Abstract:
In the wake of the fraud conspiracy convictions of its former executives Kenneth Lay and Jeffrey Skilling, the name Enron will likely long be synonymous with corporate corruption. But how did it rise, to the point of being the sixth highest-value US corporation, before its precipitous 2001 fall? This case provides a glimpse of a key element of Enron in action, as well as illuminating the complex process of foreign direct investment in a developing economy. The case focuses specifically on the Enron Development Corporation, that arm of the complex web of Enron subsidiaries which sought to build and operate power facilities around the world, including Argentina, Guatemala, the Philippines, Colombia and China. This case follows the protracted proposal and negotiations process that characterized Enron Development's effort to build a gas-powered electricity generation plant in India, specifically in the state of Maharashtra. It is fundamentally a case about the political economy of Maharashtra, and India generally, the period immediately following the beginning of post-socialist economic liberalization in the early 1990s.
Learning Objective:
The case series is meant as a vehicle for discussion both about the specific utility proposal and the structure of a potential deal between Enron and Maharashtra, and as the basis for discussion of the politics of infrastructure development, particularly in a developing country setting. It can also be used as a vehicle for a negotiations exercise or discussion of negotiations theory.
