TATA CONSULTANCY SERVICES: TACKLING SCANDAL IN INDIA
CASE STUDY SOLUTION
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SYNOPSIS
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In June 2023, a recruitment scandal confronted India’s largest IT service provider, Tata Consultancy
Services (TCS). The full extent of the fraudulent activities remained uncertain, but there was speculation
that commissions amounting to ₹1 billion2 (approximately US$13.3 million) had changed hands. The
organization took measures to fortify its system and reinforce its commitment to a zero-tolerance policy
against breaches of its code of conduct. Following the bribery scandal, the company’s chief human resource
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officer and executive director, Milind Lakkad, faced the dilemma of making an appropriate
tio
recommendation to the board of directors for strategies to prevent a recurrence of such events. Lakkad had
to decide whether TCS’s human resource (HR) practices to tighten corporate governance were adequate or
whether there were additional improvements and steps the company could consider implementing.
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OBJECTIVES
• Identify different forms of corruption, and identify the factors contributing to its growth.
• Explain the significance of corporate governance, and describe its structure.
• Define code of conduct, and describe the process of implementing such a code.
• Explain how to recognize and respond administratively to code of conduct violations.
• Define the concept of HR governance, and explain the importance of ethical leadership and
organizational culture during moments of corruption.
The Case Solution Starts From page 5
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ASSIGNMENT QUESTIONS
1. Identify and categorize various forms of corruption. Discuss the key causes that contribute to these cases.
2. Explain the significance of corporate governance in the context of handling corruption cases within an
organization. Describe the corporate governance structure of TCS.
3. Define code of conduct, and summarize the steps taken to implement a code of conduct, with reference
to the TCS case.
4. Discuss the process of addressing code of conduct violations. Examine the steps taken by TCS in
response to its bribes-for-jobs scandal.
5. Reflect on the concept of HR governance. With respect to the case, elaborate on the influence of an
ethical leader and organizational culture in handling corruption cases.
The Case Solution Starts From page 5
,ANALYSIS
1. Identify and categorize various forms of corruption. Discuss the key causes that contribute to
these cases.
The purpose of this question is for students to study and become familiar with the trend of corruption cases in
the country. This will help prepare them with the necessary understanding of the concept before working in
similar domains of work. The most common forms of corruption in business are bribery, fraud, insider trading,
tax evasion, money laundering, abuse of power, and embezzlement.8 Following are some causes of corruption:
• Lack of transparency: When organizations or governments lack transparency in their operations, this
creates opportunities for corruption to thrive. Without proper oversight and accountability, corrupt
practices can go undetected.
• Weak governance: Inadequate governance structures, where checks and balances are weak, can
facilitate corruption. Weak governance can include poor regulatory frameworks, ineffective law
enforcement, and insufficient safeguards against corrupt behaviour.
• Financial pressure: Individuals facing financial difficulties or pressures may be more susceptible to
e
engaging in corrupt practices to alleviate their financial burdens.
• Cultural norms: In some cultures, certain forms of corruption may be normalized or considered an
pl
acceptable part of doing business. These cultural factors can perpetuate corrupt behaviour.
• Lack of ethics education: Insufficient education and awareness about ethical standards and the
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consequences of corruption can contribute to unethical behaviour.
• Opportunity: Opportunities for corruption arise when there are loopholes, inadequate internal controls,
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or opportunities for personal gain without detection.
• Greed and self-interest:
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The Case Solution Starts From page 5
, EXHIBIT -3: HR GOVERNANCE FRAMEWORK FOR SOUTH AFRICAN ORGANIZATIONS
Corporate governance focus: performance and compliance
Corporate governance principles
organizational sector
engagement in the broader
External stakeholder
Corporate governance model:
design, processes, and roles
Risk Management
e
pl
m
in HR value delivery
Internal stakeholder engagement
Sa
n
tio
lu
So
The Case Solution Starts From page 5
CASE STUDY SOLUTION
e
pl
m
SYNOPSIS
Sa
In June 2023, a recruitment scandal confronted India’s largest IT service provider, Tata Consultancy
Services (TCS). The full extent of the fraudulent activities remained uncertain, but there was speculation
that commissions amounting to ₹1 billion2 (approximately US$13.3 million) had changed hands. The
organization took measures to fortify its system and reinforce its commitment to a zero-tolerance policy
against breaches of its code of conduct. Following the bribery scandal, the company’s chief human resource
n
officer and executive director, Milind Lakkad, faced the dilemma of making an appropriate
tio
recommendation to the board of directors for strategies to prevent a recurrence of such events. Lakkad had
to decide whether TCS’s human resource (HR) practices to tighten corporate governance were adequate or
whether there were additional improvements and steps the company could consider implementing.
lu
So
OBJECTIVES
• Identify different forms of corruption, and identify the factors contributing to its growth.
• Explain the significance of corporate governance, and describe its structure.
• Define code of conduct, and describe the process of implementing such a code.
• Explain how to recognize and respond administratively to code of conduct violations.
• Define the concept of HR governance, and explain the importance of ethical leadership and
organizational culture during moments of corruption.
The Case Solution Starts From page 5
, e
pl
m
Sa
n
tio
lu
So
ASSIGNMENT QUESTIONS
1. Identify and categorize various forms of corruption. Discuss the key causes that contribute to these cases.
2. Explain the significance of corporate governance in the context of handling corruption cases within an
organization. Describe the corporate governance structure of TCS.
3. Define code of conduct, and summarize the steps taken to implement a code of conduct, with reference
to the TCS case.
4. Discuss the process of addressing code of conduct violations. Examine the steps taken by TCS in
response to its bribes-for-jobs scandal.
5. Reflect on the concept of HR governance. With respect to the case, elaborate on the influence of an
ethical leader and organizational culture in handling corruption cases.
The Case Solution Starts From page 5
,ANALYSIS
1. Identify and categorize various forms of corruption. Discuss the key causes that contribute to
these cases.
The purpose of this question is for students to study and become familiar with the trend of corruption cases in
the country. This will help prepare them with the necessary understanding of the concept before working in
similar domains of work. The most common forms of corruption in business are bribery, fraud, insider trading,
tax evasion, money laundering, abuse of power, and embezzlement.8 Following are some causes of corruption:
• Lack of transparency: When organizations or governments lack transparency in their operations, this
creates opportunities for corruption to thrive. Without proper oversight and accountability, corrupt
practices can go undetected.
• Weak governance: Inadequate governance structures, where checks and balances are weak, can
facilitate corruption. Weak governance can include poor regulatory frameworks, ineffective law
enforcement, and insufficient safeguards against corrupt behaviour.
• Financial pressure: Individuals facing financial difficulties or pressures may be more susceptible to
e
engaging in corrupt practices to alleviate their financial burdens.
• Cultural norms: In some cultures, certain forms of corruption may be normalized or considered an
pl
acceptable part of doing business. These cultural factors can perpetuate corrupt behaviour.
• Lack of ethics education: Insufficient education and awareness about ethical standards and the
m
consequences of corruption can contribute to unethical behaviour.
• Opportunity: Opportunities for corruption arise when there are loopholes, inadequate internal controls,
Sa
or opportunities for personal gain without detection.
• Greed and self-interest:
•
n
•
tio
•
lu
So
The Case Solution Starts From page 5
, EXHIBIT -3: HR GOVERNANCE FRAMEWORK FOR SOUTH AFRICAN ORGANIZATIONS
Corporate governance focus: performance and compliance
Corporate governance principles
organizational sector
engagement in the broader
External stakeholder
Corporate governance model:
design, processes, and roles
Risk Management
e
pl
m
in HR value delivery
Internal stakeholder engagement
Sa
n
tio
lu
So
The Case Solution Starts From page 5
