Hypocrisy of Indian Knowledge Companies

Collapse of Satyam has exposed the double-talk of Indian companies on the threshold of Silicon Valley.

Investors come across people, almost everyday, who do not mean what they preach. They say all the good things that would otherwise go into the textbooks and seminal works but when it comes to reality their actions are completely different.

Indian companies, nay the Indian Silicon Valley companies have over years constantly harangued western and developed countries on the rise and inevitability of knowledge society. World is flat and what not. They have constantly bombarded western media with equally high-sounding concepts that were meant to take away the jobs of US and Europeans and shift them to India. And of course, take a good amount of saving as profits, nay commissions.

Now the question is: were and are Indian companies who have been die-hard propagandists of 'Coming of knowledge society' up to the mark. Or are they short-sighted, just-industrial, and mere hypocrites.

One of the things that Satyam episode has exposed is Indian knowledge companies is just hypocritical salespeople. When it came to act on the attributes of knowledge society, they backed off. They lost the first Round.

We can give them a benefit of doubt for the business and survival strategies but they have not been clear on that or may be shy of stating the reality that they too are teetering on the brink of recessionary measures.

Knowledge society

Knowledge society is made up of individuals and not by companies that they form. Is Satyam made up of one individual named Raju? What about thousands of people working are their contribution any less critical?

Satyam is not made up by Raju; it is made up by people who collectively give Satyam its form. Satyam does not go home when Raju goes home but goes out of the door 55000 times a day.

When Infosys says it does not want to buy a tainted company, one is compelled to ask: true the company is tainted by not its employees. Employees carry their integrity in their hearts and worth in their heads. Closing the doors to these knowledge workers is like closing doors is like keeping out infected organisms.

In the business where talent is the true worth of Knowledge Company, Infosys and many company of its ilk have made a deadly mistake. By taking the stance on moral high ground, against Satyam as a collective, Infosys has really lost the respect of many in the industry. It also stereotypes itself for its own employees, the hollowness of its proclamations - in the knowledge society, a knowledge worker is known by the company he keeps and not by knowledge itself. Weird!

Analysis

In the present scenario no body has the right to claim high throne, unless proven to be. Why should I trust Infosys more than Satyam? There are no reasons. Zilch. Everyone is under microscope. The biggies have to prove them once again and cannot rely on past laurels. Lets us for instance look at Infosys.

1. Infosys has had a great run in maintaining its profit figures and meeting guidance. Maddoff did the same, for decades.
   
   
2. This just ‘beating the earning estimates’, smacks of playing to the audience. Every analyst knows it, smells it, just that no body comments as this is a good thing they don’t want to stop. A true earnings management may be not fraudulent one, but a good earning management nevertheless.
   
   
3. It is always on the corporate award list of all kinds just like Enron, Satyam, Tyco etc were. May be a mere coincidence. After all award winners don't turn out to be scamsters.
   
   
4. The promoter commitment in Infosys companies are much less than other IT companies, not even trying to compare it with manufacturing companies here. Or are we to assume promoters are less interested?

The point of the above snapshot is- if a finger of doubt has to be raised, it can be raised at anyone. No exceptions. It is hard to satisfy everybody. If Infosys was such a dyed-in-wool moral blue-blood company, why has it not been able to attract Warren Buffet as its investor? When a small tea company or a retailer can charm him into investment! If I were to take that as an indicator, I would say, even Infosys does not meet many requirements, even the ones to stay on the moral high perch.

Disintegration

One of the things that have proven since 2000 is that companies, with long history and well-acclaimed, can fall and disintegrate in hours. Companies with decades of history, even a century, just melt in this world of mercurial finance. Similar thing happened to Satyam. Wiped out the instant the letter came in open. That does not indicate the weakness of Satyam, but just that there is no place for fraudsters in economy.

People and companies that preach knowledge economy must really understand where the true worth lies. There is no use pretending about that.