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Essay on AES
Organizational Culture at AES
The world's largest independent power producer based in Arlington, Va., is a self-proclaimed "cultural imperialist." His $9.3 billion corporation, he says, doesn't lower its ethical standards in any of the 31 nations in which it owns or invests in 184 power plants.
That includes countries like corruption-plagued December 2001, AES gained final approval to build a 250-megawatt hydroelectric dam on Uganda's upper Nile River. Bakke says that in a decade of project development so far, he has forbidden the paying of bribes. One of AES's own Ugandan employees landed in jail for stealing from the company. But that's the exception.
Outsiders hearing about the $550 million project say that resisting corruption must have been impossible. But Bakke maintains otherwise. He says he wouldn't even approve of paying Ugandan reporters fees for writing positive stories a routine Ugandan practice despite withering criticism leveled at AES for destroying the Bujagali rapids, for displacing poor farmers and for backroom political dealing.
Bakke deals regularly with an issue facing all firms that do business globally deciding what's ethically acceptable when home and host country practices conflict. But the dilemmas he and other CEOs handle have become much more complex and more quickly attract the media spotlight.
Note the 1990s travails of footwear and apparel manufacturers, from Nike to Levi Strauss. Accusations of sweatshop and child labor tarred their reputations. In view of those experiences, CEOs everywhere have learned that they have to nurture a culture of ethical decision-making. They also have to implement review systems that reward ethical behavior and set a more visible example of good corporate practices.
AES has expanded its famously scanty headquarters staff and begun to instill a sense of company-wide discipline in a far-flung workforce accustomed to working independently. The moves are an acknowledgment; executives....
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