Would you describe Valve Corporation as a flat organization? Why? Does such a st

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Would you describe Valve Corporation as a flat organization? Why? Does such a structure seem to be effective for Valve?

Case Study 17.1: Valve Corporation Gabe Newell was a founder and is the CEO of Valve Corporation, a Bellevue, Washington-based video game maker founded by former Microsoft employees Newell and Mike Harrington or that's what it says on paper somewhere, anyway Not surprising, given the loose, fluid structure (or lack to) at Valve, Greg Coomer, a designer and artist who was one of the first employees, said of Newell, " think he's technically the CEO, but it's funny that I'm not even sure of that. That's because Valve Corporation is not exactly, well the archetypal vision of a "corporate" environment. Valve doesn't use formal titles, except in the hiring process so as to not scare away prospective applicants who might find the titleless work environment a bit peculiar. Here, desks move on wheels so that employees can relocate anywhere in the office and form work Employees don't have strict job duties; they fill in where they think they can contribute the most. Valve has no formal bosses, pay is often determined by peers, groups at a moment's notice. and employees create their own schedules and workdays. Valve personifies the trend of recent years to flatten out hierarchies within companies, reducing the role of middle management where information and processes can get clogged, enabling, in theory, a freer flow of communication and increased productivity. "When you're an entertainment company that's spent the last decade going out of its way to recrult the most intelligent, Innovative, talented people on Earth, telling them to sit at a desk and do what they're told obliterates 99 percent of their value." states the now-famous employee handbook, which generated buzz in 2012 when it was leaked online. "This company is yours to steer. Toward opportunities and away from risks. Valve developed Steam, an oline service that is basically the iTunes of the video gaming world. Though some say its plans are overambitious, the 30o employee company is competing with Google to develop wearable computing-like video games played through gpezles or glasses where you might see a zombie coming out of your own bathroom at home. Even competitors acknowledge that Valve is on the cutting edge of the industry. Valve is responsible for Half-Life-a game that has received numerous "Game of the Year" awards and is still widely regarded as moment's notice. Employees don't have strit job duties they lill in where they think they can contribute the most. Valve has no formal bosses, pay is often determined by peers, workday and employees create their own schedules and Valve personifics the trend ot recent ycars to flatten out hicrarchies within companies, reucing the role of middle management where information and processes can get clogged, enabling, in theory, a freer flow of communication and increased productivity. "When you're an entertainuent company that's spent the last decade going out of its way to recruit the most intelligent, innovative, talented people on Earth, telling them to sit at a desk and do what they're told obliterates 99 employee handbook, which generated buzz in 2012 when it was leaked online. of their vle," states the now-famous This company is yours to steer. Toward opportunities and away from risks. Valve developed Steam, an online service that is basicallythe iTunes ol the video gaming world. Though some say its plans are overambitious, the 300 employee company is competing with Google to develop wearable computing like video games played through goggles or glasses where you might see a zombie coming out of your own bathroom at home. Even competitors acknowledge that Valve is on the cutting edge of the industry. Valve is responsible for alf-Life-a game that has received numerous "Game of the Year" awards and is still widely regarded as influential among its peers Half L.ife 2, Left 4 Dead, and Counterstrike are among wildly popular and industry shaping games. In other tlat (also called "lattice") organizations, lines of communication flow directly from one person to the other with no intermediary; there is no fixed or assigned authority; nata leadership is identified by those who follow; and objectives are set by the same employees who have to realize them. In many lat urganizations, inluding Valve, associales decide how much they think their Teams at Valve decide together whether a team member isn't working out "We don't have any management, and nobody reports to' anybody else states Valve's employee handbook. Valve said it was rare that anyone chose to leave the company, and when someone did, it was often for something like a sick parent needing help. peer s should be paid but are never allowed to vote on their own salaries. There are challenges to the lat approach like lack of accountability. Though the environment can trigger creativity and collaboration, some still leave for more traditional companies that are more structured and organized. Retaining highly motivated individuals is critical for effectiveness within a flat organization. Discipline and motivation need to be off the chart, but unfortunately, the types of employees that a flat organization requires in order to thrive represent a small segment of the workforce. This type of structure does not work for eveyone. Other challenges include talent management, appraising and motivating employees, and enforcing any policy the company might have. There is ten a lack of standardization to ensure that salaries and benefits are competitive, internally and externally. Working in a flat organization may feel disorganized and chaotic, which, depending on the employee, can either be a great source of inspiration or great frustration. "I think of it as being a lot like evolution-messy, with lots of inetficiencies that normal companies don't have but that would never have seen the light of day under normal hicrarchical manageme," said Michael Abrash, an engineer at Valve. "Almost by definition, it's a great place for the right sort of creative people to work. ing remarkable results, things

Explanation / Answer

Yes. Given the details in the case, Valve can be described as the ideal flat organization. The reasons to identify Valve as a flat organization is brought out in the case several time. The key points that describe them are

Given the brand recognition and the market reputation of Valve, I think the company has been extremely successful. Recently they have been competing with Google in certain AR, VR segment but other than that, their core business and their products are quite popular. In fact, names like Half-life, Left 4 Dead, and Counter-strike are extremely popular titles that millions of the people play on a regular basis. Considering that they are merely 300 employee company and are able to churn out such popular industry leading products shows that whatever they have done internally has worked for them. Naturally, we cannot debate on the fact that Valve are a successful company. This means it is not only their employees and the work they do, but how they do it also matters. One of this is their organizational structure. A flat hierarchy structure enables them to retain talents that want a free rein and want to explore their own potential. Considering that they are an entertainment company and a lot of creative work is required, their best bet is when their employees are free to express themselves. This flat organization structure helps them to do that.

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