Global Vision and Emerging Challenges - Term Paper Example

N R Narayana Murthy: Global Vision and Emerging Challenges of the OrganizationalDiagnosis Dr. Bramwell Osula September 2, 2010 Organizational Diagnosis EXECUTIVE SUMMARY This research report is based on an e-mail interview of NR Narayana Murthy. NR Narayana Murthy, an Indian entrepreneur of humble origins, is better known as the founder and ex-CEO of Infosys Technologies, an Indian consultancy and IT firm of global fame and repute. Mr. Murthy is at present serving as a non-executive chairman of this MNC. NR Narayana Murthy, besides being a global leader par excellence, is also famous as a dedicated social worker, an innovative thinker and an acclaimed international speaker. The net worth of Mr. Murthy is estimated at $1.6 billion. The report intends to identify the global challenges faced by Infosys Technologies, as envisaged by Mr. NR Narayana Murthy in his response. Also, a sincere attempt has been made to cull out the prominent and major factors underlying these challenges. One important objective of this report is to elaborate on the leadership dynamics existing within Infosys, and to come out with alternate explanations for the challenges being faced by this company. This serves as an additional vantage point from which the chosen leader can analyze the performance of his organization on the international stage. The report culminates with an action plan, especially drafted for Mr. NR Narayana Murthy, to possibly help him resolve the global challenges faced by his dream enterprise. The salient features of this action plan are backed by valid theoretical inputs. TABLE OF CONTENTS 1.0 Introduction ……………………………………………………………. 6 2.0 Discussion ……………………………………………………………… 6 2.1 NR Narayana Murthy as a Global Leader …………………… 6 2.2 Highlights of the Interview ……………………………………. 8 2.3 Global Challenges being Encountered by Infosys ……………. 10 2.4 Leadership Dynamics ………………………………………….. 11 2.5 Leadership Worldview ………………………………………… 12 3.0 Conclusion ………………………………………………………………. 13 4.0 Action Plan …………………………………………………………….. 13 References ………………………………………………………………….. 15 1.0 INTRODUCTION With the proliferation of knowledge and information based enterprises in the 21st century, the leadership paradigms of the yore are just not sufficient to navigate organizations operating sans borders and constraints (Foxon, 1998). Enhanced usage of telecommunication, information technology and the internet has not only accelerated the pace at which businesses are conducted, but has also expended the arena and formats governing the hitherto traditional enterprises (Bennis, 1993). Thus, it is not a surprise that contemporary businesses need global leaders, who are not only effective and committed, but own a rich set of qualities, skills and attributes, which enable them lead organizations in a global playing field (Rosenbach & Taylor, 1998). The salient ascriptions of a global leader are one’s global perspective, technology savvy, cultural competency, adaptability, integrity, social finesse, theoretical astuteness, creativity and individual drive, bolstered by an international and variegated experience (Patterson, Dannhauser & Stone, 2007). 1.0 DISCUSSION 2.1 NR NARAYANA MURTHY AS A GLOBAL LEADER NR Narayana Murthy could validly be ascribed to be a global leader in the true sense of the word. Not only he possesses the essential competencies of a global leader, as mentioned above, but the corporate profile of the man is such that it is impossible for an individual to do justice to these honors and responsibilities, unless one happens to be an authentic global leader. The salient features of Mr. NR Narayana Murthy’s corporate profile are: Founder and ex-CEO, Infosys Technologies Non-executive Chairman, Infosys Technologies Independent Director, DBS Bank of Singapore Director, Reserve Bank of India Independent Director, Unilever Independent Director, HSBC Board Member, Ford Foundation Board Member, UN Foundation Member, Asia Advisory Board of British Telecommunications Chairman of the Governing Body, IIT Bangalore and IIM Ahmedabad Member Board of Overseers, Wharton School of the University of Pennsylvania Member, Board of Trustees, Great Lakes Institute of Management Member, Board of Trustees, Singapore Management University Member, Board of Advisors, William F. Achtmeyer Center for Global Leadership at the Tuck School of Business Member, Board of Governors, Asian Institute of Management Chairman, Board of Members, School of Management at Asian Institute of Technology, Bangkok Chairman, Asia Business Council, Hong Kong Member, Advisory Board, Stanford Graduate School of Business, Harvard Business School, Yale University and the University of Tokyo Founder, Catamaran Venture Fund 2.2 HIGHLIGHTS OF THE INTERVIEW Q. Did you ever have any role models? Response: Being from a middle class family hailing from a small town, my parents happened to be my first and most important role models. They always used to stress on putting collective good before personal aspirations and the importance of sacrifice in personal and professional life. They primarily limited their discussions to fundamental values of life, without pressing me to opt for any specific career. Q. How was your experience at IIT (Indian Institute of Technology) Kanpur? Response: It was at IIT Kanpur, that I for the first time grasped the important role that technology was to play in the times to come. I had several professors who were young and had their doctorates from the US. Also, the newly initiated Indo-American program not only imparted me valid insights into the way American academic institutes worked, but also introduced me to the computers for the first time. Q. So far I know you had overseas exposure at a very early stage in your career. Please tell me something about that? Response: My tenure at Paris had a deep impact on the nascent entrepreneur within me. I was surprised to see that in the West; even the socialists understood that it was important to create wealth before using it to do public good. So the primary responsibility of the state was to foster a salubrious environment that supported wealth creation. This was in contrast to the platonic socialism being practiced in India in those days. I was also deeply influenced by the Western culture and especially the Western Classical music. Q. What were Infosys’ initial business plans? Response: Having scarce capital and access to an emerging influx of young IT professionals, we decided to be in India. However, right from the day one, we had to rely on the foreign markets. At that time, the business prospects were fluid and unpredictable. Some of us left for the US to work on-site while others stayed back to develop the requisite infrastructure. Primarily, this is how we come up with our Global Delivery Model. Q. What are the challenges you face at present? Response: With the opening up of economies, the challenges we face are immense. For example, our Global Delivery Model has become somewhat complex and non-vertical, thereby incurring immense communication and management overheads. Besides, the business at Infosys is still predominantly dependent on the US based customers. On the other hand, the competition from other emerging economies like China is on the rise. The competitors in the West are much better at offering customized, low-cost and value-added solutions. We are still dependent on the work force from India. Predatory pricing is one other big concern. Q. Do you think that Infosys should move ahead to become a product driven company? Response: I don’t think so. In fact, if we see, in the IT sector, it is the service driven companies like eBay and Amazon.com that have exhibited a consistent growth. Q. What do you think about emerging opposition to outsourcing in the US? Response: This is a temporary problem. Fundamentals say that it is always saner to procure capital from where it is cheapest and to invest it where it is most profitable. Q. What do you think about empowering people who work for you? Response: For me, empowering is about blending individual goals with broad organizational objectives. Definitely, it is the organization, which is more important. But, still, ways must be found to satisfy individual aspirations. 2.3 GLOBAL CHALLENGES BEING ENCOUNTERED BY INFOSYS 1) More focus on external markets: True to its initial vision, Infosys is still focused on external markets. With the operational competency within India being on the rise, the country itself has become a lucrative market. Having access to a talented and local workforce, Infosys can certainly benefit from a look-inward policy. 2) Cumbersome Global Delivery Model: The Global Delivery Model propounded by Infosys has become cumbersome, costly and unwieldy with the expansion of its customer base. 3) High dependence on the US markets: A major chunk of Infosys’ business originates from the US. Thus, the company is very sensitive to the fluctuations in the US markets. 4) Threat from Asian competitors: Emerging Asian providers like China pose a big threat to the Infosys with their competitive and sometimes predatory pricing. 5) Threat from Western Competitors: Infosys is still not as good at extending customized, cost-effective and value-added IT solutions as its Western competitors. The Western competitors, though susceptible to high wages, do lead in providing quality solutions. 6) Predominantly Indian workforce: The workforce at Infosys is predominantly Indian, which contradicts the very spirit of the company’s Global Delivery Model 2.4 LEADERSHIP DYNAMICS On the basis of the above interview, it will be safe to conclude that the leadership at Infosys has a global perspective, as far as managerial skills, technology savvy, ethical integrity, global perspective and the ability to manage fluid and unpredictable scenarios is concerned. The leadership at Infosys is conclusively cognizant of the world markets and their intricacies. However, in a way, the leadership is partially myopic in the sense that it is compromising the cultural competency and business competitiveness of the organization, by still choosing to be dependent on a predominantly Indian workforce. The leadership to some extent seems to be India-centric, a trait that hampers its global aspirations. Also, the leadership is primarily transformational, as it believes in empowering employees to fundamentally facilitate the organizational goals (Burns, 1978; Bass, 1985). 2.5 LEADERSHIP’S WORLDVIEW To some extent, the leadership at Infosys regards the business environment to be threatening. Yet, it is justifiably confident of its talented workforce, strong value system, strong fundamentals and core-competencies. The leadership is also aware of the need to change in the current circumstances. 2.6 ALTERNATE EXPLANATIONS FOR THE DEEMED CHALLENGES Being home to one fifth of the world population, with a burgeoning middle class, with disposable income and rising levels and standards of consumption, being catered to by expanding goods and services industries, it is high time that Infosys target India as one of its major customers and facilitate its Indian clients, world class services (Krueger, 2002). This will dilute its dependence on the Western markets and will make it less vulnerable to global political and economic fluctuations. Also, the reason for augmenting complexity of the firm’s Global Delivery Model is its high dependence on the Indian workforce. This not only burdens it with the cost of moving its workforce to the job-sites, but also makes its dearer to communicate and manage its offshore professionals. This dilutes its brand equity in the foreign markets. The company is also second to its Western competitors, one reason being that these competitors, hire local professionals, who not only happen to be more effective in the local environment, but command an edge owing to their cultural competency on the home turf. Infosys also seems to be lagging on its responsibility of chalking out a policy for nurturing global leaders within the organization. No wonder, the Asian competitors, though lagging in professionals with a knowhow of English, are fast emerging, courtesy their global vision. 2.0 CONCLUSIONS The important conclusions drawn from the analysis of this interview are: 1. Infosys is a global organization in the context of its global perspective, technology savvy, integrity and managerial talent. 2. The company has for a long time been shying away from going multicultural and hiring foreign professionals, which to a great extent is responsible for threatening its competitiveness in the foreign markets. 3. The company lacks a formal strategy for nurturing global leaders. 4. The company possesses ample inherent strengths and competencies. A little change of vision can go a long way in ensuring its global competitiveness. 4.0 ACTION PLAN The proposed action plan is designed with an envisaged timeframe of three years. The important steps of this action plan are: 1. Infosys already commands a young, talented and skilled workforce which being predominantly Indian, is conversant with the needs and requirements of the local customers. In a period of one year, the company should carve out a specific subsidiary that solely focuses on the Indian market and customers. Over the next two years, this subsidiary should make a concerted effort to enhance its local business by 20 percent. The company can dedicate its leaders who are locally proficient, but are less prone to evolve as global leaders, to lead this subsidiary. This will not only help Infosys retain its traditional workforce, but will reduce its dependency on the foreign markets. 2. The company should launch a drive extending over the next 6 months, to identify local leaders who show promise of evolving into global leaders. The senior leaders within the organization, who have credible credentials as global leaders and are conversant with the attributes that go in to make a global leader, should be assigned the responsibility of identifying prospective candidates. Once selected, these aspirants should be posted at foreign locations, to work under a seasoned mentor, for the next 3 years. Each successive posting should be to a specific global location and should not last more than one year. These candidates should be encouraged to imbibe and understand the local culture and to be conversant with the local languages, while serving at a foreign location. 3. Infosys should go multicultural and should chalk out a plan to augment its foreign workforce by 5 percent successively, over the next three years. Local candidates should be recruited for onsite jobs, who can exploit their cultural competency to endow the company with a competitive edge. Besides, each of the foreign employees should be posted in India for a period of 6 months. This will help one blend with one’s Indian counterparts, besides benefitting from foreign exposure. The whole objective is to help the company build a multicultural and multilingual pool of global leaders, which is in consonance with its global aspirations. This will streamline the company’s already effective Global Delivery Model, thereby making it more competitive. 4. Infosys already commands a considerable Brand appeal in the local and foreign markets. Over the next three years, the company should graduate to products sector also. To begin with, a range of products, based on intensive R&D and bolstered by in-house competencies of the company should be released in the Indian market. Learning from the feedback and response garnered from the Indian markets, the company can expand its products to the foreign markets in the next two years. This will reduce the dependency of the company on the services segment and will help it exploit its brand equity. REFERENCES Bass, M.M. (1985). Leadership and Performance beyond Expectations. New York: The Free Press Bennis, Warren. (1993). An Invented Life: Reflection on Leadership and Change. Reading, MA: Addison Wesley Burns, J.M. (1985). Leadership. New York: Harper & Row Publishers Foxon, Marguerite. (1998). Closing the Global Leadership Competency Gap: the Motorola Gold Process. Organization Development Journal, 16(4), 5 Krueger, A.O. (2002). Economic Policy Reform and the Indian Economy. Chicago: University of Chicago Press Patterson, K., Dannhauser, Z & Stone, A.G. (2007). From Nobel to Global: The Attributes of Global Leadership. Servant Leadership Research Roundtable. Retrieved September 29, 2010 from http://www.regent.edu/acad/global/publications/sl_proceedings/2007/patterson_dannhauser_stone.pdf Rosenbach, W.E & Taylor, R.L. (1998). Contemporary Issues in Leadership. Boulder: Westview Press Read More