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Managing a Crisis: Accountability vs Responsibility

ORGANIZATIONAL BEHAVIOR
ET Cases, 51.12 minutes
PUBLISHED DATE: 08/05/2015

Teaching Note Preview

Managing a Crisis: Accountability vs Responsibility

Synopsis

In this Case Brief, the erstwhile CIO of Satyam Computer Services Ltd. (taken over by Tech Mahindra in April 2009) and the Co-founder & CEO of Voice of Big Data, Srinivas Kishan Anapu (Srinivas), shares his poignant story of how he was forced to handle a crisis that he wasn’t privy to. The fallout of the NYSE-listed Satyam Computers’ founder and CEO, Ramalinga Raju’s (Raju) (in)famous letter released on January 7th 2009, was quite challenging and demanding. The revelations sent shock waves not only amongst its customers and its employees, but also amidst the Indian stock exchanges, NYSE, Indian government, Indian IT Industry and the entire India Inc. A company that was known for its exemplary corporate governance practices and having an illustrious board was never doubted even once and then this sudden revelation brought in quite pronouncing repercussions – in the short term as well as the long term.

One of the immediate challenges for the investigative agencies was to piece together the $1 billion-scandal and to identify who would help them put together this jigsaw puzzle? No one seemed to know how to infer the report scam, as Raju admitted in the letter, “even business leaders and senior executives in the company, such as, Ram Mynampati, Subu D, T R Anand, Keshab Panda, Virender Agarwal, A S Murthy, Hari T, S V Krishnan, Vijay Prasad, Manish Mehta, Murli V, Shriram Papani, Kiran Kavale, Joe Lagioia, Ravindra Penumetsa, Jayaraman and Prabhakar Gupta are unaware of the real situation as against the books of accounts. None of my or managing directors’ immediate or extended family members has any idea about these issues.”1

Who then should investigative agencies look up to? Who can help them in deciphering the data? It was Srinivas they turned to, to resolve the data deluge and unearth the intricacies of the reported fraud. Never did Srinivas imagine that he would become the focal point of all the investigations subjecting his professional and personal life to enormous pressure and trauma. However, not to be left lurking and tentative, he assisted the investigative agencies with the help of his resilient team members. This Case Brief is a candid account of how he went about assisting the investigative agencies in piecing together the reported scandal on one hand and managing the daunting and demanding pressures of the new responsibility with the (unfound) fear that he might be made accountable.

Pedagogical Objectives

• To understand the role of a CIO of a large IT Solutions company in managing a corporate crisis
• To develop and hone a sense of empathy for the people managing a crisis, especially for those who haven’t had any fathomable or perceptible role in the underlying crisis
• To examine the role of personal character/personal values in managing a crisis and what kind of leadership might suit the crisis times
• To discuss and debate on the processes and practices that can be developed and deployed in managing crises of a well-known, actively traded Public Company

Case Brief ’s Background

This case brief ’s effectiveness can be enhanced only when the students/participants are either aware of or made to be aware of Satyam Computers’ fiasco. Just the way Indian IT companies, including Satyam Computers, placed India on the global business map across the continents, Satyam Computers’ fiasco also placed India on the global business map for a different reason – that an Indian company can also falter and indulge in very questionable and deplorable corporate governance practices causing sufficient damage for India and India Inc.’s IT industry.

To appreciate the depth of crisis and gauge the extent of crisis, the students were asked to read up on Satyam Computers’ scandal. This understanding forms the background for this Case Brief. Called as India’s Enron, Satyam Computers’ scandal was not only shocking for India Inc., in general, but also its 53,000 employees leaving them completely demoralized and devastated.

By now, enough has been written about Satyam Computers’ fiasco – including books, case studies, white papers, articles, videos, etc., and it is beyond the scope of this Teaching Note to capture the nitty-gritties of the Satyam Computers’ fiasco. Nevertheless, a quick and brief recap of what triggered the crisis.

Satyam Computers Services Ltd. was started in 1987 by its founder Ramalinga Raju (Raju) in Andhra Pradesh, India. In a short span of time, Satyam climbed the corporate ladder to be recognized as the fourth largest company in India. It offered services such as Business Process Outsourcing (BPO) and consultancy in several IT, engineering and management areas. Very soon, prominent Fortune 500 companies (185 Fortune 500 companies from 66 countries) like Nestle, GE and GM came to be top customers on Satyam’s client list. On January 7th 2009, Raju declared that he had been showing non- existent profits on the company’s books for the past several years...................


1 B. Ramalinga Raju, “It Was Like Riding A Tiger...”, http://www.outlookindia.com/article.aspx?239402, January 7th 2009

Product code: OB-3-0020, OB-3-0020A

In this Case Brief, Srinivas Kishan Anapu, the former CIO of Satyam Computer Services Ltd. and currently the Co-founder & CEO of Voice of Big Data, narrates his travails in managing a crisis out of Satyam Computers’ fraud.

Abstract

In this Case Brief, Srinivas Kishan Anapu, the former CIO of Satyam Computer Services Ltd. and currently the Co-founder & CEO of Voice of Big Data, narrates his travails in managing a crisis out of Satyam Computers' fraud. Ramalinga Raju, the Founder & CEO, of Satyam Computer Services Ltd., the erstwhile bellwether of Indian IT industry who was held in highest esteem for his exemplary leadership and stewardship, was abruptly tainted with India's biggestever corporate scam. Announcing this on the fateful January 7th 2009 through the (in) famous letter Riding the Tiger1, Ramalinga Raju admitted that there were deliberate misgivings placing enormous financial pressure and threat to the very existence of the illustrious company. What followed was a saga of traumatic moments for 53,000 employees and the leadership  team, including the CIO (Chief Information Officer), Srinivas Kishan Anapu.

Being the CIO of the company, he knew his role was to serve internal customers and to manage external customers. But never did he imagine that his role also would demand traumatic interactions with India's premier investigative agency, the CBI and such agencies as CB-CID, SEBI, SFIO, and most importantly the Judiciary. Should he defend the status quo? Should he defend his loyalty or his professional dignity? Should he defend his team or should he sacrifice them at the altar of excruciating personal trauma?

Pedagogical Objectives

  • To understand the role of a CIO of a large IT Solutions company in managing a corporate crisis
  • To develop and hone a sense of empathy for the people managing a crisis, especially for those who haven’t had any fathomable or perceptible role in the underlying crisis
  • To examine the role of personal character/personal values in managing a crisis and what kind of leadership might suit the crisis times
  • To discuss and debate on the processes and practices that can be developed and deployed in managing crises of a well-known, actively traded Public Company

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