Managing Innovation without Managers: Valve Corp.
Valve Corp has become one of the most successful entertainment and technology firms in the world in terms of firm performance and innovativeness. Valve utilized an organic organizational form with over a hundred employees and no managers. Employees had no one to report to for their time and effort, and no employee had an official title or job description. This paper examines how Valve was organized and how it was able to leverage its unique structure to develop disruptive and valuable innovations. Findings suggest that the lack of a formal hierarchy created a strong social hierarchy within the organization. Furthermore, the flat hierarchy seems to have improved the effectiveness of the firm’s products but may have lowered the efficiency of the firm’s product development capabilities.