Strategy
AES distinguishes itself through developing new products and applications at a low cost. It is committed to social responsibility and empowering its employees through its four main principles which include integrity, fairness, social responsibility and fun. It is “different” from other corporations because AES is focused on retaining its core values and culture as the corporation expands in size. The company’s sources of sustainable competitive advantage include technical leadership through its innovative research and development team and its worldwide network of distributors and strategic partners. AES is committed to penetrating international markets, specifically in developing or emerging economies, and constantly improving on product development. The case states that AES believes their competitive advantage is a result of its “agility or speed and its ability to commit to corporate equity and to arrange complex financial transactions.”
Structure
AES is operating in a network structure. In this structure, employees form groups to solve problems and achieve common objectives. Employees may volunteer for task forces, without any formal credentials, because they are interested in a particular subject or want to set effective company policies. Although employees are not given a formal career path at AES, they are given latitude to move up the career ladder within the company to other positions.
The organization has five hierarchical levels, consisting of a set of divisional/regional managers, and three additional levels that exist in the plant. The plant organization consists of three levels: the plant manager, the seven area superintendents, and the front line people. The two cofounders decided “to avoid creating bureaucratic organizations resembling the government” because of their bad experiences working for the government. As a result, the structure of AES is highly decentralized. This allows managers and employees to both take ownership of their roles and have input on the success of the company. It also allows individuals to develop leadership skills for potential promotions. This flat management structure encourages high employee involvement in all decision-making opportunities.
Systems
The case revealed that AES uses four measures of performance; shared values, plant operations, assets and sales backlog. Shared values is described as how f...
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...n address how to review the manual and make changes if necessary. Finally, the members of the HR manual task force should be adequately compensated for the time and effort they put into the project in addition to their regular job duties. A monetary bonus or compensatory day off will be required to reward them for their hard work and diligence.
The next step for AES is to establish a human resource information management (HRIM) system. A HRIM system will allow employees to access information contained in the HR manual through a company intranet. A HRIM system could also help AES employees track their training and development, look for courses to take, search for job openings or cross training opportunities throughout the company, and locate benefit information. As AES plants become more geographically dispersed, a HRIM system will help to communicate the company’s values and strategy to all employees.
References:
1.Organizational Alignment: The 7-S Model, Harvard Business School, November 19, 1996
2.Human Resources At The AES Corporation: The Case Of The Missing Department, Graduate School of Business Stanford University, February 1997; Mgt 7640 Course pack
3. www.aes.com
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