With the sudden stepping down of TCS CEO Rajesh Gopinathan, when he was just appointed for a second term as the head of India’s largest ITES company and part of the global conglomerate Tata Sons, the market and investor community were closely watching the performance of TCS under its new CEO Kritivasan. It was said that the restructuring adopted by Gopinathan in line with his future ready strategy led to discontent expressed not only by a section of employees but also the Chairman of Tata Sons Chandrasekharan who was also the erstwhile CEO of TCS.

As TCS evolved into India’s leading software services company post liberalization, it maintained its leadership position by balancing changing needs of clients in terms of emerging technologies and their impact in helping clients in turn to create value for their customers. This it did in the most cost-effective way without compromising on quality of service. In the tenure of different CEOs namely Ramadorai, Chandrasekharan, Gopinathan and Kirtivasan, TCS had adopted different strategies to meet its client needs. In order to implement these strategies effectively each of these CEOs modified the existing organizational structure of TCS. Such strategy and structure match proved successful as the company performance showed positive growth even during the global financial recession of 2008 and ensured completion of project ‘Agile 2020’ undertaken in the midst of Covid-19 pandemic. TCS had emerged as the leading IT services company from India by 2022 in terms of revenue, market capitalization and number of employees.

Aspiring to compete with global consulting giants like IBM, TCS wanted to work closely with clients to handle their complex problems on a long-term basis.  However, in transforming TCS, by leveraging emerging technologies like cloud, digital and AI, the structure proposed by Gopinathan left the employees in the organization confused and resentful. The incoming CEO Kritivasan undid the proposed structure of predecessor Gopinathan and adopted a structure which was a modification of the structure TCS followed till 2018, to include new and emerging technologies. Gopinathan indicated that for migrating to a consulting company, TCS needed to change its culture and business outlook from technical problem solving to undertaking long term association with clients in complex solutions that added value over time- going beyond the existing strategy and structure match, as captured through his organization structure of 2022.   

 Was the proposed structure significantly different from those followed so far? Was it the right response to the changes in the competitive environment? Was it aligned to the strategy being followed are some of the questions raised as one reads the case.

Learning Objective

This case, written using information from secondary sources, can be taught in the MBA program as part of the strategy implementation module highlighting the strategy-structure linkage. With a good understanding of strategy and the mission-vision-values linkage for an organization, it may be useful to understand the limitations of an organization structure when attempting to capture a transformational change in the goals of an organization through its strategy.