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1.  Explain how Valve's structure differs from that of a bureaucracy with respect to
decision-making authority, access to information, and work autonomy (i.e., how much
freedom employees are given in defining their jobs)?
The importance of an organizational structure is that structure determines how an
organization operates. Structure influences the workflow and authority of an organization, how
information flows and who has access to it, who has the authority to make decisions and where
power lies, how work is organized, the pace of work, and accountability.
Valve’s structure differs from that of a bureaucracy in many ways. A bureaucratic
organization is a form of management that consists of key features such as a hierarchy, labor
specialization, division of labor, and clear and defined roles and responsibilities. Bureaucratic
organizations tend to be centralized, formalized, and standardized. Valve follows a networked
organization structure that takes a decentralized approach consisting of very few layers of
management. In the article Valve: How going boss-free empowered the games maker an
employee states, “The fact that we're not managed by people and we're not managing people and
you're able to formulate your own ideas and work with whoever it is to come up with a project or
feature - that's empowering”. Decentralization gives Valve’s employees the freedom and
flexibility to make decisions on their own whereas a centralized organization confines decision
making power to upper management resulting in employees having little to no authority in make
decisions. A formalized organization is rigid and have many rules and regulations that control
employee behavior. Formalization creates a predictable environment where if an issue were to
arise employees have guidelines to follow. This constructs all employees to respond to problems
in a similar manner across the organization ultimately resulting in consistent behavior. Valve has
an informal work environment meaning that there are not that many rules and rules are generally
made as needed. Standardization in organizations establishes that tasks are accomplished in a
routine manner. Employees may become accustom to behaving in a certain manner which can
cause reduced motivation and job satisfaction. Valve’s structure does not consist of labor
specialization or division of labor. Employees are encouraged to collaborate with one another
and to be innovative. For example, in the article Valve: How going boss-free empowered the
games-maker an employee states that what he likes most about the company is that it “privileges
the idea of dialogue, the idea of collective engagement.” Unlike a bureaucratic organization
where employees are told what to wok on and have defined roles and responsibilities Valve’s
employees are free to choose what they work according to what they find interesting as well as
who they want to work and collaborate with. Furthermore, in a Networked organization like
Valve’s sharing information is encouraged and letting customers in to help design products
whereas in a bureaucratic organization there are clear boundaries between the internal and
external organization. Change and the exchange of information in centralized organizations are
slower because of the many levels of approval and decision making and the many layers in the
hierarchy. Overall, employees at Valve a networked organization have much more freedom in
defining their jobs than employees at a bureaucratic organization.
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2. What is the basis for gaining and keeping power at Valve versus a bureaucratic
organization?  Specifically, explain how one gets and keeps power in both structures.
Power is important in organizations because it is a necessary tool to achieve goals. The
way power and influence are used can either help an individual advance in their career or can
destroy their career. Power affects interpersonal relationships, who has access to money and
information, accountability, and control over resources.
In a bureaucratic organization power is gained by creating dependance. A source of
dependence that bureaucratic organizations use is structural dependance by implementing a
hierarchy. For example, in the article The Secrets of Bezos: How Amazon Became the
Everything Store the article states that “Managers in departments of 50 people or more are often
required to “top-grade” their subordinates on a curve and must dismiss the least effective
performers.” Performance reviews at amazon create fear in employees which causes them to
engage in political behavior such as character assassination. Employees resort to politics to gain
power to save their jobs and to move up in the hierarchy. According to the article Inside
Amazon: Wrestling Big Ideas in a Bruising Workplace ex-employee Elizabeth Willet, arranged
with her boss to work in the office from 7am-4:30pm after having a child. Although her boss
approved her timings and assured her that everything was going well her colleagues sent him
negative feedback regarding her work ethic saying she was leaving work too early which resulted
in her boss telling her “I can’t stand here and defend you if your peers are saying you’re not
doing your work.” Many employees at Amazon called their system of performance review as a
“river of intrigue and scheming”. Employees would make pacts with one another to bury a
specific employee or to praise another. Many employees felt sabotaged by negative comments
made anonymously by their colleagues. In a bureaucratic organization the people at the top of the
hierarchy are the only ones who have power. Although Managers are placed higher in the
hierarchy than their subordinates, they still do not have the authority to make decisions.
Bureaucratic organizations create powerless manager because managers are held accountable
without authority. Furthermore, bureaucratic organizations sustain power with the managerial
elite (top 10%) by creating “insignificant people” because the organization does not allow
workers to give their input on defining the organizations future. Power is kept and maintained at
upper management in a bureaucratic organization.
At Valve power and authority is not confined to management but rather the employees
themselves. For example, the article Valve: How going boss-free empowered the games-maker
states that “Staff working on the same project rank each other’s technical skills, productivity,
team-playing abilities and other contributions. The information is then used to create an overall
leaderboard which then helps determine who gets paid what.” Furthermore, this creates
coalitions and political behavior. Gaining and keeping power at Valve can also be done by
interpersonal dependence in terms of access to resources and influence. Because Valve follows a
self-organization culture to succeed in their organization you must belong to the group that has
more decisional power. For example, the article states that if everyone is paid well salary is not a
huge issue at the company, but “as soon as resources become more scarce, then competition
increases, which creates conflicts, which creates tensions, which creates hierarchies, which
creates concern about relative positioning.” Like Amazon employees at Valve participate in
political behavior to gain power so that they can be a part of the coalition that holds the power.
The coalition that holds more power will ultimately decide how the resources are distributed.
Being a part of the coalition that holds ore power can also implement Interpersonal Power
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(Referent) which can be used to influence peers to achieve more power or goals based on self-
interest. The article No bosses, no managers: the truth behind the ‘flat hierarchy’ façade states,
“No matter how hard you work, no matter how original and productive you are, if your bosses
and the people who count don’t like you, you will be fired soon or you will be managed out.”
Organizational politics can play a major factor in which employees get fired because
performance can be politicized because the employees who are in favor can be evaluated
differently than those who are not.
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3. Which structure offers more protection from managerial abuses of power and arbitrary
decision-making?  Is Valve's structure better suited to protecting employee rights or is
bureaucracy better able to foster employee rights?
A decentralized structure like Valve’s offers more protection from managerial abuse of
power and arbitrary decision-making and is better suited to protecting employee rights. The
textbook states that, “employees believe that decentralized companies provide greater levels of
procedural fairness to employees.” Unlike a bureaucratic structure where decision making, and
authority is at the higher levels of a hierarchy Valve’s decentralized structure gives more
authority to its employee which creates a sense of empowerment and allows quicker decision
making and problem solving. Because lower-level employees have authoritative power they can
make quick decisions to solve problems that they encounter. In a bureaucratic organization
power is centralized and is not delegated between the many layers that exist. Furthermore,
centralized organizations make decisions based on the interest of the organization regardless of
how it may negatively impact its employees. The strict rules and regulations that are
implemented give employees no room for flexibility and they are forced to obey rather than
being creative or innovative. Centralized organizations encourage direct control by managers to
ensure that employees are following all rules and regulations. This may result in powerless
managers micromanaging. For example, in centralized organizations employees have no say in
what projects or tasks they work on and complete. Management gives them tasks to complete
and they must complete it. There is no room for creativity or innovation at centralized
organizations whereas Valve takes a different approach. Valve allows its employees to
collaborate with one another, encourages creativity and innovation, and allows its employees to
decide what they want to work on based on what interests them. In the article Valve: How going
boss-free empowered the games-maker an employee states, “I think the fact that we're not
managed by people and we're not managing people and you're able to formulate your own ideas
and work with whoever it is to come up with a project or feature - that's empowering”.
Furthermore, centralized organizations have policies already in place such as wages. These
policies are enforced and do not change. Employees do not have any say in what their earnings
will be in a centralized organization because top management makes those decisions.
Management does not base an employee’s salary on their skills or what they bring to the table
but rather the position and responsibilities of the job whereas at Valve the employees are the
ones that decide one another’s salary based on a ranking system that ranks employees’ technical
skills, productivity, team collaboration, and other contributions. Centralized organizations also
have fixed layouts of workstations. Employees do not have a say in where they work or who they
work with whereas at Valve, employees can move around whenever they want. Employees at
Valve can form into teams to work on a project and once the project is done, they can move their
workstation into another office and work with a new team.
Valve’s decentralized structure allows employees flexibility and freedom whereas
employees in a centralized organization do not have that luxury. Because Valve employees are
able to make their own decisions it creates an environment where their employees have rights
that employees in centralized organizations do not have.
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Works Cited
Kantor, Jodi, and David Streitfeld. “Inside Amazon: Wrestling Big Ideas in a Bruising
Workplace.” The New York Times, The New York Times, 15 Aug. 2015,
www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-
bruising-workplace.html.
Kelion, Leo. “Valve: How Going Boss-Free Empowered the Games-Maker.” BBC News,
BBC, 23 Sept. 2013, www.bbc.com/news/technology-24205497.
Organizational Behavior. (2017). University of Minnesota Libraries Publishing.
Spicer, André. “No Bosses, No Managers: the Truth behind the 'Flat Hierarchy' Facade |
André Spicer.” The Guardian, Guardian News and Media, 30 July 2018,
www.theguardian.com/commentisfree/2018/jul/30/no-bosses-managers-flat-hierachy-
workplace-tech-hollywood.