Organizational Culture and the Effects on Business: Analysis of AES Corporation

Essay by loliver19University, Master'sA+, April 2004

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The global power company, AES Corporation is going through some major changes in its organizational culture as well as the organizational structure due to various events of the past few years. The organizational culture of AES is one of change and shows the willingness to make the company successful at all costs. Just as the culture of AES has changed, so has the organizational structure of the company as it has transformed to be more competitive in the new millennium. AES is an innovative company that has survived turmoil and has restructured itself to be even more competitive on the global scale.

The organizational culture as well as the organizational structure of AES is changing due to recent events over the past few years. AES experienced problems in regional areas, specifically in the accountability of spending and in fiscal decision making. The organizational culture and structure of AES created a scenario that placed the company at risk for financial problems.

The senior management of AES decided that a cultural and structural change was necessary to provide the needed structure to bring AES back on course to being a successful company.

The culture of AES was one based on a loose ideal that self motivated individuals will work harder if they do not have a boss standing over them watching their every move. The unique structure of AES had allowed it to grow and react more quickly to changes than its competitors. The reason for the quick responsiveness is simple; it is much easier to get a project started if there are only a few people to obtain approval from. AES initially grew exponentially because decisions were made at the lowest possible level. Corporate headquarters made policy and oversaw all activities, but day-to-day decisions were made by the local employees on...