Culture Structure Strategy and Power MBA Management Project 2007 Robin Dews

Culture, Structure, Strategy and Power

An investigation of organisational dynamics at Games Workshop
By
Robin Paul Dews

2007
A Management Project presented in part consideration for the degree of Master of Business Administration
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Culture, Strategy, Structure and Power

An investigation of organisational dynamics at Games Workshop
1. Introduction and Rationale

1.1. Research Questions and Method
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2. Literature review
2.1. 2.2. 2.3. 2.4. 2.5. 2.6. 2.7. 2.8. 2.9. The Differentiation/Integration paradox Organisational Culture The Dark Side of Organisational Culture Strategy, Core Competence and Knowledge The Hidden Champions Core Competence and Learning Organisational Structure Organisational Power Literature Summary
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8 9 12 13 14 16 20 23 26
3. Research Method
3.1. 3.2. 3.3. 3.4. The Management Sample Interview Procedure Strengths and Limitations of the Method Selecting the Sample
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4. The Case Study Games Workshop Plc

4.1. The Red and Black Books
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Culture, Structure, Strategy and Power 4.2. 4.3. Symbols, Artefacts and Language The Spirit of Games Workshop 40 42
5. The Dynamics of Power at Games Workshop

5.1. 5.2. 5.3. 5.4. 1980s The Dominance of the Design Studio 1990s - The Rise of Retail 2000s - The March of Manufacturing The Art of the Long View
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6. Strategy, Power and Culture: Managerial Perceptions 7. Conclusion and Implications

7.1. 7.2. 7.3. Management Implications Directions for Further Research Looking to the Future
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References Appendix A Management Perception Survey Appendix B Letter to Management participants
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1. Introduction and Rationale of the Project

This report explores the dynamics of organisational structure, strategy, culture and power at Games Workshop Plc. I have worked for this company for over eighteen years and so its characteristics are well known to me. However, as my understanding of organisational theory has deepened throughout my MBA studies, I have also developed a more analytical perspective on many of these characteristics. These insights have in turn prompted the current work.
As a member of the senior management team at Games Workshop, what has really come to intrigue me is how culture, structure, strategy and power interact within the organisation and whether an increased awareness of the dynamics of these forces might help inform future management thinking. The rationale of the study therefore, is first of all to look at what is going on inside Games Workshop from both a current and historical perspective. I then subject these observations to scrutiny through the lens of current theory, in order to both contextualise them and evaluate their relevance and validity. Finally, I conduct a piece of primary research and analyse and draw conclusions that I hope will be of long-term value to the business in its future management decision making.
Within Business Studies; culture, structure, strategy and power have each been subject to substantial investigation by a broad spectrum of writers and academics, leading to an accompanying library of literature. It was therefore essential for the project that I could identify those areas of the writing and research that would have bearing and relevance for the case study.
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Culture, Structure, Strategy and Power At the core of this project is an examination of how Games Workshop has managed the integration-differentiation paradox (Child 2005) over a fifteen to twenty-year period and how the strategies it has employed have impacted upon the culture, structure and performance of the business. According to Scheins (1985) definition, culture consists of an emergent pattern of behaviours through which an organisation manages the challenges of internal integration and external adaptation. Business strategy too is focussed on matching internal competencies to the external environment. These two organisational dimensions, like the face of Janus - simultaneously look inwards and outwards and are always finely balanced with the bridge between them being the structure of the business itself and the power relationships within it. As we will see, in the course of the literature review, I have indeed been able to identify some key theoretical work that helps to illuminate and contextualise the research.
My second task was to frame my research questions in a way that would not only enable me to develop an appropriate research method, but that would also have relevance for the staff and management at Games Workshop. Furthermore I was keen that this research might develop a validity beyond the specifics of the case study and that it would be of interest to other management practitioners and students of organisational theory.
1.1
Research Questions and Method
In undertaking cultural research it is notoriously difficult to isolate specific variables due to the complex interplay of cause and effect. This was even more the case in my study as I also wanted to explore how the organisational culture played out with the dynamics of structure, strategy and power. I therefore decided quite early on in this work that what was important was not to boil down the research to some possibly quantifiable but potentially
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Culture, Structure, Strategy and Power meaningless statistics, but to stay with the richness of the material and see where it led me. What is critical in all cultural management studies is not simply what seems to be going on on the surface, but how that visibility is perceived, interpreted and contextualised by managers and staff across the business. It is within this constantly emerging social reality what is called the negotiated order of the organisation (Strauss et.al.1963) - that we are likely to get a real glimpse of the underlying dynamics behind the visible forms.
My key research question therefore is:
How is the managements perception of culture, business strategy and power currently distributed across Games Workshops functional divisions?
Having obtained a satisfactory answer to this question, I hope then to be in a good position to draw a number of inferences. The most important of these is:
Does this revealed pattern, enhance or diminish the ability of the business to make the optimum strategic choices for its future survival and growth?
As I have said, I have been employed in the business, at a management level, since the late 1980s and so my chosen research method is that of a participant observer. This allows me to draw upon my own experiences, insights and observations of the organisation over an almost twenty year period. In addition, throughout the summer of 2007, in order to address my key research question, I conducted a series of structured and recorded interviews with senior managers from across the business. The purpose was to explore and quantify their views on the dynamics of culture, structure, strategy and power at Games Workshop. I set
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Culture, Structure, Strategy and Power out to test the hypothesis that individuals from these three areas would have quite different perceptions of these dynamics and that these perceptions would be contingent upon their understanding of where the power lay in the business.
Finally I would like to explore the hypothesis that in pursuit of superior operational and manufacturing characteristics, the business has arrived at a point where power in the organisation no longer resides in an area that is valued by its customers and that this is one of the underlying problems behind the recent challenging commercial conditions the business has faced.
My extended association with this company has provided me with a unique long view from which I hope to apply insights from a range of academics and writers. I make particular use of this long view in the discussion of life cycles and learning at Games Workshop and in the analysis of how the centre of power has shifted within the organisation drawing on the Hickson et.al. (1971) contingency model of intraorganisational power
As Watson (2006) has articulated, there is a deeper form of common sense that he calls critical common sense. This is an analysis built upon the basic logic, rationality and levelheadedness to be found in human beings whenever they step back from the immediate situation and critically put their minds to an issue or problem (Watson 2006, p11). Its in this spirit that I aim to approach this study. However, at the same tine, I must also acknowledge the fact that Games Workshop is an organisation for which I have worked for a long time. As such, I am deeply embedded within its culture, and it is possible that some of its essential underlying values and assumptions are simply no longer visible to me.
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2. Literature Review
2.1 The Differentiation/Integration paradox
The focus of this project is an examination of how organisations and in our case study, Games Workshop Plc have adopted specific strategies and structures in order to deal with the integration-differentiation paradox. The essence of this problem is that in order to effectively deliver goods and services, organisations have to create differentiated sub-units Sales and Marketing, Research and Development, Manufacturing and Distribution etc. each with their own staff, ways of working, characteristics, cultures and organisational power.
At the same time, in order to deliver value to customers, and ensure their own future financial survival, organisations have to be highly integrated that is they have to join all these different functional units together into a seamless whole.
As Child (2005) puts it: Integration signifies cohesion and synergy between different roles or units in an organisation whose activities are different but interdependent in the process of creating value.
In fact you could argue that the single unifying characteristic of all successful businesses is that they are able to continuously monitor, manage and resolve these two contradictory tendencies and that the glue that binds such organisations together is a strong organisational culture.
At the core of the investigation therefore, is an examination of how the dynamics of culture, structure, strategy and power have played out historically within Games Workshop and
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Culture, Structure, Strategy and Power their impact on the organisation today. I therefore take each of these concepts in turn, review the relevant literature and provide a theoretical context for the investigation.
2.2
Organisational Culture
Over the last three or four decades, managers, academics, writers and students of business have seen an absolute upsurge in the attention given to organisational culture as one of the key characteristics and driving forces in the delivery of competitive advantage across a wide range of businesses and organisations.
The idea of strong organisational cultures as determinants of commercial and economic success began to take hold in the late 1970s and early 1980s. Ouchi and Williams (1985) describe how this explosion came about as a result of the widely held perception, during this period, that Japanese companies had superior operating capabilities, but the then dominant approaches to organisational research emphasised formal structures and so failed to uncover any difference between Japanese and western firms. As a consequence, scholars began to examine the possibility that the different national cultures might have penetrated modern corporate forms, thus creating differences in organisational culture between, say, Nissan and General Motors. Several early studies gave credence to this approach, which led next to the possibility that even within a single national culture there might be local differences between the culture of firms, e.g. between Hewlett Packard and ITT. (Ouchi and Wilkins 1985, p458)
This notion of individual corporate culture as a purveyor of competitive advantage reached its most widespread and populist appeal in Tom Peters and Bob Watermans (1982) bestseller In Search of Excellence. Presented with the pace of a detective thriller and
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Culture, Structure, Strategy and Power packed full of self-evident homilies such: A Bias for Action, Close to the Customer and Productivity through People, it argued that success in the new global market was going to depend up corporations developing strong people centred values - upon culture!
In the subsequent decades since Peters and Watermans publication, many other writers, academics and theorists have entered the arena. At its core, this notion of developing strong business cultures is almost common sense and therein lays its appeal. As human beings, the notion of culture is so intrinsically embedded in our individual and social psychologies that we live with it at a largely unconscious level. We only really become aware of it when we encounter a different culture either on holiday, changing jobs at work, or engaging with a new social group. In each case, we are rapidly led from the visible manifestations of difference dress, habit and behaviour - into the underlying values and assumptions in which our own cultural experience is rooted.
Definitions of organisational culture abound but, for the purposes of this report, I am going to go back to Schein (1985). As Hatch (1993) has commented; (he)was especially influential because he, more than the others (including anthropologists and folklorists), articulated a conceptual framework for analysing and intervening in the culture of organisations. (Hatch 1993, p.657)
According to Schein, culture exists simultaneously on three levels: on the surface are artefacts, underneath artefacts lie values, and at the core are basic assumptions (Fig 1) Assumptions represent taken-for-granted beliefs about reality and human nature. Values are social principles, philosophies, goals and standards considered to have intrinsic worth. Artefacts are the visible, tangible and audible results of activity grounded in values and assumptions. In Scheins words, culture therefore is:
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Culture, Structure, Strategy and Power a pattern of basic assumptions that a given group has invented, discovered, or developed in learning to cope with its problems of external adaptation and internal integration, and that have worked well enough to be considered valid, and therefore to be taught to new members as the correct way to perceive, think and feel in relation to these problems.
Figure 1. Artefacts, Values and Assumptions after Schein (1985)
Artefacts
Visible organisational structures and processes (hard to decipher)
Espoused beliefs and values
Strategies, goals, Philosophies (espoused justifications)
Underlying assumptions
Unconscious, taken-for-granted beliefs, perceptions, thoughts and feelings. (ultimate source of values and action)
Although on Scheins (1985) version of the diagram, he incorporates the arrows to show that these three elements are in constant interplay, it is often pictured in management texts as a floating iceberg. This is done to draw the analogy that just as nine-tenths of an icebergs mass is hidden below the water, in the same way the mass of culture is also invisible, with only artefacts, language and behaviours visible above the surface. This is all well and good, but it risks presenting organisational culture as something that can be literally frozen, rather than the dynamic interplay of structure, purpose, value and meaning, in a process that is continuously emergent or becoming.
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2.3
The Dark Side of Organisational Culture
Although much of the writing and research on strong organisational cultures has focussed on their potential to raise business performance, there is also inevitably a dark side. A number of writers (Willmott 1993; Casey 1999; Ogbonna and Wilkinson 2003) have looked at how the attempt to increase compliance amongst a workforce through management control of corporate culture can also produce high levels of dissonance, stress and anxiety. Casey used the term psychic accommodation to describe the process by which the organisation selects and shapes in the employee certain kinds of orientations that achieve an appropriate fit between the requirements of the organisational culture of work and the character of those who work within it. A successful employees values, attitudes and general orientation must correspond with those promoted by the organisational culture. Consequently specific traits and attitudes that are useful to the work and the team are stimulated and rewarded and those that are unnecessary or that impede the process of the workplace culture and therefore of production are thwarted and suppressed. (Casey 1993, p164)
He goes on to describe the way in which a lack of or change in their level of congruence with the company culture can result in job related stress and in some cases dismissal. Individuals unable to successfully adapt to the new cultural conditions that require such normalisation and repression are told that they do not fit with the culture (in the words of a manager from corporate HRM) and are encouraged to leave the company. (Casey 1993, p167)
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2.4
Strategy, Core Competence and Knowledge
Business Strategy is an academic discipline in its own right and well beyond the scope of this project to fully illuminate but, as with culture, it is important to establish some core principles and then match those principles to the observed data and behaviour of our case study.
Although definitions of strategy abound, at the core is the idea of an organisation developing a clear set of goals or objectives from which it can begin to create the means to achieve them. However this view of strategy as planning plays into the systems-control orthodoxy (Watson 2006) that suggests that the organisation can be designed or engineered as a machine in order to optimise its outputs. This view of strategy has it roots in the military antecedents of business strategy and usually involves a strategic hierarchy of goals, policies and programmes coupled to a timetable against which strategic progress can be measured.
On the other hand, strategy can also be seen as putting in place a system of management that will facilitate the capability of the organisation to respond to an environment that is essentially unknowable, unpredictable and therefore not amenable to a planning approach. This perspective is much closer to the process-relational means of framing an organisation (Watson 2006). Burns and Stalker (1961) in their classic text also describe the management of organisations on a continuum between what they describe as organic and mechanistic, that is contingent upon the external environment (stable or dynamic) and the internal operations of the business (innovative or steady state).
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2.5
The Hidden Champions
When looking at strategy from the perspective of the case study, there are two issues that require highlighting. First of all, Games Workshop describes itself as a niche business and the company operates largely within a market and industry of its own making. Much of the academic material on strategy has been developed from the perspective of large corporations where the classical models such as Porters five-forces (Porter 1979:1980) do indeed have a real world veracity. With the notable exception of Simon (1996), very few commentators have looked at what he calls the hidden champions, businesses that operate in highly specialised markets and with quite different rules. Specifically Simon characterises these hidden champions as possessing a number of characteristics that we can observe in Games Workshop.
In particular, he makes the following observations that are pertinent to our case study. According to Simon (1996) these companies prefer to remain hidden they avoid publicity and dislike advertising. Despite being a company with sales in excess of 100m, Games Workshop does not advertise and puts all of its resources into direct customer contact through the staff in its stores, magazine publications and the web.
Simon further describes these companies as making; a big splash in a small pond with their goal of becoming number one in a tightly defined market. These businesses are frequently one product companies but rather then being seen as a weakness, this doesnt bother them one bit! In the case of Games Workshop the product range is both narrow (fantasy games and miniatures) and at the same time very deep (with literally thousands of individual products) and the company defines its goal as being the biggest toy soldier company in the world.
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Culture, Structure, Strategy and Power These businesses also have global scope - they combine a narrow market focus with a global orientation. They choose to deal as directly as possible with customers around the world and seek to service them wherever they are. Games Workshops CEO Tom Kirby wrote in the 2002 Annual Report: This is what Games Workshop does; we create materials of the highest quality that appeal to a minority of the population. The challenge for us is not to try to get everybody to buy our products but to reach out and find the people who want them, anywhere in the world. In order to do so we sell wherever we can. We have our own Hobby stores that serve to introduce people to the Hobby our marketing if you will. We work with independent retailers of many types. And we sell direct both on the internet and by mail order. These channels should work in harmony together, each providing a different, but complementary, service.
For all of the hidden champions sales are not based on price. Their message is of value not price and they believe that quality remains long after the price is forgotten. The most important competitive advantage is product quality and the least important is price with the result that they constantly innovate. They strive for continuous innovation in both products and processes and pay equal attention to internal competencies and external opportunities in all aspects of their business for example; gaming tables inside stores and shops that function as hobby centres. These businesses also have little competition they create clearcut competitive advantages in both products and service and then defend their competitive position ferociously.
Operationally, they are often highly vertically integrated or with very long-term supplier relationships. They rely on their own operational strengths, keeping core competencies within the company but outsourcing non-core activities. They also have a strong corporate
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Culture, Structure, Strategy and Power culture and a leadership style that is autocratic on principles but participative around details. Hidden champions pay the utmost attention to the selection of leaders, observing their unity of person and purpose, energy and perseverance, and the ability to inspire others.
The value of Simons (1996) Hidden Champions for our research is that it provides a relevant and wider contextual framework from which we can examine the cultural strategic and power characteristics of Games Workshop. This will support our attempt to identify those elements that are specific to our case study and those that have a broader business verisimilitude.
2.6
Core Competencies and Learning
The work by Hamel and Prahald (1990) on core competencies has articulated a different view of strategy which they define as: the collective learning in the organisation, especially how to co-ordinate diverse production skills and integrate multiple streams of technologies
The epithet learning organisation has become something of a business school clich, but as Nonaka (1991:97) elegantly puts it: creating new knowledge is not simply a matter of processing objective information. Rather it depends on tapping the tacit and often highly subjective insights, intuitions and hunches of individual employees and making these insights available for testing and use by the company as a whole.
The philosopher Michael Polanyi (1966) coined the phrase; We know more than we can tell. What he was trying to say, was that knowledge is embedded in human beings at a far
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Culture, Structure, Strategy and Power deeper level than simply the conscious intellect. Our knowledge is also deeply rooted in action and in an individuals commitment to a specific context.
Boisot (1995) proposed a descriptive typology that characterised knowledge as codified or un-codified and un-diffused or diffused. Codified knowledge is knowledge that can be stored or put down in writing without undue loss of information, such as stock market prices, software code and legal statutes; while un-codified knowledge is knowledge that cannot be captured in writing or stored without losing the essentials of the experience it relates to, such as recognising a face, operating complex machinery, or playing the piano. Diffused knowledge is shared with others, such as radio broadcasts, published reports and press releases, while undiffused knowledge stays locked inside ones head whether it is hard to articulate or because one decides to keep it there, such as company secrets, childhood memories, and personal fantasies (Boisot 1995, 145.) (Fig 2)
Figure 2. Typology of Knowledge after Boisot (1995).
Codified Un-codified
Proprietary Knowledge Personal Knowledge
Public Knowledge Commonsense Knowledge
Un-diffused
Diffused
The application of Boisots (1995) definitions to a two by two matrix generates four new characterisations of knowledge as Proprietary, Public, Personal and Commonsense (Figure 2). For example: Public knowledge is codified and diffusible. It is what we conventionally regard as knowledge in society and can be found structured and recorded in textbooks,
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Culture, Structure, Strategy and Power research journals and other formal and informal printed sources (Choo 1998, p.110). Furthermore, we can go on to describe each of the other classifications in a similar way.
Nonaka (1994) has built upon this style of typology by proposing a theory of how knowledge is created and transformed within an organisation. Polanyi (1966) classified human knowledge into two categories Explicit and Tacit and Nonaka (1994) uses these concepts to generate two dimensions of knowledge creation. Explicit or codified knowledge refers to knowledge that is transmittable in formal, systematic language. On the other hand, Tacit knowledge has a personal quality, which makes it hard to formalise and communicate. Tacit knowledge is deeply rooted in action, commitment and involvement in a specific context. In Polanyis words, it indwells in a comprehensive cognisance of the human mind and body. (Nonaka 1994, p.16). He then takes these two polarities and uses them to demonstrate how knowledge is transformed within the organisation through four different modes that he characterises as Socialisation (tacit knowledge to tacit knowledge), Externalisation (tacit knowledge to explicit knowledge), Internalisation (explicit knowledge to tacit knowledge and Combination (explicit knowledge to explicit knowledge). (Fig 3)
Figure 3. Modes of Knowledge Creation after Nonaka (1994)

To Tacit Knowledge Explicit Knowledge
Tacit Knowledge From Explicit Knowledge
Socialisation
Externalisation
Internalisation
Combination
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Culture, Structure, Strategy and Power Nonaka states that knowledge: is created by individuals. An organisation cannot create knowledge without individuals. The organisation supports creative individuals or creates a context for such individuals. Organisational knowledge creation therefore should be understood in terms of a process that organisationally amplifies the knowledge created by individuals and crystallizes it as a part of the knowledge network of the organisation (1994. p.17)
Furthermore, there is a temporal component to this knowledge transformation. As the tacit knowledge of individual experience is captured and documented by the organisation through externalisation, it subsequently becomes available to other members of the group who in turn bring it into their own realm of experience by means of internalisation. Over time, this spiral of knowledge creation enables the organisation to both create new knowledge and transform and diffuse it throughout the entity.
As we will see, these ideas of competitive advantage and organisational learning are of particular interest to our case study because of the extremely high degree of vertical integration that it exhibits. In several of my research conversations with managers from the manufacturing division they stated that the explicit strategy of Games Workshop Manufacturing was to: make the best toy soldiers in the world, better than anyone else in the world. What this is saying, is that the make or buy decision depends upon organisational knowledge and that the application of this knowledge to its operations provides Games Workshop with a core competitive advantage. This continual, development, refinement and application of organisational learning and knowledge is also one of the key characteristics of Simons (1996) hidden champions who largely occupy
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Culture, Structure, Strategy and Power markets and industries of their own making and with products that have unique informational characteristics.
2.7
Organisational Structure
In the fifteen years since Tom Kirby led the management buy-out in 1992, Games Workshop has grown tenfold from 250 staff all based in the UK, to over 2500 people worldwide. We now turn to the literature on structure in order to examine how an organisation has to change and adapt as it moves from its early entrepreneurial phase of development, characterised by a loosely bureaucratised set of management processes with indirect control practices, to a more tightly bureaucratised structure with much more direct control practices. This analysis brings together ideas from contingency thinking with work on organisational life cycles.
The insight of contingency thinking (Burns and Stalker, 1961) is that the structure and culture of organisations is both emergent and adaptive and will conform to the broad pattern of activity in which they are engaged. As Watson summarises it: Their (Burns and Stalkers) research showed that the companies they studied which manufactured products for a stable market, requiring little innovation in product or method, tended to perform better in business terms if they worked in a mechanistic or tightly bureaucratic manner than one that did not. Companies in which there needed to be much more innovation because of changing conditions which give rise to fresh problems and unforeseen requirements for action (Burns and Stalker, 1961, p.121) found it necessary to adopt organic or loosely bureaucratic management systems if they were to succeed in the relatively turbulent business environment with which they were faced (Watson, 2006, p.273)
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This structural/contingency approach, links together with the life cycle work of Greiner (1972) and other researchers (Downs, 1967; Lippitt and Schmidt, 1967; Katz and Kahn, 1978). Each has described a series of predictable stages that an organisation passes through as it develops from an entrepreneurial start-up to a mature business. In Greiners model each phase of growth is followed by a crisis that necessitates a change in the way that the business is structured and managed in order for it to continue to develop.
Greiners (1972) first phase is that of entrepreneurial creativity. This initial burst of energy and enthusiasm leads to a crisis of focus and leadership that requires a more directive style of management. As the business grows, it then meets a crisis of autonomy as it is no longer possible for an individual to direct the work of the whole enterprise. In a successful venture this problem is resolved by the creation of management teams and a period of delegation which in turn leads to a crisis of control and a subsequent era of co-operation between management and the work force.
At this stage the enterprise will have ceased to have many of the characteristics of the owner-managed firm because there are set procedures and policies for doing things. The danger at this point is that the firm might lose its initial entrepreneurial drive and the next crisis it will face is one of red tape and bureaucracy. Greiner proposes that this can only be overcome by a strategy of collaboration making people work together through a sense of mission and purpose rather than by reference to a rule book. (Fig 4)
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Culture, Structure, Strategy and Power Figure 4. Model of Organisation Development after Greiner (1972)
Size of Organisation Large
Phase 5: Crisis ???
Phase 4: Crisis Red Tape Phase 5: Growth Collaboration
Phase 3: Crisis Control
Phase 2: Crisis Autonomy
Phase 4: Growth Co-ordination
Phase 1: Crisis Leadership
Phase 3: Growth Delegation Revolution Phase 2: Growth Direction Evolution
Small Young
Phase 1: Growth Creativity
Old Age of Organisation
Greiner notes that as each new developmental crisis is encountered, there is a temptation for senior managers and directors to look back into the past in order to find a solution. There is an inevitable yearning for a simpler time, often in the remembered past, and so you hear managers saying things such as: Why dont we have the spirit of excitement we used to have? and so forth. He argues that: The critical task for management in each of the revolutionary periods is to find a new set of organisational practices that will become the basis for managing the next period of evolutionary growth. (1972, p.58).
Greiners (1972) model is one of a number of accounts of organisational life-cycles. Quinn and Cameron (1983) have conducted a thorough review of a number of the different lifecycle models which attempt to correlate organisational effectiveness with life stage. Although most researchers agree in their characterisation of organisational growth into a number of different phases, the number and content of these varies from author to author.
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Culture, Structure, Strategy and Power Commentators such as Daft (2004) describe four main stages Entrepreneurial, Collectivity, Formalisation and Elaboration. Katz and Kahn (1978) utilise three Primitive, Stable and Elaborative. Judith Simon (2001) in her study of non-profit organisations describes five Imagine and Inspire, Found and Frame, Ground and Grow, Produce and Sustain and Review and Renew- and as weve seen, Greiner (1972) also makes use of five. Although it is appears very difficult to define the precise boundaries of these phases, intuitively the insight feels right that an organisation will indeed pass through a number of developmental stages in a predictable sequence, although at any point in time, an institution may display the characteristics of more than one segment.
The key critique of this kind of life-cycle analysis is that it is overly deterministic and does not allow for management decision making and actions, unlike the structural contingency approaches postulated by Burns and Stalker (1961). However I believe that it simply provides an additional investigative tool that neither diminishes the insights of contingency thinking nor interferes with the dimensions of strategy, structure, culture and power that are the focus of this investigation.
2.8
Organisational Power
In examining the role of power within the structure, strategy and culture of Games Workshop, I draw in particular from the work of Hickson et.al.(1971). In their 1971 Administrative Science Quarterly paper A Strategic Contingencies Theory of Intraorganisational Power they draw upon Lawrence and Lorschs (1967) definition of an organisation as a system of interrelated behaviours of people who are performing a task that has been differentiated into several distinct subsystems (Lawrence and Lorsch. 1967: 3) but use it to explore the nature of organisational power.
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Culture, Structure, Strategy and Power Drawing on insights from Emerson (1962) and Perrow (1961:1970) on power as a property of the social relationship not of the actor they argue that when organisations are conceived as interdepartmental systems, the division of labour becomes the ultimate source of intraorganisational power and power can be explained by reference to the variables that are elements of each subunits task, its functioning and its links with the activities of other subunits. They then go on to develop their theory of organisational power based upon three dimensions or organisational characteristics; managing uncertainty, non-substitutability and centrality.
Managing uncertainty (or de-risking the future) The first dimension of power that Hickson et.al.(1971) deal with is that of future uncertainty. They postulate that if the central problem facing modern organisations is uncertainty, then power in the organisation will be partially determined by the extent to which one of the subunits copes with these uncertainties better than others. The essential notion here is one of de-risking the future. For both individuals and organisations the future can never be known so we are constantly faced with uncertainty with its attendant risks. We therefore, again as individuals and in organised groups, develop strategies for managing this risk by attempting to build certainties or create contingencies to mitigate any negative impacts. This is also one of the key areas in which our four variables of culture, structure, strategy and power interlock. A core concept in strategic business studies is that of managing the internal integration of the organisation and equipping and adapting it to survive and thrive in its chosen environment. Again we see these similar concepts of internal integration and external adaptation in Scheins (1985) cultural definition and so we are right to believe that we are dealing with a slightly different framing of closely related issues here.
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Culture, Structure, Strategy and Power Substitutability The second element that Hickson et.al (1971) consider a key dimension of organisational power is the notion of substitutability. They define this as: the ability of the organisation to obtain alternate performance for the activities of a subunit (Hickson et.al. 1971 p.221) and suggest that the lower the substitutability of the activities of a subunit, the greater its power within the organisation. thus a purchasing department would have its power reduced if all of its activities could be done by hired materials agents, as would a personnel department if it were partially substituted by selection consultants or by line managers finding their staff themselves. Similarly a department may hold onto power by retaining information, the release of which would enable others to do what it does. (Hickson et.al. 1971 p.221).
Given the tendency of commercial and industrial organisations to differentiate their structure in order to improve operational efficiencies and develop core competencies, we can see how differentiation will almost inevitably lead to the development of low substitutability as knowledge and expertise are consolidated within the organisational subunits. We also know from our cultural analysis that, over time, these differentiated subcultures are also likely to develop their own cultural characteristics with attendant communication and behavioural challenges to organisational integration.
Centrality The third characteristic that Hickson et.al (1971) consider to be an essential dimension of organisational power is the notion of centrality. What they mean by this is the degree to which the activities of a subunit are interlinked into the system as a whole and in particular the workflows of other subunits, a concept they call pervasiveness. Furthermore, they argue
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Culture, Structure, Strategy and Power that; the activities of a subunit are central if they are essential in the sense that their cessation would quickly and substantially impede the primary workflow of the organisation. This workflow immediacy is defined as the speed and severity with which the workflows of a subunit affect the final outputs of the organisation. (Hickson et.al. 1971. p.222)
They therefore hypothesise that the higher the pervasiveness, and immediacy of the workflows of a subunit, the greater will be its power within the organisation.
Clearly power is a multi-dimensional concept and a full discussion of the nature of personal power, organisational power and their first cousin, leadership are beyond the scope of this project. I will therefore make use of Watsons (2006) definition of power as: The capacity of an individual or group to affect the outcome of any situation so that access is achieved to whatever resources are scarce and desired within a society or a part of that society. (Watson 2006 p.202). The key notions here are the ability to influence future outcomes in order to obtain access to resources.
2.9
Literature Summary
The subject of this study is the interaction of structure, strategy, culture and power and so our review has had to cover a lot of ground. Before turning to the case study itself I want to briefly summarise our findings and highlight where they have specific relevance to our research.
First of all we touched on the core problem faced by many business organisations; that of integration and differentiation. Although differentiation can and does produce operational efficiencies one inevitable by-product is the emergence of organisational subcultures that
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Culture, Structure, Strategy and Power can significantly hamper the ability of the organisation to integrate these outputs into customer facing goods and services. One powerful way to mitigate these disintegrating effects is through the development of a strong organisational culture that can act as a unifying counterbalance, facilitating communication and providing a commonality of values and behaviours across the group.
We then looked in much greater detail at the emergence and development of cultural thinking within organisational studies and identified Scheins (1985) work as key in understanding the relationship between the overt and covert elements of culture. Although throughout the 1980s and certainly in the business softback literature there appeared to be a belief that simply having a culture must be a good thing, we identified that there was also a dark side to organisational culture particularly in terms of employee fit.
Organisational and business strategy has a vast and generic literature, but the specialised nature of a case study requires a rather more tailored approach. Simons (1996) work on the hidden champions specialised businesses that operate in niche or under the radar products provides such a framework. Although operating in diverse and unrelated markets, these companies have a significant number of common underlying characteristics such as; high levels of vertical integration, strong corporate culture, an obsession with product quality and an unusually high degree internal knowledge creation and propriety expertise. These characteristics are all observed in our case study.
Using the hidden champions as a framing device, we then incorporated the ideas of core competencies and in particular the work of Nonaka (1991) on the creation and transformation of knowledge within an organisational setting.
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Culture, Structure, Strategy and Power Organisational structure is another huge area of interest and research and it is impossible to review this area without drawing on the work of Burns and Stalker (1961) and their identification of organisational structure as an adaptive process that conforms to the broad pattern of activity in which the business or division is involved. This insight was important to my research design, that looks at perceptions of culture, strategy and power from the perspective of managers from three different divisional areas of the business, each representing a spread between highly mechanistic and more loosely organic management approaches. Given that we will be looking at the case study from an almost twenty-year long view, I also wanted to incorporate the literature on organisational life cycles (Greiner: 1972) (Lippitt and Schmidt: 1967). Although some of this work has been criticised for proposing an overly deterministic view of organisational development that appears to exist outside of management control, I believe that it provides a valid framework for reviewing some of the passages in the growth and development of our case study.
Finally, we looked at the literature on organisational power. Here we draw almost exclusively upon Hickson et.als (1971) strategic contingencies approach. This provides a powerful tool not only for analysing the current distribution of power within the case study, but also for looking at how it might have changed and developed over time. This links the dimensions of power, with those of structure over time and so forms a core component in my research.
Having reviewed the relevant literature, we can now look in more detail at the methods well use to explore the veracity of our research question in relation to the case study.
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3. Research Method
My primary research method is that of a participant observer. In this role, I not only draw from my own knowledge and experience of the organisation, but also make use of internal documents such as books and films, as well as public materials such as the companys annual reports. I have also taken insights from many informal chats and conversations with managers and staff across the business. However, in addition to this material, I also wanted to acquire some new empirical data that would help me better understand how the cultural values, business strategy and management power were perceived to be distributed across the organisation. Once acquired, this data, together with my own insights into the development and operation of the business would provide me with material from which to draw inferences as to whether this revealed pattern enhances or diminishes the ability of the business to make the optimum strategic choices for its future survival and growth.
As already discussed, business organisations are normally segmented into three major subsystems. These are the sales subsystem, the production subsystem and the research and development subsystem. In the case of Games Workshop, these are known as: Sales, Manufacturing and the Studio. In order to explore these ideas of cultural integration and power, I conducted a series of structured interviews with managers and staff from across all three subsystems. These interviews were conducted on-site during work hours using a preprepared set of questions. Each interview took approximately an hour, and each one was tape recorded for later analysis. I also took contemporary notes on responses that I thought were interesting or significant. This enabled me to probe a little more deeply on areas that were of interest to the investigation.
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3.1
The Management Sample
From an initial list of 24 individuals, I was able to conduct 17 interviews. Although everyone I approached agreed to participate in the research, other commitments on the part of some participants made it impossible for us to fix a mutual date and so I was not able to include them in the sample.
Of the seventeen managers I spoke to, six were currently employed in Manufacturing, five were from the Sales division and four were from the Studio. The remaining two were both senior staff who, although currently employed in other parts of the business, had strong historical connections with one or more of these areas. Over the last fifteen years, from the early 1990s, Games Workshop has experienced rapid growth and so many of its senior managers have had prior experience in more than one of the three major subsystems Manufacturing, Sales and Studio. It is likely that this is another factor in the high levels of integration observed across the business.
The final participant tally was therefore: Manufacturing: Sales: Studio: Other: 6 participants 5 participants 4 participants 2 participants (Both of whom had previously worked in one or more of the main three areas.)
The interviewees length of service with the company ranged from eight years to twenty five years, with an average of 15.7 years. The mean age of the participants was forty one and there were sixteen men and one woman in the sample.
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3.2
Interview Procedure
The interviews took place throughout September 2007 and so many of the recent structural and commercial challenges to the business were still in peoples minds. The conversations took place in Bugmans the companys onsite restaurant and coffee bar. This was an informal and familiar setting to all of the participants and so it was very easy to get them to relax and talk openly.
Each interview followed the same plan. For each conversation I used a pre-prepared question/statement booklet that enabled me to ask the same questions in the same order (Appendix A). These questions were framed around four headings of Culture, Structure, Strategy and Power and in each section there were what I termed primary and secondary questions.
For each of the headings, the primary questions all asked:
What is the current status? How has that changed over time?
I was therefore able to ask What is Games Workshops structure? and How has that structure changed over time? or What is the most powerful part of Games Workshop? and How has that centre of power changed over time?
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Culture, Structure, Strategy and Power For the purposes of my investigation, what I was most interested in was the first thought answer to these questions and by embedding them into a series of supplementary or secondary questions I believed that I was more likely to get an uncensored response.
3.3
Strengths and Limitations of the Method
Within cultural research, the ethnographic approach is well established as a means of exploring the dynamics of organisations. Although there have been many recent attempts to develop and apply quantitative measures to organisational culture in the form of cultural audits and so forth, it is far from clear that these are indeed capturing culture, instead of the more measurable notion of organisational climate (Denison 1996). Indeed, Siehl and Martin (1990: 274) argue that this type of research runs the risk of reducing culture to just another variable in existing models of organisational performance.
The ethnographic approach involves a range of elements and methodologies that are blended together by the skills of the participant observer. In the context of this report I make particular use of four elements:
The direct observation of the daily behaviour of the organisation Conversations across a range of levels of formality. The structured interviews that form the core of this research are a part of this range.
Long-term study of the organisation from my own eighteen-year history as a manger at Games Workshop.
and hopefully a little of what Watson (2006: p11) calls critical common sense
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Culture, Structure, Strategy and Power Therefore, although I am not a trained ethnographer, I believe that I do have the ability to pass my observations through this common sense filter, in order to give the results of my investigation some real and lasting validity.
3.4
Selecting the Sample
A critical challenge to the data collected from my interviews might be that the managers who participated in these investigations were not randomly sampled from the organisation. Instead, they were selected by me on the basis that I had known them personally for a number of years and knew them to be outspoken and forthright in their views.
Although this approach does leave the investigation vulnerable to conscious or unconscious bias in my choice of subjects, when identifying the potential participants in the research I used three key criteria. First of all I was looking for individuals who held positions of management responsibility or authority within the organisation and were able to represent the voice of one or more of the major subsystems. Secondly it was important that they had worked for the organisation since at least 1999 or 2000 so that they would have had experience of at least one of the structural, cultural and power transitions that were the subject of the study. Finally, they needed to view me as a colleague or a peer so that their own comments and observations would be more open.
This was important, because as a member of the Games Workshop management team I myself carried a degree of authority power. If I had made use of less senior members of the management team, or individuals with whom I did not have an established or historical relationship this authority effect might have had a distorting effect on the interviews and the kind of responses they generated.
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Culture, Structure, Strategy and Power The invitation to participate in the study (Appendix B) also made it clear that:
a) This was a management research project connected to my MBA degree course and not a normal Games Workshop management investigation.
b) Although I would want to make use of individual responses and quotations in the final report, no individuals would be named or given an identifiable job title.
As a result I feel that although not representative in a statistical sense, my respondents do indeed represent a range of voices within the organisation and within the context of this report provide valid and valuable insights into the organisational elements under study.
Having identified our research questions, reviewed the literature and settled on an investigative method, its now time to look in more details at the characteristics of our case study.
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4. The Case Study Games Workshop Plc

Games Workshop Group Plc is a UK company with its head office in Nottingham that designs, manufactures and markets a hobby built upon the linked activities of collecting, modelling, painting and fighting battles with model soldiers. The companys products are metal and plastic fantasy miniatures and their associated games, rulebooks, magazines, paints, brushes and modelling materials.
Customers use these materials to build armies of hand-painted fantasy miniatures which they then use to fight battles over carefully modelled terrain. Participation in this activity requires a great deal of skill and commitment on the part of these hobbyists. They are in turn motivated and rewarded for their involvement through the received benefits of fun, excitement, entertainment and increases in self esteem that flow from participation in this set of closely related social and skill based activities.
The books, games and miniatures the company sells are all embedded within its fictional, fantasy worlds of Warhammer and Warhammer 40,000. These fantasy and science fiction backgrounds have been articulated and elaborated by artists, writers and illustrators employed by the company to the point where they have an almost historical verisimilitude. It is these fantasy worlds, replete with imagery, iconography, mythologies, histories and heroes and villains that make the companys product offer so compelling for enthusiasts.
Games Workshop is a highly vertically integrated business. All of the companys products, packaging and point of sale are designed and developed in its Nottingham Design Studio. Manufacturing takes place at its Lenton headquarters or at sister sites in Memphis and
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Culture, Structure, Strategy and Power Shanghai. The company sells its products through a chain of over 300 wholly-owned hobby centres, that sell only Games Workshop products, and where customers can spend time playing games and learning how to model and paint miniatures. It also distributes to independent toy and hobby stores and sells direct to customers through mail order and the world-wide web.
As a business with a dedicated and specialised customer base, Games Workshop perfectly understands that operating in such a niche demands a highly specific set of resources and capabilities. It knows that its products appeal to a relatively small number of people who are devoted to the Games Workshop hobby. It also knows that, within its niche, quality is more important than price and that respect for the customer is paramount. It knows that mass-market advertising is expensive and, for niche businesses, ineffective compared to the power of word of mouth.
The companys ownership of the value chain design, manufacture and retail - results in highly cohesive patterns of interaction between individuals and teams within the business. Apart from the purchasing departments, most Games Workshop staff spend the bulk of their time either working with other employees, or directly with customers. These customers act in turn as a ready recruitment pool for the business as their enthusiasm and specialist knowledge of the companys games and miniatures perfectly fits them for further customer facing roles.
We therefore have an organisation within which Peters and Watermans (1982) adage to stay close to the customer is not so much a theoretical proposition but a literal consequence of the organisations recruitment policies. By borrowing symbols, myths,
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Culture, Structure, Strategy and Power metaphors and legends from its fantasy worlds, the company is also rapidly able to assimilate new staff. These new members easily identify with, and are excited by, the internal use of these artefacts and readily internalise the values and assumptions that they represent and project them onto the company in an act of almost psychodynamic transference. The result is a group of people who readily (albeit unconsciously) buy into Scheins notion of culture as the correct ways to think, feel and perceive in relation to problems of internal integration and external adaptation and who find in Games Workshop a sense of purpose and meaning.
As Peters and Waterman (1982) put it: By offering meaning as well as money, they give their employees a mission as well as a sense of feeling greatThe institution provides guiding beliefs and creates a sense of excitement, a sense of being the best, a sense of producing something of quality that is generally valued. (Peters and Waterman 1982, p323)
Games Workshop is also a business in transition. Over the last thirty years it has grown from an entrepreneurial start-up to a medium sized multi-national company with operations in the UK, France, Spain, Germany, Italy, Northern Europe, USA, Canada, Australia and Japan. However, although the company almost doubled sales in the five years between 1999 and 2004, from 78m (99/00) to 152m (03/04) with pre-tax profits rising from 6.5 to 20m, recent commercial performance has been poor. (Fig 5)
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Culture, Structure, Strategy and Power Figure 5: Games Workshops five year performance 2003-07. Source: Games Workshop Group PLC Annual Report 2007
*2003-2004 operating profit prepared under UK GAAP and 2005-2007 operating profit prepared under IFRS
Between 2004 and 2007, sales fell to 111m and in the summer of 2007, the company reported its first ever loss and announced that it was embarking on a significant cost reduction and rationalisation programme across the business.
4.1
The Red and Black Books
Despite the apparently committed nature of its employees and their willingness to share in the values of the company, Games Workshop still has to struggle with what Strauss et.al. (1963) describes as the negotiated order of the organisation. This idea describes the dynamic interplay between the official and unofficial elements of an organisations structure and culture. When the official and unofficial culture and structure are one and the
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Culture, Structure, Strategy and Power same then it can be said that there is complete management control. When the two are completely at odds with one another then there is little or no control at all.
As Watson (2006) has put it: It has been recognised that it would help managers enormously in the struggle for control if they could get all of their employees to subscribe to the beliefs inscribed in a corporate bible especially if they themselves could write this bible. In the case of Games Workshop, the organisation does indeed have two bibles in the form of CEO Tom Kirbys Black and Red Books. The first of these the Black Book, was published in 1996. This was four years after Tom had led a management buy-out in 1992 and two years after the company had been floated on the LSE.
On the face of it, what Kirby was attempting to do was to draw a line under the entrepreneurial phase of the companys development and prepare it for its next phase of growth through delegation (Greiner 1972). In doing so, Kirby not only created a management primer, but he also attempted to establish a set of principles and values that should guide the behaviour and choices of individuals with managerial responsibility. The Black Book was highly influential in a period of time when the company was still relatively small and you could gather the twenty or so most influential people into a one room. As the company grew in size and expanded overseas, he realised that he needed to update this management text for a new age. The result was the Red Book, a volume that is far less of a tome of management tips, tools and techniques, and far more of a book of culture. At the core of both of these volumes is the notion that; How you behave does matter and that the right ways to behave at Games Workshop could be encoded in a short set of classical metaphors. In ancient Greece (and Rome) the muses came to stand for learned qualities
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Culture, Structure, Strategy and Power things you could be taught. The graces were gifts from the gods personal qualities. My lists are the muses and graces that Games Workshop needs (Kirby 1996).
What we have here is a highly explicit attempt at cultural shaping. If you now ask any member of staff at Games Workshop What are the personal requirements of the company? they would undoubtedly reply; the three graces - Courage, Honesty and Humility. Depending upon their length of service and seniority they might also be able to rattle off the six muses Consistency, Clarity, Firmness, Fairness, Openness and Integrity. However, as we shall see from the research, the recent increased differentiation of Games Workshop into the Studio, Sales and Manufacturing divisions has resulted in some significant variations in the underlying core values and assumptions of these different parts of the business.
I am not saying that Games Workshop is uniquely moral and is run by saints. I know that it isnt true. But we must have high aspirations, both on behalf of the company and on behalf of ourselves. If we fall short we must try harder. We should have the honesty to accept we fell short, the humility to want to do better and the courage to try. How you behave does matter. (Kirby Red Book, 2003)
4.2
Symbols, Artefacts and Language
As weve already indicated, one of the unusual characteristics of Games Workshop is the way in which it borrows symbols; imagery and iconography from its game worlds and uses them as metaphors for the company. This extends far beyond the kind of brand imagery and sloganeering used by many businesses and reaches far deeper into statements of value,
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Culture, Structure, Strategy and Power purpose and meaning. The buildings at Games Workshops Nottingham HQ and indeed many of its offices around the world are decorated with a large double headed eagle. This same logo also repeatedly appears on company stationary, including the cover of the employee handbook. This symbol is drawn from its Warhammer 40,000 game world and is the badge of the Legions Astartes the Space Marines - one of the companys best selling miniature ranges. Outside the building there is also a large mock-bronze statue of one of these superhuman warriors.
Within the game world and their fantasy background, the motto of the Space Marines is: And they shall know no fear! and this notion of No Fear! is taught to new recruits to Games Workshop as one of the cultural values that has enabled the business to develop and grow. The organisation communicates this idea of No Fear through a series of legends, myths and sagas that describe how great challenges to the business were overcome in the past through the fearless determination of individual staff who struggled against the odds to deliver some new initiative or process.
This notion is invoked time and again in the internal discourses of Games Workshop to describe for example; how the company came to develop plastic components, or run a chain of stores that stock purely Games Workshop designed and manufactured products. What it is saying, is that if you want to get on around here then you too must have No Fear!
Although what No Fear! means for any individual employee is not defined, the notion of Courage as described in Tom Kirbys first Black management book probably comes pretty close: We have to face the world and face it downWe are the only people who can achieve that and the world is full of those who tell us it cant be done, that it isnt worth
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Culture, Structure, Strategy and Power doing and that were going to fail. Spit right in their eye and walk past! What we do takes courage, every working day of our lives. (Kirby 1996, Black Book)
A further example of the conscious use and interplay of language and symbols from the Warhammer 40,000 game world is evident in the Emperor maxim that appears in both the Red and Black books. The quotation goes: The Emperor will not judge you by your medals or diplomas but by your scars. In the Black book, it appears as a final quote on the end papers, but in the Red book it is included under a section entitled Planning, performance and how you are judged.
Within the context of the Warhammer 40,000 universe this phrase is used to extol the commitment and bravery of imaginary warriors going into battle against fearsome alien life forms. It tells those about to die, that what they do is more important than who they are. Used as an internal metaphor its tells both managers and employees at all levels of the business that what counts over qualifications, seniority, or pay packet, is performance and that it is on this alone that individuals will be appraised and rewarded (judged). Thus a simple phrase, borrowed from one of the companys products, becomes a statement of values that says; Games Workshop is a meritocracy and how your career develops is down to you and the courage, initiative and determination you display in the performance of your duties.
4.3
The Spirit of Games Workshop
In spring 2005, faced with continuing sluggish sales performance, the company felt that that it needed to invigorate people across the business and reconnect them with the core values of Games Workshop. The result was the creation of an induction course for all new and
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Culture, Structure, Strategy and Power existing staff called The Spirit of Games Workshop (SOGW). The course consisted of a series of five lectures and seminars delivered by senior members of the management team under the headings: The History of Games Workshop, The Business of Games Workshop, What is a Hobby, Outrageous Customer Service and People and Culture. As a part of its roll out, this course was then filmed and edited into a multi-lingual DVD that could also be used in Spain, France, Germany, Italy and Japan with the intention that it became the standard induction course for all new staff wherever in the world they were located.
Again, like Tom Kirbys management texts, both the courses and the DVD provide examples of explicit attempts at cultural shaping by the management team. In the decade since the buy-out, as the company has grown and internationalised, any number of subcultures have begun to emerge. The purpose of the SOGW was therefore to once again establish Scheins (1985) notion of culture as: a pattern of basic assumptions taught to new members as the correct way to perceive, think and feel
As a cultural artefact, the DVD provides an incredibly rich source of analysis that is far beyond the scope of this report to decode. Watson (2006, p.286) has provided a typology of the various elements of organisational culture and all of these make their appearance at various points in the filmed material.
Artefacts: can be seen in the logos, uniforms, signs, badges and images.
Jargon: constantly appears; as in the use of the term toy soldiers to describe the companys games and miniatures.
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Culture, Structure, Strategy and Power Discourses: can be observed is the way the presenters make use of concepts such as; outrageous customer service, hobby and niche to frame and influence the way employees understand and act in relation to the organisation.
Stories and Jokes: the presenters continually make use of perfectly constructed stories and jokes as a means of cultural initiation.
Legends, Myths, Sagas: appear throughout the material and are used in an instructional manner.
Heroes and Villains all make their appearances and are expertly used by the presenters for their instructional impact. In one section (SOGW/People and Culture - 0:03:40) the presenter describes the behaviour of a number of Games Workshop villains a Head of Retail and Trade Sales Manager - and ends each description with the phrase; and you knowhe doesnt work for us anymore! Although like much of the material, this is delivered in an almost jocular fashion, the message to the audience is clear. If you deviate from the right way of thinking and behaving, then your employment with the company is unlikely to continue!
After almost thirty years of development, Games Workshop has few competitors within its niche and largely operates in a market entirely of its own making. In some ways its analogous to a tribe or community that has been isolated from civilisation for a number of years and has developed unique elements of culture in order to deal with the problems of internal integration and external adaptation. Having successfully navigated its initial stages of growth and development, the company now faces a challenge of age and maturity. Many
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Culture, Structure, Strategy and Power of the individuals who founded the company are now in their late forties to mid fifties and have realised that in order for the organisation to continue to thrive their knowledge needs to be captured, transformed and externalised, so that along with the company culture, it can to be handed over to the next generation of the business.
The major challenge for Games Workshop is that almost all of the knowledge upon which it depends is tacit. At the core of its activities is the Games Workshop Design Studio. This consists of 40-50 artists, sculptors and writers who design and develop the companys games and miniatures. Many of the staff who work in this area have been continuously employed by the company for between ten and twenty years. The craft nature of their activities means that the only way in which their skills and knowledge can be transformed is through socialisation and this is exclusively the case. The problem is that very little of the knowledge that these individuals possess has ever been captured or documented. There has been an assumption that they would always be working for the company and, given both the nature of the business and the lack of competitors who might wish to aggressively recruit or poach staff, this has largely held true. However as the organisation has developed over time and navigated its various crises, these individuals have simply grown older and there is rapidly approaching a time when retirement will simply strip the organisation of its key skills.
At the other end of the spectrum, the company is highly dependent upon its chain of hobby centres for recruiting and engaging with new hobbyists and selling products to customers. Attempts to document and make explicit the knowledge, skills and behaviours associated with the most successful of these have resulted in manuals and lists of commandments that rather than stimulating knowledge have stifled it under a torrent of dos and donts.
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Culture, Structure, Strategy and Power These have resulted in staff in some of the key customer facing areas feeling as if they no longer have any freedom of action. The resultant paralysis and inertia has had a direct and measurable effect on recent sales performance for the group.
Given that Games Workshop is a company that prides itself on its ability to truly innovate both in terms of its products and customer service, what appears to have occurred here is almost a textbook management of innovation mismatch. According to Burns and Stalker (1961) operations that are working in a changeable and unpredictable environment require organic or loosely bureaucratic management systems. When sales growth and performance were incremental and predictable, through most on the 90s and into early 2004, the company began to develop increasingly bureaucratic management and control systems. When the commercial environment the company faced began to become ever more unpredictable and turbulent, then these same, rather mechanistic systems were simply unable to adapt quickly enough to the much looser kind of controls that the management of innovation requires.
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5. The Dynamics of Power at Games Workshop

According to CEO Tom Kirby, Games Workshop has been through many incarnations and you will hear people say Warhammer is 25 years old or we have been doing this for over 20 years you know. Roughly true, but the group of companies you work in really started life in December 1991. That was the date the founders sold it to a small management buy-out team. That team is responsible for taking Games Workshop around the world and transforming it into a public company with sales well over 100m and nearly three thousand staff. That team is responsible for the culture and style of the business. A good way of looking at this great group of businesses is not to see them as a head office with branches or divisions, but as a big, loving family. Families have people of different ages and differing personalities. Sometimes they squabble, but they all root for one another and woe betide the outsider who tries to come between us. Like a family we make our own way in the world. Interdependent but free. (Kirby: Red Book, 2003)
What is clear from this quote is that although Kirby clearly acknowledges the differentiation of the business into separate divisions and functions over time; he also draws on the belief that there is a stronger underlying culture - he likens to the blood ties of a family acting as a powerful integrating force throughout the organisation.
With this in mind, I now want to make use of the Hickson et.al. (1971) dimensions of intraorganisational power as a framing device; with which to analyse the historical development of power within Games Workshop.
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5.1
1980s - The Dominance of the Design Studio
In the early years of the business, from roughly 1983 to 1992, the most powerful part of the business was the Design Studio. This division carried responsibility not only for the design and development of the physical products miniatures, games, books and magazines that the company was selling, but also the logos, imagery, symbols, badges and iconography that gave these products such verisimilitude and made them so powerfully evocative for the companys fans and customers.
Applying the Hickson et.al. dimensions, we can say that at this point in time, the Design Studio was the most powerful part of Games Workshop by virtue of the fact that:
a) Reducing future uncertainty The product out put of the Studio was very successful in that everything it produced sold in much larger than expected quantities and Games Workshop began to build its reputation for high quality, innovative gaming products and miniatures. This continuing sales success established a high level of confidence and trust in the business because of the ability of the Studio to de-risk the future.
b) Centrality At this point in the development of the business, it was hard at work establishing its unique brand and presence in its marketplace. The idea of collecting, painting and fighting fantasy wargames with model soldiers was still in its infancy and the product turnover from design to market was extremely rapid. The Design Studio and its output was central to the development and performance of the company.
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Culture, Structure, Strategy and Power c) Non-substitutability It contained a unique range of creative talents in the form of the sculptors, designers and artists that were establishing the highly innovative product portfolio of the company in the form of its twin fantasy universes of Warhammer and Warhammer 40,000. This group of creative individuals made the studio highly non-substitutable.
This phase of development with the Studio as the centre of power within the business, extended for a decade from the early 1980s until the early 1990s. In late 1991, the initial entrepreneur/owners of the business sold it to a small management buy-out team led by the current Chairman and CEO Tom Kirby.
5.2
1990s - The Rise of Retail
Over the subsequent decade, as the business developed, growth continued but power shifted in the organisation away from the R&D team in the Studio and over to the Sales function. The Studio was still producing exciting and innovative products that thrilled Games Workshop customers and enthusiasts, but the house style had already been well established over the previous ten years. A rapid growth in sales resulted from the internationalisation of the business as it set up operations in the USA, France, Spain, Australia, Canada, Germany and Italy.
During this time, many of the key elements in the companys sales approach were also laid down. Its chain of wholly-owned stores rapidly expanded and, within each one, distinct areas for painting, modelling and introductory gaming were created. These elements give Games Workshop stores a unique character in the high street and indeed the company itself describes them as hobby centres rather than retail outlets.
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Culture, Structure, Strategy and Power In the words of Kirby: Games Workshop is not a retailer, To characterise it in that way is to misunderstand completely the way the business model works. Games Workshop stores promote the Hobby. They introduce people to the Hobby and they provide a venue for experienced gamers to meet and play. A retailer buys product in, adds a mark up and sells it on. We teach gaming, painting and modelling. (Games Workshop Annual Report and Accounts 2002)
If we apply Hickson et.als (1971) dimensional analysis of centrality, substitutability and reducing future uncertainty, we can make the following observations about the shift in the centre of organisational power over this period.
a) Reducing future uncertainty As you can see from the sales performance graph (Fig 6) between 1991 and 2004, the sales were growing at an annual LFL rate in excess of 15%. By any standards this was an impressive performance. In terms of reducing future uncertainty, the credentials that were built up by the sales teams over this period made them very powerful and by the mid 1990s they felt able to start placing constraints and demands on the Design Studio across a range of areas, from the character and content of the games and miniatures themselves through to the design and presentation of the packaging.
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Culture, Structure, Strategy and Power Figure 6. Games Workshop Sales 1991-2005 (m). Source; Games Workshop Annual Report and Accounts 2004-05
Sales - m
b) Centrality Throughout this period, the Design and Manufacturing teams remained relatively stable and small. They were essentially both servants of the Sales function because this was driving forward the growth and expansion of the business and as a result was central to the operational performance of the group.
c) Non-Substitutability As the Sales function developed in the mid-nineties it began to acquire a character and culture that would set it aside from other parts of the business. This would create an operation that could not be replicated elsewhere in Games Workshop. Within the retail chain, a customer service manual known as the Ten Commandments was developed and all staff were expected to buy-in to its methods. The character of the shops, with instore gaming, painting and modelling areas, was also established. The staff themselves were recruited from the companys customer base so that they would have a passion and enthusiasm for Games Workshops games and miniatures and this would ensure that the company was able to stay close to the customer. The net result of these innovations Page 51 of 78
Culture, Structure, Strategy and Power was to give the Sales function a unique personality that was non-replicable either inside or outside of the company.
5.3
2000s - The March of Manufacturing
Towards the end of the 1990s a couple of events took place at Games Workshop that would bring about a shift in the powerbase of the organisation for the next decade. Between 1996 and 2000, the impact of six or more consecutive years of rapid growth had taken their toll on the manufacturing and distribution function. At the time, Sales and Manufacturing were both operating out of small rented factory/office and warehouse units in the north of Nottingham with the Design Studio based in the centre of town.
The need to produce ever increasing volumes of product for an international market stretched capacity to breaking point and the company was failing to meet its own standards for manufacturing quality and service. As a result, the decision was taken in 1997 to relocate the whole business to a new manufacturing and operational headquarters close to the city centre.
Although this move had the positive effect of re-integrating the Sales, Studio and Manufacturing functions, the organisation and layout of a new factory from scratch while continuing to service an expanding market brought the operation to its knees and after three years of slowing growth the business reported its first ever profits fall in 1999-2000. (Fig 7)
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Culture, Structure, Strategy and Power Figure 7. Games Workshop full-year profit 1995-2003 (m). Source Games Workshop Annual Report and Accounts 2002-03
Operating profit (pre-exceptional) - m
However, in late 2000, the company also took out a license from New Line Cinema to produce games and miniatures based upon Peter Jacksons - The Lord of the Rings film trilogy. Although the subsequent success of this product range placed huge demands on the manufacturing function, it also initially restored the companys sales and profit profile.
Concurrent with both of these events, a new Manufacturing Director joined Games Workshop who oversaw not only a complete re-shaping of the manufacturing function but also, as a result, an internal shift in power within the business.
a) Reducing future uncertainty In the six years from 2001 to 2007, the Manufacturing function at Games Workshop has completely re-invented the way the company makes and distributes its products. Each new project, from the removal of the separate European warehouses and centralisation
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Culture, Structure, Strategy and Power of distribution through a purpose-built Eurohub, to the establishment of new production facilities in Memphis and Shanghai has been pushed forward with an energy and costconsciousness that has seen the team deliver again and again on their promises and predictions for the future.
The result has been not only a lean and efficient organisation, but one with a distinct and embedded culture of continuous improvement. In my interviews with many members of the manufacturing team, they talked with pride about the sense of focus, improvement and performance for which the team feels responsible. The result has been a function with enormous capacity to predict and deliver on its future promises. The fact that this shift has also taken place against a backdrop of recently faltering sales and profits has made the manufacturing performance all the more impressive.
b) Centrality According to Hickson et.al. the activities of a subunit are central if they are essential in the sense that their cessation would quickly and substantially impede the primary workflow of the organisation. This workflow immediacy is defined as the speed and severity with which the workflows of the subunit affect the final outputs of the organisation. (Hickson et.al. 1971: p.221)
The radical re-structuring of Games Workshops supply chain over the last six or seven years has created a lean and highly cost-efficient operation. Manufacturing has become the bridge between the creative staff in the Studio and the Sales delivery teams and is able to place demands on both of them. These have included the removal of all warehouse and distribution activities from the Sales companies and the re-specification
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Culture, Structure, Strategy and Power of some products to meet manufacturing requirements. The result of these changes has been to shift the Manufacturing function to the centre of Games Workshops operational capability, without which neither the Studio nor the Sales division can operate.
c) Non-substitutability At the same time as these operational changes were being delivered, within the Manufacturing function, an integrated staff training and development programme was also underway that was unique and separate from the rest of the business. The result was that the Manufacturing operation began to acquire a distinct and highly performance driven culture.
The result of this focus on performance, delivery and people has been the development of a function which in both its operations and its staff has acquired a distinct capability that makes it highly non-substitutable.
5.4
The Art of the Long View
There is always a distinct danger in attempting to retro-fit a historical picture into a piece of convenient theory, but the Hickson et.al (1971) model of power does appear to provide a relevant contextual narrative into which the development of the business does appear to fit.
In conversation with many of the managers at Games Workshop over the past six month or so, I have discussed elements of this approach and, on the whole, have met with support as to the veracity of these three ages of Games Workshop Design, Sales and Manufacturing being directly related to the concentration of power in the business. We shall return to this area when we draw conclusions from the study.
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6. Strategy, Power and Culture: Management Perceptions

The material I collected through the course of the interviews, over twenty hours of it, provides a fascinating snapshot of the thoughts and feelings of a section of the management team to the issues of culture, strategy and power within the Games Workshop. In working with these recordings and my contemporaneous notes, I analysed the material for indications of a strong preference in response to the specific questions: a) What is the most powerful part of Games Workshop? b) Which part of the business has the strongest culture? and c) Which division has the clearest strategy? (Fig 8)
Figure 8. Raw preference scores derived from recorded interview material and notes.
Interview Number Division Key Centre of Power Studio Sales Manufacturing None of these Strongest Culture Studio Sales Manufacturing None of these Clearest Strategy Studio Sales Manufacturing None of these
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 S St M St St S St S M St M S M St S M M (S) Sales (St) Studio (M) Manufacturing Total 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 3 10 3
1 1 1 1 1 1 1 1 1 1 1 1 1
1 1 1 1
3 2 5 7
1 1 1 1 1 1 1 1 1 1 1
1 1 1 1 1 1
2 4 9 2
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Culture, Structure, Strategy and Power These results were tabulated for the whole sample and indicate that although a) Power and c) Strategy are seen to be concentrated in the Manufacturing division, b) Games Workshops cultural values were seen to be more evenly distributed across all three functions. It was notable that when the managers from the Manufacturing division were asked the question; What is Games Workshops culture? they would often start to describe continuous improvement as the key cultural characteristic of the Manufacturing division. This was in stark contrast to the managers from both the Design Studio and the Sales divisions who would almost invariably begin to talk about the Muses and Graces and the content of Kirbys Red and black books.
Figure 9.
Distribution of Organisational Power (whole sample)

W here is the centre of power in G W ?
U nspecified
M anufacturing Centre of Pow er Sales
Studio 0 2 4 6 8 10 12
Figure 9: indicates the perception of where the centre of organisational power currently rests in Games Workshop drawn from the interviews with all seventeen managers. There is a high level of agreement that power lies in the Manufacturing division.
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Culture, Structure, Strategy and Power Figure 10. Strength of Culture (whole sample)
W hich Division has the strongest culture?
U nspecified
Manufacturing Strongest C ulture Sales
Studio 0 2 4 6 8
Figure 10: The picture with regards to the perception of the strength and persistence of the Games Workshop culture was far more ambiguous. The biggest group (seven interviewees) talked about culture largely in terms of the Red and Black books and were unable to give any indication of where they felt the culture was strongest as it was a far more personal construct for them. Although words and concepts such as courage, honesty and humility repeatedly cropped up in the conversations, many managers would frame their ideas in quite different language but with the same underlying meaning. One of the nonmanufacturing managers described the culture as: being about values and behaviours and how you go about doing thingstake responsibility, speak your mind, be passionate about what you dohelp your fellow man do his joband there are no wallsget up and walk across the factory floor, building, or sales office and talk to whoever you need to and they will value what you say. Although the words he uses are different, the same ideas are all present.
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Culture, Structure, Strategy and Power Figure 11. Strength of Culture (Manufacturing interviewees only)
W hich Division has the strongest culture?
U nspecified
Manufacturing Strongest C ulture Sales
Studio 0 1 2 3 4 5
Figure 11: If we look at one of the sub-samples drawn purely from the manufacturing managers we see a slightly different picture emerge. Four out of the six managers I interviewed talked specifically about culture in terms of continuous improvement methodology. When asked the question; What is Games Workshops culture? several of the manufacturing managers gave answers such as: From a manufacturing standpoint, we definitely have a culture of improvement and thats at an individual levelthere is also a lot of team focusa team journey and there are also a number of processes and systems that we try to improve. However some of the managers also talked about continuous improvement as more than just a methodology. It is a cultureit adds meaning to everybodys job in my mindit connects people and you feel like you do make a differencebut weve also had to adapt it to Games Workshop. One manager in particular made a strong case that the continuous improvement method, in conjunction with Games Workshops underlying culture of selfless responsibility, made for a very powerful combination indeed.
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Culture, Structure, Strategy and Power Figure 12. Clearest Strategy (whole sample)
W hich Division has the Clearest Strategy?
U nspecified
M anufacturing C lear Strategy Sales
Studio 0 2 4 6 8 10
Figure 12: With respect to strategy, the Manufacturing division again appeared to be the area of the business that was felt to possess the clearest focus and purpose. Strategy is very much tied up with internal organisation, a focus on core competencies and the ability to deliver predictable business outcomes. All three of these concepts have a strong resonance with the notions of non-substitutability, centrality and reducing future uncertainty and so we should expect to see the perception of strategy carrying a similar pattern to the perception of power and, when we overlay the two graphs, this is indeed what we see. (Fig 13)
Figure 13.
Comparison of the perception of Strategy and Power (whole sample)

Com parison of the Perceptions of Strategy and Power (whole sam ple)
U nspecified
M anufacturing Perception of Strategy Perception of Pow er Sales
Studio
10
12
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Culture, Structure, Strategy and Power Taken overall, and particularly in conjunction with the depth of the interview material, these results provide a solid snapshot of how power, strategy and culture are perceived to be distributed across the business in the minds of our sample of managers. The answer to our research question therefore seems to be that power and strategy are concentrated in the Manufacturing function but that the cultural values are far more widely dispersed across the organisation. We now turn to the implications of these findings for management and business decision making.
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7. Conclusions and Implications

The goal of this project was first of all to examine the organisational dynamics operating at Games Workshop. My key research question was targeted to look at what is going on in the business from an organisational point of view and so was framed as:
How is the managements perception of culture, business strategy and power currently distributed across Games Workshops functional divisions?
We then looked at the case study from a number of theoretical perspectives, drawn from the literature, and observed that Games Workshop has a highly individual culture that derives from a number of factors.
The first of these is the nature of the business itself. As a highly vertically integrated niche business, Games Workshops organisational culture is driven by the very self-same characteristics quality and service - as the products it designs, distributes and sells. This notion of the culture and behaviour as derivative of the product and service values of the organisation was clearly expressed by one of the managers. Gamers and modellers are just obsessed by quality and detail. To most people a plastic tank kit is just a plastic tank kit, but to a WW2 model maker it really matters whether the turret on a King Tiger is the Porsche or the Henschel variant or if it has the KwK 36 or KwK 43 gun. It also matters that the guy in the model shop is also aware of this difference and can sell you the right kit.
The fanatical obsession of Games Workshop with regard to product quality and service therefore appears to be a direct derivative of the hobby itself. This creates a powerful
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Culture, Structure, Strategy and Power cultural loop that draws together the companys management, staff and customers into a self-sustaining relationship. This relationship is articulated in the form of a diagram that is used on the companys Spirit of Games Workshop training course. It shows how the company spends money and resources on people and product in order to engage with a hobby community and that, if it does its job right, the hobby community responds by purchasing those products and the whole cycle commences again as a self-sustaining wheel. (Fig 14)
Figure 14.
The Games Workshop-Hobby Community loop. Source: Spirit of Games Workshop Course Notes (2005)
People
Hobby Community
Product
At the heart of this diagram is the notion, often articulated by members of the management team at Games Workshop, that the company, in common with other niche businesses has two pillars great products and great service (people). These pillars are given tangible form in the high quality miniatures, books and games that the company produces and the quality Page 63 of 78
Culture, Structure, Strategy and Power and delivery of customer service through its own chain of hobby centres and direct sales channels. These functions are in turn supported and underpinned by a highly efficient manufacturing and distribution function that can take the output from the Studio, reproduce it on a large scale and ship it to customers around the globe.
Given the importance of products and service to the business, we might therefore expect to see an organisation in which business strategy and power is distributed between the Studio and Sales, but our investigations indicate that this is currently not the case. Our research strongly indicates that under the Hickson.et.al. (1971) model, power is highly concentrated within the Manufacturing function and is likely to remain there until the Sales and/or Studio divisions can develop the dimensions of; managing uncertainty, non-substitutability and centrality upon which power rests. The situation is analogous to the centre of power in Apple Computers resting in its manufacturing division rather than in the R&D department responsible for the iPod and other innovative products or indeed in its Sales and Marketing division that does so much to develop and market the Apple brand as cool.
The implication for the management at Games Workshop is that if this indeed the case, then to what degree is this distribution of power distorting its ability to deliver a value proposition to customers. It is of course extremely important to Games Workshop that it can manufacture and distribute its products efficiently, effectively and with continuous operational improvements and tight cost control, but these capabilities in themselves provide no direct customer value. The dimensions of the offer that customers value are the qualities and characteristics of the games, books and miniatures themselves and the way in which they are promoted and sold by passionate, enthusiastic and knowledgeable staff.
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7.1
Management implications
So how might this insight assist managers at Games Workshop in their medium and longterm planning and decision making? in some ways it already has. The very process of researching and writing this management report has led me into many, many conversations with managers and staff at all levels of the organisation.
In the summer of 2007, in response to continued difficult trading, the company announced a large scale-cost reduction and consolidation programme. The aim was for Games Workshop to revert to being a large, small business again with the characteristics and habits of small family company, rather than the rather bureaucratic medium-sized multinational it had become. In presentations to staff across the business, the model we present here of the three ages of Games Workshop - Design, Sales and Manufacturing - was used. The stated goal was for Games Workshop to now enter its fourth age where all three divisions would be drawn together into a dynamic partnership under the leadership of a new CEO.
For many organisations, it would simply be too much of a task to overcome the inevitable structural and cultural resistance to this level of change. However, as we have identified, Games Workshop has some unique characteristics. The most important of these is the organisational culture itself, with its focus on values and behaviours as articulated through the Black and Red books. Again in the summer of 2007 it was decided that these volumes needed to be updated for new times. The result will be a new single volume simply entitled Games Workshop that will be published in early 2008. The intention is to assist the business get further leverage from its already highly cohesive culture and support an integrative pattern of activities, operations and interactions, despite the need for the differentiation of business functions.
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Culture, Structure, Strategy and Power From a learning perspective, the company has also embarked on a highly ambitious management development programme. As we have seen, one of the key characteristics of the hidden champions is that they are highly sophisticated learning organisations that are able to manage the transformation of knowledge as articulated by Nonaka (1994). Concern had been expressed that an influx of senior managers from outside of Games Workshop had begun to have a diluting effect upon the company values and culture. As a result, the company has committed itself to a ten-year goal of making all senior appointments from internally developed candidates by the year 2017.
There is also strong evidence that this re-balancing of the organisational structure will result in a much greater degree of autonomy for the customer-facing staff in Sales and the creative staff in the Studio. What this appears to be signalling is a shift from the over-bureaucratised or mechanistic management approach of the past few years towards a more organic style. This is characteristic of an organisation moving from a steady state operation to one that is much more capable of adapting to a changing environment and is able to harness its own powers of innovation.
7.2
Directions for Further Research.
The focus of this research has been upon how Games Workshop has managed the integration/differentiation paradox within the divisional structure of its UK headquarters. It would be interesting to explore whether the organisation has successfully exported its own particular brand of cultural shaping to its international offices. In Spain, France, Germany, Italy, USA, Canada, Australia and Japan, Kirbys Red and Black books are also used as a combination of management primer and cultural tool. Although these operations are more homogenous than the site under study, in that they are primarily sales functions with some
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Culture, Structure, Strategy and Power translation and support services, it would none the less provide additional support for our proposition that Games Workshops cultural characteristics do indeed act as a unifying force if we could replicate similar attitudinal results to our questions on: culture, strategy and power, across the international businesses
7.3
Looking to the Future
As we have seen, Games Workshop has many characteristics that make it a fascinating source of study for students of organisational culture. Its pattern of growth and development during the late 80s and early 90s mirrors the period when businesses began to instinctively incorporate ideas from writers such as Peters and Waterman (1982) into their thinking and processes.
The vertically integrated nature of the business coupled with the genuine enthusiasm with which employees regard the companys books, games and miniatures results in a highly coherent staff group. Furthermore, the company remains closely in touch with its customer base not only because large numbers of its staff have been recruited from their ranks but also because these staff, at all levels, continue to be active hobbyists.
Games Workshops systematic use of symbols, stories and metaphors from the worlds of Warhammer and Warhammer 40,000 as a means of communicating the companys values to its staff and customers, appears to be all at the same time innovative, exciting, compelling and strange.
From our understanding of culture as a continuously emergent pattern of meanings, it is extremely unlikely that any organisation-wide strong culture could ever exist outside of
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Culture, Structure, Strategy and Power relatively small groups of workers, and then only for very short periods of time. That Games Workshop has been able to sustain a set of core cultural values and promulgate them throughout the workforce for over fifteen years lies at the core of its strength as an organisation. It remains to be seen, as time goes by, if the business is able to continuously manage and balance the need to become operationally specialised with the need to provide an integrated approach to its product and service offer. As the business continues to internationalise, geographical separation will also become a further dis-integrating factor that will need to be managed.
The risk is that the organisation will once again begin to experience the emergence of subcultures within different areas of the business Studio, Manufacturing and Sales, each with their attendant power dynamics and structural relationships. The danger for the organisation is that each of these subcultures believes that it is the carrier of the true Spirit of Games Workshop and conflict between them will rob the organisation of much of the coherence that has been such a huge part of its success.
In addition, over the next decade, the company is about to face a further challenge. Over next ten to fifteen years, many of the individuals who joined the organisation back in the late 70s and early 80s will be reaching retirement. How Games Workshop responds to the challenge of generational succession and the loss of many of its key creative and management figures within a short period of time has yet to be seen. However, on the evidence to date, it is highly likely that it will manage this work through culture.
Robin Dews December 2007 Word Count: 15,944
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Executive MBA Management Project Report
REFERENCES
Boisot, M.H..(1995). Information Space: A Framework for Learning in Organisations, Institutions and Culture. London, UK: Routledge Burns, T and Stalker, G.M (1961) The Management of Innovation 3rd Ed. Oxford University Press Casey, C. (1999). Come, Join Our Family: Discipline and Integration in Corporate Organizational Culture. Human Relations, Volume 52, Number 2 February 1999 pp155 - 178 Child, J. (2005) Organization: Contemporary Principles and Practice. Blackwell. Oxford Choo, Chun Wei (1998), The Knowing Organisation: How Organisations Use Information to Construct Meaning, Create Knowledge and Make Decisions. Oxford University Press Daft, Richard L (2004), Organisation Theory and Design. 8th Edition. Thompson South Western Denison , D. R. (1996) What is the Difference between Organizational Culture and Organizational Climate? A Native's Point of View on a Decade of Paradigm Wars The Academy of Management Review, Vol. 21, No. 3 (Jul., 1996), pp. 619-654 Downs, A. (1967) The Life Cycle of Bureaus In Downs, A, Inside Bureaucracy, Little Brown and Company and Rand Corporation. San Francisco California, 1967: pp296-309 Emerson, R.E. (1962) Power-dependence relations American Sociological Review Vol 27: pp31-41 Greiner, L.E. (1972). Evolution and Revolution as Organisations Grow. Harvard Business Review, July-August, pp 37-46. Hamel, G.and Prahalad, C.K. (1990) "The Core Competence of the Corporation", Harvard Business Review, vol. 68, no. 3, May-June 1990, pp. 79-91 Hatch, Mary Jo. (1993). The Dynamics of Organizational Culture Academy of Management Review, Vol. 18, No. 4 (Oct 1993), pp. 657-693 Hawkins, Peter (1997). Organisational Culture: Sailing Between Evangelism and Complexity Human Relations, Vol 50, Iss 4, April 1997, pp 417 Hickson, D.J., Hinnings, C.R., Lee, C.A., Schneck, R.E. and Pennings, J.M. (1971) A Strategic Contingencies Theory of Intra-Organisational Power, Administrative Science Quarterly, 16: 216-229 Katz, D and Kahn, R.L.(1978). The Social Psychology of Organisations. Wiley, New York 1978
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Krackhardt, David. Kilduff, Martin. (1990). Friendship Patterns and Culture: The Control of Organizational Diversity American Anthropologist, New Series, Vol. 92, No. 1. (Mar., 1990), pp. 142-154 Kirby, T. (1996). The Black Book Games Workshop, Nottingham Kirby, T. (2003). The Red Book Games Workshop, Nottingham Lawrence, P.P. and Lorsch, J.W.(1967) Differentiation and Integration in Complex Organisations Administrative Science Quarterly, Vol 12 pp 1-47 Lippit, Gordon L and Schmidt, Warren H. (1967). Crisis in a Developing Organisation Harvard Business Review, Vol 45, pp 102-112 Nonaka, I. (1991). The Knowledge Creating Company. Harvard Business Review, November-December, pp 96-104 Nonaka, I. (1994). A Dynamic Theory of Organisational Knowledge Creation. Organisation Science, Volume 5, Issue 1, (Feb 1994), 14-37 Ogbonna, E. and Wilkinson, B. (2003) The False Promise of Organizational Culture Change: A Case Study of Middle Managers in Grocery Retailing Journal of Management Studies, Vol 40, Iss 5, pp 1151-1178 Ouchi, William G. Wilkins, Alan L. (1985) Organizational Culture Annual Review of Sociology, Vol. 11. (1985), pp. 457-483 Perrow, C. (1961) The Analysis of Goals in Complex Organizations American Sociological Review, Vol 26: pp 854-866 Perrow, C. (1970) Departmental Power and Perspectives in Industrial Firms in Mayer N. Zald (ed) Power in Organizations. Nashville, Vanderbilt University Press Peters, T. and Waterman, R. H.(1982). In Search of Excellence: Lessons from Americas Best-Run Companies. Harper Row, Profile, London Polanyi, M (1966), The Tacit Dimension. London, UK: Routledge & Kegan Paul. Porter, M.E. (1979) How competitive forces shape strategy, Harvard Business Review, March/April 1979 Porter, M. (1980) Competitive Strategy, The Free Press, New York. Quinn, R. E. and Cameron, K. (1983).Organisational Life Cycles and Shifting Criteria of Effectiveness: Some Preliminary Evidence, Management Science, 29, (1983), 33-51 Schein, E. (1985) Organizational Culture and Leadership 3rd Ed. Jossey Bass, San Francisco
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Siehl, C. and Martin, J. (1990) Organizational Culture: A Key to Financial Performance? in B. Schneider (Ed), Organizational Climate and Culture. San Francisco, CA: Jossey-Bass Simon, Hermann. (1996), Hidden Champions Lessons from 500 of the Worlds Best Unknown Companies. Harvard Business Scholl Press, Boston Simon, J. S. (2001) Five Stages of Non-profit Organisations. Wilder Foundation 2001 Strauss, A. Schatzman, L. Erlich, D. Bucher, R. and Sabsin, M. (1963) The Hospital and its Negotiated Order in E. Freidson (ed.) The Hospital in Modern Society, New York: Macmillan Watson, T.J. (2001) Beyond Managism: Negotiated Narratives and Critical Management Education in Practice British Journal of Management, Vol 12, (2001), pp 385-396 Watson, T.J.(2006). Organising and Managing Work (2nd Edition) Pearson Education Wilkins, Alan L. Ouchi, William G. (1983). Efficient Cultures: Exploring the Relationship Between Culture and Organizational Performance Administrative Science Quarterly, Vol. 28, No. 3, Organizational Culture (Sep., 1983) pp. 468-481
Willmott, H (1993) Strength is Ignorance; Slavery is Freedom: Managing Culture in Modern Organisations Journal of Management Studies, Vol 30, No 4, (1993), pp515
The Spirit of Games Workshop DVD (2006), Games Workshop Academy Training
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Appendix A Management Perception Survey Form

Management Project Interviews
Name .................................................................................... Current Job Title .................................................................. Date of Interview ................................................................. Date of joining Games Workshop........................................
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1. SECTION ONE - CULTURE
1.1.
How would you define Games Workshops organisational culture?
1.2.
How do you know it when you see it?
1.3.
Are there good and bad elements to cultures?
1.4.
Has the culture changed over time?
1.5.
In what ways do you think that it has changed?
1.6.
In what ways have these changes impacted on your role and responsibilities?
1.7.
Can you give me an example of how you might make use of the organisational culture to get something done (or stop something from happening)
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2. SECTION TWO STRATEGY
2.1.
What is Games Workshops strategy?
2.2.
How do you know that is the strategy how is it communicated?
2.3.
Is the strategy the same for the whole business and for your department?
2.4.
Has the strategy changed over time?
2.5.
In what ways has this impacted on your role and responsibilities?
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3. SECTION THREE STRUCTURE
3.1.
What is Games Workshops structure?
3.2.
How has that structure changed over the time youve worked for the business?
3.3.
Is the structure the same in all parts of the business?
3.4.
How does the structure affect your role and responsibilities?
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4. SECTION FOUR POWER
4.1.
How would you define POWER?
4.2.
What is the difference between personal power and organisational power?
4.3.
What is the most powerful part of Games Workshop?
4.4.
Has that centre of POWER changed over time?
4.5.
In what ways has this impacted on your role and responsibilities?
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5. SECTION FIVE NOTES AND COMMENTS
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Appendix B Letter of invitation to interview participants

MBA Research Project
Dear As you might know, for the last few years, Ive been doing a part-time MBA degree and have now come to the final stage - my management research project. The focus of this project is how organisations - in my case Games Workshop - manage the integration-differentiation paradox. The essence of this problem is that in order effectively deliver goods and services, organisations have to create differentiated sub-units in our case Sales, Studio, and Manufacturing etc each with their own staff, ways of working, characteristics, cultures and organisational power. At the same time, in order to deliver value to customers, and ensure their own future financial survival, organisations have to be highly integrated that is they have to join all these different bits together into a seamless whole. In fact you could argue (and many people do!) that the single unifying characteristic of all successful businesses is that they are able to continuously monitor, manage and resolve these two contradictory tendencies and that the glue that binds such organisations together is a strong organisational culture. So whats all this got to do with you? For the research element of my project I want to conduct short interviews with a range of people from across the business, and Id like to include you in my sample. The conversation should take no more than an hour and the format will be for us to talk though a set of pre-prepared questions on Games Workshops culture, strategy, structure and power The content of the conversations will be confidential and no individuals will be named in the final report. However, I would like your permission to record the conversation and make use of any specific quotes or comments from our chat as empirical evidence if I deem them to be relevant to the overall project. If you would be prepared to participate in this process, could you please drop me an email and I will then get back in touch to arrange a time and date for us to meet. Many thanks for your help. Best regards
Robin
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