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From the case of Infosys it is easy to see that Narayana Murthy, the founder of the company has transform the 1981 year founded little software company into the first Indian company to be listed on the NASDAQ and become a world leader in IT consulting and software service provider, these achievement to a certain extent have close relationship with Murthy’s management practices in which his management philosophy and approaches, in the management’s perspective it would interesting and worthy to go into the case to study Murthy’s managerial skills and his philosophy. And below the essay will examine this great former CEO’s management practices in four aspects: business ethics, leadership, human resource management and strategic management in order to solve the following key issues and problems:
1.1 Human resource management
1.1.1 Employee as an asset
Figure 2.0 Human resource valuations
Source: 2009 Annual report of Infosys (Unknown 2009)
According to the last two years’ data which is shown above in Figure 2.0, the Indian IT giant may be influenced by the effect of the economic crisis and there was a caused surplus of human resource in Infosys which is proved by the later layoff of 600 contract works of the Infosys BPO (Unknown 2009), with the excess human resource it is easy to understand the decrease of the value of human resources per employee from 2008 to 2009 and the increase of the employee cost since the total employee number had grown by more than 1200 by the end these two years. Another fact need to be noted is that the growth of the employees in the support position is just 43 compared to the growth of 329 in position of software professionals, this difference will contribute to the increased high percentage of professional workers which is fundamental and advantageous to an IT service provider.
1.1.2 Campus connect
The campus connect program which was set up in the middle of 2004 is a training program currently involves more than 300 engineering colleges throughout India and there are two important parts of the program. (Unknown 2007) The first part is the so called Faculty Enablement Program (FEP) which is designed to provide educational experience to the college faculty members to enhance their soft skills which was found insufficient among them. The second part of the program is correlated to the first part, in the second part or second stage, the trained faculty members will teach the Infosys Foundation Program back in their respective colleges. According to the annual report (Unknown 2007), there are more than 20,000 students who were undergoing or finished the training program. Throughout such kind of program between the company and the campus, there are at least two benefits for the company. Firstly, this training program has potential software talents will get better trained because of the sharing of experience from the Infosys, and the better prepared and educated talents will in return benefit the software industry in India. Secondly, Infosys as the sponsor of the program will certainly get more famous and known to within the engineering colleges in Indian, and the graduate of these colleges may probably consider Infosys as their ideal employer. So in the end Infosys earns good honor for doing the good for the society and better potential and backup software talents and this is a win-win program.
1.1.3 Continuous learning
Candidates for positions in Infosys are short listed not only because of their certificates earned in their universities, but also attributed by their continuous learning ability to better prepare themselves in the future challenges and changes. Such learning ability of the employees are sustained, ensured and to some extent, forced by the company with the function of Education and Research. The Education and Research function provides 178 courses and a half of which are e-learning program designed for those who are not convenience to attend the instructor-led courses according to the data from the 2008 annual report of the company (Unknown 2008). Such courses cover various areas and subjects ranging from project management to special technological domains. Such kind of certifications differentiated from other certificates has three major benefits. Firstly, on the shoes of the company, such certification provides customized examination of the special skills of the employees and thus provides useful information about the human resource for the company. With this information, the managers could train and select the suitable talents from those who had the finished the relative courses which indicates that they should have the relative skills. Secondly, with offer of the continuous study programs, there will be active competition created between the employees as those who do not take the course or fail the exam will lose made in disadvantage and show the sign of laziness to their direct managers. Thirdly, on the shoes of the employees, they could learn such courses to earn the chance for a better carrier development. On one side, those who work hard and study hard may have more chance to get promoted by their managers. On the other hand, even they are not preparing to stay in Infosys any more; they also get better opportunities for a better because they are of high calibers.
1.1.4 Employee stock option
As mentioned above, Infosys is the first Indian company to provide stock option to the employees and within the company it is called as ESOP (Employee Stock Option Plan), the stock option plan provide the qualified employees with the stock option which is a noncash benefit to the employees to bind the interest of the employees who are granted the stock option with the company in a long run to maintain and increase the involved employees’ commitment to the company. Compared to the salary, the stock option as a way incentive to the employees has two advantages. The first advantage is the long term commitment of employees. Especially in the preliminary fast growing period, the offer of stock option would help maintain the experienced employees for the good of the company. The second advantage compare to cash inventive, the stock option offer makes the employees feel that they are the owners of the company despite the fact that that the stock price during the recent years the stock price had undergone a lot of fluctuations as stated in Figure3.0 below. Because by holding the stock of the company, these employees are also shareholders of the company at the same time, and this will drive the employees to try their best to benefit the company at large because the performance of the company influenced by the employees will return influence the stock price in the long run.
Figure 3.0 Historical stock prices (Exchange: BSE)
Resource: Official website of Infosys