MGTS7809 - STRATEGIC HRM - GROUP 2
Humberto Jimenez Martinez
Background
Who is Valve?
- Video game developer, publisher and digital distribution company.
- Est. 1996 in Bellevue, Washington.
- Online platform Steam
- Key games Half-Life, Counter-Strike, Portal, Day of Defeat, Team Fortress, Left 4 Dead, and Dota 2.
Organisational Structure
Organisational Structure
Holacracy is at the core of Valve's structure:
- Flat structure
- Core goal oriented
- Dynamic & flexible
- Distributed control & authority
- Self-organising teams ('cabals')
Hardware?
- Trend towards closed PC environment
- Software development hindered by not being able to exploit full hardware capabilities
- Consumers moving into the living room
Critical Issues
How does Valve adapt to the changing environment?
Valve's Core Competence lies in its ability to create and develop innovative gaming software
Structural support
- Individual Competence: "T" Shaped
- Collective Competence: Shared understanding underpins core competence
Core Competency
Valve's structure supports their core competence
- Flat structure fosters creativity, flexibility and co-creation of game development
- Hiring strategy: Focus on understanding rather than attributes
- New employee handbook: An explicit method of developing shared understanding
- Self-organising teams: Implicitly creates a shared understanding and a culture of discipline
Option 1
How does Valve adapt to the changing environment?
Option 1: Design & manufacture own hardware
Option 2: Do nothing
Option 3: Partner with hardware developer
Option 3
Options
Option 1: Develop & Manufacture Hardware
Pros
- Allows complete control of the process to support advances in software
- Not reliant on PCs: gets games into the living room and allows market penetration of Steam
Cons
- Organisational structure not fungible to hardware
- Changing organisational structure to suit hardware risks negatively impacting core competence
- New distribution channels, relationships with retailers
- Costly, particularly if it fails
Option 2
Pros
- No impact on existing structure and core competence
- Continue as a Hedgehog
Cons
- Risk losing market penetration given trends
Option 3: Partner with Hardware Developer
Pros
- Leave Valve's current structure and culture intact
Cons
- Risks in partnering with the right developer and alignment of values and culture
We recommend Valve to keep their current structure and partner up with a hardware developer
Implementation
Internal
- Focus on core capabilities
- Allocate a team to manage external relationships
Partnership
- Scout for potential partners
- Values and culture compatibility
- Define level of control given to partners
- Protection of Intellectual Property
Recommendation
Where to start?
- Define the structure needed for deals
- Assign responsibility to manage partnerships
- Scout and shortlist potential hardware developers
- Define responsibilities (legal)
- Manage deals / follow up
- Production and distribution