Based on the case description, Valve employee handbook, and relevant materials, as well as my own
analysis, I answer the following questions:
- Why has Valve been so successful?
- Should valve start producing hardware? If so, how?
The lack of defined roles, job titles, and hierarchy; high degree of work in self-created teams;
preference of face-to-face, largely informal communication; and finally the individual authority to
control own tasks all suggest that Valve has an organic organizational structure. This structure allows
for a high degree of flexibility when performing tasks but also lets a company adapt quickly to the
changing market conditions. Being a player in an industry that requires extremely creative and
innovative ideas, this organic structure was one of the factors contributing to Valve’s success.
Another strength of the company is its system for recruitment and employee retention. The company
provides its employees not only with a wide range of perks but also as a highly decentralized
organization, which gives space for autonomy in performed tasks. This, in turn, results in high
employee satisfaction, which as studies show translates into a better performance of an organization
(Edmans, 2014). In the case of Valve, it is even more so about employee retention as the organization
fosters teamwork more than individual performance. “No matter how good you are as set of individuals
after you’ve worked together through multiple shipping interactions, you’re adding more value to the
underlying capabilities of people on the team” (Newell, p.2). With that being said, the ability of Valve
to keep its employees long-term adds to the firm’s success.
My analysis shows that Valve should not produce hardware. Hardware production is a highly
standardized process, which calls for a mechanistic organizational structure. According to Gabe Newell:
“Repeatability is the enemy of what Valve does […]” (p.3), which indicated that the company would not
work well as a centralized, structured organization. Nevertheless, Valve’s dependability on up-to-date
hardware for continued success in software production still remains a problem. My first
recommendation would be for Valve to outsource the hardware production to an outside
manufacturer. In that way, the organization could remain its organic structure, which clearly works
well but still, have a voice in the desired hardware functionality. The second recommendation, which
also allows Valve to keep its structure, would be for the company to enter a partnership with an
established hardware producer. Although this still calls for some organizational changes such as
allocating a team to manage the external partnership(s), my case analysis shows that this is more
feasible for Valve than producing its own hardware.
analysis, I answer the following questions:
- Why has Valve been so successful?
- Should valve start producing hardware? If so, how?
The lack of defined roles, job titles, and hierarchy; high degree of work in self-created teams;
preference of face-to-face, largely informal communication; and finally the individual authority to
control own tasks all suggest that Valve has an organic organizational structure. This structure allows
for a high degree of flexibility when performing tasks but also lets a company adapt quickly to the
changing market conditions. Being a player in an industry that requires extremely creative and
innovative ideas, this organic structure was one of the factors contributing to Valve’s success.
Another strength of the company is its system for recruitment and employee retention. The company
provides its employees not only with a wide range of perks but also as a highly decentralized
organization, which gives space for autonomy in performed tasks. This, in turn, results in high
employee satisfaction, which as studies show translates into a better performance of an organization
(Edmans, 2014). In the case of Valve, it is even more so about employee retention as the organization
fosters teamwork more than individual performance. “No matter how good you are as set of individuals
after you’ve worked together through multiple shipping interactions, you’re adding more value to the
underlying capabilities of people on the team” (Newell, p.2). With that being said, the ability of Valve
to keep its employees long-term adds to the firm’s success.
My analysis shows that Valve should not produce hardware. Hardware production is a highly
standardized process, which calls for a mechanistic organizational structure. According to Gabe Newell:
“Repeatability is the enemy of what Valve does […]” (p.3), which indicated that the company would not
work well as a centralized, structured organization. Nevertheless, Valve’s dependability on up-to-date
hardware for continued success in software production still remains a problem. My first
recommendation would be for Valve to outsource the hardware production to an outside
manufacturer. In that way, the organization could remain its organic structure, which clearly works
well but still, have a voice in the desired hardware functionality. The second recommendation, which
also allows Valve to keep its structure, would be for the company to enter a partnership with an
established hardware producer. Although this still calls for some organizational changes such as
allocating a team to manage the external partnership(s), my case analysis shows that this is more
feasible for Valve than producing its own hardware.
