Organizational Management Assignment: Case Study Analysis Of Fivecent Media
Case study: Stop Work
The chrome and glass façade of Fivecent Media’s main offices in North Ryde, Sydney, gleamed in the warm Autumn sun. On the broad front terrace, a crowd of camera-ready demonstrators from the Game Developers Union (GDU) milled about and chanted: “No deal, no code, no games!”
The protesters presented signs that equated Fivecent’s management to the blood-soaked villains of the video games that had spurred the company’s growth. Members of the GDU – among them nearly half of Fivecent’s 10,000 employees – had been working without a contract for three months. The programmers were well paid, to be sure, but their deadlinedriven, round-the-clock coding marathons made for short and exhausting careers. Adding to labour-management tensions were the layoffs that had hit the gaming industry in waves since late 2008, fuelling rumours of potential cutbacks at Fivecent.
The protest was loud but lightly attended – most of the programmers remained at their computers. Hero’s Duty 2, the new title by star developer Catsumi Wakatanabe, was weeks behind schedule. Though his hit rate with games was sky-high, he wasn’t so hot with deadlines. Catsumi drifted away from a conference-call with coding teams in San Francisco and Tokyo to peer out the window. A couple of coders passed behind him from the direction of the vending machines.
“I’d sure rather be out there protesting,” said one to the other. “Fivecent’s trying to screw us on the revenue sharing.”
“Dude,” said the other coder, “the longer this thing drags out, the worse the market’s gonna be. If those clowns don’t cut a deal soon, we’ll get termination letters instead of a raise.”
Catsumi chuckled. The two held up their cans in a mock toast and then hustled back to their desks. Consumed by his work, Catsumi hadn’t been giving much thought to the contract talks. Still, the conflict was there, in the back of his mind, triggering low-grade anxiety. A strike would prevent his team from working on Hero’s Duty 2, but it wouldn’t stop Fivecent from completing the job with non-union programmers. Given the game’s current raw state, he was determined to see the project through to completion – a thought that returned his attention from the protest outside to his call with the programming teams.
Two months after the protest, Coretta Lee, Fivecent’s business lawyer and lead negotiator, wandered around the vast show floor of the E3 expo in Darling Harbour. She had just given a presentation on strategies to combat online game piracy and was enjoying the chance to walk off residual adrenaline.
Her company’s humongous booth showcased its forthcoming releases, including the latest first-person shooter sensations, I Think, Therefore I Kill and War Zone: Campbelltown, teed up for the holiday season.
As she meandered, Coretta thought about two internal reports she’d recently read. The first asserted pessimistically that Fivecent’s revenue from internet games would be negligible for at least the next three years. It concluded that the ad-supported model would struggle to overcome advertiser distaste for Fivecent’s typical use of violence, and that the pay for-play model would meet strong resistance from the free-content internet culture.
But from what Coretta could see, the expo told a different story: She noted a big jump in internet games being offered this year compared with last year. Almost every booth had a section devoted to online gaming, and a number of web-based game companies were touting their multiplayer offerings.
The second report provided hard evidence that the sour economy was finally hurting the supposedly recession-proof video game sector. For example, one of Fivecent’s top rivals, GameCrack Sofware, had just laid off more than 10% of its workforce.
Coretta’s phone vibrated against her hip, defeating the show floor’s noise. It was Fivecent’s CEO, Yasser Teti. “Hang on, Yasser,” she yelled into the phone, while virtual .50-caliber machine-gun shells tore through the air to her left. “I need to find a quieter place.”
Coretta knew Yasser hated events like this. He would come for half a day, give his keynote speech, schmooze his way around the show-floor as though he loved it more than life itself, and then flee back to North Ryde – where he could badger people like her from a safe distance.
“I’m listening,” said Coretta once she’d gotten off the floor.
“Let’s start up negotiations again,” Yasser said, “while the GameCrack layoffs are fresh in everyone’s mind. Do you think it’s too late to take the pay raise off the table?”
Back in December, Fivecent had proposed a three-year deal with the GDU that would boost pay and benefits 5% annually, a raise that looked even more generous now than it had when the company first offered it. But the sticking points involved two other issues: the company’s desire to transition the GDU from revenue-sharing to profit-sharing, and the union’s demand to extend its jurisdiction to games made for the internet as well as those for PCs and consoles. If Fivecent could deny (or at least delay) GDU jurisdiction over internet games, the company would be buying time to hire non-union programming talent for its fledgling online ventures.
“The raise is the least of our problems,” said Coretta.
“Tell me about it – did you see what the stock did today?”
“That’s putting it mildly,” said Yasser. “And the latest sales figures show us down year over year. The market says we’re going to miss our numbers – and I have no doubt we will, thanks to our talkative but deadline-impaired star developer.” Catsumi had told CNET, on the record, that the release date for Hero’s Duty 2 was going to slip because he wasn’t happy with the way the characters looked and was planning to overhaul the code.
“Brilliant,” said Coretta.
“Oh, yeah,” said Yasser. “Genius is a curse – especially for those who depend on it but can’t control it. Maybe the economy gives us some leverage.”
“Let me see if I can set up a negotiating session,” said Coretta.
On a foggy Friday in early July, Coretta stood in a North Ryde watching Catsumi redo the motion capture for Hero’s Duty 2. Yasser had asked her both to show Catsumi some love and to give him a little push.
As a black-garbed figure bounced and pirouetted from a trampoline – “Soar! You are a crane, not a frog!” Catsumi shouted – Coretta scanned the room and noticed programmers gathering along a back wall. Fivecent employees were caucusing with Reid Gunther, a coder who was on the GDU negotiating committee. She watched for a few minutes and realised that the people gathered around him were among Fivecent’s most senior coders. And their body language was forceful.
The contract stalemate had worsened a rift in the union between hardliners, who dominated the negotiating committee, and pragmatists like Reid, who were eager to claim the raises that the company had offered late last year. Coretta wondered whether the action at the back of the room might signal an impending coup. Up front, a heavyset figure bounded on the trampoline likes an overcaffeinated panda – “Yes! Yes!” Catsumi cried, delighted. “Perfect!” But Coretta suspected that the real gymnastics were occurring in the shadows.
Sure enough, she saw Reid huddling later with Catsumi.
Certain that something was up, Coretta pulled Reid aside. “You know, the way the market is going, the company’s offer is looking less tenable by the day,” she said. “If GDU wants something resembling the deal that’s been on the table, you’d better not waste any time.”
Reid nodded. “I’ve been getting that message from everyone.” “Catsumi?” Coretta asked. Reid shrugged. But she guessed that the developer had pressed for a fast settlement to keep his game from slipping away.
“He loves his creations, doesn’t he?” she said.
“As well he should,” Reid replied. “He’s two years ahead of everybody else.”
“Are you ready to come back to the table?” she asked.
“It’s not my call,” said Reid. “But this has dragged on way too long. Everyone’s stomach is in knots – including mine.”
“Mine too,” said Coretta.
Three days later, Reid entered the meeting room of the InterContinental Hotel in Circular Quay for the first formal talks with Fivecent since the contract lapsed in January. Over the weekend his role had changed – he’d become lead negotiator. Coretta hardly seemed surprised that the union had shaken things up, and that unnerved Reid slightly. He hoped there were still a few secrets she hadn’t found out, including Catsumi’s recent ultimatum: that at the drop of a picket sign, he would leave to start his own non-union internet game development shop – and lift out the Hero’s Duty team to staff it.
Reid cleared his throat and launched right in. “The members have made it clear that they’re not happy with the impasse. It’s delayed raises and increased anxiety. We are ready to accept most of the company’s offer from last year, provided that the pay provisions are retroactive to the end of the last contract.”
“Most of the offer?” Coretta responded. “What does that mean? What else are you looking for?”
“We would drop our demand for accelerated revenue sharing. But we don’t want to shift to profit sharing, and we still want jurisdiction over games made for the internet – at least for those with budgets of $150,000 or higher.”
“Reid, neither of those terms is acceptable. The downturn is killing our sales, the holidays are shaping up to be a nightmare. Just look at the latest quarterly report! Our offer has to reflect these market changes.” Reid watched her face darken as she paused before delivering the really bad news. “We’re now offering pay increases of 2% in the first year, then 4% and 5% in the second and third years. And no retroactivity.”
Reid looked startled. “The members won’t accept a deal with so much less pay than the original offer. Fivecent needs Hero’s Duty 2, Coretta. That means it needs Catsumi. And he’s with us.” He chose not to mention Catsumi’s threat.
Reid and Coretta looked hard at each other. Somehow, they would have to find common ground.
When the bargaining session wrapped up, Coretta called Yasser and told him that Reid and his team showed a much better grasp of where the game business was headed than their predecessors had.
“Reid seems more open to the idea of replacing the current revenue-sharing model,” said Coretta, “just not right away. But he knows those payments are going down. And he knows we need an alternative to retail.” Yasser just grunted in response.
Driving home, Coretta wondered if a good quid-pro-quo might be to give the GDU a foothold online, where a growing share of Fivecent’s dollars would inevitably be invested.
The next morning, Coretta arrived at work to find Yasser reviewing marketing materials for Hero’s Duty 2.
“This is moronic,” he said, holding up poster art that showed a central beacon covered with dozens of Cy-Bugs, one of the game’s monsters. “It just screams, ‘DON’T BUY ME!’”
Coretta shrugged; she had heard that the art tested well with focus groups. But she kept quiet and waited him out before making her pitch about the negotiating strategy. “It wouldn’t hurt Fivecent to give a little ground on internet jurisdiction,” she ventured, “as long as we get the compensation provisions right. Plus, I’m confident that in the next contract cycle GDU will go for a shift from revenue sharing to profit sharing. Maybe we could even build a transition to profit sharing into the third year of the contract.”
“Hey, if you want to be friends with them again, that’s your call,” said Yasser, “but I think you ought to just declare a last, best, and final offer – no further concessions. The union’s a mess! No way could they get the 75% they’d need to authorise a strike.”
“Maybe,” said Coretta. “But…”
Yasser interrupted her. “If we play it tough, they’ll fall apart,” he said. “Jeez, they can’t even agree with themselves! They’ll have another power struggle and lose more members. And we’ll keep paying last year’s rates, plus buy time to find new developers offshore. Isn’t that better?”
His phone rang. Coretta stepped out and refilled her coffee, a little staggered by her boss’s militant approach. She took a few sips, giving Yasser some time to finish his phone call and settle down. She wondered how hard she could push the union without triggering a strike. On the other hand, what minor concessions could she offer that might yield a deal saving both Fivecent’s numbers and its freedom to manoeuvre online?
When she returned to Yasser’s office, Coretta asked whether she had any wiggle room to build the raises back up closer to the original offer. He grimaced.
We could afford it – just barely – but Wall Street will kill us if we don’t win more givebacks.”
“They’ll also punish us if GDU walks out,” she said.
Yasser laughed. “No chance of that in this economy. They’d be insane.”
“You have no idea, Yasser. Who knows how long they could hold out? They live on ramen and Red Bull.
As a senior management and leadership consultant, you have been hired to offer a solution to the problem described in the case study. Prepare a report on organizational management assignment addressing the following points:
- Using at least three theories covered in this subject (your choice), analyse the attached case study to describe the situation. Explain each relevant theory or concept, clearly relate it to the information in the case study and justify its relevance to the case presented.
- Based on the analysis you have conducted; prepare a set of recommendations for the managers and for the employee. Justify and reference your suggestions and recommendations based on the theories and concepts discussed.
The overall report on organizational management assignment will be based on the given case study, wherein it has been identified that a given company named Fivecent Media is experiencing some kind of issues that are related to the management and project team leading. Therefore, as a senior management and leadership consultant, the overall issue will be solved by using the three relevant theories, i.e., Management Theory, Leadership Theory, and Negotiation Theory. Furthermore, the overall case study will be analyzed as per the given theories and thus, will be given a recommendation on the same issues.
About the Case Study
As per the given case study, it has been found that Fivecent Media has been facing some kind of management as well as leadership issues, wherein the CEO of the company, Yasser Teti, seems to have no interest in employees who works for the company and whatever the organizational issues that they were facing altogether. It is noticed that Yasser is not at all interested in attending meetings, events, and programs; he would hardly visit for half a day and deliver a keynote speech to the employees. Considering the same, the overall case study is based on the mismanagement wherein he lacks to lead the team for effective organizational performance and motivate the employees as well as does not care about the employees' concerns. Therefore, taking into consideration all of the management and leadership issues that are related to the case study, the three relevant theories have been discussed accordingly.
Theories that are relevant to Case study
Management theories are the group of common rules that direct the managers to handle as well as control the firm. This theory emphasizes the responsibility of the organization, supervision, and group performance. Hence, this theory is generally relevant to the given case study, as there seems to have a management issue within the company. However, the three types of management theories are:
Classical Management Theory- This theory mostly focuses on the perceptions that employees only have financial and physical requirements and recommends specialization of employment. Hence, this theory suggests fundamental leadership and decision-making and focuses on increasing revenue (WGU, 2021). Thus, as per the case study, it has been identified that Fivecent is not able to increase their productivity, and that is the reason why they are not able to fulfill the demand of GDU (Game Developers Union).
Behavioural Management Theory- This theory reflects on the individual aspects of work and also frequently indicates the movement of human relations, but Fivecent's CEO does not want to be part of employee gatherings, events, and so on. Thus, this theory seeks to acquire a better interpretation of human behavior at the workplace in order to recover output. This theory generally focuses on the employees in order to meet the organizational and individual goals. Therefore, this theory reflects on motivations, expectations, disputes, and team dynamics for better performance outcomes (Technofunc.com, 2021).
Modern Management Theory- This theory focuses on the practice of systematic mathematical techniques to evaluate and interprets the inter-association of management and employees in all factors. However, considering the case study, it can be said the relationship between the employers and employees seems to be disturbed wherein the GDU shows protest against the management and raise of pay.
Leadership theories are said to be a school of reflection that brought forward to articulate how and why some individuals turn out to be leaders. The theory focuses on the behaviors and traits that managers can execute to enhance their abilities of own leadership (Burns, 2017). Hence, considering the case study, under leadership theory, Contingency theory is relevant to the given scenario. The theory is directly linked with the situational approach and was proposed by Fred Edward Fiedler, an Australian Psychologist. The theory focuses on the significance of both the situation and personality of leaders. Fiedler and his co-workers examined leaders in various contexts, thus with their findings of the research, they have drawn two leadership styles, and they are:
- Relationship motivated
Task indicates the task execution, and relationship motivation indicates relationships within interpersonal. Thus, it has been found that Fiedler considered leadership style with the LPC scale that is Least Preferred Co-Worker Scale. Within this scale, the high scoring is motivated concerning relationship, and those who score low are task motivated. Thus, considering the LPC scale by Fiedler, it can be said that within the case study, it shows that the CEO of Fivecent has neither of these styles to manage and lead the team for more revenue and productivity (Tlu.ee, 2021). As the central to contingency theory is a situational conception that is featured by three aspects, and they are as follows:
- Relationships of the leader and the employees that deal with the common environment of the group and the sensations like reliability, faith, and confidence in which the team has for its leader
- Structure of task that is associated with task transparency and the means to the completion of the task
- The power of position that is related to the figure of reward-retribution control the leader has over group members.
However, it can be said that the three factors of this theory resolute the several favourableness situations in organizations. As per the case study, the organizational management of Fivecent is not in the position where proper management should be; therefore, they need to follow contingency theory for the situation they are facing currently. Thus, considering the case study, the management team needs a better and effectively leading leader to overcome the revenue growth issues.
Fig 1- Contingency Theory
Sources- (Tlu.ee, 2021)
Under leadership, the trait theory focuses on recognizing different characteristics and personality traits that are associated to successful leadership around different situations. This line of study takes place as one of the initial types of investigations into the nature of effective leadership and is joined to leadership theory of Great Man first projected by Thomas Carlyle in the middle of 1800s. This theory mostly associated with great leadership that focuses on flexibility and adaptability, assertiveness, capacity to motivate people, creativity, courage and resolution, eagerness to accept liability, emotional stability, trustworthiness, perseverance and intelligence and action-oriented judgment (Cherry, 2021).
Considering the case study, a dispute between Fivecent and GDU were discussed as in back December, Fivecent had offered a three-year deal with the GDU that may increase pay and benefits annually by 5%, an increment that looked, even more, giving now than it had while the firm initially offered it. Therefore, it can be said that the trait theory is relevant to the given case study, and the CEO of Fivecent must give emphasize the protest and find out the solution that is effective for both the parties is Fivecent and the GDU. Hence, the CEO needs to have the above mentioned leadership traits in order to maintain the working environment and know the necessities of the employees. As this theory provides valuable information about leadership, which seems to be important for Fivecent. Fivecent can apply this theory within the workplace at all levels in all types of organizations. Thus, this theory makes the management aware of their weaknesses and strengths and thus they get an interpretation of how they can develop their qualities of leadership.
After analyzing the overall theories, it can be said that the CEO of Fivecent must focus on the management and leadership issues and find out the solution considering the given theories. Based on the above discussions, a set of recommendations as well as suggestions have prepared for managers and employees that leads to effective management and better leadership quality to achieve the shared organizational objectives, and they are as follows:
Need to Build a responsive and effective interpersonal relationship- Considering the case study, the management needs to build a responsive and effective interpersonal relationship by the manager through collaborating and reporting the team members, senior managers, and colleagues. They must have integrity, reliance, and attentiveness within the team member for effective work in the future (Heathfield, 2021).
Building a strong team- A formation of a strong team needs to be developed to avoid a decline in performance and earn more revenue that will eventually help the management to overcome the payment increment issues. Building a team allows other employees to coordinate more effectively with one another and makes them more creative as well as productive. Thus, the managers should let the employees know openly when they are impeding the progress of the team members.
Communicates effectively- It is said that an effective manager is the one who interacts and communicates effectively in person, texts, print, and email. Listening and two-way review or feedbacks characterize interactions with others. Therefore, a manager needs to be very friendly and must communicate effectively with the team members. Considering the given case study, the CEO of Fivecent seems to be a person intolerant, who does not like to attend meetings, events, and this will leads to miscommunication and disturbance in the working environment (Knight, 2016). Therefore, effective communication is said to be the most in order to achieve individual as well as organizational goals.
Must understand the financial aspects of the company- Both the managers and employees must understand the financial aspects of the business, which can be helpful for the management it operates effectively. Within the given case study, it seems like the employees were not known about the financial and marketing issues wherein they were not able to raise the payment of the employees as the company was not earning as per their requirements (Hill, 2021). Here, it can be said that effective communication and interactions between managers and employees can build understanding and can be effective for organizational goals.
Must create a positive work environment- A positive work environment can be a reason for business accomplishment and growth. Thus, as per the case study, the head of the management was not interested in motivating employees and solve the issues that the management was facing for further operations. Thus, it can be said that creating a positive environment can have positive morale and recognition, as well as employees are most motivated to work harder for the set organizational goals.
Consequently, it can be said that Fivecent must have a positive work environment and an effective leader as well as management for better organizational performance. Therefore, it can be said that the management needs to follow the above-discussed theories in order to solve or overcome issues that they have faced. However, a set of recommendations has been given in order to maintain peace and a positive environment in the workplace as well as fulfill the requirement or demand of GDU. To conclude, it can be said that a successful manager understands the financial goals of the company and conveys to the employees and Fivecent needs the same.
Burns, W.A. (2017). A Descriptive Literature Review of Harmful Leadership Styles: Definitions, Commonalities, Measurements, Negative Impacts, and Ways to Improve These Harmful leadership Styles. Creighton Journal of Interdisciplinary Leadership, 3(1), p.33.
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Heathfield, S., 2021. 7 Great Tips for Your Success as a Manager. [online] The Balance Careers. Available at:
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Knight, M., 2016. The Importance of Conversation. Business and Professional Communication Quarterly, 79(3), pp.267-269.
Technofunc.com, 2021. TechnoFunc - Management Theories. [online] Technofunc.com. Available at:
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WGU, 2021. Leadership Theories and Styles. [online] Western Governors University. Available at: