Blizzard grew from a very small company of less than 300 people pre-WoW to a massive global team of over 3000 employees in a pretty short time span (8 years). Unfortunately, the management structure of the company has not evolved at the same pace, so the company is managed much like a smaller, do-it-yourself organization. This works OK at best when there's a single game release in a year, but in years when there are multiple releases, huge Cataclysm-size cracks appear at the seams. It also makes Blizzard a slow, ponderous player in an industry that is becoming more nimble and agile.
Some of the small company management styles that lead to issues:
- A very flat organizational structure that leads to a lack of promotional opportunities.
- Old timers who are so well compensated that they aren't going anywhere any time soon, further reducing promotional opportunities.
- Titles are depressed and not in line with what colleagues at other companies are doing.
- Very small number of decision makers in the company. VPs regularly weighing in on minute business decisions that can/should be handled by Directors or Managers. As a result, middle managers don't feel very empowered.
- Management by committee. Meetings take up a lot of time and end up with no clear resolution because no one is empowered to make a decision.
- Would rather build than buy. Certain groups would rather create their own internal solutions to technical issues rather than adapt off-the-shelf technology. No stomach for using external developers to create games based on Blizzard IP (including mobile/iOS games), limiting the number of projects that can be supported.
- Lack of communication between functional groups leads to confusion and mistakes.
- Org structure on the business side set by old historical decisions (dev is sacred so the business guys shouldn't bother them; the web team should be a separate entity from PR/Community/Marketing).
- Very insular view of the game industry as a whole- lack of corporate participation in key round tables, keynotes, etc. except by a very small number of Execs (Morhaime, Pierce, Pardo, Metzen)- does not bring new ideas into the company or encourage learning/sharing of best practices.