organization behavior overcoming challenges in a flat structure a case study of valve steam group 2 marketing management 63c

- History Valve Corporation is a video game development and digital distribution company founded in 1996 by Gabe Newell and Mike Harrington, former Microsoft employees.. In 2003, Valve l

NATIONAL ECONOMIC UNIVERSITY

ORGANIZATION BEHAVIOR

OVERCOMING CHALLENGES IN A FLAT STRUCTURE: A CASE STUDY OF

VALVE STEAM Group 2 - Marketing Management 63C

Name Contribution Score

Bùi Tú Linh

(Leader) with each point and assign work Keep the team on track Proposing company topics for the group Make detailed outlines

Participating in all activities and meeting deadlines

Give clear data, number, specific proof for all parts (I-V) Contributing in almost all of the content of the part (I-V) + Slide

Responsible for completing part III alone

Provide feedback and navigation for the team

Do the team's presentation script

Do the presentation, proactively participate in the discussion after the presentation

Prepare answers to critical questions for the group

Do the presentation, proactively participate in the discussion after the presentation

10

Trân Đức

Tuan Contributing in part I Responsible for part IV

Đỗ Thiên

Phúc Proposing company topics for the group

Contributing in part II, part II, and slide

Do the presentation, participate in the discussion after presentation

Deadlines were met, but didn’t have instant edit to feedback

Complete the tasks but still need Tu Linh & Minh support in

output

8.75

Contributing in part I, part I, and slide

Do the presentation, participate in the discussion after presentation

Deadlines were met, but didn’t have instant edit to feedback

Complete the tasks but still need Tu Linh & Minh support in

TABLE OF CONTENTS:

2 About Valve ccc ccc nee ce ene ee bee re ee be sre tee bee cre tee beeen ease bie ene aes

3 Unclear Goals and Expectations

4, Workload & Job desiợn cà cà cà cà cà

3 Open communication channels

4 Recognition of individual contributions

V, SUGGESTION Qui nh

1 Improvement of a team-driven management approach

2 Encouragement of collaborative wWork c.c:

3 Encouràe Employee Recognition Pròrams

4, Adding HR đepartments cc co cọ Sàn Sàn nàn nhe khe sêy APPENDIX

L INTRODUCTION

1 Overview of gaming market and industry

In the era of technology, there are several changes in the way people entertain Indeed, the gaming market has developed significantly to meet the demand of users all around the world The gaming industry has grown rapidly over the past few decades, with advancements in technology and the increasing popularity of gaming among people of all ages and

backgrounds The industry includes various segments such as console gaming, PC gaming, mobile gaming, and online gaming The gaming market is highly competitive and constantly evolving, with new technologies and platforms emerging regularly The global gaming

market is expected to continue its growth trajectory, with revenue projections reaching into

the billions of dollars When it comes to revenue, this industry has reached a total of 184.5

billion dollars in 2022 with PC games accounting for nearly 25% of that huge number

2 About Valve

Valve Corporation is an American video game developer, publisher, and digital distribution

It is the developer of the software distribution platform Steam and the franchises Half-Life,

Counter-Strike, Portal, Day of Defeat, Team Fortress, Left 4 Dead, and Dota

- History

Valve Corporation is a video game development and digital distribution company founded in

1996 by Gabe Newell and Mike Harrington, former Microsoft employees The company's

first game, Half-Life, was released in 1998 and received critical acclaim for its innovative

gameplay and storytelling

In 2003, Valve launched Steam, a digital distribution platform for video games that allowed players to purchase and download games directly to their computers Steam also included social features such as friend lists and chat functionality, as well as automatic updates for games In recent years, Valve has shifted its focus towards developing and maintaining Steam

as its primary product, while also exploring new technologies such as virtual reality Valve

has also expanded its business model to include hardware, such as the Steam Controller and

Steam Link, as well as software tools such as the Source game engine

Today, Valve is one of the most successful video game companies in the world, with a

reputation for innovation and quality in both game development and digital distribution

Steam has become the de facto standard for PC gaming and has over 120 million active users worldwide

Company Name Activision Blizzard, Inc

Number of Employees 1,139 (2022)

and Mike Harrington

"Best Game-Related Website."

@ Valve Corporation: received the 2010 Lifetime Achievement Award at the Game Developers Choice Awards, recognizing its contributions to the gaming industry

- Product Distribution

Steam's distribution model has revolutionized the PC gaming industry by eliminating the need for physical retail stores and allowing developers to distribute their games directly to players This has enabled smaller developers and indie studios to reach a wider audience and has provided players with a more convenient and accessible way to discover and purchase games In addition to games, Steam also offers other types of software, such as productivity tools, design software, and entertainment applications The platform also provides a range of

social and community features, such as friend lists, groups, forums, and chat functionality,

that allow players to connect and share their gaming experiences

Steam offers various payment options, including credit/debit cards, PayPal, and various local payment methods, and has implemented measures to ensure the security of users' personal and financial information The platform also provides a refund system that allows users to request a refund for any game or software purchase within a certain timeframe and under certain conditions

experiences with their friends

possible experience for players All decisions and actions are based

on this principle

We do what we say: Valve Steam values honesty and integrity Decisions are made collaboratively, by the people closest to the work: Valve Steam believes in a decentralized decision-making process, where decisions are made by the individuals or teams closest to the work being done

We value diversity and inclusion: The company strives to create

an environment where everyone feels welcome and valued

We do not tolerate harassment or discrimination: Harassment or

discrimination of any kind is not tolerated

We endeavor to create an environment of trust and mutual

respect: Valve Steam values open communication and trust The company encourages employees to share their opinions and ideas and strives to create a supportive and collaborative work

integrity, hard work, talent, and skill, and believes in a decentralized decision-making process

where decisions are made by the individuals or teams closest to the work being done Overall, these core values reflect Valve Steam's commitment to excellence and to creating a dynamic and supportive culture that fosters creativity, growth, and success

- Structure

In 2022, Valve had approximately 1,139 employees They are well- known for their unique work culture, which includes a flat organizational structure - where there are no traditional managers or bosses and a high degree of autonomy for employees

Flat vs Hierarchical structure comparison

Authority and decision-

or teams

Centralized approach with authority concentrated at the top

1 External Analysis:

Economics THE ECONOMIC RECESSION, HIGH INFLATION RATES

In times of economic downturn, consumers may be less willing to spend money on entertainment, while in times of economic growth, they may have more disposable income to spend on gaming Valve Steam may need to adjust its pricing and marketing strategies in response to changes in the broader economy

The gaming industry also provides employment opportunities for individuals from diverse backgrounds, which can have sociological implications Valve Steam's unique approach to leadership and management, which emphasizes autonomy and creativity, may attract individuals who value these qualities and are looking for alternative

work arrangements This can have implications for traditional notions

of work and employment, as well as for the role of technology in shaping work culture

One of the key technological advantages of Valve Steam is its digital

distribution system, which allows users to purchase and download

games directly from the platform This eliminates the need for physical media and distribution channels, making games more accessible and convenient for users Steam also offers features such as automatic updates and cloud saves, which simplify the gaming experience and improve user engagement

e RESEARCH & DEVELOPMENT Those competition companies (Epic Games Store and GOG.com,, ) are also using the same and even better technology It demands the company to come up with innovative technology by investing it in research and development Valve Steam has been using advanced computers and the latest technology to offer a better quality product

e GAMES DEVELOPMENT The platform offers a range of development tools, including the Source game engine and Steamworks API, which allow developers to create and distribute games on the platform These tools have contributed to the growth and development of the independent game development industry, as well as the overall video game industry

them, Valve has created a unique and successful culture that has led to many

groundbreaking products and technologies However, by defining that structure, the

company also has faced several organizational behavior problems, particularly related to the lack of defined hierarchy and the absence of clear job roles and responsibilities, The organizational culture at Valve Steam is characterized by an emphasis on individual talent and creativity The company has a flat hierarchy with no traditional management structure Employees are encouraged to work on projects they are passionate about, and they are given significant autonomy and flexibility to pursue their ideas While this approach has been successful in promoting innovation and creativity, it has also led to a lack of

teamwork and collaboration among employees The lack of teamwork and collaboration is reflected in the absence of clear communication channels and a fragmented organizational structure Employees are not working together effectively, and there is a lack of coordination

and communication between different departments This is leading to duplication of effort

and a waste of resources, which is impacting Valve Steam's overall productivity

There are many factors that directly and indirectly affect the motivation of employees to

contribute their efforts to the company And Maslow's Hierarchy of Needs has fully outlined

the factors that affect employee motivation at work

Self-actualization

desire to become the most that one can be

Esteem

respect, self-esteem, status, recognition, strength, freedom

Love and belonging

friendship, intimacy, family, sense of connection

No managers meaning that employees don’t have any responsibility to report their

work to anyone, and they are just working on their own If employees are not meeting

their targets, consistently missing deadlines, or not completing tasks to the required standard,

it may indicate a problem with motivation or skill level It could also be a result of unclear

expectations or a lack of resources Valve Steam has been facing a number of performance

issues that have affected its operation and its relationship with its customers, such as

instability of online gaming platforms, delays in the release of its flagship game, lack of

communication with its customers

One of the major performance issues that Valve Steam has been facing is the instability of

its online gaming platform Steam has been experiencing frequent outages and server

downtime, which has resulted in frustration and inconvenience for its customers The

company has been working to address these issues, but the problem still persists In a report

by The Verge in 2019, it was stated that Valve's internal structure and lack of

management had led to delays in the release of new games and updates, as employees were

allowed to work on projects of their choice without clear direction or accountability

There have been various reports and articles discussing the performance issues faced by

Valve Steam For example, in a report by Forbes in 2018, it was noted that Valve had faced

criticism from both developers and consumers for its lack of quality control and testing,

resulting in games being released with numerous bugs and technical issues This not only

affects the gaming experience for consumers but also affects Valve's reputation and financial

performance For example, Valve Corporation has faced delays in the release of its flagship

games, such as Half-Life 3 Fans of the series have been eagerly waiting for the release of the

third installment of the game, which was expected to be released 16 years ago, but the

company has yet to announce a release date; there are some rumors that it will not be out, due

to internal conflicts at Valve This delay has led to disappointment and frustration

among the fans In a survey of Steam users conducted by Ars Technica, 56% of respondents

said they were satisfied with the platform's customer service, while 19% said they were

dissatisfied

Valve Steam may experience performance issues if employees are not meeting project

deadlines, struggling to complete tasks to the required standard, or struggling with skill gaps

This could stem from a lack of motivation, unclear expectations, or insufficient resources

Valve Corporation has also faced criticism for its lack of communication with its customers

The company has been accused of being unresponsive to customer complaints and not

providing adequate support This has led to a decline in customer satisfaction and loyalty

There have been numerous reports from customers experiencing issues with Steam, such as

frequent outages and server downtime Valve has acknowledged these issues and has been

working to improve the platform's stability, but the problems still persist

e Communication breakdowns:

Valve Steam has been criticized for its lack of teamwork and collaboration among its

employees The company's unique organizational structure, which gives employees the

freedom to work on projects they are passionate about, has resulted in a lack of

accountability and communication One of the main issues with Valve Steam's

organizational structure is the absence of a traditional hierarchy Employees are given the

freedom to choose which projects they want to work on, and there are no managers or bosses

to oversee their work While this may seem like a great way to empower employees, it has

resulted in a lack of accountability and communication According to a 2020 survey by the

American Customer Satisfaction Index, Steam's customer satisfaction score was 76 out

of 100, which is below the industry average for internet retail

Valve Steam's organizational structure has led to internal communication breakdowns Since

employees are working on projects they are passionate about, they often work in isolation,

without seeking input or feedback from their colleagues This lack of collaboration has

resulted in missed opportunities for innovation and growth

a Isolation

There will be no task or deadlines given If an employee comes up with an idea, he would tell

their closest co-workers, or the well-known brilliant workers to conduct the idea Therefore,

there will be some employees who aren't actually being

collaborated with, so they will be isolated According to The Guardian: “The glittering aura

of Valve’s “no boss” culture has started to fade In 2013, an ex-employee described how the

company had “a pseudo-flat structure” “There is actually a hidden layer of powerful management structure in the company,” she said, which made it feel “a lot like high school”

b Being exploited

Another ex-employee has taken to Twitter to share his thoughts about a nameless company that closely resembles Valve Rich Geldreich described how the firm would hire employees, make them grand promises, then fire them once they were no longer useful He described the firm as being run by “barons” — and advises new employees to cosy up to a baron in order

to “rapidly up your purge immunity level before the next firing cycle”

Geldreich’s description squares with some reviews of Valve on Glassdoor, a site where staff leave anonymous verdicts on their employers (although it has to be said that many employees like Valve’s culture) One describes the no-boss culture as “only a facade”: “To succeed at Valve you need to belong to the group that has more decisional power and, even when you succeed temporarily, be certain that you have an expiration date No matter how hard you work, no matter how original and productive you are, if your bosses and the people who count don’t like you, you will be fired soon or you will be managed out.”

=> Valve company is believed to have a “flat hierarchy”, but it is only a facade

While the company's unique structure may offer benefits such as increased creativity and autonomy, it is important to weigh these benefits against potential risks and drawbacks before making a decision These criticisms suggest that Valve's culture may not be as inclusive or egalitarian as it is often portrayed While it's important to note that these criticisms may not

be representative of all employees’ experiences at the company, they do highlight potential risks and concerns that employees should be aware of In particular, employees may need to build strong relationships with those in power in order to ensure job security, which could limit opportunities for employees who are not part of the company's inner circle

e High turnover rates:

A high turnover rate means that many of your employees — more than what's expected in your line of business — have quit the organization High turnover rates may be a result of a toxic work environment, lack of opportunities for growth or advancement, or a lack of recognition

or rewards for employee contributions According to a report by Kotaku, Valve Steam had a turnover rate of around 16% in 2018, which was significantly higher than the industry average of 10% The report also revealed that Valve Steam had lost many high-level employees, including some who had been with the company for more than a decade

15%

10%

Vavle Steam Other industries

Figure 2: Valve Team Turnover Rates

While this structure may seem ideal, it may also lead to a lack of direction and

guidance, leaving employees feeling lost or disconnected from the company's goals Additionally, the lack of performance evaluations and feedback may make it difficult for employees to track their progress and understand their role in the company

e Poor morale:

Morale is how your employees feel about their work, your organization, and how it impacts their lives Disengaged, unmotivated, or negative attitudes among employees could be a sign

of underlying issues within the organization, such as a lack of trust, ineffective leadership, or

unclear expectations When morale is high, employees often feel appreciated and happy When morale is low, employees feel poorly about their work and your organization

Valve Steam has been experiencing poor morale amongst its employees This has led to a decrease in productivity and a high turnover rate According to a Glassdoor review of Valve Steam, only 53% of employees would recommend the company to a friend and only 47% approve of the CEO In addition, a survey conducted by Kotaku found that only 30% of Valve Steam employees feel like they have job security, and 45% feel like they don't have clear directions from upper management

The root of this issue is the lack of communication and transparency within the company Employees have reported feeling disconnected from the company's goals and frustrated with the lack of clarity on their roles and responsibilities Furthermore, Valve Steam's high turnover rate can also be seen as evidence of poor morale This also led to a lack of recognition and career growth opportunities for employees Many feel stagnant in their positions and have little motivation to continue working for the company

Conclusion: By assessing the organization's performance, communication, turnover rates, morale, and willingness to change, it 1s possible to identify specific areas where organizational behavior problems may be occurring Once these problems have been identified, targeted interventions and management strategies can be put in place to address them