Does the organization effectively use technology to transfer best practices across the

organization, codify knowledge, and develop dynamic capabilities for competitive

advantage?

Zynga has failed miserably in the use of its own technology as a tool to develop the company’s
human capital. It was not able to sustain the massive growth in developing games for social
media platforms which eventually led to decline on the year 2012. In this section of the paper,
we will point out each problems that were not resolved timely, and things Zynga ignored in
developing their human capital throughout the whole organization.

Lack of innovation – A product of weak knowledge workers

In an article written by McKenzie (n.d) in the All Business website, the former CEO of Zynga,
Mark Pincus, was said to be allowing under-performing employees in Zynga in variety of roles,
having low salaries with contributions. Pincus asked these unproductive employees in return, to
give back the unvested shares to the company which were promised to the employees in
performing their original jobs. Not only this is unethical, it also started a fire on the public
relations of the company, causing these whole scenario to be tagged as the “Stock Scandal of
Zynga”.

As a result, few investors including the supposed to be game and software developers, where
discouraged to associate with Zynga. It causes the company to have “poisoned” its own
recruiting pool which in consequence, causes the lack of innovation and product development. In
an article written by Kain (2012), Zynga management has cause the stock value to plummet for
about 75%; starting from the IPO of $10 per share to a precarious $2.48. It is to be noted that it
all happened in less than a year, although studies have shown that netizens did not stop playing
Facebook games. Due to this failure, Zynga has shifted to raising ad costs to its games and
partially changing the company structure to compete with the mobile game industry.

Inability to codify knowledge of best practices among employees

In Zynga’s shift to the mobile game industry, the company has to compete with the big rivals like
Kings, the producer of Candy Crush Saga, and SUPERCELL, the creator of the top game, Clash
of Clans. However, for Zynga, it is difficult to develop a big-hit game, knowing that there is a
high rate of continuous employee layoffs causing some of its developers to worry about when
they will get fired. This is all due to games that didn’t sell in the market. Fewer games are
needed to be made to sustain the company’s position. Zynga’s management has failed to
communicate effectively to the employees regarding the company goals and strategies to succeed
in the new industry. Currently, 60% of its income are coming from the mobile games they have
produced, and experts have suggested that the company’s standing in the mobile game industry
is not viable. This shows that Zynga has weak human capital and ineffective communication
among its employees.

McKenzie, M. (n.d). The problem with Zynga. All Business: Your Small Business Advantage.
Retrieved from https://www.allbusiness.com/the-problem-with-zynga-16720339-1.html\

Kain, E. (2012). Zynga’s decline points to much bigger problems. Forbes. Retrieved from
https://www.forbes.com/sites/erikkain/2012/10/06/zyngas-decline-points-to-much-
bigger-problems/?sh=16425f454f1f

Johnson, E. (2015). How do you solve a problem like Zynga?. Vox: Recode. Retrieved from
https://www.vox.com/2015/2/13/11559030/how-do-you-solve-a-problem-like-zynga