INFOSYS-Most admired company by AC Nielsen Corporate Reputation Index
‡ Started by 7 people in 1981 with a capital of US$ 250 and is now a global company with revenues of over US$ 3 billion. ‡ Utmost emphasis on corporate governance, compliance with national and international benchmarks. ‡ Rated high on corporate governance by agencies such as CRISIL and ICRA.

The value system is known as C-LIFE. Board of directors performs the succession planning. There is distinctive culture and value sysyem at infosys.leadership.fairness and pursuit of excellence. Customer delight. The leadership style at Infosys is driven by a commonality of approach.Board of directors have 8 independent and 7 internal directors. .integrity. Focus is on cultivating a professional style of leadership rather than a entrepreneurial style.

environment and much more. CSR is done through program Beyond Business . which covers areas such as arts and organizational structure is flat. open communication is present along with autonomy in decision making. .

STRATEGIC LEADERSHIP ‡ Ability to anticipate. . particularly the CEO. ‡ Leadership has undergone a major change due to the ever increasing complexity and globalization in the work place. ‡ The primary responsibility for effective leadership lies with the top management.maintain flexibility.envision. and empower others to create strategic changes as necessary.

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LEADERSHIP STYLES ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Autocratic leadership Bureaucratic leadership Charismatic leadership Participative leadership Laissez-faire leadership Relations-oriented leadership Servant leadership Task-Oriented leadership Transactional leadership Transformational leadership 12 8 .

Strategic Leadership ‡ Requires the managerial ability to:  Anticipate and envision  Maintain flexibility  Empower others to create strategic change as necessary ‡ Strategic leadership is:  Multi-functional work that involves working through others  Consideration of the entire enterprise rather than just a sub-unit  A managerial frame of reference 12±9 .

pragmatic decisions  Understand how their decisions affect the internal systems in use by the firm  Solicit feedback from peers. superiors and employees about their decisions and visions 12±10 . courageous.Strategic Leadership (cont d) ‡ Effective strategic leaders:  Manage the firm¶s operations effectively  Sustain a high performance over time  Make better decisions than their competitors  Make candid.

Top Management Teams ‡ Composed of the key managers who are responsible for selecting and implementing the firm¶s strategies ‡ A heterogeneous top management team:  Has varied expertise and knowledge  Can draw on multiple perspectives  Will evaluate alternative strategies  Builds consensus 12±11 .

Firm Performance and Strategic Change ‡ Heterogeneous top management teams:  Have difficulty functioning effectively as a team  Require effective management of the team to facilitate the process of decision making  but «  Are associated positively with innovation and strategic change  May force the team or members to ³think outside of the box´ and be more creative  Have greater capacity to provide effective strategic leadership in formulating strategy 12±12 .

CEO and Top Management Team Power ‡ Higher performance is achieved when board of directors are more directly involved in shaping strategic direction ‡ A powerful CEO may:  Appoint sympathetic outside board members  Have inside board members who report to the CEO  Have significant control over the board¶s actions  May also hold the position of chairman of the board (CEO duality) 12±13 .

CEO and Top Management Power ‡ Duality often relates to poor performance and slow response to change  CEOs of long tenure can also wield substantial power  CEOs can gain so much power that they are virtually independent of oversight by the board of directors ‡ The most effective forms of governance share power and influence among the CEO and board of directors 12±14 .


4 12±16 .Exercise of Effective Strategic Leadership Figure 12.

Key Strategic Leadership Actions: Determining Strategic Direction ‡ Determining strategic direction involves developing a long-term vision of the firm¶s strategic intent  Five to ten years into the future  Philosophy with goals  The image and character the firm seeks 12±17 .

Key Strategic Leadership Actions: Exploiting and Maintaining Core Competencies ‡ Core competencies  Resources and capabilities of a firm that serve as a source of competitive advantage over its rivals  Leadership must verify that the firm¶s competencies are emphasized in strategy implementation efforts  Firms must continuously develop or even change their core competencies to stay ahead of competitors 12±18 .

Key Strategic Leadership Actions: Developing Human Capital and Social Capital ‡ Human capital  The knowledge and skills of the firm¶s entire workforce are a capital resource that requires investment in training and development ‡ Social capital  Relationships inside and outside the firm that help it accomplish tasks and create value for customers and shareholders 12±19 .

information-based procedures used by managers to maintain or alter patterns in organizational activities ‡ Controls help strategic leaders to:  Build credibility  Demonstrate the value of strategies to the firm¶s stakeholders  Promote and support strategic change 12±20 .Key Strategic Leadership Actions: Establishing Organizational Controls ‡ Controls  Formal.

Key Strategic Leadership Actions: Establishing Balanced Organizational Controls ‡ Balanced Scorecard  Framework used to verify that the firm has established both strategic and financial controls to assess its performance  Prevents overemphasis of financial controls at the expense of strategic controls ‡ Four perspectives of balanced scorecard  Financial Customer  Internal business processes  Learning and growth 12±21 .

Strategic and Financial Controls in a Balanced Scorecard Framework Cash flow Return on equity Return on assets Assessment of ability to anticipate customer needs Effectiveness of customer service needs Percentage of repeat business Quality of communications with customers Financial Customer 12±22 .

Strategic and Financial Controls in a Balanced Scorecard Framework Internal Business Processes Learning and Growth Asset utilization improvements Improvements in employee morale Changes in turnover rates Improvements in innovation ability Number of new products compared to competitors Increases in employees skills 12±23 .

Family owned enterprises 3.RPG and Mahindra group rely on grooming the strategic leaders internally.DEVELOPING STRATEGIC LEADERS ‡ CHOICE OF FUTURE STRATEGISTS: 1.PSU¶S 2. HUL.MNC¶S Tata group of companies has Tata Administrative Services which takes care of the appointment of the senior managers. 12±24 .

‡ SUCCESSION PLANNING 12±25 . ‡ Another method is to appoint executive assistants to assist the CEO¶S at a young age. ‡ Satyam and Infosys have their own leadership training institutes. ‡ Institutes such as Administrative Staff College of India and IIM¶S offer preparatory courses for middle-level managers to strengthen them to take up higher responsibilities in future.CAREER PLANNING AND DEVELOPMENT ‡ Tata group relies on TAS.

BEHAVIOURAL ISSUES IN STRATEGY IMPLEMENTATION ‡ Influence tactics ‡ Power ‡ Empowerment of employees ‡ Political implications of power ‡ Leadership style ‡ Values and culture ‡ Ethics and strategies 12±26 .


Corporate culture and strategic management ‡ Corporate culture is the set of important assumptions that members of an organization share in common. . that influences the way business is conducted. symbols and core values shared through the firm. ‡ It is a complex set of ideologies.

‡ Culture could be a strength and weakness as well. .Impact of culture on corporate life ‡ Culture affects not only the way managers behave within an organization but also the decision they make about the organization's relationship with its environment and strategy.

 To change the corporate culture to suit strategic requirements  To change the strategy to fit the corporate culture .Strategy culture relationship Approaches to create a strategy supportive culture  To ignore corporate culture  To adapt strategy implementation to suit corporate culture.

Corporate politics and power ‡ Corporate politics is the carrying out of activities not prescribed by policies for the purpose of influencing the distribution of advantages within a organization. .

.Approaches to a strategic use of power and power ‡ Understand how an organization¶s power structure works. ‡ To reward organizational commitment and penalize negative or indifferent attitude. ‡ To lead strategy and not to dictate it. ‡ To practice principled politics and use openness and honesty to counter unprincipled politics.

This is due to two factors: The nature of Indian society. The higher level of enviousness exhibited by Indian managers.Corporate politics and power in Indian context ‡ It is more visible than in other culture. .

Emphasizing Ethical Practices ‡ Effectiveness of processes used to implement the firm¶s strategies increases when based on ethical practices. 12±34 . ‡ Ethical practices create social capital and goodwill for the firm.

 Continuously revising and updating the code of conduct. 12±35 .‡ Actions that develop an ethical organizational culture include:  Establishing and communicating specific goals to describe the firm¶s ethical standards.  Disseminating the code of conduct to all stakeholders to inform them of the firm¶s ethical standards and practices.

12±36 .‡ Actions that develop an ethical organizational culture include:  Developing and implementing methods and procedures to use in achieving the firm¶s ethical standards.  Creating a work environment in which all people are treated with dignity.  Creating and using explicit reward systems that recognize acts of courage.

telecom and entertainment sector and lower in transportation. retail & food sector. ‡ Lack of ethical values is the major reason for occurrence of fraud ‡ Implementation of clause 49 of SEBI had a marked impact in terms of reassessment of effectiveness of internal control and in mitigating risk of fraud. ‡ Most fraudulent activity are done by the employee of the organization. ‡ The detection of frauds within organisation is mainly done through internal audit dept or reported by third party 12±37 .Unethical practices in Indian organization ‡ The risk of fraud is higher in the financial.

Ethical practices ‡ Infosys With employees from over 70 nationalities Infosys has built an enduring value system based on openness. 12±38 . fairness and transparency. honesty.

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