Double whammy

Is not Narayana Murthy’s return to Infosys with his son a grim reminder of our feudal politics?

Bhupendra Yadav Delhi 

The economic slowdown has dogged us for five years, since 2008, and desperate times often warrant desperate measures. However, desperate times do not afford a licence for anachronism — least of all by top business minds running a flagship company in a sunrise sector such as information technology (IT).

Infosys is a $8 billion company with 156,000 employees, formed in 1981 by six partners — of whom NR Narayana Murthy was the oldest. It has felt the impact of bad times. It’s been making profits but they have been declining in the past two years. Recently, the company was overtaken by a fast-growing rival, Cognizant. Unable to stomach all this, the present board sought Murthy’s help, though he retired from Infosys on August 19, 2011.

A corporation ordinarily does not go crying to its retired founding chairman or leader. But there have been instances. Apple brought back Steve Jobs after 12 years in 1997. Procter & Gamble brought in AG Lafley after two years. Dell got Michael Dell back in 2007 after three years. Starbucks got Howard Shultz back in 2008 after an eight-year sabbatical. Coca-Cola brought Edward Neville Isdell back in 2004 after three years, and so on.

These business leaders returned but none did so with his progeny on his back. There are three main problems in bringing Murthy back with son Rohan as executive assistant. First, it appears wilfully opportunistic. Second, it is positively anachronistic — the values of a different age and sector are at play here. Third, it violates the promise Murthy or his aides made to their shareholders that the family will not dip into the payrolls of Infosys.

It has taken centuries to separate work from home and business from family. To mix the two up again goes against the ‘advanced corporate principles of managerial capitalism’. The artisan owned his/her tools and was happy to work from home. Factories made this impossible and the modern office has made home out of bounds for even sundry employees who have to take oaths of secrecy.

Business was transacted through family firms until the 20th century. These firms were known to exploit kin as labour. They were run by patriarchs who enforced abusive discipline over relatives passing off as employees. These firms were replaced in the early 20th century because they were averse to innovation and not conducive for capital-intensive operations. Managers and owners were separated and capitalism flourished. To mix the two things again will be a giant
leap backwards.

The decision to piggyback the son smacks of adherence to peasant principles of family inheritance. The corporation is jointly held and operated by a management in the interests of the shareholders. Here some are more equal than others but the spirit is democratic as the annual general body meeting of shareholders is considered the final arbiter.

Innovation and creation are keywords in the industrial sector. In contrast, appropriation decides control in agriculture. The scarcity of land makes ‘birth’ more important than ‘worth’ for agricultural inheritance. The State is a dominant player in making decisions on who gets what. Sometimes, the law of primogeniture makes family inheritance impossible for all, except the eldest son. 

Indian politics is at once modern and traditional. Some political parties are family fiefdoms because politics is now a lucrative career. The most blatant examples of family promotion come from regional satraps. When Devi Lal nominated Om Prakash Chautala his successor, questions were raised. He replied in his rustic style, “Why not? Must I promote the sons of Bhajan Lal, my rival?”

Is not Murthy’s return to Infosys with his son a grim reminder of our rural, feudal politics? He has decided to accept a token honorarium of Re 1 a year and so has his son. But, is money the issue or is it the principle of keeping the family separate from business?

The praise heaped on Infosys leaders by Fortune in February 2003 needs recounting. Clay Chandler wrote a hyperbolic piece after Fortune nominated Murthy and Nandan Nilekani the ‘Asian Businessmen of the Year’. They lead middle-class lives, they are punctilious to the extent of reimbursing the company for personal phone calls, and are ‘fanatics for ethics’. They have kept their children off the payroll, Chandler added, with admiration. Rohan Murty (he keeps the ‘h’ out of his last name) was 20 and still a student in 2003.

Today, Rohan has completed his education and is a married man of 30. He is ‘reluctantly’ joining as executive assistant, says his father, the new executive chairman of Infosys. Rohan knows times are bad, the IT sector is fiercely competitive and Infosys is losing business. Why shouldn’t he
be reluctant?  

Bhupendra Yadav teaches History at Azim Premji University, Bengaluru.

 

This story is from the print issue of Hardnews: JULY 2013