visionary and/or a technical genius. Narayan Murthy had a clear vision. He obtained his Bachelor's degree in Electrical Engineering from University of Mysore & Master's degree in Technology from Indian Institute of Technology. He had enough experience to start a business. He was a part of the team that designed a 400-terminal, real-time operating system for handling air cargo for Charles De Gaulle airport, worked in Systems Research Institute and then headed Patni Computer Systems Pvt. Ltd., Mumbai, (Maharashtra) before founding Infosys in 1981, along with six other professionals. He believed that Indian software companies should export products in which they had a competitive advantage as there was no market for software in India at the time. Narayana Murthy set up a Leadership Institute in Mysore, India, to manage the future growth of Infosys. The institute aimed at preparing Infosys employees to face the complexities of a rapidly changing marketplace and to bring about a change in work culture by instilling leadership qualities. He said It is our vision at Infosys, to create world-class leaders who will be at the forefront of business and technology in today's competitive marketplace... Q3. Explain the role of Narayan Murthy as a strategist and elaborate on his vision for Infosys. How far this vision has been accomplished by the company? From the beginning, Narayana Murthy focused on the world's most challenging market - the US. He had two reasons for this. First, there was no market for software in India at the time. He believed that Indian software companies should export products in which they had a competitive

advantage.In 1987, Infosys entered into a joint venture with Kurt Salmon Associates (KSA), a leading global management consultancy firm. KSA-Infosys was the first Indo-American joint venture in the US. Narayana Mtuthy's global strategy comprised three features. The first one was the "global delivery model." The model emphasized on "producing where it is most cost effective to produce and selling where it is most profitable to sell." Cost effective production meant doing as much of the software development work in India and profitable selling meant focusing almost exclusively on foreign markets, particularly the US. The second feature of the strategy was "moving up the value chain" which meant getting involved in a software development project at the earliest stage of its life cycle. However, Infosys would have to compete with big companies like Cambridge Technology Partners or even Andersen Consulting, and that could be tough. For this Narayana Murthy said "it is not going to be easy. But we don't have to be unduly concerned about unmitigated success. We may succeed in some and not in others which is not to say that we will not succeed as consultants." The third feature of the strategy was the PSPD. According to Narayana Murthy, there are four fundamental tenets of any well-run business. One: predictability of revenues; two: sustainability of the predictions; three: profitability of revenues; and four: a good de-risking model. 'Derisking' meant that Infosys had put limits on its exposure to businesses of various kinds. With this strategy & vision, in 1999, the company became the first Indian firm to be listed on the Nasdaq Stock Market. In 2000, Infosys was poised to become a true global company.By 2000, Infosys' market capitalization reached Rs.11 billion and by 2001, Infosys was one of the biggest exporters of software from India. Narayana Murthy had built an organization that was respected across the country, with very strong systems, high ethical values and a nurturing working atmosphere.In February 2001, Infosys Technologies Ltd. (Infosys) was voted as the Best Managed Company in Asia in the Information Technology sector, in leading financial magazine Euromoney's Fifth Annual Survey of Best Managed Companies in Asia.