SESSION 2015-2016

ASSIGNMENT
ON
MC KINSEY 7S MODEL

SUBMITTED TO:
Ms. PARAMJEET KAUR
SUBMITTED BY:
PALLAVI SETHI
M.COM-I
6728

MC KINSEY 7S MODEL
Tom Peter and Robert H Waterman were the two consultants who while in the MC Kinsey &
Co. Consulting firm developed the model in 1970s. The aim of this model was to measure
the effectiveness of an organisation.
When introduced in the late 1970s, the 7-S framework was a watershed in thinking about
organizational effectiveness. A previous focus of managers was on organization as structurewho
does what and who reports to whom. 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.
The central idea of this model was that there are 7 internal aspects which need to be aligned.
The model is most often used as an organizational analysis tool to assess and monitor changes
in the internal situation of an organization.

Placing Shared Values in the middle of the model emphasizes that these values are central to
the development of all the other critical elements. The company's structure, strategy, systems,
style, staff and skills all stem from why the organization 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.
The most common uses of the MC Kinsey framework are:

To facilitate organizational change.

To help implement new strategy.

To identify how each area may change in a future.

To facilitate the merger of organizations.

The McKinsey 7-S model involves seven interdependent factors which are categorized as
either "hard" or "soft" elements

HARD ELEMENTS

SOFT ELEMENTS

Strategy

Shared values

Structure

Skills

System

Style
Staff

HARD ELEMENTS
Hard elements are easy to defined and identified. These can be controlled by management. It
includes organisational charts, reporting lines, formal process etc.

Strategy
Strategy is the plan devised to maintain and build competitive advantage over the
competition. It is an action plan which an organisation prepares in advance to deal
with external environment. It is designed to transform the firm from present position
to the targeted position described by objectives It deals with 3 questions:

What is our strategy ?

How do we intend to achieve our objectives ?

How do we deal with competitive pressures ?

How are changes in customer demands dealt with ?

How is strategy adjusted for environment issues ?

Structure
Structure is the skeleton of the organisation. It is the way an organisation is structured.
It shows the authority and responsibility relationship. It shows who will report to
whom. Organisation can be structured in different forms depending upon various
factors. The choice of structure is influenced by organisational objectives and
organisational culture. Example Traditionally, the businesses have been structured in
a hierarchical way with several divisions and departments, each responsible for a
specific. Many layers of management controlled the operations, with each answerable
to the upper layer of management. But the recent trend is increasingly towards a flat
structure where the work is done in teams of specialists rather than fixed departments.
The checklist question under structure involves :

How is the company/team divided ?

What is the hierarchy ?

How do the various departments coordinate activities ?

How do the team members organise and align themselves ?

Is decision making and controlling centralised or decentralised ?

Where are the lines of communication ? Explicit or implicit ?

Systems
Systems are the daily activities and procedures that staff members engage in to get the
job done. Modern organisations are trying to simplify their systems by using modern
technology. Systems are the area of the firm that determines how business is done
and it should be the main focus for managers during organizational change.
Traditionally the organisations have been following a bureaucratic-style process
model where most decisions are taken at the higher management level and there are
various and sometimes unnecessary requirements for a specific decision (e.g.
procurement of daily use goods) to be taken. Increasingly, the organisations are

simplifying and modernising their process by innovation and use of new technology
to make the decision-making process quicker.
The core decisions regarding systems which need to be taken care of are as follows :

What are the main systems that run the organisation ? Consider financial and
HR systems as well as communication and document storage.

What are the controls and how are they monitored and evaluated ?

What internal rules and processes does the team use to keep on track ?

SOFT ELEMENTS
Soft elements are less tangible, difficult to subscribe and are influenced by the culture.
These are equally important as hard elements if an organisation wants to achieve
success.

Shared values
Shared Values are at the core of McKinsey 7s model. They are the norms and
standards that guide employee behaviour and company actions and thus, are the
foundation of every organization. These are also called "superordinate goals" when
the model was first developed and are the core values of the company that are
evidenced in the corporate culture and the general work ethic. The organisations with
weak values and common goals often find their employees following their own
personal goals that may be different or even in conflict with those of the organisation
or their fellow colleagues Typical questions involve :
What are the core values ?
What is corporate/team culture ?
How strong are the values ?
What are the fundamental values that the company/team was built on ?

Style
Style represents the way the company is managed by top-level managers, how they
interact, what actions do they take and their symbolic value. In other words, it is the
management style of companys leaders. It includes the leadership styles, norms,
values which developed overtime. How managers collectively spend their time and
attention and how they use symbolic behaviour. How the management acts is more
important that what management says The businesses have traditionally been

influenced by the military style of management and culture where strict adherence to
the upper management and procedures was expected from the lower-rank employees.
However, there have been extensive efforts in the past couple of decades to change to
culture to a more open, innovative and friendly environment with fewer hierarchies
and smaller chain of command. Typical questions involve :

How participative is the management/leadership style ?

How effective is that leadership ?

Do employees/team members tend to be competitive or cooperative ?

Are there real teams functioning within the organisation or are they just
nominal groups ?

Staff
Staff element is concerned with what type and how many employees an organization
will need and how they will be recruited, trained, motivated and rewarded. Modern
organisations prefer to hire best staff, provide them rigorous training, mental support
and motivate them to achieve excellence. All leading organisations such
as IBM, Microsoft, Cisco, etc put extraordinary emphasis on hiring the best staff,
providing them with rigorous training and mentoring support, and pushing their staff
to limits in achieving professional excellence, and this forms the basis of these
organisations' strategy and competitive advantage over their competitors. Typical
questions here would include :

What positions or specialisations are represented within the team ?

What positions need to be filled ?

Are there gaps in required competencies ?

Skills
Skills are the abilities that firms employees perform very well. They also include
capabilities and competencies. During organizational change, the question often arises
of what skills the company will really need to reinforce its new strategy or new
structure. Skills must b updated with adequate training and development facilities.
Typical question regarding skill are :

What are the strongest skills represented within the company/team ?

Are there any skills gaps ?

What is the company/team known for doing well ?

Do the current employees/team members have the ability to do the job ?

How are skills monitored and assessed ?

The 7-S framework highlights the importance of some interrelated and interconnected factors
within the organisation and their role in successful implementation of strategy. The successful
implementation of a strategy depends upon the right alignment of all seven Ss.
When the 7-Ss are in good alignment, an organisation is poised and energised to excuse
strategy to the best of its ability.

PROCESS OF USING MC KINSEY 7S MODEL

1. Identify the areas that are not effectively aligned

The first aim is to look at the 7S elements and identify if they are effectively
aligned with each other. One should already be aware of how 7 elements are
aligned in your company. In case this is not clear, then the checklist questions
should be looked at. After the questions outlined have been outlined, you should
look for the gaps, inconsistencies and weaknesses between the relationships of the
elements. For example, you designed the strategy that relies on quick product
introduction but the matrix structure with conflicting relationships hinders and so
theres a conflict that requires the change in strategy or structure.

2. Determine the optimal organisational design

With the help from top management, the second step is to find out what effective
organizational design you want to achieve. By knowing the desired alignment you
can set your goals and make the action plans much easier. First, there is a need to
find the best optimal alignment, which is not known to you at the moment, so it
requires more than answering the questions or collecting data. Second, there are
no templates or predetermined organizational designs that could be used and a lot
of research or benchmarking has to be done to find out how other similar
organizations coped with organizational change or what organizational designs
they are using.
3. Decide where and what changes should be made
This is basically the action plan, which will detail the areas that need to be
realigned and in what way. If it is found that the firms structure and management
style are not aligned with companys values, it should be decided how to
reorganize the reporting relationships and which top managers should the
company let go or how to influence them to change their management style so the
company could work more effectively.
4. Make the necessary changes
The implementation is the most important stage in any process, change or analysis
and only the well-implemented changes have positive effects. Therefore, it is
important to find the people in the company or hire consultants that are the best
suited to implement the changes.
5. Continuously review the 7s
The seven elements: strategy, structure, systems, skills, staff, style and values are
dynamic and change constantly. A change in one element always has effects on the
other elements and requires implementing new organizational design.

DRAWBACKS OF MC KINSEY 7S MODEL

It is easy to understand the model but much harder to apply it for your organization
due to a common misunderstanding of what should a well-aligned elements be like
External elements and environment has been totally ignored
It is very difficult to change soft elements

REFERENCES

https://www.strategicmanagementinsight.com/tools/mckinsey-7s-modelframework.html
https://www.mindtools.com/pages/article/newSTR_91.htm
http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/ourinsights/enduring-ideas-the-7-s-framework
http://university-essays.tripod.com/mckinsey_7s_framework.html
Strategic Management, Text and Cases, 2nd edition