Aes-Telasi Power Trip or Power Play - 1131 Words

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,†¦show more content†¦Although Scholey’s attempt to incur profits through the AEG-Telasi operation was highly aggressive and in many ways courageous and revered, the risks in this operation were too high. Unfortunately, both the political and economic risks in this operation surfaced towards the first four years of the 21st century for this company. The consistent political battles that Scholey initiated with events such as shutting down power to the Ministry of State Security, national televeision, and even President Shevardnadze’s bodyguards certainly drew significant consequences. (Wharton, 14) This leads us to another political risk, dissatisfaction from the domestic government. Since corruption has become an integral part of income for government officials, the attempted halt of such embezzlement within such a large electricity company drew further political opponents, which put company employees in constant attention and danger. AES’s attempt to lace Telasi into its larger goal of globalizing its multi-national enterprise and revenues was too ambitious. The risks came from all angles, and politically it was obvious. In its first two years of operation, its costs already exceeded its ten-year proposed