Opening the Valve: From Software to Hardware (A)

Ethan  Bernstein; Francesca  Gino; Bradley  Staats

Case | HBS Case Collection | August 2014

Opening the Valve: From Software to Hardware (A)

by Ethan Bernstein, Francesca Gino and Bradley Staats

Abstract

Valve, one of the world's top video game software companies, has also become an iconic example of an organization with virtually no hierarchy. A 400-person organization, Valve's unique organizational form (described in detail in the case and accompanying employee handbook) includes 100% self-allocated time, no managers (and therefore no managerial oversight), a structure so fluid that all desks have wheels to allow free movement between "cabals" (teams) on a regular basis (which happens frequently enough that Valve created a homegrown tracking app to allow peers to find each other), a unique hiring apparatus that supports recruitment of T-shaped individuals, and a purely peer-based performance review and stack ranking. As customer demand and market forces draw Valve into hardware in 2013, Valve questions whether their organizational model will need to change as it expands from software into hardware—and, if so, whether they should prioritize strategy over structure or structure over strategy. The case, therefore, presents students with a strategic and organizational challenge that tests students' understanding, and Valve's resolve, with regard to the congruence between their organizational model and strategic direction.

Keywords: Valve; Self-Managed Organizations; organization design; strategy; Flat Organization; Video Games; organization alignment; Organizational Change and Adaptation; software; family business; Steam; Steam Machine; Design; Games, Gaming, and Gambling; Human Resources; Collaborative Innovation and Invention; Technological Innovation; Leadership Style; Management Practices and Processes; Organizational Design; Organizational Structure; Organizational Culture; Organizational Change and Adaptation; Groups and Teams; Alignment; Software; Hardware; Video Game Industry; Seattle;

Language: English

Format: Print

20 pages

Educators Purchase

Citation:

Bernstein, Ethan, Francesca Gino, and Bradley Staats. "Opening the Valve: From Software to Hardware (A)." Harvard Business School Case 415-015, August 2014.

Leaders’ perceived authenticity – the sense that a leader is acting in accordance with her “true self” – is associated with positive outcomes for both employees and organizations alike. How might a leader foster this impression? Using field and experimental data, we test whether sensitive self-disclosures – for example, revealing an aversion to public speaking – make leaders come across as authentic and lead to positive outcomes, such as an enhanced desire to work with that leader (Studies 1, 2A, 2B, and 3). Stemming from our conceptual account, we show that these benefits emerge when the self-disclosure is mild to moderately sensitive in nature (Study 4) and made voluntarily (as opposed to by requirement) (Study 6) by a relatively high-status person (Study 5). Would-be disclosers do not intuit these positive consequences of self-disclosure (Study 7), suggesting that leaders may under-employ an effective tool for making a positive impression.

Article | Management Science | December 2019

Communicating with Warmth in Distributive Negotiations Is Surprisingly Counterproductive

M. Jeong, J. Minson, M. Yeomans and F. Gino

When entering into a negotiation, individuals have the choice to enact a variety of communication styles. We test the differential impact of being “warm and friendly” versus “tough and firm” in a distributive negotiation, when first offers are held constant and concession patterns are tracked. We train a natural language processing algorithm to precisely quantify the difference between how people enact warm versus tough communication styles. We find that the two styles differ primarily in length and their expressions of politeness (Study 1). Negotiators with a tough communication style achieved better economic outcomes than negotiators with a warm communication style, both in a field experiment (Study 2) and in a laboratory experiment (Study 3). This was driven by the fact that offers delivered in tough language elicited more favorable counteroffers. We further find that the counterparts of warm versus tough negotiators did not report different levels of satisfaction or enjoyment of their interactions (Study 3). Finally, in Study 4 we document that individuals’ lay beliefs are in direct opposition to our findings: participants believe that authors of warmly worded negotiation offers will be better liked and will achieve better economic outcomes.

Keywords: Negotiation Style; Communication Strategy; Perception; Performance Effectiveness; Outcome or Result;

Citation:

Jeong, M., J. Minson, M. Yeomans, and F. Gino. "Communicating with Warmth in Distributive Negotiations Is Surprisingly Counterproductive." Management Science 65, no. 12 (December 2019): 5813–5837. View Details

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