Posco in Odisha: Non-market Stakeholders (Missed) Management
Santhi Perumal, Shyam Sreekumaran Nair, Deepak ChandrashekarPOSCO, the South Korean steel maker, wanted to set up its subsidiary in the state of Odisha, India. It signed an FDI agreement with the Odisha government in 2005. The project was the biggest ever FDI proposal at that time and was welcomed by both the state government and the federal government. However, the project could not be started even after twelve years. In 2017, POSCO had to withdraw from the Odisha proposal. This case explores the reasons for such a fiasco. It looks into the factors that POSCO had neglected to its own detriment. The case gives insights into how companies can avoid such frustrating experiences and further throws light on:
- To understand the importance of engaging with non-market stakeholders before starting a business operation
- To analyze the impact of non-market stakeholders using (ia)3 framework
- To formulate steps that could be adopted by corporates to manage their non-market stakeholders
- To evaluate how corporates could balance the rights and interests of various stakeholders without compromising on business ethics
