Early in the morning of June 21, 2002, Víctor Cruz, general director of Unión Fenosa in Colombia, dashed through the Bogotá traffic on his way to his office, eagerly awaiting Honorato López Isla's phone call. López Isla was Unión Fenosa's first deputy chairman and CEO. The night before, Cruz had e-mailed López Isla concerning severe social tensions on Colombia's Atlantic coast and financial risk for Unión Fenosa. Cruz knew that López Isla would call him at 8 a.m. sharp, Bogotá time.

What had happened? Two years earlier, when Unión Fenosa entered the Colombian electric energy market, the company's main objective was to distribute electricity to the big industrial plants on the Atlantic coast. Unión Fenosa also served end-consumers, but they only played a minor role within the company's business strategy. After one year in the market, Unión Fenosa encountered problems. Not only did many of the private customers refuse to pay for the services but the inhabitants of the region's slum-like poor quarters illegally tapped electricity from the distribution network. Severe energy shortages occurred. Supplying the industrial plants on the Atlantic coast turned out to be more difficult and costly than expected. What made things even more difficult was that the official socio-economic stratification of the population failed to include the inhabitants of the disadvantaged quarters; some observers felt that for the government, these people essentially did not exist. When Unión Fenosa began to cut off energy supply in June 2002, protesters took to the streets.

Cruz entered his office at 7:45 a.m. He was not sure whether some of his proposals sounded too unusual for an electrical company. When the phone rang at 7:50 a.m., the display indicated the awaited call. How were Cruz and López Isla going to cope with the social and financial tensions?

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