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| Details |
Case Code: CLHR049
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| Case Length: 5 pages |
| Period: 2017 |
| Pub Date: 2018 |
| Teaching Note: Available |
| Subject : Human Resources/ Organization Behavior |
| Price:Rs.150 |
| Organization :Infosys Limited (Infosys) |
| Industry : IT Services and IT Consulting |
| Countries : India |
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Infosys Saga: The Struggle for Succession |
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| This case study discusses the corporate governance issues faced by Infosys Limited, an Indian multinational corporation offering business consulting, IT, and outsourcing services. The case explores how Vishal Sikka (Sikka), who had joined Infosys in June 2014 as the company’s first non-founder chief executive, stepped down, citing increased personal attacks as the reason. The case also reviews the long-drawn scuffle between the board, the founders and the management. It also presents the challenges that Infosys faced in terms of corporate governance and also in finding an appropriate successor to Sikka. At the end, it facilitates a critical discussion on the over intervention of the founders in the company’s issues and how Sikka’s exit could affect the company’s performance in the near future. The question remains whether it was the founders, the board, or Sikka himself, who were responsible for the lapses in the company’s corporate governance.
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Issues: |
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- Identify the key motives/reasons why corporate governance is important for companies
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- Understand the roles of the CEO and founders in matters of corporate governance
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- Analyze the importance of succession planning for executives
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- Understand the significance of a board
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| Introduction |
Infosys Limited, an Indian multinational corporation offering business consulting, IT, and outsourcing services, was started in 1981 by N. R. Narayana Murthy (Murthy) and six other engineers in Pune, Maharashtra. The business was set up with a capital of just $250. By 2017, Infosys had grown into India’s second largest IT outsourcing company with revenue of more than $10 billion, net profit of $2 billion, and close to 200,000 employees.
But the start of the year 2017 saw Infosys facing deep business challenges – slowing growth and rise in automation coupled with hostility from the Trump administration in the US, its most important market. Amidst all this, on August 18, 2017, came another blow to the company. Vishal Sikka (Sikka), who had joined Infosys in June 2014 as its first non-founder chief executive , stepped down, citing “unrelenting, baseless/malicious and increasingly personal attacks.” Out of the sixteen executives who had joined Infosys from SAP (where Sikka worked for 12 years ) to further Sikka’s agenda of ‘Innovation at Infosys’, ten had already left before Sikka’s resignation.
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Keywords |
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IT Services,India,Infosys,Corporate Governance,Succession Planning,Board
* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US
$16) per copy.
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