The 21st century rapidly changed society putting forth new opportunities and demands in a quest for a better future. With these elaborate changes particularly regarding the current sophistication of technology, the workplace has also been propelling forward particularly focusing on the way in which they are governed. An organisational structure is the process of arranging people and other resources to work together to accomplish a goal (Schermerhorn, 2011).
However, what happens when there is no organisational structure? This is the theme of the “Valve Steams Ahead” case study in which this report is assessing. Using peer-reviewed sources and other research, an analysis will be made of Valve Software’s operations regarding their flat, unstructured organisational structure. This report will examine Valve’s emergent and spontaneous (Schermerhorn, 2012) structure particularly focusing on the recruitment of new staff and the training development of these staff.
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Once the issues have been identified in the critical analysis, recommendations will be made as to how Valve can best resolve these issues whilst maintaining their informal organisational structure. Problem Identification Valve Software has a team of 300 employees that all work together to create some of the most popular computer games in the world (Klemke). With the astonishing achievements and popularity of their games, it comes as great surprise to many to find out that Valve does not have an organisational structure and in fact refer to themselves as an organic and flat structure.
An organic structure is a set of unofficial relationships among an organisation’s members (Schermerhorn, 2011). Basically, there is no structure and all hires must be capable of running the company, which is essentially the job of every Valve employee (Valve Steams Ahead, case study). There are no managers or bosses (Suddath, 2012) and the company states that they are averse to hierarchy or codified divisions of labour. A good organisational structure requires a few vital things that are crucial to the productivity and survival of a company.
They need to efficiently allocate task assignments through a division of labour, and provide for the coordination of performance results (Schermerhorn, 2011). However, Valve employees choose their own projects and review other staff as a whole (Valve Steams Ahead, case study). Flat organisational structures allow employees to create interpersonal networks and benefit in task performances. However, the individual characteristics of the company makes it easy for people to work against the best interests of the company, feel excluded and carry inaccurate information (Schermerhorn, 2012).
They have a “Valve Handbook for New Employees” (Suddath, 2012), which they provide for each new employee which states the guidelines and protocols at Valve Software. According to Doctor Harry Grey, one of the most difficult ways to gain and maintain clients is by having unstructured training (Grey, 2012). Naturally, clients want to become part of an organisation that has clear motives, teamwork and structure. With no hiring or training structure Valve admit that “a poor hiring decision can cause lots of damage, and can sometimes go unchecked for too long” (Suddath, 2012).
Critical Analysis Valve software works within an organisational structure that has both positive and negative effects outlined earlier (Suddath, 2012). However, the CEO of Valve Software, Gabe Newell, admits that the hiring of new staff as well as their training and developing programs are a weak point of the organisational structure. Hiring New Employees With a successful and organized Human Resources department, hiring new staff within an organisation is a relatively structured and formal process (Schermerhorn, 2012).
And with a reported 300 workers at Valve in 2012 (Klemke), the hiring of new staff is a vital and regular activity. According to the “Valve Steams Ahead” case study, “Rather than having a hiring department, employees throughout the organisation are involved in the recruitment and selection of new staff” rather than the standard recruitment stages which follow with applications, interviews, employment tests, reference and background checks, physical examinations and final decisions o hire or reject (Schumerhorn, 2012), the hiring process at Valve simply consists of interviews and a psychological test (case study). According to Gail Rieschi, in her article about hiring new staff and the problems faced with simply conducting interviews, people are highly trained and counseled about how to conduct themselves within an interview and on their resume (Reischi, 2008). The wrong choice when hiring new staff can cost up to $100, 000 per person (Reischi, 2008), which is why its vital to conduct personality testing.
She goes on to state that a bad hire will result in reduced productivity, increased performance management, de-hiring, and the accompanying negative on employee morale. The company stated that, “Ultimately people who cause damage always get weeded out” (Suddath, 2012). Training and Development of Employees The training and development of new staff is a vital aspect of an organisation as it is the employees that shape the company’s products, appearance and actions. They must become familiar with the company’s work ethics, expectations, behavior and attitudes of the staff (Schermerhorn, 2012).
Without precise training, employees with good intentions and skills may learn inapt ways to conduct themselves and perform within the organisation. “Survey of the training practices of the Western Australian hospitality sector found that over 90% of companies offered their employees internal and external training programs” (Schermerhorn, 2012). However, the Valve Steams Ahead case study shows that Valve Software does not have an organisational chart or training programs for new employees. They are simply given the staff handbook that is administered to each new employee.
This handbook describes how the structure works, picking your own projects, office hours, peer reviews, steps taken after your first 6 months, hiring new staff and the weaknesses of the company (Handbook for New Employees). This lack of structure within the company makes it hard for people to develop mentors and become accustomed to the social aspects of the company which is only translated through existing employees. This affects the hiring of new staff as some talented people who are perfect for the organisation prefer to work within a formal organisational structure. Recommendations
In order for Valve Software to improve their hiring of new staff and the initial training and development of employees, a few steps must be taken which are modified from formal organisational structures. Firstly, regarding the hiring of new staff, standardised personality testing should become a part of the day-to-day hiring procedures. Personality testing will distinguish between the right and wrong people for the job in relation to the atmosphere and co-workers within the company. With an organisational structure such as the one at Valve Software, a coherent team is vital.
Another type of testing to be put in place is skill-based personality testing, which will identify those with skills that are weaker than shown in their interview and resume (Rieschi, 2008). This will eliminate mistakes being made when hiring people whilst maintaining the organisational structure the Valve Software prides itself on. Valve should adjust the 4 main principles of scientific management to fit the criterion of a flat structure but embodying the main principles of hiring and training staff.
In relation to training staff, training exercises both internal and external should become compulsory. As well as the Valve Handbook for New Employees, a video or lecture should be devised that will further reiterate the statements made in the handbook and should be accessible at all times not only by new staff, but by current staff also. Along side this, it has been stated in the case study that mentoring is not formalised. To change this, each new employee should be assigned a reliable mentor within the company to be further educated regarding the characteristics of the company.
Conclusion Valve Software is a revolutionary company in relation to its organisational structure and its success through this. Although there are positives and negatives to the structure, improvements are crucial to the survival of the company. Once the recommendations proposed are adopted, the two main faults of the company should improve, as staff quality will result in further developed products and working environment. Through this, Valve Software will be one step closer to achieving its goal.