Valve Corporation: Does flat management have a half-life?
This case study explores Valve Corporation, an entertainment software provider. It assesses the products, the flat management structure (anarcho-syndicalism in a political economic context), the benefits and costs of such a structure, and whether it has lessons for firms elsewhere in the economy.
Features and benefits
- Analysis of Valve's product range and past successes.
- Assessing the context of a flat management structure theoretically.
- Assesses how flat management works in practice, with the benefits and disadvantages of an absence of hierarchy evaluated.
Valve emerged when software engineers left Microsoft in 1996 and was incorporated in 2003. Since then it has expanded in size and presence to produce popular and acclaim-winning video game franchises. The company also revolutionized distribution of gaming content to PCs via the Steam software, likened to iTunes for video games.
Valve is unique in that it has a completely flat management structure. The aim is to have organic responses to the consumer and to bring employees as close to their potential as possible, with egalitarian authority between all employees and decision making driven by consensus (this also extends to recruitment).
The main benefit to Valve can be seen in its success; it produces content that has changed the gaming industry and also won it a loyal following among consumers and critics alike. The other benefits are more theoretical; it claims to have circumvented the problems inherent with other more traditionally run game software companies.Your key questions answered
- What is Valve Corporation?
- How is Valve Corporation run?
- What are the benefits of a flat management structure?
- What are the disadvantages of a flat management structure?
- A BRIEF HISTORY OF VALVE
- Valve's beginnings
- The games software market is lucrative
- Valve's game production is high end
- Steam digitized video game distribution
- Steam brings ecommerce advantages to games software
- Steam is well received by consumers
- Steam diversifying services but retaining focus on gamer
- Steam’s complementary services: Steam Music and Steam Broadcast
- Expanding onto other platforms
- Source powers Valve’s games
- Valve’s future ambitions: wearable tech and Steam Machine
- ANARCHO-SYNDICALISM: HOW VALVE IS MANAGED
- Who is manning the Valve?
- Cabals help Valve complete larger projects
- Valve shows some traits of anarcho-syndicalism
- Valve in practice for employees
- Valve’s recruitment process
- Valve’s performance measurement: Stack rankings and Peer review
- How Valve counters malfeasance
- Valve in mergers and acquisitions
- WHERE FLAT MANAGEMENT BENEFITS VALVE
- Employees become stakeholders, improving the value chain
- Valve evokes strong loyalty in gamers
- Valve compared to other gaming studios
- Valve refuses to exploit its most popular franchise
- Self-funding maintains the company’s vision
- Valve’s theoretical benefits
- Cabals and resolving disputes
- THE COSTS OF VALVE’S MANAGEMENT STYE
- Valve is a strong player in a niche market
- Windows 8: Microsoft’s revenge?
- Valve time: a redundant constraint?
- Recruitment for Valve is much more complicated
- Recruitment constraints are expressed more harshly
- Recruitment errors can be much more costly
- Diversifying talent pool is harder
- Is flat management viable beyond a certain size?
- Valve in theory versus Valve in practice
- Valve goes flat out
- Further Reading
- Ask the analyst
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