Understanding Satyam Scandal and Philosophy behind .pptx

Complete analysis of Satyam Scandal and analyzing the issues with a different approach of Power Dynamics

1. National Case Contest Team – CC22 Souvik Das Prakram Rathore

2. 02 Power Theory Presentation Index Plausible HR and Organisation Flaws How Defalcation Occurred Key Actors and Organogram Raju’s undetectability even with so much Visibility H ow Regulators like SEBI can use Power Theory 01 03 Surfing through PBMS, Subverting IMS

3. IMS H (Home) S (Super) 7,561 Invoices 67,064 Invoices Oracle 6603 Invoices Invoice State 958 Invoices Revenue : 5117 Cr Passed by an emergency “Excel Porting System” Can Hide invoices generated through “Excel Porting System” Revenue : 4746 Cr Fake Invoices entered by Sr. manager of Fin Dept. Cash Balances of 3983 Cr were Shown in Company’s Account against these Invoices OPTIMA SRP PBMS OPTIMA - Operational Real Time Management SRP – Satyam Project Repository PBMS - Project Bill Management System IMS – Invoice Management System Information Project IDs Billing Final Invoices How Defalcation Occurred 01 02 03 74,625 Invoices Source- Bhasin, M.L. (2013) Corporate Accounting Scandal at Satyam: A Case Study of India

4. Plausible H.R and Organizational Flaws in Satyam Financial Manipulation: K ey Actors : Mr.Raju, CFO, Fin Dept. Fictitious Bank balances Bogus Accrued Interest Understated Liabilities Very Plausible Lack of Oversight: K ey Actors : Board of Directors, Auditors L ack of Independence Absence of Financial Expertise Auditor Negligence Organisational Frameworks and Heirarchies: K ey Actors : Department Divisions, Reporting Lines Communical Channels Decision Making Process Employee Communication and HR Training and Development: K ey Actors : HR Department, Employee Representatives. Channels of Whistleblowing Feedback Mechanism Ethics and Complaince Training Leadership Development Moderately Plausible Relatively Plausible 02 03

5. How did Mr. RAJU get on with all this? 03 Understanding Power Several actors , Individuals/ subunits Relative power of the actors determines the outcomes Interest of the Powerful Those who have the power try to further their interests Interactive aspect of Power Use to affect the behaviour of those who are not powerful Politics = Power in Use Overcome Resistance of Others Behaviours of the others can be affected by the power because of threat/actual applications Formal Authority Rules and Regulation A b ility to cope with Uncertainity Control of Scare Resources Knowledge and Information Counter Organizations Informal Organizations Sources of Power

6. 03.a Conflicts Supressing Conflict Shaping Preferences Pyschological One Dimension Focus on behavior   Observable conflict of interests Two Dimension Decisions are prevented from being taken on potential issues   Conflict of interests reflected in grievances, etc. Coercion, Influence, Authority, Force, Manipulation   Three Dimension Control over political agenda   Absence of actual observable conflict   Subjective vs. real interests   Power as ideology   Cultural manifestations Fourth Dimension Creation of social subjects Actors gain ontological security by internalizing practical knowledge  Self-discipline Level Description Dimensions of Power How did MR.RAJU get on with all this?

7. Charisma and convincing power. Influence the BODs and Management Holding the Political Agenda Position at CII to influence government’s regulatory policies Father figure and Savior for needy . Doing Right or Wrong is not the debate but this psychologically impersonates the social subject aspect Influencing the Meta Rules Shaping the Public Debate Tie-ups Positive Image Suppresses any News Initially with majority Stakes Silos and probable culture of fear and if silos are broken and silence 1 3 2 4 How did MR.RAJU get on with all this? MR. Raju’s use of power theory . 03.b

8. Education Engaging through Media and set up the pollical agenda Create Dense web of Power Networks Either become social subject / mentor or promote ideal corporation to become one onto which every other corporations look up to Shaping Public Debate Public Statements and Give and Take transparency and Grievance warnings frequently Enforce Compliances with laws and regulations Issuing fines and penalties 1 3 2 4 How did MR.RAJU get on with all this? How Regulators can use power theory. 03.b

9. THANK YOU Souvik Das Prakram Rathore