NASSCOM: Self-Regulation for Sustaining the Commons in the Indian IT Industry

In a collective prisoners' dilemma or commons problem, self-interested behavior by firms results in poor outcomes for all. Can self-regulation through an industry association solve the commons problem? Specifically, what explains NASSCOM's (National Association of Software and Service Companies) success in saving a scandal-ridden member company, Satyam, from going out of business? Satyam's demise would have shattered client trust in all Indian IT firms; saving it was an unprecedented feat for an industry association. The case provides concrete examples for instructors to highlight the varieties of commons problems faced by industry. It also provides background information on how NASSCOM established its identity and credibility with the government, formulated its values, and crafted its governance model. This background helps students relate to Elinor Ostrom's core design principles that characterize robust institutions for solving commons problems.

Learning Objectives

The case can be used in courses on Business Ethics or non-profit management. Learning Objectives: Understand different types of collective action problems. Appreciate the advantages of self-regulation in solving collective action problems in industry. Understand the importance of credible leadership. Understand how Elinor Ostrom's core design principles can sustain self-regulation. Understand how to manage voluntary organizations so that they serve the best interests of all.