23-07-2014, 09:50 AM
Management Control System (MCS) at Infosys Technologies Ltd. – A Case
Study
Management Control System (.pdf (Size: 827.58 KB / Downloads: 184)
. Introduction
1.1 Management Control System (MCS) is a system which is an aggregate of machines and people that
work toward a common objective. A system can be described as a series of steps or phases consisting of an input
phase, a processing phase, and an output phase. A control system adds measurement, analysis and reporting
phases to the system. Output is measured, compared against a plan, analyzed and then reported back to the
appropriate earlier phases of the system in the form of positive or negative reinforcement. In MCS,
data/information is typically fed back to managers of the various system phases. Responsible managers will then
take appropriate action based on the data/information provided.
The criteria are organized into five categories that correspond to the generic MCS components. The five
categories are:
1. Organization
2. Planning and Budgeting
3. Accounting
4. Analysis
5. Revisions/Access
IT Industry Structure and Development
Changing economic and business conditions, evolving consumer preferences, rapid technological innovation
and adoption, and globalization are driving corporations to transform the manner in which they operate.
Companies are now more focused on their core business objectives, such as revenue growth, profitability and
asset efficiency.
There is an increasing need for highly skilled professionals in the market to help corporations transform their
business, optimize operations and drive innovation by leveraging technology. However, enterprises are reluctant
to expand their internal IT departments and increase costs. These factors have led to the increased reliance of
corporations on their outsourcing providers and are expected to drive future growth for outsourced technology
services.
According to the Global Tech Market Outlook for 2012 and 2013, an independent report published by
Forrester Research Inc. in January 2012, purchases of IT consulting, systems integration services and IT
outsourcing by global businesses and governments are estimated to grow by 6.3% in calendar year 2012, when
calculated in U.S. dollars.
Corporations are increasingly turning to offshore service providers for higher quality, cost competitive
technology solutions. As a result, offshore service providers have become critical to the operations of many
enterprises and they continue to grow in recognition and sophistication. In view of this, the addressable market
for offshore technology services has expanded.
7. Infosys Technologies Limited ( Infosys)
Infosys, started in 1981 by seven people with US$ 250, is today a global leader in the "next generation" of
Information Technology (IT) and Consulting, with revenues of US$ 6.604 billion (Q2-FY12). Infosys defines,
designs and delivers technology-enabled business solutions for Global 2000 companies. Infosys also provides a
complete range of services by leveraging its domain and business expertise and strategic alliances with leading
technology providers. Its offerings span business and technology consulting, services, systems, product
engineering, custom software development, maintenance, re-engineering, independent testing and validation
services, IT infrastructure services and business process outsourcing.
Infosys pioneered the Global Delivery Model (GDM), which emerged as a disruptive force in the industry
leading to the rise of offshore outsourcing. The GDM is based on the principle of taking work to the location
where the best talent is available, where it makes the best economic sense, with the least amount of acceptable
risk.
Human Resource Aspects
Infosys Leadership Institute (ILI) set up in 2001 had an immense impact on the effectiveness of the HRD
function at Infosys. The institute was primarily developed so as to groom future talents in the company
(i) Performance Appraisal System:
The performance appraisal process at Infosys begins not only with performance evaluation but also
encompasses the evaluation of individual skills for the tasks assigned to an employee during the assigned period
of performance evaluation. In this regard, performance appraisal takes into consideration various performance
criteria like timeliness, quality of work, customer orientation, peer satisfaction and performance improvement
potential. The company has also launched an internal job posting mechanism and the concept of personal
development plans, on the basis of 360 degree feedback.
(ii) Compensation and Rewards:
The entire organization has restructured its compensations and reward system in order to match the performance
of its employees, business needs and the growing scale of operations. The company started following a variable
pay structure. At the lowest level, 10 per cent of the salary is variable; it is 30 per cent at the middle level and 50
per cent at very senior levels. Salary at Infosys is linked to the top line, performance of the team and
performance of the individual. The company also intends to compensate star performers more aggressively than
average or poor performers in a move that has more similarities with American culture which promotes and
rewards individual merit. Another remarkable hallmark of Infosys had been its employee stock options plan
(ESOP) framework for which the company has made a mark of its own in the industry. Many organizations had
decided to adopt the Infosys ESOP system as an effective way to retain their employees.
6. Conclusions
Infosys is divided into IBU’s, each IBU concentrated on a particular sector and this made the company
more customers focused. Managers of each IBU are empowered to take decisions to further the IBU’s
prospects and within each IBU the project matrix structure is carried forward. Decentralized system
with an ability to take quick decisions is the key to success of its organization structure.
Infosys believes that people are the core assets and their empowerment is the key to scalability and
longevity. Infosys believes in respect, dignity, fairness and inclusiveness to get the best out of
employees. It reflects the most ideal culture and the best style of the organization. Infosys’
management style and treatment of employees have won it many laurels. Infosys has been ranked three
times in five years as The Best Company to work for in India by research firm Mercer Human R particular sector and this made the company
more customers focused. Managers of each IBU are empowered to take decisions to further the IBU’s
prospects and within each IBU the project matrix structure is carried forward. Decentralized system
with an ability to take quick decisions is the key to success of its organization structure.
Infosys believes that people are the core assets and their empowerment is the key to scalability and
longevity. Infosys believes in respect, dignity, fairness and inclusiveness to get the best out of
employees. It reflects the most ideal culture and the best style of the organization. Infosys’
management style and treatment of employees have won it many laurels. Infosys has been ranked three
times in five years as The Best Company to work for in India by research firm Mercer Human R particular sector and this made the company
more customers focused. Managers of each IBU are empowered to take decisions to further the IBU’s
prospects and within each IBU the project matrix structure is carried forward. Decentralized system
with an ability to take quick decisions is the key to success of its organization structure.
Infosys believes that people are the core assets and their empowerment is the key to scalability and
longevity. Infosys believes in respect, dignity, fairness and inclusiveness to get the best out of
employees. It reflects the most ideal culture and the best style of the organization. Infosys’
management style and treatment of employees have won it many laurels. Infosys has been ranked three
times in five years as The Best Company to work for in India by research firm Mercer Human R particular sector and this made the company
more customers focused. Managers of each IBU are empowered to take decisions to further the IBU’s
prospects and within each IBU the project matrix structure is carried forward. Decentralized system
with an ability to take quick decisions is the key to success of its organization structure.
Infosys believes that people are the core assets and their empowerment is the key to scalability and
longevity. Infosys believes in respect, dignity, fairness and inclusiveness to get the best out of
employees. It reflects the most ideal culture and the best style of the organization. Infosys’
management style and treatment of employees have won it many laurels. Infosys has been ranked three
times in five years as The Best Company to work for in India by research firm Mercer Human Research
Consulting and business magazine Business Today.
Infosys has been successfully adopting both formal control systems like planning, budgeting and
reporting and informal control systems like goal oriented behavior leading to improvement in Research
Consulting and business magazine Business Today.
Infosys has been successfully adopting both formal control systems like planning, budgeting and
reporting and informal control systems like goal oriented behavior leading to improvement in