Business in India

In moving into India, Maxcom faced a variety of problems which hindered its ability to conduct business. Some of these factors were ecological or heritage factors that any foreign shareholder in India would face, and other factors lived that were particular to the Dubhol project.

Starting a new business presents opportunity and challenges, which are compounded when established in a foreign country. There are many facets to consider in the development of an international business such as the location, political, social, and economical climates of the host country. All play an intricate role in the overall success of a fledgling business. Research becomes a continual process that begins with determining that a market exists for a particular product or service and attributes to the success by providing the information that is essential to growth.

When considering doing business in India, Maxcom should consider that at the time India was emerging from a command economy and only recently realizing the huge benefits of FDI. This change would not occur overnight so opponents from those persons who before were supportive of a government designed economy should have been expected. The political ideology of India at the time was emerging from a radical viewpoint - a action away from the concept that multinational enterprises were an instrument of imperialist domination may still have been felt in many areas. The support of Gandhi's doctrine of swadeshi would be still sensed by the older people in power those who remember India's battle for independence. This cultural backdrop therefore presented a difficult task for Maxcom, before contracts had even been drawn.

Logistical matters were furthermore common here - India did not have the capability to support the demand for power and did not have the fuel supplies. The interdependence of Maxcom's Qatar project ensured that success in India was important as well as far-reaching.

When making moves into Maharashtra, Maxcom noted that the political and economic environments were favorable. Contingency designs should have been made for a likely change in political weather or a worsening in the economy. When the Congress Party lost power to Shiv Pawar in Maharashtra, there was a move in political climate and power over the project now lay at the hands of a non-supportive, ethnically-intolerant party. The Shiv Pawar Party's accusations of bribery and cost padding helped to exacerbate an already existing distrust of foreign presence which may have existed and became a source of bad publicity for Maxcom as well as a very real threat to the Dubhol project. The public were not impressed by the clear-cut need of comparable bidding for the project and there was furthermore opposition from ecologicalists who were worried about the ecological influence of the task, and local ranchers who sensed their land had been wrongly taken away from them to construct the plant.

Given these project-specific difficulties against a backdrop of potentially unfavorable environmental issues, Maxcom has a tough decision to make. It could have backed out of the project - jeopardizing the entire India and Qatar task, ...