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On Corporate Values

On Corporate Values

Narayana Murthy (

Narayana Murthy (

On Corporate Values

Narayana Murthy discusses his company's
corporate values (that may surprise you) and the social, political and
philosophical contexts from which these values arise.

On the Importance of Values

How does Infosys function so well?

We have unwritten rules. Everybody knows that if we want to work as a
team we have to be transaction based. We start every transaction on a
zero base. It is perfectly feasible for us to disagree on a transaction
but we start the next transaction without any bias. Only an argument
that has merit wins; it has nothing to do with hierarchy. Disagreeing
is in the nature of things. When you bring a set of people who have
respect for each others’ competence in certain areas and you’re
transaction-oriented then it can work as it has in our case.

Our value system was like the British Constitution – it was all
unwritten but extremely well practiced ... Our value system is the true
strength of Infosys. Besides, we have complementary skills.... I think
if you ask me what distinguishes Infosys from many other companies, it
is the following: We have a very strong value system. In fact, when I
address new hires the main thing I talk to them about is the value
system. I tell them that even in the fiercest competitive situation
they must never talk ill of customers. For heaven’s sake don’t short
change anybody. Never ever violate any law of the land. It is better to
lose a billion dollars than a good night’s sleep. It is a true

Chance favors the prepared mind. Just as we got determined to
run the marathon with much greater gusto, liberalization happened. If
there is one company that symbolizes all the good that came out of
liberalization, it is Infosys.

The Source of Values
One of the most important values I have learned I got from my family. I
came from a family of eighteen. We had grandmother and eleven other
adults with us. The value of give and take is one thing that I got from
the extended family. I learned that there is the need to sacrifice your
own wants in favor of someone else. We did that all the time. So that
is one thing we all learned. You have to sacrifice for others.

What, if anything, from the Hindu tradition shapes the way
you live and think and work with others? Are there legacies from this
tradition that help you keep your equilibrium and perspective amidst
the ups and downs of the business cycles and he challenges of your job?

I will attempt to bring about some aspects of the way we conduct
business at Infosys that may have a basis in Hindu tradition. One
aspect is the universal appeal of Hindu tradition aptly summarized in
one of the Vedic hymns: Let all living beings prosper. In Infosys, we
have consciously brought about a respect and dignity for every
individual. Right from day one, we eschewed any transaction that
created asymmetry of benefits between the founder-employees and other

Another feature is the quest for knowledge. A definition of
Hinduism mentioned in Nehru’s Discovery of India is: Hinduism is a
relentless pursuit of truth. Truth is God. Our success at Infosys
depends on our continual learning. Learnability is critical for us. We
define learnability as the ability to extract generic inferences from
specific instances and using them in new, unstructured situations.
Infosys has always placed a premium upon recruiting people with a high
learnability quotient.

Another strong belief is that ultimately hard work pays – a
concept of an inherently fair world. At the same time, we at Infosys
take a long-term view of our business and life. We remember that
success is, generally, ephemeral. We remember that we are only as good
as the results of our last quarter. We fully believe that we are
running a marathon, not a sprint; and our strategies and policies
reflect that.

We attach utmost importance for our value system that acts as a
guiding light in times of darkness, confusion and self-doubt, and when
faced with moral dilemma. At Infosys, we have had several instances
when our value system was severely tested. These events occurred in our
dealings not only in India but also all over the world. In every
incident, we were firm and stood by our values because we knew that
taking short cuts that compromise our values would be suicidal for us.

A supportive family is a support system that will always be
there for you. With this rock like support behind, one can endure
almost anything in the work-life. My family continues to play a vital
role in my achievements.

In your own life you seem to bring together ideologies that
in the West would be seen as contradictory. You have said that you were
once a dedicated Marxist and that you have been greatly influenced by
Gandhi and now you are a successful capitalist. How do you manage to
integrate all these seeming conflicting ideologies into your own world

As their core objective, Capitalism and Marxism intend to better
the lot of humanity. It is in the process of achieving this objective
that differences arise. I felt that it is better to create wealth than
to distribute poverty. Consequently, responsible Capitalism that
creates wealth and allows it to percolate down seems to be a better
option. We have incorporated this belief in Infosys. In fact, in
accordance to the Marxist philosophy of wealth for all, we have had
100% stock option coverage among our employees. I take immense pride in
the fact that among Indian companies we have created the highest number
of dollar millionaires.

Mahatma Gandhi epitomizes the qualities of leadership by example,
simplicity and perseverance. In a knowledge company whose core
competencies include human intellect and learning, leaders have to walk
the talk. Any dissonance between rhetoric and action by leaders will
hasten the loss of credibility. The words of Mahatma Gandhi are still
relevant; he said: You must be the change you wish to see in the world.

Experiences with Socialism

You worked overseas early in your career. What did you learn from your stint abroad?

My years in Paris were the most influential years of my life. I
observed how in a western country even the socialists understood that
wealth has to be first created before it can be distributed. That there
could only be a few leaders to create wealth. And that it’s the job of
the government to create an environment where it’s possible for people
to create wealth. I realized that all this talk of socialism as
practiced in India was not meaningful. Our country treated communism as
an “-ism” that was completely disassociated from the reality of the
context. You cannot distribute poverty.

What prompted your change of heart from being a staunch leftist?

After my Paris stay, I donated my earnings and with $450 American
dollars in my pocket, decided to return home overland. I came to Nis, a
border town between the then Yugoslavia and Bulgaria to take the Sofia
Express. I struck up conversation with a girl in the compartment. After
about 45 minutes the train stopped, the police took the girl away,
ransacked my backpack, and put me in a room that had no mattress and a
window 10 ft high. They kept me there for 60 hours after which they
freed me saying that since I was from a friendly country they were
letting me go. I felt that if this system treats friends this way then
I did not want anything to do with it. This experience really shook me.

So the socialist in you became a committed capitalist?

I am a 100% free marketeer but I call myself a compassionate
capitalist. While I’m very conservative in economic matters I’m very
liberal about social matters. But I have no illusions about socialism.
In a country like India, when we have to make capitalism an attractive
alternative to people, it is extremely important for us to show
tremendous compassion to the less fortunate. That doesn’t mean that you
should give jobs to people who don’t deserve them or that you should
make less profits but wherever you can show compassion you should.

Being a Good Corporate Citizen

You have said publicly many times that modern corporations
must be good citizens. To illustrate that point, how would a
corporation (such as Infosys) act? Do you think corporations will
choose to act responsibly without some outside pressure? Should there
be some countervailing power to push large corporations toward the good
citizenship you advocate by using such means as political pressure and
by organizing protest groups such as the environmental movement, labor
movements, women's movements, etc.?

One of my strongest beliefs is that corporations have an
important duty to contribute to society. While, on average, tremendous
progress has been made in enhancing the economic well being of people,
the chasm between the haves and the have-nots of the world has
unfortunately widened, especially in the developing world. No
corporation can sustain its progress unless it makes a difference to
its context. Nevertheless, these initiatives should come from the
corporation itself rather than being foisted upon by outside parties.

Infosys is voluntarily committed to contribute to its social
milieu and, in 1998, established Infosys Foundation as a not-for-profit
trust to support initiatives that benefit society-at-large. Infosys has
also instituted social programs that target educational institutions
specifically in the rural areas.

India is still largely an agrarian economy. How do you think the
rise of IT in India will touch the lives of average village Indians? In
what ways can IT help provide a better life for them?

IT can help alleviate many of the problems that rural India faces.
Health care, education, environment conservation can be comprehensively
brought to the villages. E-governance can leverage on the power of the
Internet to bringing services to the citizens. The administrative
system can be streamlined to bring more decentralization and power to
the villages. E-governance helps separate delivery of services from
decision-making, thus reducing chances for corruption. This process is
already in its initial stage in Karnataka. The Bhoomi project aims at
making the land records available to villagers. The Nondani project
aims at making land registration simple and easy for the citizens.

In addition, in this global age, given the path breaking impact
of the Internet on business practices, ideas can come from anywhere.
The best ideas or business models will dominate, regardless of their
origins. Maybe, in the not so distant future you could find people from
the villages of India making a mark on the business world.

By his own admission there are perhaps hundreds and millions of Indians
who are smarter than him. He considers himself very lucky. He believes
that if one realizes that whatever one has received is an act of God,
then it'll help in getting better and better. He quotes someone having
said, "If God is shy to announce His presence, He comes in the form of
Luck." Not surprising that he leads not too ostentatious a life. "If
you lead a simple life, then you are not a victim of wealth. You are on
top of it. Unfortunately in India, because foreigners ruled us for well
over thousand years, the mindset we have developed is that we will lead
a grand personal life, but we don't care for the community," he
laments. That he cares for the community is evident from the fact that
at the corporate level "The Infosys Foundation" has made various
donations towards charitable causes and community development projects.

Mrs. Murthy, a leader of the Infosys Foundation, has said
that in the ultimate reality, God will ask each of us what we have done
to help make a better world. What is your vision of how a person of
wealth can live a moral and responsible life in the new global world?

It is becoming obvious that the world is becoming increasingly
interlinked and interdependent, and that we have to collectively move
forward. The everincreasing income disparities cannot be neglected. A
person is no more an isolated entity and in addition to self-welfare
must shoulder responsibilities for society-at-large. One should be
trustworthy with all in one’s dealings. It is on such foundations that
great organizations are created. In the end, unless we can wipe the
tears from the eyes of every poor man, woman and child on this planet,
I do not think any of our lives is a worthy one.