Organizational Culture

American Electric Power (AEP), founded in 1906 as the American Gas & Electric Company (Business Insights: Essentials, 2012). The organization was created when the structure of the electric utility industry in the United States was changing from small, individually owned generator plants to consolidated single systems that served a large area (Business Insights: Essentials, 2012). Today AEP is a for-profit, publicly traded organization, employing almost 18,000 people throughout eleven states (Business Insights: Essentials, 2012).

There are many different business units throughout the organization, including, but not limited to, Customer Services, Distribution, and Generation. According to Edgar Schein, “As organizations grow and develop different markets, they often “divisionalize” in the sense of decentralizing most of the functions into product, market, or geographical units” (Schein, 1990). As a result of the numerous business units, there are many different sub-cultures within the organization; however, all of these various sub-cultures are founded upon norms and values that make up the entire organization culture of AEP.

“Culture is what a group learns over a period of time as that group solves its problems of survival in an external environment and its problems of internal integration” (Schein, 1990). With over one hundred years of existence, AEP has had sufficient time to establish the values that make up the entire culture. The first and foremost espoused value ingrained within AEP’s culture, is the organization’s commitment to a culture fully founded upon safety. No matter what business unit or department head one is assigned to, safety is AEP’s primary focus.

Each meeting, regardless of insignificance or subject, begins with a safety topic or issue. Employees are also encouraged to report violations of safety and walking and talking on a cellular phone at the same time, may result in disciplinary action. These invisible cultural norms may seem extreme, but being an employee of AEP means you learn to embrace the habits that are part of the organizational culture. The industry of generating, distributing, and transmitting electric can be extremely dangerous and it is imperative that employees and customers know that safety is our primary value

Next on the list of the AEP’s values is justice and fairness, which AEP defines as, “doing the right thing at the right time, every time” (American Electric Power, 2012). Respect is another organizational value. According to AEP, respect is “treating others the way we want to be treated, regardless of position, and valuing each person’s talents, perspectives and experience” (American Electric Power, 2012). The remaining organizational values of AEP are trustworthiness, responsibility, citizenship, and caring.

AEP believes these espoused values build a strong corporate culture and vows that future changes in senior management are not likely to alter or weaken the existing culture (American Electric Power, 2012). A company artifact and visible part of AEP’s culture, is the company mascot, Louie the Lightening Bug. Many adults and children alike have seen the animated character dancing and singing about the importance of electrical safety. Louie even makes appearances as various AEP sponsored public events and meetings.

A visible artifact, such as an organization’s mascot, can assist with promoting the company’s culture and values to all stakeholders, internal and external. In order to deal with trying financial times and environmental changes, AEP is shifting its’ organizational culture to prepare for long–term financial performance. The Adaptive Perspective is defined as an organizational culture that assumes the most effective cultures help organizations anticipate and adapt to environmental changes (Kinicki & Williams, 2011).

On Tuesday, May 29, 2012, Nick Akins, AEP president and CEO, announced the consulting companies selected, and the processes they will undertake, to evaluate the company’s organizational structure and work processes, and the company’s “total rewards” benefit programs (American Electric Power, 2012). Hiring the consulting company to conduct a five month Repositioning study was the beginning of AEP creating a new adaptive culture for the organization. After conducting an employee culture survey and analysis of the final recommendations made by the consulting firm, AEP’s Executive Review Committee announced plans to implement organizational and process improvements effective January 2013 (American Electric Power, 2012).

One of the organizational improvements is a change to the existing organizational structure, including the addition of a new executive position specifically related to the repositioning program (American Electric Power, 2012). The Senior Vice President of Repositioning & Program Management Office will be responsible for ensuring the success of the implementation phase and the continuing search for process improvements and organizational efficiencies (American Electric Power, 2012).

The new leadership team will begin the process of appointing their direct reports and senior management teams based on the new organizational structure (American Electric Power, 2012). It is obvious the current organizational structure is not consistent with the company’s strategies and goals, however, the new structure and environment has made the role of a manager a very complex one. A new leadership team and organizational repositioning will create opportunities for advancement, but the harsh reality is various business units and positions, including management, will also be eliminated.

One major expectation of management is the pursuit of organizational goals efficiently and effectively and with this comes with great responsibility. The complexity of today’s manager at AEP is still effectively pursing organizational goals and leading your team, even while being unsure of your own future or making decisions that will affect others. Managers are trained to handle organizational challenges, stay focused on the company’s goals, quickly adapt to any situation. It is imperative that an AEP manager exhibit those skills to their full ability, in addition to resiliency in the face of adversity and uncertain times.

References American Electric Power. (2012, May 25). AEP News. AEP Now. Columbus, Ohio, United States: American Electric Power. American Electric Power. (2012, April). AEP’s Principles of Business Conduct. Ohio, United States of American: American Electric Power. Business Insights: Essentials. (2012). American Electric Power Company, Inc. Retrieved November 27, 2012, from Business Insights Essentials. : http://0-bi. galegroup. com. olinkserver. franklin. edu/essentials/article/GALE%7CI2501315754/abc4d8f5809be44394ba9d414a930d89? u=colu29131 Kinicki, A. ,