An American Video Game Development and Digital Distribution Company - Assignment Example

Business Table of Contents Introduction 3 Analysis 4 Section Issue pertaining to Organizational Structure 5 Section 2: Issue pertaining to Decentralization 7 Conclusion 8 Reference list 10 Introduction Valve Corporation commonly referred as Valve, is an American video game development and digital distribution company. It is headquartered in Washington, United States (US). It was founded in 1996 by two employees of Microsoft, Mike Harrington and Gabe Newell. Valve have developed the much applauded Half-Life (1998) and the Portal sequels that was released in 2007. The company has also created the software distribution platform named as Steam which was released in 2002 and Source engine released in 2004. The first game of the company was funded by the owners and was a huge success since over 9.3 million copies were sold in the first year. Thus, it won 50 PC Game of Year awards. IN 1998, the game was published originally on Windows in 1998; then at Playstation 2 during 2001 and lastly at Linux & Mac OS X during the middle of 2013. Steam, the online distribution service of Valve, helped the games to be released in these particular platforms. Steam has enabled the gaming platform to connect to millions of people globally. According to the records, the company employed about 300 employees in 2012. Despite the success of the video games, the company has encountered issues pertaining to its organisational structure and decentralization (Belbin, 2010). The main aim of the report is to elaborate how Valve Corporation survived without leadership of managers. Valve Corporation adopts flat structure in order to avoid or reduce obstacle between its employees and customers. It is observed that flat organisational structure is useful for companies to provide freedom of practicing new technologies without thinking about technological failure. The justification for choosing these issues for the report is that flat organisational structure is threatened by high level of risk. It is observed that the company has committed innumerable mistakes by adopting the flat structure for its organisation. Additionally, it has been noticed that the company has no leaders who will communicate the information to its employees and direct them to do a particular task (Dawson and Andriopoulos, 2014). Thus, the company has failed to develop mentors or guides for its employees and thus it has given rise to informal mentoring which is another big problem for Valve. Informal mentoring leads to weak decision making which may harm the reputation of the company. Analysis An organization is defined as a social arrangement of human and capital resource which is controlled for achieving a set of collective goal. The human resource here refers to the employees and the capital resource is the financial structure. The people-organization relationship depends on the psychological contracts. Psychological contracts are defined as the promises and beliefs that are expressed during exchange of an agreement between the employer and employee. Similarly, Valve has exchanged its views and rules to the new employees through its Handbook for New employees. It revealed all the promises and beliefs of the company and also explained the organizational structure to the employees. A company where every employee has the same authority and there is no one to guide them or rectify their mistakes – it sounds awesome from employees’ part but it is not at all good for the company. A similar structure is observed at Valve Corporation where there is no boss for the game developers. Gabe Newell has pointed out that flat structure is very useful for any company since it removes all barriers between the employees and customers (Saudath, 2012; Kelion, 2013; Mullins, 2013). Managers are excellent in formalising certain procedures that are to be followed by the company in order to accomplish a certain task. However, he claimed that in their line of work it is not good to appoint a manager since skills in one generation are different from another generation and if managers are appointed skills are suppressed within the employees since he/she becomes the leader for everybody (Saudath, 2012). However, this concept is questioned and one of the ex-employee of Valve Corporation has pointed out that there are “hidden layer for the powerful management structure” (Ellsworth, 2013) which resembles like high school structure. In the following two sections the two issues are elaborated. Section 1: Issue pertaining to Organizational Structure There is no manager for the games developers of Valve Corporation. They govern their own work and have the authority to discuss and fix the salary of other employees in the company. Every individual in the company are treated equally and have the same power. This identifies the flat structure of the company there is no manger to guide the game developers or the employees and they have the authority to communicate with the customers and build a good customer-employee relationship (Buchanan and Huczynski, 2013). This is a successful structure for Valve Corporation but has many loop holes which are identified by one the ex-employees of the company, Ellsworth. She depicted that at Valve everyone are equal and the employees are like peers and they take any decision after consulting with everybody. However, she pointed out that there is hidden layers of powerful management and has exclaimed that the structure of Valve is same as that of high school structure. In High School there are few popular kids who acquire the power of humiliating other kids and bring trouble for everybody. Similarly, in case Valve Corporation, there are few employees who want to make them different from others and thus they try to govern others in order to show superiority though they belong to the same position. This had been huge problem for other employees since they became demoralised in their work. Valve has employed about 300 talented employees who have helped in generating billions of revenue for the company. The absence of the management level in the company has been the main challenge for the company. The flat or organic structure of the company explains the situation of no management (King and Lawley, 2013; Northouse, 2010). Organic theory has stated that the organic structure of a company is associated with flat structure (Huffmire, 2006). The absence of management levels has eased the communication between the employees and they have the power to take their own decision (Mair, 2013; Varoufakis, 2013a). There is lack of good leadership and thus if one of the employees make any mistake there is no one to identify for him/.her and guide him/her to rectify it. The company follows an informal business processes which have given rise to certain powers who want to differentiate them from other. They informally mentored other employees which demoralised the latter and thus the employees could not perform their task properly (Lunenberg, 2012; Sadler, 2007; Varoufakis, 2013). Ellsworth, the ex-employee of Valve, has explained her own experience by underlining a situation where she was harassed by her peer employees. As she was preparing a new video game, she was interrupted by her fellow employees. They were trying to misguide her by diverting her attention from the main goal (Valve Corporation, 2012). They were thus regarded as the most powerful entities in the team though there was no specific demarcation for the positions. Thus, the situation encountered by Ellsworth can be described as the simple game for power where few employees try to dominate other to differentiate them from others. This happened due to the fact that there are levels of authority in the organisations. If there have been managers in the organisation who have the responsibility to guide and govern different teams then these situation would not have aroused. The mangers would have the only source of power in the company and they could have assisted the employees who encounter problems, to cope up with it (Robbins, et al., n.d.; Savage, 2013). Thus, flat organisational structure is not at all encouraged by all companies since it brings a lot problem between the employees. The informal mentoring leads to poor decision making which weakens the moral of other employees and it harms the reputation of the company as a whole. It is already discussed that organic theory does not follow any formalization process in the business (Robbins and Judge, 2013). Likewise it can be said that there is no fixed job role for the employees all of them are designated as the game developers. The employees or the game developers are allowed to choose their own group in which they will work and perform their duties within a specie time frame. The employees are allowed to create their job role which is suitable for them to perform in order to reach particular goals. The job roles created by the employees are temporary in nature as it ends with the completion of a particular project within a specific time frame. Thus, the job roles are flexible for the employees and they are permitted to make any amendment in the job description at any time of the project in order to create a better one. This way of working in Valve Corporation has contributed positively towards the success of the company but it has provided hindrance to many employees in performing their jobs efficiently (Lunenberg, 2012; Sadler, 2007; Varoufakis, 2013). Section 2: Issue pertaining to Decentralization The second issue pertains to decentralization in the organisation. The basic definition of decentralization is easy to elaborate but hard to follow successfully by any company. Decentralization is the process in which all the employees are allowed or permitted to participate employees in the decision making process of the company. The decision pertains to the task that is performed by them to achieve the success of a certain project. These decisions are not provided by the higher authorities rather they do not play any role in the decision making process of a particular since these authority lies with the individual employees. It encourages the employees to do their work and empowers them to become the most efficient employee of the company. However, there is negative effect of this authority. It is observed that the mistakes undertaken by the individual employees in the course of the completion of the project remain unidentified and thus the success rate of the project decreases to a great extent (Lunenberg, 2012; Sadler, 2007; Varoufakis, 2013). If the management plays its role for taking decision then these mistakes will be checked upon and reduced so that the success rate of the project increases. Proper guidance leads to a work satisfaction and it also leads to the proper arrangement of the tasks that constitute the project. In Valve Corporation, there is decentralization of authority which has enabled the employees to take their own powerful decisions for successfully handling a particular project. These decisions can harm the reputation of the company since it is not guided by any mentor who has experience of encountering similar type of projects. The experience of the mentor will help the employee to build the correct process for performing the task and do the project correctly. However, in case of Valve Corporation it is manager free system which is one of the main issues encountered by the company (Warr, 2013; Yukl, 2012; Storey, 2011). Conclusion Valve Corporation is referred as a successful company in United States but recently it has encountered many issues which have questioned its existence in the long run. The human resource firms an essential part of an organisation. If these resources are not managed in proper way then the company reputation can be affected in the long run. Valve follows a manager-free system which has provided them success for the past years but this structure of the organisation is under scrutiny since it has made huge differences in the course of work of the employees. The employees are given the authority to take any decision but the effectiveness of the decision is not identified since there is no leader or mentor to judge its appropriateness. Due to the lack of leadership, the flow of information within the company is weak and employees do not get to know the previous experience of the employees who are working for the company for a long time. It has been noticed there are few employees in the company who try to differentiate themselves from other employees by governing the latter. They are permitted to do so since every employee has the equal power and position in the company but still they try to interrupt the work of other employees so that they cannot to their task properly and finish a project within the fixed time frame. By employing such a method, they demoralise the employees and force them to deviate from their goals. This affects the performance of the employees which in turn brings negative impact in the operation of the company. Thus, it can be concluded that though Valve Corporation has encountered success by employing flat organisational structure but it can also be noticed that few employees has meet with difficulty on following the same structure in the company. This fact can be justified through the interview of Ellsworth, an ex-employee of Valve, who has encountered huge difficulty in completing a particular video game project during her job period in Valve. Thus, from the case study it is understood that every company needs a leader to guide the employees in the right direction and identify their mistakes when they encounter difficulty in completing a project successfully. 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