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Shri. B.V.V.Sanghas

BASAVESHWAR ENGINEERING COLLEGE (AUTONOMOUS),

BAGALKOT-587 102.[TEQIP Lead Institute, Govt. Aided Institution, AICTE Recognized, Affiliated to VTU Belgaum]

2010-2011

DEPARTMENT OF MANAGEMENT STUDIES

MBA PROGRAMME

Case Study

MASTER OF BUSINESS ADMINISTRATION

Submitted to

Prof. Shreelatha RaoDepartment of Management Studies,Basaveshwar Engineering College, Bagalkot.

Submitted by

Jyoti Mathad USN:2BA10MBA13

Organization Design & Development


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Case1

The Infosys story


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If one looks around the information technology landscape in India for the names

of organizations that have grown from small to big, there are many to be named. However,

none have shown the growth that one such organization has done today. A walk through

the campus of this organization, a majestic landscaped area in Bangalores electronics city,

brings to ones notice that it is modeled along the same lines as a university. Infosys stands

tall on Indias map as an organization that has succeeded in becoming a world-class

organization in the global information technology sector.

This transition happened over a period of twenty years. Many say that Infosys

helped change the image of India abroad. Derived from the phrase information systems,

Infosys has grown from a very humble beginning. Its founder, Narayana Murthy,

completed his Mtech from IIT Kanpur, and began working as a researcher assistant in

Pune. Sudha kulkarni, who went on to become his wife graduated with the masters degree

in computer science from IISc, Bangalore, and was working in TATA Motors, pune. It

was here that she met the shy, introverted Narayana Murthy through a common friend. At

first her parents did not agree to her marrying Narayana Murthy as he did not have a

steady job. Three years later, in 1977, Narayana Murthy got an offer to join patni

computers systems as its general manager, and they got married at Narayana Murthys

Bangalore residence before he joined this company in Mumbai. He was then sent by patni

computers systems to the United States for training.

By the year 1981, Narayana Murthys dream was to start a company but he had no

financial capital to seed it. His aim was to make quality software for customers. To start

Infosys, Narayan Murthy took rs. 10,000 ($250) from his wife sudha. Together with 6

colleagues, all software engineers, Nandan M.Nilekani, N.S.Raghavan, S.Gopalkrishnan,

S.D.Shibulal, K.dinesh, and Ashok Arora, Infosys was registered as a private limited

company in Mumbai. Narayan Murthy became the CEO of Infosys. The purpose of the

company was to write and provide software codes. They sat in Narayana Murthy,s

bedroom to discuss the objectives of Infosys, and came to the conclusion that they would

strive to satisfy their customers, be fair to their employees, respect their investors, not

violate laws, and in all make a difference to society. Raghavans house in Mumbai served

as the registered office. Narayan Murthy operated from pune, and sudha quit her job to

help with the setting up of Infosys. Sudha operated as the clerk-cum-cock-cum-computer


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programmer, and Nandan Nilekani and his wife lived with Sudha and Narayana Murthy. It

was one big joint family with the wives helping with the cooking and babysitting each

others children, and the husbands working hard to make Infosys happen. There was no

phone or car. In 1983, Infosys got its first customer, MICO, and the office was shifted

closer to the customer in Bangalore. Things were not easy from the market perspective,

and the support of the government was also not substantial. They made mistakes but

preserved. They wrote software codes from India, mainly for U.S. customers, and

delivered it in the form of what is called offshore delivery.

In 1990 India was about to liberalize and by 1992, Infosys made a public offering

and got listed on the Indian stock market. In 1999 with revenue of $100 million the

organization got listed on the American stock listing of NASDAQ. It also attained the

quality certification, SEI CMMI Level 5 accreditation, which made it globally

competitive. After twenty-one years of leadership, in the year 2002, Narayana Murthy

handed over the position of the CEO to Nandan Nilekani. By 2004, Infosys had joined the

billion-dollar club.

Seven people had started out in 1981 with $250, and by 2006 they earned $2.5

billion with employee strength of 56,000. In the year 2007, Nandan Nilekani handed over

the position of the CEO to Kris Gopalkrishnan keeping alive their belief in collective

leadership.

Infosys provides consulting and IT services globally to customers using their

low cost global delivery model (GDM).This helps control cost and manages time

efficiency, and they work as a partner to their customers. The Mammoth size that Infosys

has now become makes it difficult to maintain communication between the employees all

over the world. However, over time Infosys invested in a well networked knowledge

infrastructure that integrated employees. This networked work environment helps keep the

flow of communication and information healthy throughout its global offices. They

maintain work flow processes that integrate the culturally varied cross-partner teams using

a collaborative work style and efficient project management process.

As it stands, in 2008 under the leadership of Kris Gopalkrishnan, Infosys has more

than 72000 employees. Infosys overhauls its organizational structure constantly,

identifying new geographic markets, and expanding the roll of its second line of


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leadership. Currently the company is organized in to 6 vertical industry business units

(IBUs) and 5 horizontal business units that cut across all the vertical units. The industry

verticals include the go-to-market vehicles while the horizontal units cover the service and

product delivery vehicles. Their industry vertical are aerospace , defense, automotive ,

banking and capital markets, communication services, consumer packaged goods, discrete

manufacturing, energy , health , high technology, hospitality and leisure, insurance, life

sciences, media and entertainment , retail, transportation, and utilities. There horizontal

units include application, development, maintenances, corporate performance

management, independent validation, infrastructure services, package application services,

product engineering, and system integration. This structure is said to reflect their

customers in the market they serve.

The organization continues to compete in the global markets striving to achieve the

status of leader in end- to end global software delivery solutions for customers. Authors

who write about Infosys say that the organization has grown so large that it has to

seriously consider whether it wants to be a big elephant, or rather smart and swift

cheetah. Thanks to the global reach of organization like Infosys, today the world is

considered to be flat.

Facts:


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Infosys has grown from a very humble beginning. Its founder, Narayana Murthy,

completed his Mtech from IIT Kanpur, and began working as a researcher assistant

in Pune.

Sudha Kulkarni, who went on to become his wife graduated with the mastersdegree in computer science from IISc, Bangalore, and was working in TATA

Motors, Pune.

In 1977, Narayana Murthy got an offer to join patni computers systems as its

general manager, and they got married at Narayana Murthys Bangalore residence

before he joined this company in Mumbai.

His aim was to make quality software for customers.

To start Infosys, Narayan Murthy took rs. 10,000 ($250) from his wife sudha.

Together with 6 colleagues, all software engineers, Nandan M.Nilekani,

N.S.Raghavan, S.Gopalkrishnan, S.D.Shibulal, K.dinesh, and Ashok Arora,

Infosys was registered as a private limited company in Mumbai.

. The purpose of the company was to write and provide software codes.

. In 1983, Infosys got its first customer, MICO, and the office was shifted closer tothe customer in Bangalore.

They wrote software codes from India, mainly for U.S. customers, and delivered it

in the form of what is called offshore delivery.

In 1999 with revenue of $100 million the organization got listed on the American

stock listing of NASDAQ. It also attained the quality certification, SEI CMMI

Level 5 accreditation, which made it globally competitive.

Seven people had started out in 1981 with $250, and by 2006 they earned $2.5

billion with employee strength of 56,000.


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Infosys provides consulting and IT services globally to customers using their low

cost global delivery model (GDM).This helps control cost and manages time

efficiency, and they work as a partner to their customers.

Infosys invested in a well networked knowledge infrastructure that integrated

employees. This networked work environment helps keep the flow of

communication and information healthy throughout its global offices.

They maintain work flow processes that integrate the culturally varied cross-

partner teams using a collaborative work style and efficient project management

process.

The company is organized in to 6 vertical industry business units (IBUs) and 5

horizontal business units that cut across all the vertical units. The industry verticals

include the go-to-market vehicles while the horizontal units cover the service and

product delivery vehicles.

The organization continues to compete in the global markets striving to achieve

the status of leader in end- to end global software delivery solutions for

customers.


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Question and answers:

1) Explain the organization structure evolved in Infosys?

Formal organization structure had been involved in the Infosys. The decision

making capacity will be flowing in the formal way. The top management taking

the decisions regarding the objectives, mission and all. The remaining operations

of the organizations like sales, production and all are executed by the different

managers followed by the top management.

2) Explain components of organization structure related to Infosys

There are several components related to organization structure they are

departmentalization, differentiation, formalization, centralization. In the Infosys

adopt all type of organization structure.


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Differentiation: It is the degree to which the location of the organization offices,

facilitate and personnel are geographically distributed.

Departmentalization:referring to the degree to which activities within the organization

are differentiated. This differentiation has three dimensions.

Formalization refers to the extent to which jobs within the organization are

specialized & the extent to which employee behavior is guided by rules &

procedures.

Centralization refers to the degree to which decision making is concentrated at

one point in the organization.

3) With reference to Infosys how do you analyze the globalization & success

related decision making policies in any organization.

In 1990 India was about to liberalize and by 1992, Infosys made public offering

and got listed on the Indian stock marketing 1992 with a revenue of 100 million

the organization got listed on the American stock listing of Nasdaq. It also attainedthe quality certification, SEI CMMI level 5 accreditation, which made it globally

competitive. To be a global company in the word the company has to operate its

operations globally and to satisfy the different needs of the customers.


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Case 2

Where should decisions be made?

In 1995, Procter & Gambles top managers took a long, hard look at the giant

companys global operations and decided that they could make much better use of

organizational resources if they changed the level at which decisions were made in their


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organization. Until 1995, managers in each of Procter & Gambles divisions, in each

country in the world in which it operated, were more or less free to make their own

decisions, and decision making was decentralized. Thus managers in charge of the British

soap and detergent division operated quite independently from managers in French and

German divisions. Moreover, even with Britain, the soap and detergent divisions operated

quite independently from other Procter & gamble divisions such as its health-care and

beauty products divisions. Top managers believed that this highly decentralized global

decisions making resulted in the use of possible gains to be obtained from cooperation

both among managers of the same kind of division in the different countries (soap and

detergent divisions throughout Europe) and among managers in the different kinds of

divisions operating in the same country or world regions.

Therefore, Procter & Gambles top management team pioneered a new kind of

organizational structure. First, they divided P&Gs global operations into four main areas

- north America, Europe, the middle east and Africa, and Asia and in each area they

created the new role of global executive vice president responsible for overseeing the

operations of all the different kinds of divisions inside that world region. This approach

was something Procter & Gamble had never attempted. It is the global vice presidents

responsibility to get the different kinds of divisions inside each area to cooperate and to

share information and knowledge so that authority is centralized at the world area level.

Each of these new top managers then reports directly to the president of Procter &

Gamble, further centralizing authority.

In another change to further centralized authority, P&Gs managers grouped

divisions operating in the same area and put them under the control of one manager. For

example, the manager of the U.K. soap and detergent divisions took control over soap and

detergent operations in the United Kingdom, Ireland, Spain, and Portugal and became

responsible for getting them to cooperate so the company reduce costs and innovate more

quickly across Europe.

Procter & Gamble has been delighted with its new balance between centralized

and decentralized authority because its top managers feel they are making much better use

of organizational resources to meet customers needs. They believe Procter & Gamble is

poised to become the dominant consumer goods company in the world, not merely in the


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United States, and in 1996 the company earned record operating profits on record global

sales.


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Facts:-

The proctor & gamble is the giant company decided global operation for better use

of organizational resource.

Proctor & gambles divisions are there in each country and each country managers

have their own authority in decision making.

Proctor& gambles company decision making was decentralized.

In Britain the soap & detergent divisions are independent from health-care &

beauty products divisions.

Due to decentralization the company comes under loss.

So for this the company changes their decision making authority from

decentralization to centralization.

It made a new type of organizational structure. They divide global operations into

four main areas- North America, Europe, the Middle East and Africa and Asia.

In each area they created the new role of global executive vice president.

Vice presidents responsibility to get the different kinds of divisions inside each

area to cooperate and to share information and knowledge so that authority is

centralized at the world area.

After this used both centralized and decentralized authority and helps to meet

customer needs.

At 1996 the company earned record operating profits on record global issue.


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Question and answers

1) Why did proctor & gamble move to centralize control?

Proctor & gambles divisions are there in each country and each country managers

have their own authority in decision making. Proctor& gambles company decision

making was decentralized. In Britain the soap & detergent divisions are

independent from health-care & beauty products divisions. The every division

managers of the company they are less cooperative. And they will take own

decisions about their divisions. Due to decentralization authority the company

comes under loss. So for this the company changes their decision making authority

from decentralization to centralization.

2) When might managers realize that they have gone too far and

centralized control too much?

Due to decentralization the company comes under loss. So for this the company

changes their decision making authority from decentralization to centralization. It

made a new type of organizational structure. They divide global operations into

four main areas- North America, Europe, the Middle East and Africa and Asia. In

each area they created the new role of global executive vice president. Vice

presidents responsibility to get the different kinds of divisions inside each area to

cooperate and to share information and knowledge so that authority is centralized

at the world area. For this also it cannot fulfill customer needs its have control over


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the every division. For that they have thought to apply both authorities. After this

used both centralized and decentralized authority and helps to meet customer

needs. It fulfills the all customer needs and help to reach company goals. At 1996

the company earned record operating profits on record global issue.

Conclusion:

After studying this I came to know that every company has their own authority

according to their needs and goals. In this case also first they implement

decentralization authority after they came to know that they have no control over

that authority so for that some conflicts are arise in different divisions. Then they

changed from decentralization to centralization for this they get benefit but after

they implement both authorities it helps to reach company goals and also earned

recording operates.


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