Narayana Murthy and Infosys

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Case Details:

Case Code : LDEN003
Case Length : 8 Pages
Period : 1981-2001
Pub Date : 2002
Teaching Note : Available
Organization : Infosys
Industry : Software
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"A true leader is one who leads by example and sacrifices more than anyone else, in his or her pursuit of excellence."

- N. R. Narayana Murthy, Chairman, Infosys.

"The US. has discovered India's high-tech industry, and the credit is largely due to shy, unflappable engineer N.R. Narayana Murthy."

- Business Week, June 14, 1999.


In February 2001, Infosys Technologies Ltd. (Infosys)1 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. Infosys was started in 1981, by seven2 professional entrepreneurs led by Narayana Murthy, Chairman and CEO of Infosys with an equity capital of Rs.10,000.

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. 

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With his sound management skills, Narayana Murthy seemed to have taken Infosys to the pinnacle of success in two decades.

From a turnover of Rs.1.16 million in 1981, Infosys had grown to a Rs.19 billion company in 2001. There were many firsts to Narayana Murthy's credit. Infosys was the first company to push for off–shore software development3 as against body shopping4 that was coming during the 1980s.

He championed corporate governance in India. Infosys was the first Indian company to follow the US Generally Accepted Accounting Principles (GAAP) disclosure norms before going for a Nasdaq listing in 1999.

Narayana Murthy was also the recipient of many awards (Refer Exhibit I).

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1]  Infosys, based in Bangalore (Karnataka), is a publicly held, ISO-9001 certified company offering information technology consulting and software services to Fortune 1000 companies. The software services offered include application development (on a fixed-time and fixed-fee basis), E-Commerce and Internet consulting, software maintenance.

2]  Nandan Nilekani, S.Gopalakrishnan, K. Dinesh, S.B.Shibulal, N.S.Raghavan, Ashok Arora (left Infosys in 1983)

3]  Due to low hourly rates and technically well-trained programmers, the European and American organizations have their major software development projects done in less developed countries like India.

4]  Body shopping is contract labor of skilled workers. It refers to the practice of recruiting software professionals in India and sending them to work on projects abroad.


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