"An Analysis of the Leadership style prevalent in
the software industry in India"


H.S. Shekar
Dept of MBA
SJB Institute of Technology


In ancient times, kings ruled over territories and were considered leaders of men. Great kings such as Lord Rama, Bharata, Yudhisthira, and Sibi ruled India with impeccable character and aplomb.The above age-old proverb holds true for modern day organizations as well. It has been largely accepted by practitioners and researchers that leaders are responsible for a large measure of successful organizational outcomes. The character of the leader determines the culture of the organization. Leadership is responsible for the difference between success and failure in many organizations. Leadership has been defined in terms of traits, behavior, influence, interaction patterns, role relationships, and occupation of an administrative position (Hemphill, J. K. & Coons, A. E., 1957). The following definitions will give us a comprehensive view of leadership. Leadership is the behavior of an individual directing the activities of a group towards a shared goal (Hemphill, J. K. & Coons, A. E., 1957). Leadership is about articulating visions, embodying values, and creating the environment within which things can be accomplished (Richards & Engle, 1986).

Leadership is an interaction between two or more members of a group that often involves a structuring or restructuring of the situation and the perceptions and expectations of the members and leadership occurs when one group member modifies the motivation or competencies of others in the group (Bass, 1990).

Leadership is a function of an interaction between the person and the situation, where the situation consists of the follower(s) and the context confronting them (Albert Murphy, 1941).

Leadership involves the influence of people/followers to bring about change toward a desirable future or shared purpose, all people, leaders and followers, being actively involved (intention) and each of them taking personal responsibility to achieve the desired result (Daft, 1999).

L = Function of [(Person) (Group) (Context)]Leadership is a process involving five key components (R. B. Dunham and J. L. Pierce, 1989). Leader is the person who takes charge and guides the performance or activity. Followers are people who perform under the guidance and instructions of a leader. Context is the situation (formal or informal, social or work, dynamic or static, emergency or routine) surrounding a leader-follower relationship.Process reflects that which is embedded in the act of leadership.  Outcomes include the results arising from the interplay between leader, follower and the context.Five components of the Leadership Process

(Source: R. B. Dunham and J. L. Pierce, 1989)

Statement of the Problem

India is a global leader in the business of outsourcing and information technology (D&B Industry Research Service, 2007). The software industry, as of today, is a major contributor to the Indian economy. One of the major factors contributing to the growth of Indian software industry is the availability of abundant supply of low-cost skilled labour. "Yatha Raja, Tatha Praja"

As is the king, so will be his subjects. - Sanskrit Proverb

Human resource is the driver and principal value-creator of output in this industry. But, in the present times, the industry is facing many challenges related to human resources and leadership. A few are listed below. The industry has evolved and grown rapidly through the leadership and skills of a few visionary leaders. Many companies are at a stage of transition as a new generation of leaders has begun to take control. The challenge is to make sure that strong leadership continues as before.

Attrition rate is around 20-30% per annum. It has a negative impact on the growth of the industry (Rathi, 2004). Many studies reveal that "employees do not leave organizations, but they quit their bosses". Indian software industry is moving up the value chain, from just outsourcing to providing end to end solutions. It will have to focus on creating new solutions, technologies and providing meaningful leadership.

Need and Significance of the Study

As stated above, there are many challenges in the software industry. The growth of the software industry has a significant impact on the growth of the nation. The challenge is much bigger because many of the software professionals do not wish to spend time and effort for acquiring leadership skills. (Agrawal, 2008)

It is therefore important to motivate the software professionals and develop their leadership skills. The first step in this process is to understand their current style of leadership. Thus, this study was undertaken to understand the leadership style present in the software industry in the Indian context.

Scope of the Study

The scope of the study is listed below.

The study analyzed the leadership style currently prevalent in the software industry in India. Eight software organizations located in Chennai and Bangalore were selected for the study.

Business Process Outsourcing (BPO) companies and software organizations head-quartered outside India were not included in the study.

Importance of Leadership in Organizations

The ancient Indian epic Mahabharata emphasizes very strongly that the king is singularly responsible for the well-being and happiness of the subjects and the prosperity of his kingdom. An unrighteous king would destroy the well-being of all people and the kingdom as well. Napolean expressed his feelings about the importance of leadership when he said that he would rather have an army of rabbits led by a lion than an army of lions led by a rabbit. It is largely recognized and accepted by practitioners and researchers that leadership is important, and research supports the notion that leaders do contribute to key organizational outcomes (Day & Lord, 1988).

Campbell (1990) identified leadership as one of the job performance dimensions that attributed to the organizational success. Thus, leadership plays a tremendous role in the organizational growth and has an impact on its success. Eastern Perspectives on Leadership Many ancient sages and texts, and few contemporary have commented on Leadership and qualities of a leader. Well-known excerpts are given below.

Western Perspectives on Leadership Many thinkers and researchers have studied the phenomena of leadership and various theories have evolved over a period of time. From the time of industrial revolution, the Western perspectives of Leadership began to influence the management styles in the organizations. Some of the prominent views on leadership have been discussed below.


Software industry includes businesses involved in the development, maintenance and publication of computer software. This industry also includes software services, such as training, documentation, and consulting.

The overview of the development of software industry is given below.

History of Software Industry

Year Developments 1950
Computers became extensively used for business applications.
First contract programming firms were formed. 1960
Contract programming services industry grew rapidly; some companies went public.

First software products came on to the market. 1970 Software industry grew rapidly despite lack of financing sources; Cullinane Corp became the first software product company public in 1978.

The industry expanded enormously with the rise of the personal computer in the mid-1970s, which created a growing market for games, applications, and utilities. Gradually, the concept of software as a product came up. The birth of the personal computer in the 1980s marked the birth of software as an "industry". According to Martin Campbell-Kelly, in the book 'From Airline Reservations to Sonic the Hedgehog - A History of the Software Industry', software industry from the SABRE airline reservation system, the first major civilian software project (one that is still running, albeit in a different form), underwent changes through stages, speculation and decline several times before it became an immutable part of the computer industry. Today, software industry encompasses more than IT services, BPO, engineering services, R&D and software products.

Software Industry in India

Narayana Murthy (2008), the Chief Mentor of Infosys, has expressed his view that the emergence of the software industry in India has heralded a new confidence, a new mindset and a new paradigm in the Indian business. The country for the first time in her history of 300 years felt that it had arrived on the international business scene and raised the international image of the country like no other sector.India currently exports softwares and services to approximately 95 countries in the world (D&B Industry Research Service, 2007). Indian companies are broadening the range of services being provided to the customers, which has resulted in more off-shoring. The success can be attributed to high quality of skilled human resources.

This industry has boosted the Indian economy. According to the International Data Corporation (2008), net value-added by this sector to the economy is estimated at 3.3-3.9 per cent for FY2008. The estimates for the global industry indicated that IT spending would grow at an annual rate of over 7% during 2005-10 and cross US$ 2 trillion in size by 2010. Further, employment to technical and non-technical graduates and the capability to generate huge foreign exchange inflow for India are the positives of the industry. An annual report published by the Ministry of Information Technology of India (2008) indicates a steady increase in the economic value of software exported in the past six years. Growth of Software Industry in India

National Association for Software and Services (NASSCOM), the organization that represents and sets the tone for public policy for the Indian software industry, in June 2008 listed the top 10 software companies in India (NASSCOM, 2008), based on their export revenue (excluding the companies head-quartered outside India and BPO-ITES).

Top 10 software companies in India

Rank Company

1 Tata Consultancy Services Ltd.
2 Wipro Technologies Ltd.
3 Infosys Technologies Ltd.
4 Satyam Computer Services Ltd.
5 HCL Technologies Ltd.
6 Tech Mahindra Ltd.
7 Patni Computer Systems Ltd.
8 i-flex Solutions Ltd.
9 MphasiS
10 L&T Infotech Ltd.

(Source: NASSCOM, 2008)


People are the most important asset of an organization and more so in a knowledge-based sector like the software industry. A skilled workforce is not only the driver and principal value-creator of the output of this industry, but also contributes to the intellectual capital. The growth of software industry in India is substantially linked to the ability to develop and sustain human capital (Agrawal, 2008). The major challenge for the Indian IT industry lies in developing leaders for the future. The industry has evolved and grown rapidly through the vision and leadership skills of a few individuals. In many companies, as a new generation of leaders has begun to take the reins, the challenge is to make sure that strong leadership continues to drive the organization. The challenge of grooming the leaders of tomorrow is a major one, especially as the problems and issues range from technical to socioeconomic to the political.

Further, many software companies in the business of providing service support require a large number of leaders for internal as well as external co-ordination with customers. The challenge is much bigger because many of the software professionals do not wish to spend time and effort for acquiring leadership skills (Agrawal, 2008). High attrition and increase in manpower cost are major challenges faced by the industry. Leaders in the industry strongly feel the resistance to growth of the industry as the average attrition rate is around 20-30% per annum, (Rathi, 2004). Therefore, attracting, training and retaining employees are the critical success-determinants for the industry (Karnik, 2008).

Another challenge is to nurture creativity in leaders. As the Indian software industry moves up the value chain, it will have to focus on creating new solutions, technologies and providing meaningful leadership. This is very different from working within defined boundaries or servicing existing software products. It is not an easy task to provide a culture that promotes creativity within existing and rigid hierarchical structures. It requires skill, time, effort and the need to adopt innovative approaches.

Motivating people employed in relatively monotonous jobs (programming, maintenance projects etc.) is amongst a vital task of a leader (Karnik, 2008). Leaders need to develop the skill of motivating others; and this cannot happen unless the leader himself is motivated.

on task accomplishment only after they have established a good relationship with followers.

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Source: E-mail March 15, 2011


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