satyam - group 6
TRANSCRIPT
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GROUP 6
MEMBERS:
HISHAMRAJESHGEETHIKAGANANYSHANIJATHSHRUTHI
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A Recent Corporate Disaster:
A Deeper Insight
ByGroup 6
MBA 3rd Semester (A1)
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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.
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WHY DID IT HAPPEN?
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.
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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.
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All that analysts and experts could manage by
way of explanation was that there were "systemic
flaws" in accounting and audit practices.
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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
disclosure.
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
5%
Foreign Exchange Management Act: Converted fictitious export
income into cash.
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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)
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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
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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,
competition,success,
prestige
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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
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INDIAN ETHOS AND VALUES
INMODERN MANAGEMENT
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What constitutes Indian
Ethos?
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Set of beliefs, ideas, etc. about social
behaviour and relationship of a person or
group.
The moral ideas and attitudes that belong to
a particular group or society.
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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).
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Is IEM some kind of Hindu concept ofmanagement?
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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Ch t i th f d ti f l
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Character is the foundation of values
The sequence being
Character
Values
Attitudes
Behaviour
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Human Values is the sum total of
qualities like
Truthfulness,
Integrity
Gratitude
Humbleness
Forgiveness
Patience
Transparency
Charitableness
Simplicity
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Human Values make a personAntarmukhi
(interiorized)
Skills will make him more and more Bahirmukhi
(exteriorized).
Human values transcend moral, ethical and
spiritual values
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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
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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.
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Skills must pass through the corridors of values and
the corridors have to be kept not dark and untidy, but
well lit and clean.
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Value-Oriented Holistic
Management
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
skills
This time tested approach to Management can help
stop the rot that has crept into individuals and
organizations
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It can be looked from the following two
approaches
1)Rationalis a bottom up approachputting
together the fragments or components or
constituent elements and thus construct the
whole.
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.
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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.
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TQM is also said to be based on four fundamental
commitments:
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
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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
People,
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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
demands.
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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.
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(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
existence
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Consequences of Stress
Physiological
Emotional
Behavioral
Cognitive
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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
personality
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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 &
express
The Classical (Eastern) Approach which says deny & reject.
There is almost complete unanimity among the psychologists
that the classical approach is valid.
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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
illness
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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).
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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.
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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