satyam - group 6

Upload: sreenath-pv

Post on 05-Apr-2018




0 download


  • 8/2/2019 Satyam - Group 6


    GROUP 6



  • 8/2/2019 Satyam - Group 6


    A Recent Corporate Disaster:

    A Deeper Insight

    ByGroup 6

    MBA 3rd Semester (A1)

  • 8/2/2019 Satyam - Group 6


    In todays world corporate scam is not at all a new happening. Its

    quite common to all of us.

    The emerging world is beginning to get its own share of blue

    chip scams as the list keeps growing longer and longer.

    Last year one of the biggest scams to rock the corporate world

    was 100% home grown Indian. Satyam Computers was always a

    well known brand name.

  • 8/2/2019 Satyam - Group 6



    Investors of Sathyam computers and general public got

    shocked when the chairman of India's fourth largest IT

    company B Ramalinga Raju announced that the

    company's profit figures have been falsely inflated over

    the years.

    He wrote a 5-page letter to the former Board outlining the

    deception in detail.

  • 8/2/2019 Satyam - Group 6


    Truth is that Raju managed this enormous fraud even though

    Satyam did everything according to the rulebook.

    An international firm audited its books, accounts were

    declared in accordance with Indian and US standards.

    Its board included some independent directors with excellent

    credentials, including a Harvard business school professor and

    a former federal cabinet secretary.

  • 8/2/2019 Satyam - Group 6


    All that analysts and experts could manage by

    way of explanation was that there were "systemic

    flaws" in accounting and audit practices.

  • 8/2/2019 Satyam - Group 6


    Raju's biggest violations were

    Fudging Numbers: Pumped up revenue, profit, bank deposits and cash

    reserve numbers.

    Undisclosed Pledges: Procured a loan of Rs. 1,230 crore without


    Insider Trading: Sold most of his 26% stake while tweaking numbers to

    keep the share price high.

    Take over Code: Probable violation if he knew when his stake fell below


    Foreign Exchange Management Act: Converted fictitious export

    income into cash.

  • 8/2/2019 Satyam - Group 6


    Raju's Educational Background and

    Corporate Career.

    Ramalinga Raju did his B. Com from Andhra Loyola College atVijayawada and MBA from Ohio University, USA.

    He also did an Owner / President course at Harvard. Way backin 1977 he started his venture with a spinning and weavingmill.

    Then he moved into the construction business. Ten years on, in

    1987, he founded Satyam Computer Services.

    Satyam became the first company to enter the Indian internetservice market with the brand Satyam Infoway (Sify)

  • 8/2/2019 Satyam - Group 6


    his company attracted a variety of national and international

    awards in the next 12 years .These include:

    Ernst & Young Entrepreneur of the Year Services Award

    1999Dataquest IT Man of the Year Award 2000

    CNBCs Asian Business Leader - Corporate Citizen of the

    Year award in 2002

    E&Y Entrepreneur of the Year 2007 (revoked after the scam)

    Golden Peacock Award for Corporate Governance 2008

  • 8/2/2019 Satyam - Group 6


    What made him do so ?

    Lack of education was not the reason whyRamalinga Raju did what he did

    Greed is what triggered the Satyam scam.- Greed for money

    - Greed for power,



  • 8/2/2019 Satyam - Group 6


  • 8/2/2019 Satyam - Group 6


    View of Mr. Narayana Murthy on

    Satyam Scam

    The IT industry has done a pretty good job of raising

    the country's image in the world and Satyam has

    hurt it

    Satyam - Company with a feudal culture

    There is opacity due to a centralised authority and insuch an environment best practices are subordinated

    to quick profits

  • 8/2/2019 Satyam - Group 6


  • 8/2/2019 Satyam - Group 6




  • 8/2/2019 Satyam - Group 6


    What constitutes Indian


  • 8/2/2019 Satyam - Group 6


    Set of beliefs, ideas, etc. about social

    behaviour and relationship of a person or


    The moral ideas and attitudes that belong to

    a particular group or society.

  • 8/2/2019 Satyam - Group 6


    Formally, the body of knowledge whichderives its solutions from the rich and huge

    Indian system of ethics (moral philosophy) is

    known as Indian Ethos in Management (IEM).

  • 8/2/2019 Satyam - Group 6


    Is IEM some kind of Hindu concept ofmanagement?

  • 8/2/2019 Satyam - Group 6


    The salient ideas and thoughts of Indian Ethos inManagement revealed by our ancient scriptures are:

    Atmano Mokshartham, Jagat hitaya cha: All work is anopportunity for doing good to the world and thusgaining materially and spiritually in our lives.

    Archet Dana manabhyam: Worship people not onlywith material things but also by showing respect totheir enterprising divinity within.

  • 8/2/2019 Satyam - Group 6


    3) Atmana Vindyate Viryam: Strength and inspiration forexcelling in work comes from the Divine, God within,through prayer, spiritual readings and unselfish work.

    4) Yogah karmashu Kaushalam, Samatvam yoga uchyate:He who works with calm and even mind achieves the most.

    5) Yadishi bhavana yasya siddhi bhavati tadrishi: As we

    think, so we succeed, so we become. Attention to meansensures the end.

  • 8/2/2019 Satyam - Group 6


    Parasparam bhavayantah shreyah param bhavapsyathah: Bymutual cooperation, respect and fellow feeling, all of usenjoy the highest good both material and spiritual.

    Tesham sukhm tesham shanti shaswati: Infinite happiness

    and infinite peace come to them who see the Divine in allbeings.

    8) Paraspar Devo Bhav: Regard the other person as adivine being. All of us have the same consciousness thoughour packages and containers are different.

  • 8/2/2019 Satyam - Group 6


    Basic principles of Indian Ethos for Management

    Immense potential, energy and talents for perfection as humanbeing has the spirit within his heart.

    Holistic approach indicating unity between the Divine (The Divinemeans perfection in knowledge, wisdom and power), individual self

    and the universe.

  • 8/2/2019 Satyam - Group 6


    Subtle, intangible subject and gross tangibleobjects are equally important. One must develop

    ones Third Eye, Jnana Chaksu, the Eye ofWisdom, Vision, Insight and Foresight. Innerresources are much more powerful than outerresources.

    Divine virtues are inner resources. Capital,materials and plant & machinery are outerresources.

  • 8/2/2019 Satyam - Group 6


    Karma Yoga (selfless work) offers double benefits,private benefit in the form of self purification andpublic benefit.

    Yogah Karmasu Kaushalam - Excellence at workthrough self-motivation and self- development withdevotion and without attachment.

    Co-operation is a powerful instrument for teamwork and success in any enterprise involving collectivework.

  • 8/2/2019 Satyam - Group 6


    Principles of IEM are universally applicable.

    IEM can help develop an effective and holisticmanagement pattern which will assure all round growth in

    productivity, marketing and profitability.

    This will help in synchronizing private and public benefitsand encourage individuals to lead an enriched quality of lifetogether with worldly achievements.

    The best form of management has to be holistic and value

    driven which is the objective of IEM.

  • 8/2/2019 Satyam - Group 6


    Ch t i th f d ti f l

  • 8/2/2019 Satyam - Group 6


    Character is the foundation of values

    The sequence being





  • 8/2/2019 Satyam - Group 6


    Human Values is the sum total of

    qualities like










  • 8/2/2019 Satyam - Group 6


    Human Values make a personAntarmukhi


    Skills will make him more and more Bahirmukhi


    Human values transcend moral, ethical and

    spiritual values

  • 8/2/2019 Satyam - Group 6


  • 8/2/2019 Satyam - Group 6


    Values v/s Skills

    1. To become, we need values. To do, we need skills.

    2. Becoming (needing values) must precede doing (needingskills). Values should act as the basis of the skills acquired.

    3. Values are the means of perfection. Skills must have soundsystem of values as the base. Otherwise, one can manipulateskills for ulterior motives.

    4. Values are internal, dealing with internal development of aperson, purifying mind and heart. Skills on the other handonly make a person proficient. Values are the means ofperfection of personality

  • 8/2/2019 Satyam - Group 6


    5. The field of values is governed by union, holism and

    relatedness. More often than not, skills are used to bring

    about division, fragmentation and separation.

    6. Values bring about excellence and universal good. Skills seeus through mechanics of management.

    7. Skills are not enduring, values are.

    8. Skills change with passage of time. Policy is flexible,

    principles and values are not.We have permanent

    fundamental values.

  • 8/2/2019 Satyam - Group 6


    Skills must pass through the corridors of values and

    the corridors have to be kept not dark and untidy, but

    well lit and clean.

  • 8/2/2019 Satyam - Group 6


    Value-Oriented Holistic


    It is the essence of the Indian Management thought

    Enriched by the rich Indian heritage and culture;

    It is based on values supplemented by adequate


    This time tested approach to Management can help

    stop the rot that has crept into individuals and


  • 8/2/2019 Satyam - Group 6


    It can be looked from the following two


    1)Rationalis a bottom up approachputting

    together the fragments or components or

    constituent elements and thus construct the


    2)Theperceptive approach is a top down

    approachsee the whole first and then go into

    the constituent elements. This is considered to be

    real holism.

  • 8/2/2019 Satyam - Group 6


    Indianizing Total QualityManagement

    Sashkin and Kiser have defined TQMas Creating an

    organizational culture committed to the continuous

    improvement of skills, teamwork, processes, product and

    service quality, and customer satisfaction.

    TQM stresses three principles: customer satisfaction,employee involvement, and continuous improvements in

    quality, which some refer to as the quality trilogy.

  • 8/2/2019 Satyam - Group 6


    TQM is also said to be based on four fundamental


    1. Commitment to the customers total satisfaction

    2. Commitment to understanding and improving the

    organizations processes

    3. Commitment to employee improvement

    4. Commitment to data-based decision making

  • 8/2/2019 Satyam - Group 6


    HRD Interventions in TQM

    TQM is now directly equated with HRD and they are

    regarded as two sides of the same coin.

    we are talking of primarily two thingsEmphasis on

    Quality of Life and Focus on Quality of Work Life.

    HRD intervention is needed to bring about Total Quality


  • 8/2/2019 Satyam - Group 6


    Stress & Indian Ethos

    Stress is a dynamic condition in which an individual is

    confronted with an opportunity,constraint, or demand

    related to what he or she desires and for which the outcomeis perceived to be both uncertain and important.

    More typically, stress is associated with constraints and


  • 8/2/2019 Satyam - Group 6


    Causes of Stress

    Mostly external and outside our control

    Stress generating events & situations in life

    Mostly internal and by and large within our control

    (a) Strong negative emotionsthe 5 As of anger, ambition, anxiety,

    apprehension and arrogance.(b) Materialistic world view including a hedonistic culture that

    promotes crass consumerism and is sustained by some powerful

    unwholesome emotions like selfishness, greed, grabbing mentality,

    envy, egocentricity, etc.

  • 8/2/2019 Satyam - Group 6


    (c) Living an impure, illegal and unethical life ruled by

    the senses

    (d) Personality composition / make-up

    (e) Interplay of duality that is a fact of life and human


  • 8/2/2019 Satyam - Group 6


    Consequences of Stress





  • 8/2/2019 Satyam - Group 6


    Methods of Stress Prevention

    Effective management of the 5As

    Developing a spirit of progressive renunciation

    The ethico-moral law of cause and effect (The

    Theory of Karma)

    Conscious efforts towards developing a healthy


  • 8/2/2019 Satyam - Group 6


    Managing Anger

    Anger could be both a cause and an effect of stress. There are

    two methods for dealing with anger.

    The Modern (Western) Approach which says accept &


    The Classical (Eastern) Approach which says deny & reject.

    There is almost complete unanimity among the psychologists

    that the classical approach is valid.

  • 8/2/2019 Satyam - Group 6


    The Indian View on Stress

    In ancient Indian literature some of the terms used are bishad, klesha and dukh

    Klesha refers to the stressor aspect

    Ancient literature does talk of tritap which refers to three kinds or rather

    sources of distress and miseries (dukhatraya) in human life, mainly

    Adhibhautikadue to beings, i.e., wild animals, reptiles and cruel humans

    Adhidaivika due to Acts of God, i.e., natural calamities which are

    ordinarily beyond human control

    Adhyatwikarelating to ones own body and mind, i.e., physical and mental


  • 8/2/2019 Satyam - Group 6


    The Dwandik Theory of Stress

    It is a contribution from The Gitawhich says that stress

    arises from the universalphenomenon of the constant

    interplay of dualities or opposites or contraries in thefabric of lifeof our existenceboth the outer/physical

    world (e.g., night and day or hot and cold) and the

    inner/psychological domain (e.g., pleasure and pain orsuccess and failure).

  • 8/2/2019 Satyam - Group 6


    The Gita suggests two alternative approaches to deal with

    Dwanda or Dualities, Samattwa (i.e.,treating the two as equal)

    and Nirdwandwa (i.e., transcending the dualities).

    The first approach suits the Bhakta and is called the Bhakti-Yoga.

    The second is for the Gyani and is called the Gyan-Yoga.

    The first approach is relatively easier.

  • 8/2/2019 Satyam - Group 6


    Few ways to stay way from stress

    Control anger by all means

    Exercise regularly

    Have good food habits Work efficiently but avoid competition with others

    Dont be a workaholic

    Look for sat sangh(company of wise and good people)

    Remember The Theory of Karma Be content with whatever you have