Leadership Analysis- Ramilinga Raju

Rambling Raja had a stint at Harvard too. He attended the Owner / President course at Harvard University. After returning to India in 1977, Rambling Raja moved away from the traditional agriculture business and set up a spinning and weaving mill named Sir Astray. Thereafter he shifted to the real estate business and started a construction company called Astray Constructions. In 1987, Rambling Raja founded Astray Computer Services along with one of his brothers-in-law, DVD Raja and with only 20 employees. The company went public in 1992. Astray later became one of the earliest companies to get a dedicated data link for offshore development.

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Through his managerial skills and quality leadership, Rambling Raja built Astray into a multinational company and bagged several key contracts, especially from the US. Astray began trading on New York Stock Exchange in 2001. With each passing year, Astray strengthened its position and extended its operations to various locations. With the launch of Astray Info way (Sift) Astray became one of the first to enter Indian internet service market. Rambling Raja’s foray into corporate data and internet services too was path breaking. Astray Inflows listed it on NASDAQ with great success.

The business process outsourcing (BOP) wing of Astray also made a remarkable beginning. The company, whose revenues crossed $2 billion in 2007-08 with 53,000 employees, became the first Indian company to list its American Depository Shares (ADS) on Erroneous, which is one single cross-border trading platform of NYSE Erroneous Group. Before the scam, Astray has a global presence and serves 180 Fortune 500 and over 390 multinational corporations. Awards & Honors Rambling Raja has won several awards and honors. These include Ernst & Young Entrepreneur of the Year for Services in 1999, Datasets IT Man of the Year in 2000,

Professor Y Mandamus Memorial Gold Medal in 1999, Conic’s Asian Business Leader – Corporate Citizen of the Year award in 2002, Ernst & Young Entrepreneur of the Year (2007), Partner Innovation Anti Money Laundering (MALL) solutions (2007), Golden peacock award for corporate governance (2008), ASIAN MAKE (Most Admired Knowledgeable Enterprise) Award (2008) Raja Co- chaired the world economic forum summit in New Delhi. He was elected to several organizations, including the National Association of Software and Services Companies (Mascot), the apex forum of the Indian IT industry and as a member f National Executive Council of Call and FOCI.

He also served on the boards of several educational, research and non-profit institutions and has tirelessly worked for creating greater social equity and providing opportunity for the underprivileged through the Asthma Foundation, Barbara Foundation and EMIR, the equivalent of America’s 911 in India. Barbara Foundation – activities The Foundation runs- A drinking project for 200 villages, A health centre for the benefit of people in 15 villages, & several schools in the West Goodyear and Physiotherapist districts of Andorra Pradesh.

EMIR – Emergency Medical and Research Institute Operating in the Public Private Partnership (PEP) Mode, it is the only professional Emergency service provider in India today. EMIR handles medical, police, and fire emergencies through the 1 08 emergency service. It is a free service provider through the state of art emergency call response centers. It has over 1 500 ambulances run over Andorra Pradesh, Gujarat, Outranked Ago, Achaean, Restaurants, Karakas, and Assam.

EMIR has received MASCOT-SYNC TV 18 IT User Award for innovative use of IT in saving lives, and received Computer World Honors Leadership Award for having been instrumental in revolutionized the use IT. Raja is a voracious reader and, being deeply influenced in science, has adopted several scientific principles in running his business and social service organizations. The ever-soaring share prices of Astray witnessed a sharp decline in December 2008, following a failed acquisition attempt involving Mantas, a company owned by Raja’s family.

In January 2009, Raja resigned as the Chairman of Astray after he admitted to major financial wrong-doings. In January 2009, Raja confessed of his involvement in inflating the profits of the company for the past couple of years and Raja has admitted to overstating the company’s cash reserves by USED $ 1. Billion. Later, a person involved in the investigation of the company said that the company’s assets were not inflated, but instead siphon off by Rambling Raja. Later on Asthma has taken over by Tech Maidenhair, they paid whooping amount of RSI 1757 core for 51% stake in the company, or RSI 58 per share.

Asthma computer service renamed to Maidenhair Asthma computer service. Raja is currently held in Headband’s Candlelight jail on criminal charges including fraud, forgery, cheating, embezzlement and insider trading. Leadership Analysis UNETHICAL LEADERSHIP On 7th January 2009, Satyr’s founder and Chairman B. Rambling Raja admitted that he had systematically falsified accounts as the company expanded from a handful of employees into a back-office giant with a large work force and operations in 66 countries.

A part of this was clearly evident when in 2008 the World Bank barred Astray from doing business with it for eight years over “improper benefits” paid to staff. Later, as news of the scam broke out, Astray lost many other clients to its competitors. He stated in letter that it started it as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years. It had attained unmanageable reapportions as the size of company operations grew.

After the incident the share price of the Asthma went down from RSI 180 to RSI 6, huge loss to shareholder & investors, and there is huge lay off. At the end of the day Rambling Raja is totally unethical to his stake holders and share holders. Satyr’s debacle once again proved what World and Enron have proven in the past that, leaders can lead their organizations towards glory or disaster. McCoy calls “a thoughtful set of personal values that provide the foundation for a corporate culture”. If the leader itself unethical how come they expect the follower should be ethical.

LEADERSHIP TRAIT Rambling Raja even though he is totally unethically towards the stake holders and share holders, there is few traits of him to be appreciated. Intelligent He started Asthma from scratch with his own hard work, it took him two decades to make it Indian’s 4th largest IT service sector. This trait had positive impact on him to be an effective leader. Self Confidence He competencies and skills allowed him to feel assured that his attempts to influence others are appropriate and right, which made him to take unethical paths by believing that followers will accept for whatever decisions he take.

Determination The pro active steps he took in growing phase of the company, made him to go up in the ladder. He is very persistent to achieve his goals. Sociability He is having good relation with the people of his own place, where he born and bought up, he developed that village by providing all the facilities with his own money. Trustworthy Raja introduced 1 500 emergency ambulance in the villages of Andorra Pradesh and other states, he started toll free number 108, so that anyone can utilities this opportunity.

By doing this, people started to trust Raja, but this is before the scam got exposed. BEHAVIOR Lead by Example He set examples for others, worked very hard to get projects from US, and he chose to enter the relatively new business by providing software services to international customers from INDIA. He is a complete risk taker A Visionary and Keen Strategist He had a vision for Astray and for the Indian IT Industry; he is a job creator and a entrepreneur par excellence. He used simple, yet an extensive management model to create value.

LEADERSHIP STYLE Authority-compliance Management He is much more of a task oriented, emphasis on task and job requirements. Until the scam got burst, none of the employees know about the status of the many including higher level executives, very few of them in the company like Auditors & SCOFF know about the inside story. The annual report of the Asthma is always having flaws, finally the balance sheet is having short fall of sorceress. It clearly shows that he never opened the issues to his employees; he kept on directing the work for the last minute.

SITUATIONAL APPROACH Coaching- High Directive and High Supportive, during the growth phase of the company Raja is very much active in delegating work and getting work done in friendly environment, he used to be very much supportive to the employees Directing- High Directive and Low Supportive, when things started to get worse Raja started to be more of a Directive leader. Raja never exposed the situation of the company balance sheet to the employees he just kept on directing the work for the last minute by hiding the truth.

CONTINGENCY THEORY Leadership styles are described as Task oriented and Relationship oriented, Task oriented leaders are concerned primarily with reaching a goal, whereas Relationship oriented leaders are concerned with developing close interpersonal relationships. Raja clearly showed Task oriented leadership behavior, he only eared about, whether the goals are achieved or not, and he never cared about the employees, share holders and stake holders. Without out taking them in to consideration, he worked for his own self and finally he betrayed everyone with the window dressing by showing unconventional profits on the balance sheet.

He used position power, when the World Bank warned about the internal wrong doings and barred Asthma services for areas, Raja sent a notice to each and every employee about the misunderstanding of the World Bank and he literally succeeded in managing the situation. Based on the research findings, interagency theory posits that certain styles are effective in certain situations. People who are task oriented – Low LIP score will be effective in both very favorable and very unfavorable situations – that is, in situations that are going along very smoothly are situations are out of control.

According this theory Raja is having LOW LIP score. PSEUDO TRANSFORMATIONAL LEADERSHIP According to Bass (1998), this term refers to leaders who are self consumed, exploitive, and power oriented, with wrapped moral values. He considered Pseudo Transformational leadership as personalized leadership, which focuses n the leaders own interests rather than on the interests of others. For example Doll Hitler, Jeff Killing, & Sadism Hussein are the transformational leaders but they worked for their own interests.

In the same way Raja worked for his own interests, even though he started off with good moral values but later on he just became so greedy to become famous & rich within less time. This made him to take Unethical decisions and followed Unethical practices. CONCLUSION Raja had started his career with so much of desire & passion to be No: 1 in IT Industry and to get Famous and Rich, and he worked very hard for that, but in mean while he got so greedy to earn more money, eventually he used some unethical practices to achieve his aims.

At last the scam got busted and now he is in Jail, those who invested in the company in whatever means lost their money and employees lost their jobs. Foreign investors who wants to invest in Indian companies started to think whether to invest or not, and few of the projects which are running in Astray company were cancelled and taken back. It’s all just because of following unethical practices for running a business. I believe that, to be a successful and to run a business successfully, and also to be in the hearts of he stakeholders and shareholders everyone should be ethical towards himself and also ethical towards others.