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Case Studies

Aditya Birla Minacs: Is Economic Gripe Boon or Bane

Hinduja Global Solutions Limited: Ecstasy in Economic Turmoil

Larsen & Toubro Infotech Ltd: Distinctiveness Exertion in Reticent Atmosphere

Mastek Ltd: Recession Rebooted Organization to Version 3.0

Nucleus Software Exports Ltd: Product – Tardy Melancholy

Omnitech InfoSolutions Ltd: Joie-de-vivre in Uncertainty

Zensar Technologies Ltd: Innovation - Depression Take a Rain Check

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Case Study #1

Global Recession: Impact on the firm performance of Indian IT/ITES Firms Serving BFSI Industry 

Between December 2007 and November 2009, the business cycle experienced contraction, leading to global recession. There were conflicting signals in the Indian Information Technology-Information Technology-enabled Service (IT-ITES) industry during this period. A few firms posted healthy profits and reported double digit year-on-year revenue growth. Investments continued in intellectual property (IP) development, to improve service offerings and compensation and in recruitment. At the same time, some Indian IT-ITES firms posted a loss, and, consequently, retrenched to optimize spend. These contradictory signals raised questions of what had really happened in Indian IT-ITES firms. This led to this study, the purpose of which is to understand the effect of global recession on the performance of Indian IT-ITES firms. In this study, organizational performance was considered across multiple dimensions: financial, human resources, customer service/satisfaction and quality.

Seven publicly-traded Indian IT-ITES firms, serving the banking, financial services and insurance (BFSI) industry were researched. They were

  • Aditya Birla Minacs Limited
  • Hinduja Global Solutions Limited
  • L&T Infotech Limited
  • Mastek Limited
  • Nucleus Software Exports Limited
  • Omnitech Solutions Limited
  • Zensar Technologies Limited

This qualitative study employed explanatory case study research methodology. It was a longitudinal study over four financial years (FY08- FY11), thus encompassing the economic crisis and a return-to-growth period. This study identified turnaround strategies employed and accurately diagnosed their effectiveness. Finally, it compared and contrasted the cases studied.

The findings revealed that high performance companies were able to control costs to match their revenues. Their revenues continued to grow in spite of the decline in demand.  They innovated and increased sales, diversified and performed mergers and acquisitions (M&A). They continued to invest in order to retain uniqueness and specialized abilities. They managed strong customer relationships, and the ability of their management to handle recession was far superior. Retrenchment which would have affected quality, HR activities and customer service/satisfaction was avoided, and indeed, most continued to invest in these areas. These findings offer suggestions for companies to better combat recession. This research had limitations, since it covered only a single recession cycle, industry and country. It is suggested that future quantitative studies should consider more or alternative industries, regions and company sizes and span multiple economic cycles. 

Conceptual Model.jpg

Conceptual Model for this research