The success of Microsoft’s biggest deal ever is based on rehabilitating Activision Blizzard’s culture, Microsoft CEO Satya Nadella said after announcing a $ 69 billion transaction.
To achieve this, Microsoft will demand that it deviate from its usual hands-free approach to acquisitions to address what constitutes the job of “cleaning up” fixing well-known game franchise maker Call of Duty, which faces multiple allegations of sexual harassment and indecency. behavior, analysts and management experts say.
Activision CEO Bobby Kotick, whose conduct in connection with the alleged misconduct has sparked media criticism, is expected to leave the company after the transaction closes, according to one source. However, “cultural issues are never one person,” Jaluria said. “There will be a lot more work for Microsoft.”
Activision, for its part, has already begun to make changes.
The company recently laid off about three dozen employees after its own investigation and said it has made high-level personnel changes and increased its investment in anti-harassment and discrimination training since last October. His board of directors formed the Workplace Accountability Committee to oversee the company’s progress in improving culture.
Activision also agreed to pay $ 18 million in September to resolve a complaint filed by the U.S. Equal Employment Opportunity Commission over sexual harassment and discrimination.
The company said it had investigated – and would continue to investigate – complaints of harassment, discrimination and retaliation and would update it regularly. In October, Activision announced a zero-tolerance harassment policy.
People trained as soldiers to promote the video game Call Of Duty Black Ops 3 at the Gamescom fair in Cologne, Germany, 2015.
“We recognized that we need to improve our culture and provide an environment where people feel safe, comfortable and respected,” Kotick said.
A Microsoft spokesman said the company is committed to inclusion and respect in games and is “looking forward to spreading our culture of proactive engagement to great teams across Activision Blizzard”.
Before the deal is expected to close by fiscal 2023, Microsoft is limited by what it can do, said Kathryn Harrigan, a professor at Columbia Business School who specializes in corporate growth and turnaround. In addition to declaring it a priority, Microsoft can ask questions and collect data, she said, adding that one good place to start is collecting information such as payroll data to identify pay gap.
After concluding the contract, Microsoft can take a more active role by hiring advisors, bringing in law firms or committing to sensitivity training, said Brian Uzzi, a professor at Northwestern’s Kellogg School of Management.
Microsoft could also launch its own culture investigation at Activision, he added.
In the end, Microsoft could decide to reorganize Activision’s management team, Jaluria said.
That would be good news for some Activision employees, who sought Kotick’s removal by arranging a departure and petitioning.
Jessica Gonzalez, a former Activision employee who helped lead labor activism, said she was cautiously optimistic that conditions would improve after the acquisition. But workers still need better representation in the company to achieve lasting change, she said.
Microsoft will have to overcome its own cultural problems. The company’s board of directors said in January that it had hired a law firm to review its policy of sexual harassment and gender discrimination after shareholders backed a November proposal calling on Microsoft to review the effectiveness of its policies.
That vote followed a Wall Street Journal report that Microsoft founder Bill Gates left the company’s board of directors in 2020 amid an investigation into the billionaire’s past intimate relationship with an employee.
Nadella issued a statement on January 13 announcing audit plans, saying the board appreciates the importance of a secure and inclusive workforce. He called culture “our number one priority”. He used similar language in his comments on Tuesday about Activision.
