Human Resources at the AES Corp.: The Case of the Missing Department SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Human Resources at the AES Corp.: The Case of the Missing Department
AES develops and operates electric power plants all over the world, and by late 1996, has approximately 20,000 employees. But, the corporation has no human resources staff, either at corporate headquarters in Arlington, VA, or in any of its operating facilities. Moreover, the company has very little centralized staff at all--little or no strategic planning, no environmental department, and almost no legal staff. The question is: Could and should the company continue to operate in this same way, with little specialized staff, as it continues to expand and geographically diversify? Another question is: How had the organization been able to be so successful without developing and relying on specialized expertise?
Authors :: Jeffrey Pfeffer
Topics :: Organizational Development
Tags :: Human resource management, Leading teams, Organizational structure, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Human Resources at the AES Corp.: The Case of the Missing Department" written by Jeffrey Pfeffer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Staff Aes facing as an external strategic factors. Some of the topics covered in Human Resources at the AES Corp.: The Case of the Missing Department case study are - Strategic Management Strategies, Human resource management, Leading teams, Organizational structure and Organizational Development.
Some of the macro environment factors that can be used to understand the Human Resources at the AES Corp.: The Case of the Missing Department casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, there is backlash against globalization,
there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Human Resources at the AES Corp.: The Case of the Missing Department
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Human Resources at the AES Corp.: The Case of the Missing Department case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Staff Aes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Staff Aes operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Human Resources at the AES Corp.: The Case of the Missing Department can be done for the following purposes –
1. Strategic planning using facts provided in Human Resources at the AES Corp.: The Case of the Missing Department case study
2. Improving business portfolio management of Staff Aes
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Staff Aes
Strengths Human Resources at the AES Corp.: The Case of the Missing Department | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Staff Aes in Human Resources at the AES Corp.: The Case of the Missing Department Harvard Business Review case study are -
Highly skilled collaborators
– Staff Aes has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Human Resources at the AES Corp.: The Case of the Missing Department HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Staff Aes has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Human Resources at the AES Corp.: The Case of the Missing Department - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Staff Aes is present in almost all the verticals within the industry. This has provided firm in Human Resources at the AES Corp.: The Case of the Missing Department case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Analytics focus
– Staff Aes is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Jeffrey Pfeffer can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Staff Aes is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Staff Aes is one of the most innovative firm in sector. Manager in Human Resources at the AES Corp.: The Case of the Missing Department Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Staff Aes is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Staff Aes is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Human Resources at the AES Corp.: The Case of the Missing Department Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Staff Aes is one of the leading recruiters in the industry. Managers in the Human Resources at the AES Corp.: The Case of the Missing Department are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Staff Aes are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Superior customer experience
– The customer experience strategy of Staff Aes in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Staff Aes has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Staff Aes has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Sustainable margins compare to other players in Organizational Development industry
– Human Resources at the AES Corp.: The Case of the Missing Department firm has clearly differentiated products in the market place. This has enabled Staff Aes to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Staff Aes to invest into research and development (R&D) and innovation.
Weaknesses Human Resources at the AES Corp.: The Case of the Missing Department | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Human Resources at the AES Corp.: The Case of the Missing Department are -
Capital Spending Reduction
– Even during the low interest decade, Staff Aes has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Human Resources at the AES Corp.: The Case of the Missing Department, in the dynamic environment Staff Aes has struggled to respond to the nimble upstart competition. Staff Aes has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Staff Aes products
– To increase the profitability and margins on the products, Staff Aes needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Staff Aes has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Interest costs
– Compare to the competition, Staff Aes has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Increasing silos among functional specialists
– The organizational structure of Staff Aes is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Staff Aes needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Staff Aes to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Human Resources at the AES Corp.: The Case of the Missing Department HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Staff Aes has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Staff Aes is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Human Resources at the AES Corp.: The Case of the Missing Department can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Human Resources at the AES Corp.: The Case of the Missing Department, it seems that the employees of Staff Aes don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Human Resources at the AES Corp.: The Case of the Missing Department HBR case study mentions - Staff Aes takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Staff Aes, firm in the HBR case study Human Resources at the AES Corp.: The Case of the Missing Department needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Human Resources at the AES Corp.: The Case of the Missing Department | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Human Resources at the AES Corp.: The Case of the Missing Department are -
Using analytics as competitive advantage
– Staff Aes has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Human Resources at the AES Corp.: The Case of the Missing Department - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Staff Aes to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Staff Aes can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Staff Aes is facing challenges because of the dominance of functional experts in the organization. Human Resources at the AES Corp.: The Case of the Missing Department case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Staff Aes in the consumer business. Now Staff Aes can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Staff Aes can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Staff Aes can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Staff Aes can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Human Resources at the AES Corp.: The Case of the Missing Department, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Staff Aes to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Developing new processes and practices
– Staff Aes can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Staff Aes can use these opportunities to build new business models that can help the communities that Staff Aes operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Buying journey improvements
– Staff Aes can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Human Resources at the AES Corp.: The Case of the Missing Department suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Low interest rates
– Even though inflation is raising its head in most developed economies, Staff Aes can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Staff Aes to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Staff Aes to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Staff Aes can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Human Resources at the AES Corp.: The Case of the Missing Department External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Human Resources at the AES Corp.: The Case of the Missing Department are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Staff Aes.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Staff Aes can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Human Resources at the AES Corp.: The Case of the Missing Department .
Shortening product life cycle
– it is one of the major threat that Staff Aes is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Staff Aes has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Staff Aes needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Staff Aes can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Staff Aes with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Staff Aes
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Staff Aes.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Staff Aes will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Human Resources at the AES Corp.: The Case of the Missing Department, Staff Aes may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High dependence on third party suppliers
– Staff Aes high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Staff Aes needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Consumer confidence and its impact on Staff Aes demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of Human Resources at the AES Corp.: The Case of the Missing Department Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Human Resources at the AES Corp.: The Case of the Missing Department needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Human Resources at the AES Corp.: The Case of the Missing Department is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Human Resources at the AES Corp.: The Case of the Missing Department is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Human Resources at the AES Corp.: The Case of the Missing Department is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Staff Aes needs to make to build a sustainable competitive advantage.
