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Enron International in India.

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BBUS 346 International Business Case Study: Enron International in India 2nd Feb, 2004 Han, Ying # 9475582 Introduction As a vanguard firstly entered India for international operation in 1990, Enron International experienced rise and fall through years and had been built into a global operation with remarkable achievements by 1997. Simultaneously, the growing presence in India became the major potential treasure in Enron International's business kingdom. As the CEO appointed by Enron's chairman, Rebecca Mark has been fastly gaining reputation for her splendid diplomatic skills and political intelligence. However, influenced by different factors, this critical international company had a tough way to its latter success. Although it was chosen by the India's former prime minister, Narasimha Rao, it successively experienced unexpected problems and complex conflict in the country. By 1997, Enron International had been built into a global operation with sales of $1.1 billion, annual profits of $220 million, and a backlog of international energy projects worth over $20 billion. While it showed a good learning example in success, enlightenment also could be found in this case, which calls for further perception of finely manipulating a business under a circumstance, which related to culture studies and major ethics. Problems Enron International had been through several problems from the initiation: * Inappropriate Anticipation At very beginning after Enron International jumped ...read more.


The aspect of how political and legal environment influenced the approval of the project should be considered the root problem for this issue. * Political And Cultural Risk 'Culture' has not got a simple definition. The values and norms of a culture do not emerge fully formed. Many things such like prevailing political and economic philosophy, social structure of a society and dominant religion, language, and education, constitute them. According to one observer, "The popular belief is that any dealing with foreigners are bound to be either crooked or disadvantageous. Maybe 9 times out of 10 this is correct." Many people in India held this sort of notion by that time. Because of that, the claim that the local leader had been bribed by the company played well in public. Enron's investment in India had been regarded as a corrupt machination associated with the local leader and the Congress Party. The company began experiencing a conflict with the state government of which the new leader had been elected. The campaign constituted the trials and tribulations of both the company and the Indian government. It also took time and efforts that were unexpected to Enron international. In this case, a major change of the control power in the state government had been through by Enron International. ...read more.


2. It should be thought as correct. Just like what Mark said, the situation might change before and after you enter the country since for a foreign company, they must risk its fortune or capital for running a business in different conditions like culture and regulations. The risk premium was built for taking responsibility to both the company and the government. The company should have foreseen that this might have been perceived as cost padding since in the point view of the host government, the risk claimed by the company was associated with their usual customs, which should be a part of the society, it should not be regard as something a country should have obligations to. 3. For a foreign company that intends to make a investment in India, fully preparation should be considered. For India is a society may has different cultural and political environment. As a better way to run your business in India and avoid draining away large amounts of profits, a fair contract should be signed with carefulness. 4. He is right. The signal in this case is referred to the real meaning for foreign direct investments in India after the government claimed to do the substantial deregulation. In spite of the encouragement and the lure of India's environment of investment. It is necessary for a foreign company to reconsider the entire plan in order to successfully run business in India after Enron's experience. ...read more.

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