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Essay on AES Corporations

Posted by admin as Example papers

Example Essay on AES Corporations

Energy is one of the most important resources for any economy. There are so many things that depend on energy: transport, manufacture, communication, domestic electric appliances, light, technics… – this list can be continued infinitely. Of course someone has to supply the world with energy. In some countries it is provided by the government in other by private enterprises. But there is something that links these suppliers into global mechanism – Applied Energy Service Corporation or AES contracted. AES was founded in 1981 by Roger Sant and Dennis Bakke. Since it became “The Global Power Company” and now it supplies electric power to 27 world countries on 6 continents. There are many reasons which helped AES to become successful. I will describe two of them – organizational culture and organizational structure of AES – which are inseparably linked together.

Organizational culture of AES is based on concepts which are very simple and effective. Firstly, most of its employees have the authority to make decisions directly in the work process and it provides quick and effective decision making. So employees feel the trust to their competence and professional skills, they understand the responsibility of their decisions and do their best. Secondly, AES workers feel the corporate spirit inside of the company and thus they work as one and share their knowledge with each other. Thirdly, AES clearly understands its social responsibility and everywhere it does its business it takes appropriate measures. The list of AES public utilities is very long and it includes the building of schools and hospitals, planting trees and gardens, providing medicines and food, development of culture, environmental protection, charity etc. Fourthly, the company let to know its employees that hard work leads to success and many benefits. There are many examples of excellent carrier growth in AES from the average worker to the top management level. Also AES has code of ethics which is essential to fulfill by the workers and the most important values: fairness, integrity, global mindset and distinct division of labor, social responsibility and fun.

Organizational structure is the distribution of authority and responsibility between the employees. AES has very decentralized organizational structure. It means that many decisions are made on the lower level of organization, it becomes more difficult to control these decisions and thus top managers trust their subordinates. AES has many units that are independent and do not interact much. There is a one chief in the head of each unit who is a subordinate of CEO. The headquarters of AES is not very large and it generally coordinates rather then makes decisions and there work about 30 people which have about 30,000 of subordinates.

Recently AES organizational structure was based upon geographical factor and it functioned well. But in order to improve the efficiency of AES performance it was decided to restructure its management. Nowadays there are recognized two directions of AES business – Integrated Utilities and Electric Generation and each of them is headed by two CEOs. Nevertheless financial reports are made correspondingly to the 4 areas (Contract Generation, Competitive Supply, Growth Distribution Businesses and Large Utilities) and 5 geographic regions (North America, Caribbean, South America, Europe and Asia) as it were before the restructure in order to easier understanding by potential investors.

In conclusion I want to summarize my points: AES has very advanced and adaptive organizational culture and organizational structure. It helped the company to get to its present position in the world market of energy, it helped to use the best opportunities and eliminate threats, it helped to attract good specialists and profitable partners, it helped to adjust its business in many countries which have their own cultures, customs, traditions and laws etc. The restructure of its organizational structure is connected with the improvement of AES overall production, because the company has to develop and specialize as time goes by.

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