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Reaction Paper On Powertrip

1338 words - 6 pages

Ethics in international business, differences in culture and political economy are increasingly important issues for corporations that operate in emerging markets and developing countries, for appropriate behaviour standards are sterner, penalties for international laws and rules offences are severe. Those against this view I perceive are for monopolistic enterprises and purely to gain profits no matter the means. From the Independent Lens website, the documentary film “Power Trip” by Paul Devlin depicts the challenges faced by the AES Corporation, an American energy company, during its attempt to operate an electric company in Tbilisi the capital of the former Soviet Republic of Georgia, a ...view middle of the document...

Of the first few minutes of the film, I was taken aback by the messy state of affairs the electricity distribution was in Georgia. I soon discovered that the business climate in Georgia is rampant with corruption, political assassinations and regular street riots. The following evaluates the challenges faced by AES in investing in Georgia.
First, culture matters. Culture provides clues about the attitudes, norms and mores, values, the depth of influence the local religion has on the law of the land, the ethical systems adopted that shape their behaviour and communication between the local workers, consumers and corporate leaders of a country, which countries are most welcoming to investment and which to avoid. As illustrated in the film, the Georgian residents did not have to pay for electricity when they were under Soviet rule. This I believe was already ingrained in their culture therefore their refusal to pay their bills. Once Georgia gained independence the power went. Another cultural issue was the language barrier. At the expense of AES and a contract condition, meters were replaced and meter boxes installed to regulate electrical services. From my research the contract indicates any disputes to be arbitrated in London in English language and English text of the agreement. Communication was poor, for the residents did not understand what it does and why it was needed. The meter installation caused conflicts between neighbours and friends when the power was turned off or disconnected; sometimes death by electrocution occurred and damages to meter boxes. I found the reaction of the Georgians to be quite bizarre, for I can identify with modern meter boxes and for them it is difficult to accept in light of cost issues.
Second, national differences in political economy, provides valuable information on the interplay between economics, law and politics of a country, how public policy institutions are formed and implemented, how interdependence may undermine the efforts of national governments to cope with urgent national issues such as unemployment, inflation, health, and housing, access to food, water and utility services. AES had problems recovering past paid bills for they were non-existent; no records could be found and therefore difficult to reconcile debts. It is assumed that the bills did not make it back to Telasi, the cashier was stealing, or postal bankers were pocketing the money. Another matter to consider is the weak political institution and policies of Georgia due mainly to several previous invasions of occupiers which breeds mistrust of a helping hand. Also the political structure influences the culture and operations of Georgians, especially where the rulers in the past ruled and organized people through fear. The way of social control was to pay attention to detail, build wars between people and lose sight of the big picture.
Third, from an economic standpoint the population of Tbilisi, Georgia was 1.225 million of which...

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