Fortum started operations in India in 2012 as a producer of solar energy and soon became one of the country’s leading clean-energy companies. It was driven by the values and code of conduct established by its parent company, Fortum Oyj. headquartered in Espoo, Finland. In December 2019, Fortum acquired land in Jaisalmer (Rajasthan, India) to construct a 250-megawatt solar power plant. The Covid-19 pandemic hit the world soon after. India initiated a complete national lockdown. Construction activities were suspended, resulting in joblessness of the migrant construction workers. Fortum faced a sudden and acute shortage of construction workers in Jaisalmer. Although the Government of Rajasthan allowed extended work-hours, Fortum India Pvt. Ltd. struggled in deciding what to do.
Each choice came with a consequence of either delaying the plant commissioning or bearing additional and high costs towards ensuring safety and health of the workers amidst the fast-spreading pandemic. Employing fewer workers for longer hours may breach universal labour practices, and could thus attract negative attention. Keeping the construction workers employed using regular work hours is expected to increase the construction time due to shortage of construction workers.; Measures to protect workers from COVID infection will increase project costs, rendering the produced power uncompetitive and violating the Power Purchase Agreement (PPA). What should Fortum do?
The case will help students to understand the complexity of business environment in making key decisions by enabling them to:
- Assess various options available to a business in the times of high volatility and uncertainty and the consequences tied to each option in the context of the need to safeguard business reputation, hold responsibility towards stakeholders and pursue business objectives Appreciate the reasons for responsible behaviour in making tough decisions.
- Understand the nuances of corporate values which align international geographies with different cultures and legislations.
- Understand the fine line between ethics and legality, especially when the legal recourse seems to be in the organization’s interest