Business ethics for corporate growth: A case study of Infosys in India

To achieve our objectives in an environment of fairness, honesty and courtesy toward our clients, employees, vendors and society at large Mission Statement of Infosys. Starting in 1981 in Bangalore, India with seven colleagues who dared to dream and who were lucky to be among the first in the economic liberalization of India in 1990s, Infosys has crossed billion dollars in revenues in 2004.The company has maintained a consistent growth and built a global company providing turnkey software development. There are many businesses that succeed-the unique factor about Infosys is in just over two decades it has built a brand known for ethical standards both inside and outside in the marketplace. The hypothesis of this paper is that corporate ethics promotes and inspires competitive advantage in a burgeoning marketplace. Ethics in Corporate governance means the parameters which a company sets for itself for its functioning. Transparency and disclosures about accounts as well as other important issues have to be communicated to the stakeholders in a truthful and prompt manner. These build up confidence and trust in the marketplace. When issues like Enron and WorldCom hit the headlines, it is difficult to ignore business ethics. As consumers are getting increasingly aware of ethical issues, corporations have to respond to their concerns whether it is related to issues of environment, heath or any other concern.
Ethics in marketplace Discussing the concept of The big idea" Robert Jones says What matters isnt technology or economics. These things are signs of something more fundamental-of a desire to break free, to question assumptions, to make things better".(Robert Jones:2001) In a marketplace, where businesses are springing up regularly, only those survive that bringing something special to the stakeholders. This something special" is the honesty and integrity that a company builds up as its brand. In a profile of N R NarayanaMurthy, the chief mentor of Infosys Technologies, The Economic Times said that what he will most certainly be remembered for is showing skeptical Indians that serious wealth could be created legitimately and ethically and in a single generation at that. ( http://economictimes.indiatimes.com ) In many of public addresses, the chief mentor of Infosys has tried to set benchmarks in the business environment. In his address at the Confederation of Indian Industry leadership summit in September 2003, he said CEO compensation is an issue that has to be decided by the board and shareholders. Three factors are to be considered for this-fairness, transparency and accountability". In the same speech he added, We have seen particularly in the west when the companies did not do well, when they had to fire thousands of employees at lower levels , the CEOs continued to get very good salary. That hurts people."

Such type of remarks, which when backed by action, helps a company in building up a band of stakeholders who back the growth of the company. Thus, the widely reported news in media that Narayana Murthy still lives in his modest flat establishes his companys credibility in the Indian market where the gap between the rich and the poor is immense. When words and action do not match, people become cynical. To verify how much ethics mattered for a person who wants to invest his money in a firm, a random survey of 50 persons was carried out in the national capital of Delhi . The question asked was If you have to invest in a company which of the two would you give more preference (a) Consistent growth of a firm which has exemplary ethical history. (b) High profitability of a firm but which is largely non transparent and no clear ethical rules." More than 80 percent supported the firm with a good ethical history. Though the other company was highly profitable, yet its non transparent nature made it a risky venture. Non negotiable rules Ethical benchmarks for the company has to be non negotiable. This is more relevant in the case of economies that have started late in competing in the world market. A large number of businesses in India are family run. A company formed by outsiders can succeed in such environment only when it goes that extra mile. The image of a non compromising attitude on ethical issues builds up the confidence of the stakeholders. In case of Infosys , the company achieved ISO 9000certification in 1993 and level 5 of CMM in late 1999.It was the first India registered company to list on NASDAQ in 1999.This helped in establishing the credibility of the firm as a global model. Mr.Narayana Murthy was named among twenty five most influential global executives by Time/CNN in 2001. Human resources have to be regarded as the main focus of growth. Personalities are not important and the company has to function as a team. In India ,where caste and class dynamics still help in preserving the hierarchical structures , emphasis on building up horizontal structures provides a level playing field to the employees. When the team leaders are role models, employees also ensure that they do not misuse office time for personal gains. Infosys has built a state of the art office complex in Bangalore with all modern facilities which helps in giving its employees a sense of belonging. While offering stock options to its employees, it ensures that the workforce has a stake in its overall growth. Actions speak louder than words and leaders must speak in a way that inspires integrity and a vision for the company. Principles By making business ethics its unique selling proposition, a company can accelerate its profit making

process.Business ethics incorporates certain issues and principles. transparency accountability honesty Trust All these are interlinked. If the stakeholders believe that the entity they are dealing with is transparent, accountable for its actions and honest in its dealings, it will build up trust. Without a proper cohesion among these interlinked factors, it is difficult to survive in an expanding complex business environment. This is more relevant in case of multinationals. When companies move to other nations in search of revenue and non saturated markets, ethics can build and sustain a reputation. The challenge of operating in foreign markets is now more daunting because they now exist in an alert media landscape where accountability for corporate actions is greater. Conclusion A business that makes nothing but money is a poor kind of business" Henry Ford, 1863-1947 A business, which wants to survive long term and also generate good revenue, has to achieve market credibility by making brand loyalty as its main goal which can only be achieved by following ethical standards. Developing ethics will not stop unethical behavior but the efforts to follow such standards will be perceived by the people. The track record to follow such rules is vital for developing long term relationships with employees, investors, investors, clients, stockholders. If ethical is allowed to grow, it inspires stakeholders and also marks a firm as performing its functions as a socially responsible entity.