Case | HBS Case Collection | December 1994 (Revised October 2009)

AES Honeycomb (A)

by Lynn S. Paine and Sarah C. Mavrinac

Abstract

Senior managers of the AES Corp., an independent power producer, must decide whether to drop the company's emphasis on corporate values and revamp organizational controls as advised by investment analysts and outside counsel. The company is recovering from an incident of environmental fraud at one of its plants where an innovative decentralized "honeycomb" structure has been put in place. Some believe the structure is too decentralized and that lack of controls contributed to the incident.

Keywords: Crime and Corruption; Energy Generation; Values and Beliefs; Corporate Governance; Governance Controls; Crisis Management; Organizational Structure; Environmental Sustainability; Energy Industry; United States;

Citation:

Paine, Lynn S., and Sarah C. Mavrinac. "AES Honeycomb (A)." Harvard Business School Case 395-132, December 1994. (Revised October 2009.)