Is Infosys Unethical, or Just Incompetent?

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.