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Unit 1: Entrepreneurship: A world of Opportunity
Self Assessment Notes
Fill in the blanks:
14. Entrepreneurs in small sectors have …………….. resources and cannot compete with large-
scale manufactures.
15. The ………………… gap pushes many entrepreneurial ventures towards extinction.
Case Study The Rise and Fall of Ramalinga Raju
he Rise and Fall of Ramalinga Raju Abstract: The case discusses the rise and
subsequent fall of one of the visionary leaders in the Indian IT sector, Ramalinga
TRaju (Raju). US-educated Raju founded Satyam Computers Services Limited (Satyam)
and under his leadership, the company grew to become one of the leading IT services
companies in the world. In an announcement that surprised the IT and investor communities
both in India and across the world, Raju confessed to a major accounting fraud that marked
his fall, drawing comparisons to Bernard Madoff. The case examines in detail the inception
and growth of Satyam, vision and leadership skills of Raju, the problems Satyam faced
due to growing competition, the Maytas fiasco and the events leading to confession of
accounting fraud by Raju. The case concludes with a discussion on the events that occurred
after the confession, and the reasons that led to the fall of Raju.
Issues
1. Study the inception and growth of Satyam.
2. Analyze the importance of visionary leadership for the growth of a company.
3. Examine the importance of having a strong board and governance structure.
4. Understand the reasons that led to the fall of Raju.
5. Appreciate the importance of ethical leadership.
Contents
Fall from GraceBackground NoteAll is Not Well with RajuRaju’s Fall BeginsRaju Confesses
to FraudThe Aftermath”Satyam, for all its glitter, was a firm whose owner ran his software
company in the manner his forefathers did land deals. It failed to make the jump between
the two centuries.”
—Far Eastern Economic Review, in January 2009
"In many ways, the Satyam scandal is having the same effect in India that the Madoff
scandal is having here (in the USA). Mr. Madoff was an important, highly respected figure
on Wall Street, just as Mr. Raju was an important, highly respected figure in the Indian
business world.”
—Joe Nocera, 3, New York Times, in January 2009
Fall from Grace
On January 07, 2009, B. Ramalinga Raju (Raju), Founder and Chairman of India’s fourth
largest IT services company, Satyam Computer Services Limited (Satyam), claimed that
the company had been inflating the revenue and profit figures for several years.
Contd...
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