Case Name :      Eskom and The South African Electrification Program (B)

Authors :           Patricia H Werhane, Michael E. Gorman, Brian Cunningham

Source :             Darden School of Business

Case ID :           UV1875

Discipline :        Finance

Case Length :    02 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

After Eskom implemented a viable plan for providing electricity to more than 1.75 million South African households, many of its customers failed to pay for service, which resulted in a debt of approximately $400 million by 1997. This negative consumer behavior was not necessarily unjustified, as South Africa’s black citizens had historically used consumer boycotts as a means of protest against the apartheid state, so the country’s consumer base had evolved in an environment where nonpayment was often seen as a social norm rather than negative behavior. Recognizing that consumers’ behavior was the result of living under an oppressive regime, Eskom needed to address this seemingly intractable situation.