Is Infosys Unethical, or Just Incompetent?

Don Tennant

Having spent so much time following Jay Palmer’s whistleblower retaliation case against Infosys, and the U.S. government’s investigation of the company’s alleged violations of this country’s immigration and tax laws, I became aware of and reported a lot of information that led me to conclude that Infosys cannot reasonably be identified as an ethical company. I simply saw too much evidence of rampant, institutionalized fraudulent activity to draw any other conclusion.

Presumably, that comes as a surprise to no one who has followed my coverage of the case. It should also come as no surprise that not everyone agrees with my assessment. One person who disagrees is Vivek Wadhwa, the Silicon Valley innovation and entrepreneurism advocate who is best known as a proponent of more effectively tapping the skills of foreign workers in the United States. According to Wadhwa, the Infosys case can be chalked up to a simple matter of incompetency. I recently spoke with Wadhwa about the case, and he said that while he hasn’t followed it closely, he doesn’t see it as a big deal:

My view is every company has incompetent managers doing the wrong thing. They don’t follow direction. I don’t think Infosys is a bad company. In fact, I think Infosys is a pretty ethical company. It could be that you had a couple of rogue employees, and so on. So these things happen all the time. The way the anti-immigrants are hyping it, it’s as if it’s some kind of Watergate or something. It really isn’t. Everyone in the business world knows that you have some level of incompetence within every company. I call this sheer incompetence.

Wadhwa also suggested that there is a racial element driving the focus on Indian companies rather than U.S. companies in the discussion of H-1B visa abuse. I asked him if I was correct in my assumption that he would not consider Infosys, and other large Indian outsourcing companies like Tata and Wipro, to be body shops. His response:

Not as much as I would consider IBM and Accenture to be body shops. [The Indian companies are] in the same league as America’s top companies. It’s just that you have this racial [attitude] over here: because they’re Indian, they must be evil. They’re not. … In fact, they are all equally ethical. IBM is an ethical company—their corporate governance has high standards. So does Infosys; so does Wipro. These are all well-managed, ethical companies, not to say that you don’t have a few incompetent employees.

I asked Wadhwa if he had any thoughts on the extent to which B-1 visas are being abused, and he said he hadn’t looked at the B-1:

I don’t know the details of how it works. I’ve sort of stayed out of that, because the last thing I want to do is to step into this Indian company vs. American company debate. I’m looking at the Silicon Valley point of view. This is where I live now, and this is the cause I care most about—innovation, startups and entrepreneurship. This is the perspective I’m looking at it from—I’m not looking at it from an IT perspective, which is all about the use of skilled labor in IT shops, not in startups and in Silicon Valley.

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Oct 10, 2012 10:25 AM D.K.Bose D.K.Bose  says:
Don, do you have any update on how much money Palmer has to pay to InfoSys after loosing the case? I am asking this to you as you were covering this story from starting and suddenly stopped after Palmer loosing the case. My feedback to you- always give a logical end to stories you start! Reply
Oct 10, 2012 11:46 AM R. Lawson R. Lawson  says:
"I think Infosys is a pretty ethical company. It could be that you had a couple of rogue employees. . . The way the anti-immigrants are hyping it, it’s as if it’s some kind of Watergate or something." Wadhwa never skips a beat. He sides with Indian corporations, and in probably the same breath hammers on the anti-immigrant accusation. He can't debate the facts, so he attacks the people bringing up the facts. "Wadhwa also suggested that there is a racial element driving the focus on Indian companies rather than U.S. companies " Total baloney. It's politically motivated. It's easier politically to pick on foreign companies that American companies. The problem exists in both American and foreign companies. Indian companies seem to have a higher tolerance for fraud however, and they get a disproportionate share of the visas so of course they are standouts. "I’m looking at the Silicon Valley point of view. This is where I live now, and this is the cause I care most about—innovation, startups and entrepreneurship. " For someone who acts like an expert on all things immigration you really missed a chance here Wadhwa. This is the United States of America. Not Silicon Valley. Reply
Oct 10, 2012 12:16 PM Don Tennant Don Tennant  says: in response to D.K.Bose
Thanks for the feedback, my friend, but the story isn't over. When it ends, you'll know it. Reply
Oct 10, 2012 1:32 PM Odumbo Odumbo  says:
They're both incompetent and unethical. Though they may have internal policies on using visas correctly, anyone who works in these companies knows that people at the very top turn a blind eye to visa abuse and then they get serious about cleaning up the mess after the media gets it. Everyone who works in these companies know that people from delivery managers to project managers don't care about visa laws as long as they can send people to client destinations by any means at the price they want. Is Infosys and other Indian companies like Wipro and TCS a bodyshop and can they be compared to IBM and Accenture? Yes and No. No, because Infosys has HR, training, career guidance and actively manages their employees and projects while also managing client projects and businesses. Yes because they also just send most of their people to fill contract positions like a staffing firm. What about IBM? No. IBM has a lot of product, RnD, solutions work going. They don't act like a staffing firm seeking to fill positions to make an extra buck. That's the kind of stuff Indian companeis do. Reply
Oct 10, 2012 9:54 PM Raja Raja  says:
As usual one more one sided view by an American who thinks world means America. How about a discussion on Apple's China plant's ethics and work culture. Broaden your purview my dear. Law and its misuse are NOT above humanity and its misuse. Reply
Oct 10, 2012 10:15 PM Madagasper Madagasper  says:
Lack of ethics and lack of competence are not mutually exclusive. Why are you asking the poseur Wadhwa? Instead, ask the many H1B Indians in the US who know intimately all the shady practices of Indian companies. They will tell you things off the record that could fill a tome. By the way, did you ask Wadhwa to explain why the Indian geniuses have not won a single Nobel Prize this year? Reply
Oct 11, 2012 1:22 AM James James  says:
I now Infosys is very much ethical Company, but yes i do heard of the Visa Ignorance cases from Top Level of Employees of this company Reply
Oct 11, 2012 8:38 AM Al Al  says:
Is it unethical to break unethical laws and labor market regulations? No. It is against the law but breaking the law and being unethical are different. Reply
Oct 11, 2012 9:40 AM Vikram Vikram  says:
Unethical and incometence are very light words to use for Infosys. I witnessed their billing for their offshore resources who left the company over three months, have their T&M resources working for other clients and not working for projects they are actually billed for. I was asked to be more aggresive while at client location. I couldn't understand what aggressiveness has to do in writing code. Later on I realized that was harassing other people working at client and make them leave so that Infosys can bring in more people. Right now they have shortage of resources, and they recruiting people by telling lies about their roles and responsibilites, even working areas of Business Units. I escalated about their cheating practices to HR, Unit Heads, AVPs, Engagement managers. The answer I got from everybody is "This is how IT industry works." Horribly cheap!. This company can't be compared with it's competitors. Most of its employees and their practices will not tolerated in companies like CTS, HCL etc. They may be doing somethig unethical but not to the level of Infosys. Reply
Oct 11, 2012 9:58 AM Was H1-B Guy Was H1-B Guy  says:
One can the comments from the readers in news website post. Most of them are or were Employees. Some of them are very logical. One can also read how Infosys is grearing up for the next round of fooling media with PR firm. Reply
Oct 11, 2012 12:41 PM George A George A  says: in response to Don Tennant
Dream on! By the way, your blog is relegated to last pages in google search. What happened? :) Infosys is an ethical company. The way you took them without knowing the facts tells more about you than Infosys! Reply
Oct 11, 2012 3:14 PM Lalu Lalu  says:
Even if Indian education system is considered to be very bad ( when it is not), it can't produce professionals of class Infosys has. My first initial thought was some PIMPs or Brothel runners have been made it to Infosys. Employees by and large are very open in their illegal, immoral, unethical and untoward ways. They have confidence that they can get away with anything. I never felt like I am working with educated class. Correction to Vikram, this class is unacceptable in any other Indian companies. Reply
Oct 12, 2012 8:20 AM Ex-Infosys Ex-Infosys  says: in response to George A
You write this comment about Infosys in TimesofIndia and Economictime. You know the kind of bashing you get. Hope that will enlighten you. I don't want to say much because of the anti Indian sentiments and racist attitude of some of the readers in this blog. Reply
Oct 12, 2012 10:26 AM Richard Richard  says:
I hate to read don's blogs now because he never told us what happened to Infosys trial on Sep 17. Did Infosys win the B1 visa case or not ? The previous victory was on the whistleblower issue and that was not really relevant one. This blog has become more of Don's personal thoughts and ideas than the real picture. Hope you improve your journalism standards Don Reply
Oct 15, 2012 8:32 AM Jake_Leone Jake_Leone  says:
I know that companies calculate the risk of being caught versus the monetary gain of using a "potential" loophole. This is a cold calculation. Ethics have nothing to do with it. People who espouse this are usually Ayn Randian types, who frankly could care less about anything but profit. People at the top of companies typically see workers as cost verse profit object. Wadwa isn't the person to ask. He's quoted as saying that he typically used the H-1b system, because H-1b workers were cheaper. If drug-addict takes welfare, and uses the money to buy more crack, we all would agree that, is unethical. If a cheap-labor addicted employer, uses the H-1b visa, to recruit the cheapest labor abroad, it is no different. Both are destructive to the U.S. economy, both ruin the lives and potential of our citizenry. For 200+ years this country had an immigration system that meant if you came here, you came to be a citizen and stay the rest of your life. Both Crack and H-1b system are inventions of the late 20th century, CEO's are addicted to H-1b. Frankly, there is just as much "entitlement" attitude at the top of corporations, as there is in any crack-head. Reply
Oct 24, 2012 3:35 PM Dolores Dolores  says:
You saw this, right? Reply
Oct 31, 2012 4:02 PM Wakjob #2 Wakjob #2  says: in response to Raja
Since when can an Indian lecture Americans on law? India is the most lawless country on earth and makes Mexico look like Switzerland. I love how these people come on here and lecture us after destroying our economy. Reply
Nov 3, 2012 10:29 AM Sitting on the Fence Sitting on the Fence  says: in response to Don Tennant
For someone questioning / battering an organization like you have - Don, can you for a moment put yourself upto the same test? We have read many of your reports with factual errors that even a high school graduate would not make. What is in this debate for you? And for a moment don't be tempted to say the pursuit of truth... Reply
Mar 22, 2013 1:49 PM Sahib Sahib  says:
It's hard to believe that global companies still fall for the Infosys business model of delivering super cheap, incomptent employees, in order to become permanent staff augmentation (very poor staff, at that) vs. actually delivering something, while just continuing to bill and bill and bill. I also know that they treat their employees as virtual indentured servants. Is life in India really that bad? I have been on teams that have been called in to clean up several Infosys-created catastrohpic disasters that have greatly harmed these businesses. Yet, these Infosys fools still want to pat themselves on the back? I hate working with any Infosys team, because I fear that even being in contact with such incompetence will somehow make me as dumb as them, and render me unemployable anywhere else. Reply

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