Dawn Chmielewski, Julia Love, and Sheila Dang

(Reuters) – The success of Microsoft’s biggest deal ever rides on rehabilitating Activision Blizzard’s culture, Microsoft (NASDAQ:) CEO Satya Nadella declared after announcing the $69 billion transaction.

Accomplishing that will require Microsoft to deviate from its usual hands-off approach on acquisitions to tackle what amounts to a “clean up” job of fixing the famed maker of the “Call of Duty” games franchise, which faces multiple accusations of sexual harassment and misconduct, analysts and management experts say.

Rishi Jaluria, RBC Capital Markets analyst at RBC Capital Markets said that Microsoft allows companies it buys to operate independently. Microsoft has purchased LinkedIn, GitHub and Skype in recent years. Mojang is the creator of Minecraft video games from Stockholm. None of these companies have seen significant changes since they were acquired.

Activision’s Tuesday deal will need a stronger hand. Activision was sued by California regulators in July for allegedly “fostering a sexist environment.” It also has been the subject of investigative stories detailing allegations of sexual harassment internally, and its employees have staged walkouts to protest Activision’s response to the issues. Activision claimed it had received information requests from the U.S. Securities and Exchange Commission “regarding employment issues and related matters” and that they are cooperating.

One source says Bobby Kotick (Activision CEO), is set to leave the company following the closing of the transaction. However, “cultural issues are never one person,” Jaluria said. “There is going to be a lot more work for Microsoft.”

Company has started making improvements.

Activision has recently fired about 30 employees after an internal investigation.

The company’s Board of Directors established a Workplace Responsibility Committee in order to monitor the progress made by the company towards improving its culture.

Activision claimed that they have investigated complaints about harassment, discrimination, and retaliation. They will also continue their investigations and provide updates. Activision introduced a zero-tolerance policy for harassment in October.

Kotick stated to Reuters that he recognized the need for improvements in culture. He said, “We realized we had to create an environment where people are safe, comfortable, and respected.”

Microsoft spokeswoman said that the company was committed to inclusive gaming, and it is looking forward to “extending our culture for proactive inclusion to Activision Blizzard’s great teams (NASDAQ :).”).

Kathryn Harrigan of Columbia Business School, an expert in corporate turnarounds and growth, says that Microsoft’s capabilities are limited before it closes the deal by fiscal 2023. Microsoft has the ability to ask questions, collect data and declare that priority. She also said that Microsoft could gather data such as wage data in order to determine wage disparity. Activision settled a U.S. complaint in September by paying $18M. Equal Employment Opportunity Commission for sexual harassment, discrimination and other issues

After the deal closes, Microsoft can take a more active role by hiring advisers, bringing in law firms or mandating sensitivity training, said Brian Uzzi, a professor at Northwestern’s Kellogg (NYSE:) School of Management.

He suggested that Microsoft might also conduct its own investigation into the Activision culture.

Ultimately, Microsoft could decide to revamp Activision’s management team, Jaluria said.

LIGHT AT THE END OF TUNNEL

That would be good news for some Activision employees, who have demanded Kotick’s removal by staging a walkout and circulating a petition.

Jessica Gonzalez, an Activision worker who led worker activism, expressed cautious optimism that the conditions would improve after the acquisition. However, workers will still require better representation in the company to make lasting improvements.

Microsoft needs to address issues in its own culture. In January, the company’s board announced that it had hired a legal firm to evaluate its gender discrimination and sexual harassment policies. This was in response to a request by shareholders in November to Microsoft to review its policies.

That vote followed a Wall Street Journal report that Microsoft founder Bill Gates left the company’s board in 2020 amid a probe of the billionaire’s past intimate relationship with a female employee.

Nadella made a Jan. 13, statement announcing the plans for the review. It stated that the board values a safe, inclusive workforce. He called culture “our No. 1 priority.” He used similar language in his remarks Tuesday about Activision.