MORG4038: Organisational Analysis of King Digital Entertainment Ltd

This report provides an analysis of King Digital Entertainment Ltd., examining its organizational structure, management approaches, strategic objectives, and cultural framework. It begins by introducing the company and its history, highlighting its success with Candy Crush Saga and subsequent cha...Read More

MORG4038 Management and Organisations
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Contents
Introduction................................................................................................................................3
Task 1.........................................................................................................................................4
Introduce the organisation......................................................................................................4
Task 2.........................................................................................................................................5
Identify the organisational structure of the company and analyse how this structure
facilitates its functionality......................................................................................................5
Task 3.........................................................................................................................................7
Suggest one modern management approach that could be used in the company to improve
its functionality.......................................................................................................................7
Task 4.........................................................................................................................................8
Using Charles Handy’s cultural framework, identify and analyse the relevance of the
company’s organisational culture to its on-going success.....................................................8
Task 5.......................................................................................................................................10
Critically analyse two innovative strategic management objectives of the company..........10
Conclusion................................................................................................................................12
Reference..................................................................................................................................13
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Introduction
This report is based on the analysis of the gaming industry across the world in context with
the King Digital Entertainment Ltd. This report will conduct independent research on the
King and identify the organisational functionality of the company. This report will
recommend the appropriate management approach that has to be used to improve the
organisation functionality. Besides this report will analyse the strategic management
objectives and cultural framework of the organisation.
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Task 1
Introduce the organisation
King digital entertainment Limited is running its business under the brand name King and
developing the social entertainment games for the youth that can be run on the web, Android,
iOS and windows interface. The company get fame for the once very popular game known
as Candy Crush Saga. Besides, this company has developed 200 games to date for their
gaming portal. The company was founded in 2003 in Sweden by angel investing funding. The
company was the brainchild of Riccardo Zacconi and Sebastian Knutsson who saw huge
scope on the video gaming industry and primarily started developing the browser-based video
games.
2003 is the year when the industry has observed huge demand among the youth for new and
innovative video gaming (Mullins, 2016). After seen the highest peak in revenue of $ 2.26
billion 2014 the company has seen a significant decrease in revenue of $ 1.99 billion in 2017,
as a company not able to change themselves as per the rapidly changing gaming industry. The
company has all the necessary skill and resources but there is a lack of innovation in the
company. The company should develop the new games to regain the interest of the youth by
properly understanding their tastes.
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Task 2
Identify the organisational structure of the company and analyse how this structure
facilitates its functionality.
(Figure 1: Organisation structure of Kings)
(Source: Created by Author, 2018)
King Digital Entertainment has been acquired by the Activision Blizzard by a deal of $5.9
billion and this deal will this deal will provide immediate mileage to the fastest rising gaming
industry of video games (Nieborg, 2015). The head office of this Activision Blizzard is based
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Riccardo Zacconi -
Chief executive
Officer
Sebastian
Knutsson - Chief
Creative Officer
Humam Sakhnini -
Chief financial
Officer
Rob Miller – Chief
Legal Officer and
Corporate Secretary
Alex Dale – Chief
Marketing Officer
Stephane
Kurgan – Chief
Operating Officer
Thomas Hartwig –
Chief Technology
Officer
Colin Daly – Chief
People Officer

in London. Riccardo Zacconi is still the CEO and with King Digital Entertainment still from
its inception and free to lead the company with his effective leadership.
The organisational structure of the company is working on the pattern of Flat Organisational
Structure. This type of organisation structure is very effective in the organisation where a
decision has to be taken frequently and quickly as well as decisions are also to be
implemented rapidly (Mullins, 2016). This type of organisation structure is very effective in
this company because it has minimum levels of hierarchical positions between the top level
management and employees and it will permit an easy stream of the communication between
the levels. This type of open environment will encourage the innovative thinking. Roles and
responsibilities are clearly defined and effectively explained. In this type of structure,
employees are getting more freedom on their work and this will help the King Digital
Entertainment Ltd effectively functioning in rapid increasing video gaming industry.
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Task 3
Suggest one modern management approach that could be used in the company to
improve its functionality
There are several modern management approaches but as per the functionality and the nature
of business the company is dealing, the Contingency approach is the best suitable for the
company. This approach is stating that there is no best way of managing the problems. Every
problem has its unique dimensions and peculiarities and for dealing with them strategies is
needed to be modified or sometimes changed to effectively function in the market (Robbins
and Judge, 2014). This theory will be providing the practical way out by making a balance
between external environmental factors and management theories and principles.
This approach is very practical in nature because it is recommending to devise tailor-made
solutions for the non-controllable external competitive environmental situations. It is sated as
the open-ended and very action-oriented approach. This approach will promote management
development and sharpen the diagnostic skill of managers and make them innovative. This
approach will provide freedom to managers. This approach will promote the open
environment and develop motivation among the employees.
King Digital Entertainment Ltd has developed many games in the past and seen a huge
success in terms of popularity and also gained higher revenue but they are not able to make
rapid changes as per the rapidly changing market dynamics. Video gaming industry is
continuously changing and youth who are the target customers of the gaming industry is
always seeking new games and easily get diverted towards the competitors who are providing
innovative gaming to the users at earliest (Robbins and Judge, 2014). It is essential for King
Digital Entertainment Ltd to make changes in their management approach as per the
situation by looking at the external environmental factors. Every organisation, in every
nation, there are daily contingencies. Principles and strategies that are working in past may
not get success in tomorrow’s circumstances.
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Task 4
Using Charles Handy’s cultural framework, identify and analyse the relevance of the
company’s organisational culture to its on-going success.
(Figure 2: Charles Handy’s cultural framework)
(Source: Handy, 1996)
This model has been developed by the Ireland based philosopher. As per this model, there are
forms of culture are prevailing in the organization. This has understood in detail as per the
context of the King Digital Entertainment Ltd.
1. Power: There are people who will seek special attention in the workplace and are
seeking as the key decision makers and most powerful person. In this type of
organisational culture, people don’t have any freedom to provide any innovative ideas
and has the only option to follow the direction of his superior. In King Digital
Entertainment Ltd main power is in the hand of Riccardo Zacconi but he has provided
freedom to their subordinates to speak and provide solutions that are effective for the
company. All the decisions are being taken after conducting the discussion in the open
forum (Johnson, et. al., 2014).
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2. Task Culture: It has been observed that there are many organisations where the teams
are being developed to accomplish the critical and most challenging tasks. In King Digital
Entertainment Ltd the people who have common skills and specialisations will work as a
team. In this form of environment, all the team members are divided into groups and
every member is contributing equally to accomplish work in the most innovative process.
3. Person Culture: There are several organizations around the globe where the employees
will feel that they are the most important among the organisations and only because of
them the organisation is performing well in the market. King Digital Entertainment Ltd is
not following such type of culture (Johnson, et. al., 2014). Every employee from top to
bottom is attached to the organisation and every employee has the sense of belongingness
with the organisation. For the employees of King Digital Entertainment Ltd, everything
will become after the organisation.
4. Role Culture: King Digital Entertainment Ltd is the delegating tasks to their employees
as per their suitability and in this type of culture the employees will perform more
effectively. Employees will love to face challenges and ready to accept accountability.
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Task 5
Critically analyse two innovative strategic management objectives of the company.
SWOT analysis
STRENGTHS
 King has the ability to entertain the youth
generation.
 This company has been in the gaming
industry since 2003.
 Candy crush saga has gained huge
popularity.
 The games that have developed in past is
easy to play
 Company was able to develop the games
that can run on all the most used
interfaces.
WEAKNESS
 Management of the company has been
changed due to acquisition by
 Company has not able to innovate
themselves with the changing trends.
 Company is located in London and not to
able understand the pulse of the other
markets (Liu and Maitlis, 2014).
 The innovation of company has been
significantly decreased.
OPPORTUNITY
 There is a huge opportunity for the
company as the video gaming industry is
rapidly changing
 The company can develop physical
products such as gaming console etc.
 The company can develop a gaming zone
in different part of the world along with
the UK to develop the brand presence.
 Company and give licensing for using
their brand to and popular game loge
embossed on t-shirts this will increase
their brand awareness along with
revenues.
THREATS
 The competition in the gaming industry is
very fast, unpredictable, and intense.
 New player such as Rovio etc is
emerging with new games.
 Tastes and preferences of the customers
are changing very quickly and it is
essential for the company to be flexible in
this type of approach.
 There is a lot of effort has been required
in the conversion from iOS to Android
platform and margins will be less if
compared to the cost of interface
developing
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Ansoff Growth matrix:
Market Penetration: This is the first quadrant of the Ansoff matrix. This strategy has been
adopted by the company as the company already has established and popular game in the
online market but needed a growth strategy due to the decrease in market share.
Market Development: The Company has a significant presence in the UK markets but it has
been seen that due to increase in the competition the growth of the company has been
restricted so it is needed to expand more into the Asian markets with to increase their reach
and market share (Nieborg, 2015).
Product Development: It is the most significant factor in the gaming industry as the youth
will easily get bored with the earlier version of the games and required new games as per
changing tastes and preferences. The company is overseeing saturation on their current
gaming products and now it is very crucial on their part to develop innovative products to
regain the customer base.
Diversification: This approach is also significant in the case of the company where after a
certain time the company will decide to diversify into new business segments. The company
can diversify in producing the gaming console, brand t-shirts etc.
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Conclusion
It has been concluded from this report that the company should innovate the different ways to
maintain their competitive advantage. It is difficult and expensive in this industry to maintain
a competitive advantage. The company should diversify in the new markets after properly
analysing the market. Video gaming industry is continuously changing and youth who are the
target customers of the gaming industry is always seeking new games and easily get diverted
towards the competitors who are providing innovative gaming to the users at earliest.
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Reference
 Egenfeldt-Nielsen, S., Smith, J.H. and Tosca, S.P., 2013. Understanding video games:
The essential introduction. Routledge.
 Handy, C.B., 1996. Gods of management: The changing work of organizations. Oxford
University Press, USA.
 Johnson G., Whittington, R., Scholes, K., Angwin, D., and Regnér, P. 2014. Exploring
Strategy: Text and Cases. 10th edn Harlow:Pearson
 Kooiman, B.J. and Sheehan, D.P., 2015. Interacting with the past, present, and future of
exergames: At the beginning of a new life cycle of video games?. Loisir et société/Society
and Leisure, 38(1), pp.55-73.
 Liu, F. and Maitlis, S., 2014. Emotional dynamics and strategizing processes: A study of
strategic conversations in top team meetings. Journal of Management Studies, 51(2),
pp.202-234.
 Mullins L. J. 2016. Management and Organisational Behaviour 11th edn.,
Harlow:Pearson
 Nieborg, D.B., 2015. Crushing candy: The free-to-play game in its connective commodity
form. Social Media+ Society, 1(2), p.2056305115621932. Robbins S. P. and Judge T. A. 2014. Essentials of Organizational Behaviour 12th edn..
FT Prentice Hall
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