Case Study Overview Trip Hawkins founded Digital Chocolate in Silicon Valley in 2003 to “develop outstanding games for mobile devices.” Hawkins’s previous experience as CEO of Electronic Arts helped him appreciate the challenges with coming up creative content and making that contain available on different platforms. By 2008, Digital Chocolate had expanded its operations into four countries: San Mateo, California; Helsinki, Finland; Bangalore, India; and Barcelona, Spain, and had become one of the top developers of solo-player games for standard mobile phones and iPhones. The structure of the company is based on these the global teams where each one has expertise and a defined role and function during the development of games. Digital Chocolate’s culture is an example of cooperative environment and fine inter-personal relations. These features are results of the well-established communication methods followed. Functional departmentalization and communication is an important factor in every company and Digital Chocolate has achieved an exceptional flow of information between all levels of employees. Hawkins’s general strategy followed incorporates acquiring small but talented gaming companies. This way Digital Chocolate went into operations in very short period and captured a great market share. Moreover, one of the strategic tactics involves industry research. The competition of the gaming industry is fierce and in order to maintain a strategic position the companies offering services and products have to align with the technological achievements and customer needs. When the research is based on a global perspective, it opens new markets and can identify the global trends. This can be considered one of DC’s strengths that has helped in the development of a global common spirit and reduced costs. In 2009, Hawkins was eager to start developing new types of mobile games that could be played by multiple players over a period of time. Hawkins wondered how he should redirect his team to focus in social gaming without losing any of the creativity and productivity his team had built over the previous years. His idea for multiplayer, interactive games that can be assessed on multiple platforms simultaneously was not new, but it was not applicable until that time. In fact, Hawkins had tried before to launch social games, but important features such as the hardware and software of the platforms were not compatible and advanced enough to support his vision. This decision was further complicated by Hawkins’s desire to have a portfolio of new social games in a short period of time. Even though, he recognized that he was asking a lot of his team, yet he was optimistic about DC’s ability to leverage its strengths to help define the next big trend in mobile gaming. This rapid and vast change resulted into raising concerns among the employees and more questions about how this will be achieved. The assumptions on which Digital Chocolate was built were no longer valid. The business theory was getting challenged; the strategy was getting reformed and there was no planned strategic execution process or effective solutions to the questions posed. Reevaluation of how to conduct business for Digital Chocolate became mandatory.

Problem Statement The problem rests in the context of strategic execution and making effective decisions to support the changing strategy. The strategy is to launch social games, but this was never done before and none of his teams can work on such project. The nature of the problem classifies it as a unique event which in reality is the first appearance of a new generic problem (Drucker, pp.297). Unfortunately, there is no generic answer, thus Hawkins needs to pose the correct questions in order to understand the right problem. Moreover, Digital Chocolate was specialized in “knowing how to make good games rather than about dating marketplace”. In other words, DC was created to develop games and not focusing on social media. These two activities are different in nature and require a different approach. In response to that, another problem identified is that the assumptions on which the company was built were changing and the theory of business was getting tested (Drucker, pp.91). However, trying to evolve and adapt in a new environment is very healthy for any company and ideally justifies the four business theory specifications as per Drucker.

Alternatives Hawkins trying to define the new mission and environment of the company has first to answer several questions. Questions such what is the actual problem of launching social games and what the related decisions that have to be made are? How can the structure and culture of the company be reformed to support his vision? Undoubtedly, the aforementioned have an effect on the base criteria on which the alternative options are evaluated. Moving to these alternatives, the first option would be specifying one of the offices as “social gaming department”. The purpose of the office will be solely the development of social games. This approach can help in making every part of the organization to focus on a specific activity rather than getting distracted by different concepts. In return, the company will continue generating profits by developing the already successful solo-games. San Mateo’s office location makes it ideal for this purpose as the proximity to a technologically active area like Silicon Valley will enable more resources and creativity.
Alternative No.1: The social gaming department
Pros Cons
• Expertise in developing social games
• Every office will have a special focus
• Increased creativity
• Increased productivity
• Maintaining profits
• Supports the vision • Demotivation of other teams
• New business theory
• Starting from scratch
• Increased expenses
• Initially no profits
• Inexperience

Second option would be the acquirement of a rival that is already an established social games developer. Hawkins is notorious for his successful mergers, thus researching the market and finding a company that can fit DC’s culture will offer an easy start. However, such an action can bring implications. The process is time consuming and in case the new company does not align with Digital Chocolate, then this will have negative results.
Alternative No.2: Acquiring a rival
Pros Cons
• Available resources and expertise
• Easy start
• Existing social games
• Less operational effort
• Established mission and environment • Expensive
• Different structure and culture
• Conflicting management methods
• Not entirely part of DC
• Time consuming research process

Internal changes will constitute the third alternative. Every site office can create its own team of social gaming. Personal interest of volunteering employees can help in the formation of teams. This way the manager, Trip Hawkins, can maintain the control he desires over the operations. Moreover, the good communication between the offices will enhance the processes as the information and knowledge will be transferred.
Alternative No.3: Internal changes
Pros Cons
• Selection of employees
• Self motivation
• Intact culture and structure
• Global customer base
• Effective management • Time consuming
• New process
• Coordination
• Not tested
• Inexperienced personnel

Proposed Course of Action Social gaming industry is a booming. For a company like DC, diversifying and developing a new product to this industry will be a profitable venture. Hawkins will have to consider various parameters before he starts performing new activities in an unknown sector. The healthy working environment that has been constructed within the company and the free flow of communication are the core values that have provided the motivation for the employees to produce successful games in the past. Hawkins will have to consider the implications that this new product line and industry will have on these strengths. According to Porter “without excellent operational and governance processes, strategy – even the most visionary strategy – cannot be implemented. Conversely, without strategic vision and guidance, operational excellence is not sufficient to achieve, let alone sustain, success. Taking into consideration the aforementioned words, Hawkins has to go through a decision making process that will incorporate the current successful operation of the company and will relate it to his future plans. He has to make decisions that will make the difference and will be applicable to the problem. Moreover, “Only a clear definition of the mission makes possible clear and realistic business objectives” (Barksdale & Lund, pp.19). As Drucker states it is the foundation for priorities, strategic planning and work assignments. Thus, the first step is to develop the strategy (Kaplan & Norton, 2008). In other words, the required actions to be performed must be based on a single vision for the company. The development of solo-games for different platforms does not align anymore with the current proceedings for social games. Before concluding to the most appealing alternative that can implement DC’s strategy planning, it is important to mention the role of present resources to an uncertain and unknown future. Responding to the new mission, all employees are liable for the success of the company. Identifying the key participants who will be involved as the strategic planning is getting developed is critical (Barksdale & Lund, pp.16). As discussed previously the core competencies of Digital Chocolate are its structure and culture. Thus, these two strong points have to be maintained as they promote motivation and productivity Inevitably, the only alternative that can be considered as ideal to implement the processes of the new strategy while retaining the original values; is the formation of a cross-functional team with employees from all stations (third alternative). This will provide motivation to all members to excel and enhance their performance and eventually will be one of the elements of strong execution. Everybody will have a good idea of the decisions and actions for which they will be responsible. Moreover, the free flow in communication across organizational boundaries will make possible important information about the competitive environment to reach headquarters quickly (Neilson, Martin & Powers, 1998). Coming back to Hawkins’s role it has to be pointed out that as any other good decision maker he has to be courageous and willing to take risks. Sometimes good decision makers have to go out on a limb and take a risk, knowing that things may not turn out the way they had thought or hoped (Drucker, 1999). So, if his decision to approach the problem with the proposed method does not have the wanted results he must be willing to take responsibility for the decisions he made. Good decision makers will still make mistakes, but having a reason for making a decision, the outcome becomes a part of the learning process and a building block for the next decision to be made. However, Hawkins still needs to communicate the plan to the employees, point out the benefits and sell the idea. As the structure of the company remains the same the above mentioned are achievable. In case Hawkins makes a deal with another company then his leading figure can faint out. Also the third alternative can motivate the employees more, and promote production. Promoting creativity and looking beyond to ideas constitute a vehicle through which an organization can become more effective (Drucker, pp.120). As discussed previously, the integration of Digital Chocolate into the industry of the social gaming is the ultimate objective and all the company members have to apply the concept. This clear and realistic objective is a product of the mission’s definition.”The mission statement communicates legitimacy to internal and external members, who may join and be committed to the organization because they identify with its stated purpose and vision.” (Daft, pp.60) However, the theory of business is a hypothesis that has to be adapted and tested constantly (Kaplan & Norton, 2008). Digital Chocolate must react and maintain the ability to change itself. For example, when the economical status is bad, the introduction of new technologies or changes within the company have to take place. Many times resistance can be experienced but in overall the decisions will not be second guessed and will not undermine the employees’ common vision towards the company. However, different techniques can be followed to overcome resistance to strategic planning (Barksdale & Lund, pp.19). But, the open culture of Digital Chocolate makes it possible to offer a feedback of self-control and problems from events back to the planning process (Barksdale & Lund, pp.74).and thus reduce any future implications. Concluding, the defined mission and understanding of the problem will set a more effective working environment for the company. However, the decision regarding social gaming will not finish before building its implementation and effectiveness into it (Drucker, pp. 295). The proposed course of action along with Hawkins’ managerial effectiveness will be able to convert this decision to an action and complete the assignment.

References
• Barksdale, S. & T. Lund. (2006). 10 Steps to Successful Strategic Planning. ASTD Press. 16, 19, pp.
• Drucker, P. F. (2008). Management. Revised Edition, with Joseph A. Maciariello. HarperCollins. 295, 296, 120 pp.
• Linda A. Hill, Alison B. Wagonfield (2009). “Digital Chocolate”. Harvard Business School
• Richard. L. Daft. (2010).Organizational Theory and Design. 60, pp.
• Robert Kaplan, David Norton (2008). Balanced Scorecard. Harvard Business School
• Beer M., Yong S., Elizabeth Powers (1998). TerraCog Global Positioning Systems: Conflict and Communication on Project Aerial. HBR’s Must-Reads on Strategy. Harvard Business Review