Is AES corporation empowering its employees too much?

Essay by HannahHan1991University, Master's October 2014

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Is AES corporation empowering its employees too much?

Xu Han

Problem Statement

When Sant and Bakke wanted to create a very different company, they decided that the 4 most important values of each community- "fairness, integrity, social responsibility, and fun"-should be embedded. "Fun" should be interpreted as enabling employees to take ownership of the company's operations, use their experience and gifts to make decisions, and enjoy working at AES. The honeycomb structure was so successful that AES started to expand its business internationally (exhibit 2) and its revenue increased sevenfold from 1988 to 1992 (exhibit 3). However, the applicability of the honeycomb system was doubted after a series of environmental incidents. Were employees given too much power?


To reach a conclusion, the first thing to answer it what has been done and what is AES doing to make the empowering system work. As Sant said, empowerment with values is the key.

Derived from the core values is the "no they" culture, that is, everyone is owner of the whole operational team. Then comes the structure of the company. To encourage employees to make decisions by themselves, Sant has decided that no approval is needed for many decisions and that there should not be more than 5 layers of management in the whole company (exhibit 6). Operation and maintenance departments are not separated. Moreover, every employee is expected to be generalist, since no team contains more than 1 specialist from a specific field and each team member has to rotate to learn other skills. To facilitate decision-making process, information about the strategy and financial performance is open to everyone, even though doing so involves risks of leaking secrets to the company's competitors. The hiring process largely represents the 4 core values. As for the control of operation, surveys of...