It is important for the businesses to have a formal management system so that it can work effectively and efficiently. The organisation chosen is King Digital Entertainment Ltd, which deals in making games like Candy Crush Saga.
- Understanding characteristics and structure of organisations.
- Principles of modern management.
- Identification of the relationship between the functional management, strategic objectives and business environment.
An organisation is group of people who work together in an organised manner for shared purpose. The purpose of organisation is to overcome individual's limitations, enable people to specialise in some activities and accumulating and sharing knowledge. King Digital Entertainment Limited (King) known for its famous and successful game 'Candy Crush Saga' become one of the leading revenue generating video game company in United Kingdom (Yaylaci and Yaylaci, 2016). In this context, the following report will show detail understanding about King's organisational structure and its functions. The modern management approach that could be used in the company to improve its functionality will be assessed and eventually strategic options and direction to the company will be provided in the report.
King Digital Entertainment Limited conducting business operations under name “King” is a social and video games development company. It was found in August 2003 and became popular for its saga series which includes Candy Crush, Farm Herons, Papa Pear, etc. The games are developed for web, mobile, smartphones and works on all platforms including Android, iOS, Windows Phone, etc (Albliwi and Ghadge, 2017). King operates in video gaming industry and develop cross platform and interactive games that like by players in all over world. The video gaming industry in United Kingdom contributes enormous amount of revenue (3.35 billion pound) to the national economy of the country.
Size: King Digital Entertainment limited became medium scale organisation after success of Candy Crush Saga. The total revenue earned by the organisation in 2016 was US $1.59 billion. With effective leadership and managerial skills of its founders, the organisation able to generate profits and revenue by developing new and updating existing games for their users efficiently.
Scope: Video gaming industry thriving not only in United Kingdom but worldwide (Moe, 2015). There is wide scope for the King to enhance its productivity and profitability as demand of new and innovative games are increasing day by day.
Market Value: The total market value of King Digital Entertainment as of May 2014 was US $6.2 billion.
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Organisational structure of and analysing the way structure facilitates its functionality
Organisational structure is the structure which defines how activities such as task allocation, coordination and supervision are directed so that organisational goals and objectives can be accomplished in effective and efficient manner (Deegan, 2014). There are different types of organisational structure which has been followed by the organisations according to their functions. As a modern and digital organisation, the founders of King prefers to have Flat Organisational Structure where employees can independently communicate with the top management.
A flat organisation structure is the structure of company with very limited or no level of management between managers and staff. Supervision of employees is less and their involvement is more in the organisation (Goldsmith and Dezuanni, 2017). Riccardo Zacconi chief executive of Britain's most valuable gaming company King prefers that employees must participate and generate new and innovative ideas which helps the organisation in sustaining in the competitive environment. Software and games development is the primary function of the organisation and this system encourage employees to freely discuss new and innovative ideas with each other and management. The results can be reflect on its performance as the company just transformed into high revenue generating company.
Modern Management Approach
Modern management though has been turning somewhat away from the extreme human relations ideas particularly regarding the direct relation between morale and productivity (Zhao, 2017). Researchers and philosophers proposed different modern management approaches such as Quantitative or Mathematical Approach, System Approach, Contingent or situational approach etc. which can be utilised by the present business organisations to enhance the effectiveness in work culture. In context with King Digital Entertainment Limited, Contingency approach would be appropriate. Lorsch and Lawrence were the developers of contingency theory where they proposed that under different situation or circumstances, management of business organisation can change their style accordingly (Grifoni and Praticò, 2014). The contingency theory focuses at integrating theory with practice in systems framework.
As present business environment is dynamic, traditional way of doing business would not help the management to sustain in the competitive environment. Thus, contingency theory can be applied in Kings as to gain competitive advantages and tackle the changing situation management must transform their style, structure and work culture accordingly (Lacasa and Cortés, 2017). Contingency approach is advance version of system approach. It acknowledges organisational system as the product of interaction of the sub system and environment. Thus, King's management could implement the concept from the approach which can enhances the overall performance of employees as well as leaders. As leaders and managers are not bound to follow one particular method or way of leading team and organisation. They can change their style on the basis of situation so the best and efficient output can be achieved. In order to sustain in the competitive environment it is essential and important for management of Kings to follow modern approach of managing business operations and work culture. This will eventually enhances the performance of employees and organisation can have competitive edge.
The way individuals live and follow or the unwritten rules are known as culture. Organisational culture refers to the practice, belief, power, behaviour and interpersonal relationship. Positive organisational culture leads the organisation towards growth and development whereas negative organisational culture drags the overall performance of organisation down. Charles Handy developed model on organisational culture which popularly known as Handy's Model of Organisational Culture. He defined organisational culture into four different kinds which are Power, Role, Task and Person. From the analysis of organisational culture of Kings' it can be said that the company follows Role culture. According to Handy's cultural model, role culture are based on rules. Every employee in the organisation knows about his or her position, roles and responsibilities. In role culture, power is divided on the basis of role or position of employee. For example, manager in organisation have higher power as compared to ground level employees (Heaven, 2014). In King's role culture has been followed where managers have higher power and authority so that task can be done in systematic and within deadline. Free flow of communication exists but employees first needs to discuss the issue or queries with manager first. Thus, by following role culture within the business premises, the management of business organisation will be able to sustain in the competitive environment and proliferating its market share effectively and efficiently (Koles and Nagy, 2014). In the role culture, employees are provided with their roles and responsibilities and they have to fulfil it accordingly so that the organisational goals and objectives can be accomplished. In short, organisations with role cultures tend to be very bureaucratic. King Digital Entertainment limited organisational culture is agile as employees have right to make decisions regarding their task and managers put belief on the employees which helps in enhancing their motivation and satisfaction. In this manner, the organisation able to attain their business goals and objectives.
Strategic management objective of King's
To survive in dynamic business world, it is essential for the management to generate precise strategic directions. The strategic objective of King's are :
- To develop innovative games in order to surpass the competition
- To enhance existing games which enables attraction and retention of users.
Porter Generic Strategies
In order to accomplish the strategic objectives, management first needs to construct strategic direction. By using Porter Generic Strategies, the management of King's could get to know about the strategic direction.
- Cost Leadership: Cost leadership is the strategy where firm offers products at low cost in order to gain competitive advantages. King's provide online games for free but users in order to get extra benefits have to purchase inside applications. King's can reduce the cost of in-app purchase in order to increase its customer base.
- Product Differentiation: It is the strategy where firms provides different products at premium price. Candy Crush Saga has premium version where users have different levels. King's can modify this strategy in order gain customer attraction (Kaivo-Oja and Westerlund, 2017).
- Cost and Product Focus: This is fusion of both cost and product differentiation strategy. King's can provide different products at low cost to gain more competitive advantages.
This tool can help the management to enhance its market share and productivity. It is described below:
- Market Penetration: In this strategy firm enhances its productivity in existing market by increasing marketing activities (Jhon, 2018). In UK, Kings' can enhance its profitability by developing more and more games.
- Market Development: In this strategy, firm enter into new market with existing product. Online gaming platforms can be accessible worldwide. Kings' can enter new market by focusing on marketing and promoting activities.
- Product Development: This is the strategy where firms provide new product in existing marketing. King's launch new games in United Kingdom in order to retain in market.
- Diversification: It is the strategy where firm launches new products in newer market. This is highly risky strategy where firm has to focus on both marketing and quality of products. Kings' could apply this strategy in order to enhance this market share.
From the above report it can be understood that managing an organisation is a challenging task. Video gaming industry is currently flourishing in United Kingdom and Kings' become popular company because of its famous gaming applications. The analysis of organisation has been made in this report, the organisational structure company uses has been discussed and eventually the strategic direction has been made in this report.