Global Policy Forum

By Saritha Rai

The close software industry bond with the United States, which has brought India great riches, is also bringing it an increasing awareness about the rules of global play. In a recent jolt to corporate India, a sexual harassment lawsuit was filed in the United States against a top executive of a leading Indian software provider. The litigation is forcing Indian software concerns, many of which have large numbers of employees deployed abroad, to rethink their workplace policies and processes.

With about two-thirds of India's 365 billion rupees ($7.54 billion) in export revenue coming from the United States, where sexual harassment in the workplace is treated with far more gravity than in India, companies are concerned not just about their image but also their financial welfare.

In a first-of-its-kind controversy to hit an Indian company, Phaneesh Murthy, the head of global sales and marketing for Infosys Technologies, India's largest listed software exporter, quit in July after a former United States employee, Reka Maximovitch, sued him and the company, contending sexual harassment and wrongful termination. Mr. Murthy, who was based in Fremont, Calif., was also an Infosys board member and the company's highest-paid employee. Ms. Maximovitch, who had been Mr. Murthy's executive assistant, contends she was subjected to verbal and visual sexual harassment and unwanted sexual advances. She also contends that the company failed to take reasonable steps to keep the harassment from occurring and recurring. An Infosys spokeswoman said that since the matter was before a court, the company did not want to comment.

The suit itself, which was filed in December in Alameda County Superior Court in Oakland, Calif., may settle out of court — talks are scheduled for Friday. But its mere existence has had a big impact throughout India. "The Murthy incident has put the fear of the lawsuit in Indian companies with operations abroad," said Vasanthi Srinivasan, assistant professor in human resource management at India's leading business school, the Indian Institute of Management-Bangalore.

Infosys, which is listed on the Nasdaq exchange and known for its high corporate-governance standards and transparency, is based here in Bangalore and has 11 offices in the United States. More than two-thirds of its $540 million in revenue last year came from American customers. The lawsuit grabbed the headlines and sent Indian software companies scurrying to make sure their policies comply with United States law.

Though the Infosys chief executive, Nandan Nilekani, said recently that the lawsuit would not hurt sales, he also said the company had instituted a policy review. "We regularly review policies," he added. Wipro Ltd., India's biggest software company by market capitalization, also has a big presence in the United States. It said it had undertaken an audit, put its reworked policy on its intranet and increased its focus on cross-cultural sensitivity training for employees, particularly those being sent abroad. It also announced that it had recently fired two employees, who it said were not management level, for sexual harassment.

"We are sensitizing our managers in issues like gender discrimination, noncompetitive behavior and age discrimination," said Vivek Paul, vice chairman of Wipro. "Our aim is to change the image of the Indian software professional from country-boy techie to cosmopolitan global business manager."

A third software company based in Bangalore, Mascot Systems, has called for a worldwide review of its employee conduct policy. Mascot, which has a dozen overseas offices, said the tone and content of its employee conduct policy, which covers sexual harassment, is country- and culture-specific. "We are considering setting up a committee to oversee sexual harassment complaints," said Bina Raj, a Mascot spokeswoman.

Of course, even when companies do all they can to prevent workplace controversies, there are no guarantees, said Vivek Paul of Wipro. "At 10,500 employees, we are practically a U.S. neighborhood." Human resources specialists said that an incident of the kind faced by Infosys was just waiting to happen, considering the large numbers of Indians working in overseas offices and at customer sites. According to an estimate by Nasscom, India's software industry trade body, there are now more than 50,000 Indians working in the field in the United States alone. (Canada and Europe are other big outposts.)

Even in a midsize company like Mascot Systems, 450 of the total 1,700 employees work in the United States. Over 2,400 of Infosys' 11,300 employees, and 2,000 of Wipro's 10,750 workers, are in the United States. "Today, geographic barriers are disappearing, and the way we do business is changing," said Mr. Nilekani, the Infosys chief. "Multicultural interaction is becoming a very important part of our work environment." Infosys has a program to train employees on cross-cultural differences.

India's highest court, the Supreme Court of India, first defined sexual harassment in the workplace in 1997 and issued guidelines on how companies should act. This apart, specific acts of sexual harassment are supposed to be dealt with under criminal law. But the issue of sexual harassment has largely been swept under the carpet in India. "Sexual harassment in the workplace is nothing new," said Ms. Srinivasan, the assistant professor. "The recent incident has only helped draw it out of the Indian corporate closet."

Indian women tend to shy away from reporting sexual harassment at the workplace — the few public complaints so far in this country have all come from women — in part because of the accompanying stigma. "Most women prefer to quit the company and move away," said Ms. Srinivasan, who teaches courses on how to treat employees to managers enrolled in the business school's executive programs. A big percentage of these managers are from the software industry. While the sexual makeup of the global technology industry is skewed, it is even more so in India, where there are only 16 female employees for every 100.

"When I try to sensitize H.R. managers in my program, I get branded a feminist," Ms. Srinivasan said. Still, global Indian companies are rapidly learning that in cross-cultural situations, biases can be perilous.

Most multinationals and many newer companies, like MindTree Consulting, a three-year-old software services company based in Bangalore, have already put in place in all offices grievance mechanisms that comply with United States workplace requirements. And some Indian software companies are trying out new ways to avoid problems altogether. Wipro, for instance, has started hiring senior managers from the local market to serve as workplace role models for its Indian employees. Wipro's top two employees in the United States are Americans, and it has hired a European to lead the European operations as well as a Japanese manager in Japan. "Not only is it easier for them to sell to customers who look like them, they also help avoid potential land mines," Mr. Paul of Wipro said.

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