Wipro at Crossroads: The Failed Dual CEO Structure
Case Code: BSTR433
Case Length: 28 Pages
Pub Date: 2013
Teaching Note: Not Available
Organization: Wipro Limited
Industry: Information Technology and Consulting
Themes: Management Structure, Turnaround strategy, Organizational Restructuring, Managing external and internal challenges
Abstract Case Intro 1 Case Intro 2 Excerpts
The case discusses the challenges faced by Bangalore-based information technology and consulting company, Wipro Limited (Wipro). The company's disappointing results for the financial year ended 2013 were attributable to its portfolio mix compared to its peers. Wipro had traditionally focused on investment banking in the Banking, Financial Services, and Insurance (BFSI) vertical, and on the telecom sector. Both these segments had reportedly taken a beating in recent years. While the investment banking segment had reported muted growth, the fact that clients in the telecommunications sector, especially in Europe, were reducing their technology spend had also negatively impacted Wipro's performance.
In addition to this, the company's dual CEO structure adopted in April 2008 did not yield the expected results. According to analysts, the two CEOs – Girish Paranjpe (Paranjpe) and Suresh Vaswani (Vaswani) - did not focus on key segments that helped Indian IT companies recover growth post the global financial crisis. Thus, Wipro lagged behind its peers such as TCS and Infosys.
To arrest the decline in sales and profitability, Wipro's founder and executive chairman, Azim Hasham Premji (Premji), scrapped the dual CEO structure in January 2011, to make way for company veteran and head of the Eco Energy Business, TK Kurien (Kurien), to take over. In a bid to turn around the company, Kurien restructured the organization to make it nimbler and focused on key segments such as the BFSI and consulting to chase growth. Moreover, the single CEO model was also adopted to ensure that Wipro retained its position in the top three club in the Indian IT industry along with TCS and Infosys.
Though the turnaround plan helped Wipro gain traction in key segments, it still continued to lag behind its peers. Some industry analysts opined that ever since Wipro had brought in Kurien, the company had been playing a waiting game with investors. They felt that the latest FY 2013 results signaled that Wipro still had a long way to go to match the performance of its peers.
The case is structured to achieve the following teaching objectives:
- Critically analyze why the dual CEO structure failed at Wipro
- Examine the challenges faced by the company while functioning with a dual CEO matrix structure
- Evaluate the strategies adopted by Kurien in turning around Wipro
- Understand the challenges faced by Wipro in maintaining its position in the top three club in the IT industry in India
- Understand the structural changes in the IT industry in India and the quest of Indian IT players to focus on thriving segments such as analytics, cloud, mobility, etc.
The Dual CEO Structure
The Turnaround Plan
Focusing on Thriving Segments
Will Wipro Regain Lost Momentum?
Wipro, Dual CEO structure, Single CEO structure, Organizational structure, Matrix structure, BFSI , vertical, Turnaround, Organizational restructuring, Demerger, Global financial crisis, Tata Consultancy Services , Infosys Ltd., Azim Hasham Premji, TK Kurien, Girish Paranjpe, Suresh Vaswani
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