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IN MAY 1997, ALESSANDRA Marinheiro, a financial analyst at the Brazil operations of U.S.-based energy company AES Corp., helped put together a bid for Companhia Energetica de Minas Gerais (CEMIG), a power generation and distribution company in the state of Minas Gerais that was being privatized by the government. The price: US$1 billion.
Such a large acquisition would be a challenge for even a seasoned development executive. But Marinheiro was all of 24 years old.
Still, she performed like a pro. She built financial models, analyzed cash flows and tallied up costs to determine the true value of the company. She figured out how AES was going to finance the acquisition. And when one of AES's partners backed out at the last minute, Marinheiro and her team rounded up another. AES ended up buying 33% of the company along with Southern Co. and Opportunity, a Brazilian investment fund. "If you have an interest and you want to learn, they [AES] give you opportunities to do new things and improve your abilities and knowledge," she says.
Welcome to AES, which is turning Latin America's traditionally hierarchal corporate management style upside down. At the electricity company, there's no rigid organizational chart. While employees do carry titles, few have set job descriptions. Most answer their own telephones, set their own agendas and even determine their own salaries.
And, most radically, they are allowed to make decisions without getting approvals from upstairs. It's bottom-up management style gone to the extreme.
"It's hard to understand for an outsider," says Tom Tribone, executive vice president of AES Corp. and president of AES Americas, the umbrella for all of the company's Latin American operations. "But it works."
Latin Trade decided to find out how. The magazine interviewed seven AES employees up and down the corporate ladder in Argentina and Brazil to see how the system is working. While we discovered a few resistant managers, a little disorganization and some bruised egos along the way, we mostly came away with the conclusion that the system allows AES to make decisions fast and operate efficiently.
That nimbleness has enabled the company to grow quickly as a result, from $519 million in sales and $1.6 billion in assets in 1993 to $1.4 billion in...