Aes-Telasi: Power Trip or Power Play?

Topics: Political corruption, Investment, Risk Pages: 3 (1121 words) Published: November 3, 2010
AES- Telasi: Power Trip or Power Play?
The state of Georgia’s geographic location provides resources, in particular hydroelectric power sources advantageous to their economic well-being. For this reason this post- communist state attracted the attention of AES, a multinational U.S. energy firm. More specifically, it caught the eye of Michael Scholey, a prospective investor and manager for AES. However, Georgia’s impoverished state and rampant corruption throughout the nation made the restructuring of Telasi difficult for Scholey.

AES’s western laissez-faire management style and organizational structure did not work due to Georgia’s past sour relationships with suppliers that were fueled by unpaid debts, theft and corruption. AES’s, primarily Michael Scholey’s, position to reconstruct Telasi involved the reconstruction of the Georgian society as a whole. However, the four organizing principles that AES was found upon, fairness, integrity, social responsibility, and fun, were not practical to Georgia’s status quo as bribes and unofficial payments were entrenched as a part of nearly every business transaction. “Eighty-seven percent of Georgians believed that unofficial payments were either an essential or a useful part of doing business” (Wharton 6). Along with government corruption the primitive methods of monitoring electricity use via meters within customers’ homes clearly did not work, as customers would tamper with them as best they could to get free electricity. Along with this, many customers implanted second and third power lines into their supply; raising the net electricity brought to their house from the plant. Scholey dealt with this by cutting off all illegal power lines and handled corrupt employees seriously. Furthermore, Scholey’s preaching in Tbilisi on closely monitored electricity usage and payment was not received well by customers. He attempted to resolve this by public relations as a part of main management plan to combat and halt...
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