Human Resources at the AES Corp

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Human Resources at the AES Corp

Structural Frame

The organisational structure and management systems of AES are well aligned with its set of values and principles of (a) fun at work through making decisions and being accountable, (b) trusting its people by being treated fairly and with respect and (c) social and corporate integrity.

No functional departments: fun but a costly trade-off?

These values are manifest through a simple, five level hierarchical structure. Each plant has three levels - the plant manager, seven area superintendents and front-line staff while a divisional layer oversees the plants and projects by area providing the interaction between the headquarters and plants followed by the CEO.

Each plant comprises a number of small; multi-skilled; flexible; collaborative and self-managed teams instead of functional departments with specialised functions (e.g. legal, finance or human resources etc as in a conventional system). These teams have the decision-making power over all plant-specific business functions including capital allocation, expenditures, strategic planning and plant design. This bottom-up decision making process emphasises the trust the company places in its employees and is very effective in decentralizing the power base, consequently, involving every employee in being responsible for the performance of the company not just the CEO.

This management structure where “everyone does everything”, obviously create an ideal learning environment, “one in which people have an engaging experience on a daily basis”. While it permits speed in decision making since approvals are not required from the top management, they can also prove to be inefficient and costly at times. Not only does the employe...

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...ture, hence, prepare, adapt and be able to communicate a corporate strategy to all the staff.

This would pull the company together strengthening it in the face of incoming competition while keeping all its existing structure and value system intact. Rather than take away responsibility from the employees, the functional specialists together with the functional operators’ level would introduce dynamic measures of collecting and coordinating operations across the whole company and thus, not only giving direction but keeping everybody well informed about market conditions/trends and company focussed and prepared for future changes. Teams will then be able to take better decisions in view of the overall company’s short and long- run strategy. Knowing that the company is stable and well prepared for future contingencies boosts the employees’ and shareholders’ confidence.

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