Business Case Studies & Business Publications

Eskom and The South African Electrificat...

Werhane, Patricia ...

Case

Eskom and The South African Electrification Program (B)

Werhane, Patricia H.; Gorman, Michael E.; Cunningham, Brian

E-0163 | Published April 7, 1999 | 2 pages Case

Collection: Darden School of Business

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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.