On Campus

The Murthy effect

| Updated on October 20, 2013 Published on October 20, 2013

Nishant Verma

Sneha Motwani

Is the Narayana Murthy effect beginning to show on Infosys? What is your view?

Nishant Varun

One would say, yes. Soon after Narayana Murthy entered Infosys as Executive Chairman, Infosys is finally getting its mojo back.

But there are always two sides to a coin. Narayana Murthy came up and announced hikes for all the employees by an average 8 per cent, which was a strategic move as he believes that employee performance is a vital differentiator and is linked to a broader effort to revive a culture of meritocracy in the company. But this hike was something that the employees already deserved in the year 2013-14 on the first place.

Though, with him in the top management decision-making has been centralised, this has strengthened the leadership and put the company back on a high growth path.

But, still, the Infosys Q2 results success is because of its particular focus on cost-cutting in all the offices and more because of the sharp depreciation in the rupee against major currencies.

Sneha Motwani

I feel Narayana Murthy’s vision and risk-taking ability would help Infosys bounce back from the lows it has seen in the recent past. His strategy of focusing on volume-driven, low-margin growth has started bearing fruit, demonstrated by the quarterly profit figures posted by Infosys in 2013.

However, the suitability of such a model for sustainable revenue generation is questionable. I am of the opinion that India has to shed its image as a source of cheap labour to that of a country which leverages its demographic dividend and technical prowess to deliver high-end solutions.

This strategy, though unprofitable in the short term, would pave the way for better profits and better utilisation of human resources in the long term.

(Both are first year students of Delhi University’s Faculty of Management Studies)

Published on October 20, 2013
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