7S Model of Mc Kinsey PDF

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Full notes of lecture on McKinsey's 7S Model....

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7S Model of McKinsey Was first mentioned in The Art of Japanese Management in 1981. It’s a management model that describes the 7 factors to organise a company in a holistic and effective way. Together they determine the way in which a corporation operates. Managers should take into account all factors to be sure of successful implementation of strategy. Large or small the strategies are all interdependent so if you fail to pay attention to one of them then it is very likely to affect all others. 7S model is used to help analyse the current situation (Point A), a proposed future situation (Point B) and this helps identify the gaps and inconsistencies between them. It then means to adjust and tune the elements and ensure organisation works effectively. Hardware components – Managers can directly influence them  Strategy  Structure  Systems Software components – Less tangible and more influenced by culture.  Shared value  Staff  Style  Skills Model is used to assess and monitor the changes in the internal situation of the organisation. Placing shared values in the middle of the model emphasizes that these values are central to development of all other critical elements. The 7S explains why the organisation was originally created and what it stands for. The original vision of the company was formed from the values of the creators. As the values change, so do all the other elements. Soft elements are as important as the hard elements if the organisation is to be successful. A previous focus of managers was on organization as structure—who does what, who reports to whom, and the like. As organizations grew in size and complexity, the more critical question became one of coordination. the framework maps a constellation of interrelated factors that influence an organization's ability to change. The lack of hierarchy among these factors

suggests that significant progress in one part of the organization will be difficult without working on the others.

Strategy – Plan devised to maintain and build competitive advantage over competition. Structure – The way the organisation is structured and who reports to whom. Systems – The daily activities and procedures that staff members engage in to get the job done. Shared – Called “Superordinate goals” when the model was first developed. These are the core values of the company that are evidenced in the corporate culture and the general work ethic. Despite the fact that staff come from different cultural backgrounds there is a need for employees to understand what the organisation stands for, where it is going and to share the same organisational values. Style – The style of leadership adopted Staff – The employees and their capabilities. The staff recruited around the world need to be capable, well trained and given the jobs will allow them to make use of their talents. Recognitions of contributions of the staff, the criteria for advancement, acceptance of appraisal and disciplinary process vary considerably between countries. Skills – The actual skills and competencies of the employees working for the company. The sort of skills needs to carry out the strategy cary considerably across between countries and also over time as the firm grows rapidly and new strategies and sytems are introduced. Because the levels and quality of education vary, considerably, too an effective HM development strategy can be important to identigy and build the necessary skills. The model can be used in a variety of situations where alignment perspective is useful, for example.

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To help improve performance Examine likely effects of future changes within a company Align departments and processes during a merger of acquisition Determine how best to implement a proposed strategy

Examples: Starbucks in India -

They have a joint 50/50 partnership with Tata Starbucks Ltd and they operate Starbucks outlets in India. Tata Coffee serves coffee that is 100% locally sourced. The company objective is to become the most recognised and respected brand in the world Since day 1 they set out to be different and not only celebrate coffee but the rich tradition that bought a feeling of connections. Today they have more than 15,000 stores in 50 countries. Now they operate 63 outlets in 7 cities of India with 1000+ staff. Organisation constantly refers to Starbucks experience and believes in its coffee, friendly staff and comfortable meeting place. Didn’t follow franchising model but strategic alliance and joint ventures of international markets. They refer to employees as its partners and even offers part time workers same benefits such as health coverage. They purchase coffee directly from growers and regional associations rather than relying on import brokers. Employees are allowed to make decisions and participate...