Hierarchical Organization of Delta Flows Discussion


Case Study Assigned: Delta Air Lines, Inc.


This is your fourth case study assignment out of four. For this assignment, you will need to access the full-length case study you have been assigned at the top of this page within your Case Studies eText. You are required to read and analyze this case study.

Your analysis must:

  • Describe the company’s organizational culture and present evidence from the case to support your opinion. At a minimum, include discussion about the company’s values, norms and artifacts, as it relates to their culture.
  • Describe the company’s organizational structure and present evidence from the case to support your opinion. At a minimum, the discussion should touch upon the building blocks of an organizational structure (specialization, formalization, centralization and hierarchy.
  • Discuss whether or not you believe the organizational culture and structure align with the organization’s ‘strategy’. Explain your rationale.
  • Provide a total of four findings of fact; 1 from the following four functional areas of business:
    • Management
    • Marketing
    • Finance or Accounting
    • International Business

Explanation & Answer length: 12 pages.

Infosys ORGANIZATIONAL CULTURE VALUES: Infosys’ values revolve around fairness, honesty, and courtesy towards clients. “These values drive the firm’s commitment to provide customer delight, exemplary leadership, integrity and transparency, fairness, and pursuit of excellence” (Rothaermel, 310). The high prioritization of these values is a key strategy for Infosys to maintain existing clients and establish new clients as long-term revenue streams. This value strategy has proven effective for Infosys, and it’s a major contributor to their growth as shown in their Intangible Assets score sheet which reveals 97% of revenues in 2010 derived from existing customers (322).

Moreover, it’s also another reason that the organization is able to maintain a prestigious image in the market through various publishers’ high rankings of Infosys. In fact, adherence to international governance guidelines like the UN Global Compact has allowed Infosys to win “. . . recognition for best practices in corporate governance by Asiamoney and best company in corporate governance, investor relations, and corporate social responsibility by FinanceAsia” (310). Their efforts on this front and their resulting awards and reoccurring client revenues clearly show why fairness, honesty, and courtesy towards clients are important to Infosys. As of 2018, Infosys values: “Client Value- To surpass client expectations consistently. Leadership by Example- To set standards in our business and transactions, and to be an exemplar for the industry and ourselves. Integrity and Transparency- To be ethical and sincere in all our transactions.

Fairness- To be objective and transaction-oriented, and thereby earn trust and respect. Excellence- To strive relentlessly; constantly improve ourselves, our teams, and our services and products to become the best” (Infosys). The current values at Infosys continue to envelop fairness, honesty, and courtesy towards clients. They have also added a level of quality in their pursuit of excellence which is complementary to their existing values. NORMS: According to Frank Rothaermel, “norms define appropriate employee attitudes and behaviors” (384). The employee attitudes and behaviors at Infosys can be seen in the 2017 senior vice president and head of human resources department, Richard Lobo’s assertions about the employee value proposition, “Through the culture of the organization, the employee must be free to express who they are both professionally and outside of work.

Open communication channels with peers and leadership, health and wellness support through our Health Assessment and Lifestyle Enrichment (HALE) initiative, emotional support through counselors, . . . plus flexible policies and interactive internal networking encourage employees to “be who they are”.” Open communication would be an essential part for Infosys to disseminate information, collaborate, and help managers like Adrian Patel communicate the necessary strategies for Infosys in the future. The open communication combined with employee appreciation and managerial support suggest positive attitudes and outlook on growth for both individual employees and the organization. ARTIFACTS: Some of the artifacts at Infosys can be seen within the level of education that a majority of employees have received or entitled to. For instance, Infosys’s Education & Research unit and Leadership Institute “. . . employs over 600 full-time faculty members, a third of whom hold at least a master’s degree” (Rothaermel, 310).

The high level of education that employees have suggests that employees have intellectual conversations. Additionally, Stephen Wise, managing partner for Infosys, the furniture layout in some of the offices promotes work communication and interactions (Singapore Business Review). This suggests that despite the vertical hierarchy and centralization of decision making, the environment is still open and inclusive. In fact, Infosys has even incorporated a bowling alley to some of their offices (Smith). ORGANIZATIONAL STRUCTURE SPECIALIZATION: A basic perspective of specialization or the division of labor at Infosys is the separation between software professionals, and sales and support staff.

However, additional levels of specialization can be seen in Infosys’ revenue segmentation. For instance, Infosys focuses on the following industries: Manufacturing Banking and Financial Services, Insurance, Telecom, Retail Energy and Utilities, Application Development, Application Maintenance Business, Process Management, Consulting Services, and Package Implementation, Infrastructure Management, Product Engineering Services. Moreover, their global delivery model reveals that the organization distinguishes business activities between offshore development centers, global delivery centers, future development centers, clients and partners, client teams, and activities of onsite Infosys personnel (Rothaermel, 324). FORMALIZATION: “An organizational element that captures the extent to which employee behavior is steered by explicit and codified rules and procedures” (Rothaermel, 371).

The instance of Infosys following and adhering to international governance gives insight into how the organization is conscious of policy because of the effects it can have on them. Also, the organizations’ development of formalized training is another example of the formalization within the organization. For instance, “To ensure that Infosys’s learning-strategy investments yield results, the company’s leaders and governing learning council review the firm’s action plan and training performance every six months; an internal employee certification program is integrated within the firm’s performance management system, and promotions and benefits are tied to a full dimension of competencies says M.P. Ravindra, senior vice president and head of education and research” (Infosys Technologies Limited, 74). Also, Infosys aims to shape employees’ behavior by enhancing the tradecraft and skills of both recent graduates and engineers in an initiative called Campus Connect (Infosys Technologies Limited, 74).

This not only shows the formalization of the organization on how they implement initiatives to guide employees work processes, but it also shows how Infosys values their employees and new hires. “Infosys believes that its employees are its “vital and most valuable assets and also stands out for its human resource practices” (Rothaermel, 311). Infosys is vested in their human-capital and enhancing these skills furthers the quality of Infosys products and services to their clients. CENTRALIZATION: Centralization is “An organizational element that refers to the degree to which decision making is concentrated at the top of the organization” (Rothaermel, 371). The management structure at Infosys is primarily aligned in a vertical structure as indicated below in regards to hierarchy.

The vertical construct shows that decision making is the upper echelons of the organization and there is a lack of flexibility of control. However, the decision by the chief executive officer to send Adrian Patel to the STRAP, Infosys’s Annual Strategy Retreat shows some willingness to delegate responsibilities and decision making to managers and partners (308). HIERARCHY: According to Rothaermel, “An organizational element that determines the formal, position- based reporting lines and thus stipulates who reports to whom” (Rothaermel, 371). The management structure at Infosys in 2010, is relatively vertical. All business units answer to a director or chief of operations, who in turn report to the chief executive officer and managing director (Infosys Limited). Additionally, Adrian Patel’s role as a managing partner falls in line with the vertical construct showing she is near the role of managing director (Rothaermel, 308).

This allows for a level of separation in both geographic, functional, and divisional control because a majority of products and services are not intertwined or reliant on cross-functional teams in order to get clients their end products. The only part of the organization that requires integration is between the client sites with on-site Infosys personnel and the development centers. ALIGNMENT OF CULTURE AND STRATEGY Overall, Infosys organizational culture and structure align with their overarching strategy. Infosys values their clients above all else, and fairness, integrity, honesty, and excellence help them to achieve their highest priority. Infosys’ competitive advantage has stemmed from their global delivery model, “. . . the principle of taking work to the location where it makes the best economic sense given the available talent and the least amount of acceptable risk . . .by employing cheaper, offshore labor, as well as providing an onsite presence, Infosys can provide better value to its clients without sacrificing quality” (Rothaermel, 311).

Despite recent downturns in foreign markets (i.e. H-1B, L1 and tax reforms), Infosys strategy to provide high-quality products and services at low labor costs will help the company maintain a strong place in the market. Additionally, the positivity associated with their work centers as indicated by Asiamoney, FinanceAsia, Wired, and Bloomsburg Businessweek suggest that their management, offices, and employees are well choreographed for a well-cultured and productive-organization.

FINDINGS OF FACT MANAGEMENT: Finding of fact: Infosys’s ability to retain a competitive advantage will be hindered by the outsourcing component of their global delivery model. Finding high-quality labor in the technology industry at competitive rates will pose challenges with the H-1B visa reforms. MANAGEMENT RECOMMENDATION: Infosys should focus on retaining talent already present in their existing operating markets and segments. The organization will need to be prepared for less favorable returns in U.S. markets. Instead, of transferring employees to overseas business operations, they should focus on managers and leaders that can train new personnel. Being overly reliant on outsourced labor was at one point a proven strategy for Infosys, however, a major change in their hiring strategies will need to occur

If clients in U.S. markets prove to have unfavorable returns with hiring in U.S. labor, then the organization should focus marketing on other operating areas and segments to make up for lost revenue opportunities in the U.S. However, Infosys should also exhaust other efforts to have profitable ventures in the U.S. Some of these strategies include hiring entry-level employees. Infosys can still offer new hires “. . . an integrated on-the-job training program of 20 to 29 weeks before they are assigned to a business unit,” as well as have “. . . employees participate in continuing education through Infosys’s Education & Research unit and Leadership Institute” (Rothaermel, 310). Adding additional training to the existing training can still help Infosys attract the best talent in the industry and to keep low attrition rates, and entry-level workers between 20-25 years of age are the largest component of Infosys human capital.

The disadvantage will be in regards to management positions where a majority of costs of goods sold in the form of payroll will be much higher than other outsourced labor. However, the organization will benefit from local labor in the form of culture because local hiring will reduce the cultural learning curve that outsourced labor would have to overcome. In this sense, Infosys’ clients might benefit and additional revenue streams might open in the form of new customers when they see cultural norms and artifacts that are consistent with the country in which Infosys is doing business. MARKETING: Finding of fact: Marketing to U.S. clients will pose a challenge for Infosys with the potential for reform H-1B visa reform in the U.S. Existing clients may be fearful of negative publicity for doing business with a company that outsources labor, and new clients might refrain from conducting business for reasons of escalation of labor costs, and in turn, Infosys products and services.

MARKETING RECOMMENDATION: In order to overcome the potential diminishing revenue from the H-1B visa reform, Infosys should look to use some of their $2 billion cash reserve used to fund future growth to increase marketing efforts in other markets where labor concerns are not a current political or legal issue. These marketing efforts may bring in new clients and help reduce the lost revenue from U.S. markets. Additionally, if the company chooses to continue operations in the U.S. with U.S. labor, then they should focus on advertising the fact that they hire U.S. workers. During a tense political and legal environment, Infosys could capitalize on the momentum of reform talks by continuing to exude their corporate social responsibility as a leader in the technology industry. In doing so, the potential for existing and future clients of being fearful of negative publicity could be reduced and actually have a positive effect on revenue.

The initial investment to change a part of their global delivery model might be costly, but if they limit it to the markets where labor sourcing is an issue (e.g. United States), they will still be able to maintain a competitive advantage in most markets. FINANCE: Finding of fact: Infosys will have to invest some of their roughly $2.6 Billion of reserves and surplus (Exhibit 4, Infosys Financial Performance Data (Currency in Rupees Crore)) in marketing and U.S. operating strategies in order to capitalize on U.S. tax reforms and mitigate the damage from H1-B reform. FINANCE RECOMMENDATION: Capital resources will be the most significant impact to Infosys from the recommended course of actions indicated in the findings of facts in management, marketing, and international business.

Infosys will need to finance new components to their global delivery model in order to meet U.S. requirements for a U.S. labor-force from H-1B reform. The increased operating costs in U.S. markets will force Infosys to spend capital on developing new business processes, increasing training for entry-level employees, and finding talented managers to oversee the new, U.S. entry-level Infosys personnel. Return on invested capital has been the second-lowest within the past ten years, and it’s likely the initial investment in U.S. operations will initially continue to cause diminishing returns until business operations there are solidified. The best avenue for Infosys is also investing reserves in marketing and physical operations in growth markets. Favorable operations in such markets could induce increased shareholders if returns and revenue growth show potential (especially if U.S. companies are hindered by tax reform).

INTERNATIONAL BUSINESS: Finding of fact: Despite potential increases in costs of services and goods sold for Infosys’ operations in U.S. markets as a result of increased labor costs, Infosys will benefit in markets outside of the U.S. from impending tax reform. INTERNATIONAL BUSINESS RECOMMENDATION: As indicated by Infosys’s co-founder, N. R. Narayana Murthy, “Obama’s tax proposal will not impact Indian firms because they already pay taxes in the United States. Rather, American firms operating in India would have to repatriate taxes on profit earned outside their home country” (Rothaermel 316). This will make Infosys competitors faced with the challenge of increased operating costs and will diminish the negative impact of the H-1B visa reform in U.S. markets, because competitors in overseas markets will also be faced with the challenge of retrograding international operations, or increasing pricing to compensate for rising operating costs.

The challenges that U.S. companies face present opportunity for Infosys in Asia, Africa, and China, “the only growth markets left” (Azim Premji, CEO of Wipro). Consistent with the aforementioned marketing strategy, Infosys can capitalize on outpricing U.S. firms operating overseas while continuing with their global delivery model. This will ensure Infosys continues to have a competitive advantage over other firms, and the marketing campaign will help Infosys absorb lost clientele from U.S. firms that are unable to sustain operations in foreign markets. The primary focus for Infosys should be in the aforementioned markets, while simultaneously trying to develop a new component of their global delivery model specific to U.S. operations.

Works Cited Daft, Richard L. Organization Theory and Design. 12th ed., CENGAGE LEARNING, INC, 2015. Estaura, Krisana Gallezo. “Take a Sneak Peek inside Infosys Consulting’s New Office.” Singapore Business Review, Singapore Business Review, 18 July 2016, sbr.com.sg/commercial-property/exclusive/take-sneak-peek-inside-infosys-consulting’snew-office. Infosys Limited. “Infosys Culture.” Infosys Confluence 2017 – Speaker Profile | Aimée Mullins, Infosys Limited, 2018, www.infosys.com/careers/discover/culture/. Infosys Limited.

“Management Structure.” Infosys Confluence 2017 – Speaker Profile | Aimée Mullins, Infosys Limited, 2010, www.infosys.com/investors/reports-filings/annualreport/annual/Documents/AR-2010/Management-Structure.html. “Infosys Technologies Limited.” T+D, vol. 61, no. 10, Oct. 2007, pp. 74–77. EBSCOhost, search.ebscohost.com/login.aspx?direct=true&db=tfh&AN=26962349&scope=site. Lobo, Richard. “How Infosys Keeps Its Employees Happy.” Business Today, Business Today, 13 Jan. 2017, www.businesstoday.in/opinion/columns/how-infosys-keeps-its-employeeshappy/story/238729.html. Rothaermel, Frank. Strategic Management: Concepts. 3rd ed, New York: McGraw-Hill, 2017. eText Smith, Jacquelyn. “10 Cool Office Spaces.” Forbes, Forbes Magazine, 8 Mar. 2013, www.forbes.com/sites/jacquelynsmith/2013/03/08/10-cool-officespaces/#1c522d7c1806.

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