King Digital Entertainment Ltd: Organisational Characteristics And Situational Analysis

Using reliable information from own independent research on the company “King” and knowledge of effective management and organisational practices, learnt on the module, carefully address the following tasks:

Task 1

Introduce the organisation.

(Consider including details such as; what the organisation does; its scope and scale; the industry it operates in; its market value; when and how the organisation was created)

Task 2

Identify the organisational structure of the company and analyse how this structure facilitates its functionality

Task 3

Suggest one modern management approach that could be used in the company to improve its functionality.

Task 4

Using Charles Handy’s cultural framework, identify and analyse the relevance of the company’s organisational culture to its on-going success.

Task 5

Critically analyse two innovative strategic management objectives of the company. 

Organisational Structure of King Digital Entertainment Ltd

King Digital Entertainment Ltd operates in popular social gaming space and it is the maker of popular game Candy Crush Saga. In video gaming industry, King Digital Entertainment plays the important role with sustained success along with popularity. In this paper, King's structure and characteristics of the organisation are discussed. In the following section, the organisational structure of the companies is discussed which facilitates the functionality. King’s situational analysis is used in the company to develop the functionality of the organisation. Handy’s cultural framework is identified which analyses the relevance of the company to its ongoing success. Lastly, King’s two innovative management objectives are identified in order to improve the condition of the organisation.

Introduction of the organisation

King Digital Entertainment is a social games development company and it develops games for the mobile and web. King achieved its fame after releasing the game in cross-platform titled Candy Crush Saga. King was founded in the year 2003 and founder of the organisation Riccardo Zacconi and he made the team along with 5 other members. Headquarter of the organisation is in London, the UK. The global game market reached US$108 billion in the year 2017 with taking a 42% market share in mobile phone (Berger 2017). The recent report showed that there are 2.2 billion gamers across the world it contributed an average £3.35 Billion to the UK economy in 2017. King provided the successful game Candy Crush Saga using the freemium model. In the year 2016, King was acquired by Activision Bizzard and it operates its own entity within that company. King has 13 studios in Stockholm, London, Barcelona, San Fransisco and Malmo and it reached the revenue of US$1.60 billion. Net income of the organisation touched US$ 700 million. King has more than 2000 employees and it spent US$ 110 million on R&D (Discover.king.com 2018). King made the revenue through in-game advertising along with micro-transaction.  

Identifying the organisational structure and analysing how this structure facilitates its functionality 

The co-founder of the organisation King was Riccardo Zacconi and King made it possible to quickly establish the company as the market leader in the casual games to play in the mobile devices. Activision Blizzard is one of the largest organisations in gaming and it offered $6 billion to Zacconni. King had adopted disruptive technologies and it followed a hierarchical organisational structure. Activision Blizzard uses has four departments and from which ABS partners controls King. As stated by Glisson (2015), the hierarchical structure contains the direct chain of order from the top to bottom. In this structure, senior management takes the tough decision and the decisions pass down to the bottom. The hierarchical structure can be operated well in the few products which are sold in high volume; therefore King is can be operated best in the hierarchical structure as Candy Crush Saga sold in high volume as tight control of the organisation is the best to design the quality, production, quality and distribution of the goods.  

Situational Analysis of King Digital Entertainment Ltd

Figure 1: Organisational structure of King Digital

(Source: Discover.king.com 2018)

Activision Blizzard has strong integration record and structure of King kept as same. The management thought that structured minimisation can stop the disruption and integration risk can maintain the spirit of the creative independence.

Suggesting one modern management approach to improve the functionality 

A contingency approach to management is mainly based on the management effectiveness or dependent upon the interplay between the application of organisational behaviours and specific situations (Johnson et al. 2014). As opined by Otley (2016), most of the organisations are taking the contingency approach as this approach provides the flexibility of the organisation and contingency approach suggests that there should be need of the investigation of current dynamics and situation. King will be benefited if the organisation takes the belief that there is no single set of rules which can be applied in the organisation in general. Business leaders of the organisation need to understand the business needs of the given situation and leaders must give the decisions which can be best applied to the situation (Alexander 2017). Leaders of King must be effective so that it may transform towards the group effectiveness. There are two factors; relation motivation and task motivation. Riccardo Zacconi understood the needs of the organisation and he allowed the organisation to be acquired by Activision worth of $ 6 billion. In contingency perspective; King draws the attention to have the stable environment which allows the mechanistic structure to achieve the consistency and efficiency. The management of King can take the decision on situational basis where the techniques may depend on the complexity of the situation. Management principle is not universal in nature and senior management takes the decision based on the best style of management. Managerial actions mainly depend on the environmental circumstances.

Management of King assesses the situational favourability; mainly in three factors. King management tries to make the best relations between leaders and the members. Leaders and members' relationship is the cooperative relations and task structure is subject to the standard procedures. Some of the tasks are easy to make the structure and some needs standardise along with assessment. Position power is based on the rewarding behaviour.   

Using Charles Handly’s cultural framework, identifying and analysing the relevance of company’s organisational culture to its on-going success 

Charles Handy defined mainly four types of culture within the organisation; power, role, task and person.

Handy’s Cultural Framework and King Digital Entertainment Ltd

Power culture is held by mainly a few people whose influence can spread throughout the organisation. Therefore, power culture is linked by rules and regulation (Crane 2017). Employees are mainly judged through their achievement rather than their actions. Power culture is strong and it can turn toxic also. In King; the management controls from the centre and it concentrates power among the few. In addition, few rules and little bureaucracy can help to get swift decisions. Role culture is mainly based on the rules and these people are highly controlled by everyone in the organisation who knows their responsibilities and roles. In King, role culture is built on the detailed structure of the organisation which is hierarchical with a long chain of command. The CEO is on the top and his command spreads through the organisation. A consequence is about decision-making which can be painful and organisation is less likely to take the risks. In King, people can clearly delegate authorities within the highly defined structure as it follows hierarchical bureaucracy. According to Jansen (2017), task culture can be formed in order to address problems as the task is a most significant thing. Power of the team can shift as it is mainly based on the mix of the team members and the status of the issues. King's task culture can be determined by the team dynamic. Finally, person culture is associated with the individuals who see as superior and unique to the organisation. King at present has more than 2000 employees and the management exists just because people work. The organisation with a person culture is a collection of the individuals who work for the same organisation. The management wants that people must not believe themselves to be superior to the business.

Analysing two innovative strategic management objectives of the organisation

To reach new customer subscriptions that can help King to be a market leader again

King developed many of the fun games including Candy Crush, Farm Heroes, Bubble Witch and Pet Rescue. King has 285 million monthly active users as first quarter across the web, mobile and social platforms. King needs to take the strategy so that King can reach new customers using the same games through social media and online platform. Reaching new customers will help the organisation to increase the customer base. The freemium strategy will addict the gamers and the active users will subscribe to increase their gaming experience. The active users can ask ‘refer' new players to play the game in exchange for free credit points and it will increase the numbers of active players. In the Ansoff Matrix, this strategy is stated as market penetration. As stated by Lee et al. (2014), market penetration is involved in focusing on selling the existing products into the existing markets in order to achieve the higher market. Market penetration can increase or retain the products’ market share which dominates the growth of the market. In addition, the organisation can drive out the competitors through market penetration.

Innovative Management Objectives of King Digital Entertainment Ltd

To invest more in Research and Development to make augmented reality game to increase revenue

Existing released games of King are simple and easy to play. The organisation can increase the investment so that they can make AR (Augmented Reality) games and these types of gaming have recently grabbed the attention of the gamers. King can mould their existing games into AR or VR (Virtual Reality). Therefore, the sales of the organisation will increase through AR games. This objective can be met through product differentiation strategy. As opined by Hoberg and Phillips (2016), product differentiation is the marketing of similar products with minor vibrations which are used by customers when making the choice. Therefore, AR strategy into gaming can make more attractive by contrasting its unique qualities with other competitors products.

Conclusion 

It has been observed that King has been following the hierarchical structure which is controlled by Activision Blizzard. The combination of hierarchical structure can unite the organisational culture and it can align the commitment of deep respect along with innovation with the creative process. King can also follow the contingency management where the business leaders must take the policies which may help the organisation. The management focuses on the skills, leadership and personalities when the employees work in the teams to be creative and productive. Through market penetration and product differentiation; King Organisation can strive to increase the subscription in order to increase the existing customer usage and revenues.

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