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Published by:
Harvard Business Publishing (2014)
10 August 2015
Revision date:
16 pages
Data source:
Field research


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 which tests students' understanding, and Valve's resolve, with regard to the congruence between their organizational model and strategic direction.


Organizational behavior; Strategy; Human resource management; Organizational design; Collaborative innovation; Leadership styles; Organizational culture; Teams; Computer software; Design; Organizational structure; Organizational change; Self-managed teams; Flat organizations; Family businesses
> USD1 billion; Mid-size
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