Activision Blizzard, a video game developer that produces popular titles like World of Warcraft and Call of Duty, is not only a case study in how not to respond to allegations of sexual harassment and discrimination in the workplace—it’s also the latest blatant showing of managerial recklessness in an industry ripe for transformational change.

Jaclyn Jaeger is a freelance contributor to Compliance Week after working for the company for 15 years. She writes on a wide variety of topics, including ethics and compliance, risk management, legal,...