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STRATEGIC MANAGEMENT ASSIGNMENT-1

Topic: - Detailed study of McKinsey 7-S framework

Submitted by:Mohammed.H.T 08d1634 V BBA ‘B’

INDEX
S NO. 1 2 3 4 5 6 7 TOPIC The Mckinsey 7- S Framework Description of 7-S McKinsey's 7- S model of Hewlett-Packard (HP) Comparitive McKinsey 7-S Model for HP, Dell & Acer Recent News - Anatomy of Agile Enterprise Conclusion Bibliography PAGE NO. 3 to 6 7 to 11 12 to 17 18 to 19 20 to 23 24 25

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systems. two consultants working at the McKinsey & Company consulting firm. strategy. skills. staff. style. focus on the change levers which leaders. By extension. The framework was devised to encourage managers to extend their thinking beyond the commonly accepted key variables of strategy and structure. [1] The key factors distinguishing the 7-S framework from the traditional approach to organizational effectiveness. the basic premise of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful. much of what the 7-S approach embodies is the direct result of observing organizations run by leaders as opposed to managers. in fact. [2] 3 . A framework for analyzing and implementing organizational change based on the interrelationship between seven key factors that contribute to organizational effectiveness: structure. have always manipulated to effect organizational change and to achieve superior performance. and super ordinate goals. as distinct from managers.THE McKINSEY 7-S FRAMEWORK-OVERVIEW Ensuring that all parts of the organization work in harmony Developed in the early 1980s by Tom Peters and Robert Waterman.

management.Article Name:. The Seven Elements The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements: Hard Elements Strategy Structure Systems Soft Elements Shared Values Skills Style Staff "Hard" elements are easier to define or identify and management can directly influence them: These are strategy statements. p209-209. for example to help you: • • • • Note:- Improve the performance of a company.Craig M Watson Source:. 1/5p [2] – Article Name:. and formal processes and IT systems.Leadership. 4 .The 7S model can be used in a wide variety of situations where an alignment perspective is useful. Determine how best to implement a proposed strategy. Issue 3. 2001. Align departments and processes during a merger or acquisition.Mckinsey 7s framework Source:-Dictionary of Human Resource Management. Examine the likely effects of future changes within a company.McKinsey Quarterly. and the seven keys Author:. Autumn83. [1] . p45. organization charts and reporting lines.

However. management. the typical manager is seen as over relying on the "hard" S’s (strategy. skills. p44 McKINSEY 7 S MODEL IN DETAIL The shape of the model was also designed to illustrate the interdependency of the variables. [3] Note:. Issue 3. can be more difficult to describe."Soft" elements. This is illustrated by the model also being termed as the "Managerial Molecule". on the other hand.Craig M Watson Source:. In terms of the McKinsey 7-S model.McKinsey Quarterly.Article Name:. these soft elements are as important as the hard elements if the organization is going to be successful. Autumn83. staff and shared values) helps to galvanize his organization into superior long-term performance.[3] . and the seven key Author:. structure and systems). While the authors thought that other variables existed within complex 5 .Leadership. and are less tangible and more influenced by culture. while the leader's mastery of the "soft" elements (style.

g.g. strategy and systems) while neglecting the other variables. 1982). the notion of performance or effectiveness is not made explicit in the model. These other variables (e. At Dana it is productivity improvement. staff and shared values) are considered to be "soft" variables. the variables represented in the model were considered to be of crucial importance to managers and practitioners (Peters and Waterman.organisations. "At IBM. The analysis of several organisations using the model revealed that American companies tend to focus on those variables which they feel they can change (e. quality. they feel that the variables should be changed to become more congruent as a system. Japanese and a few excellent American companies are reportedly successful at linking their structure. The authors have concluded that a company cannot merely change one or two variables to change the whole organisation. the values are pursued with an almost religious zeal. The operating principle at well-managed companies is to do one thing well. At McDonald's it is customer service. At P&G it is product quality. While alluded to in their discussion of the model. For long-term benefit. strategy and systems with the soft variables. style." states Thomas Peters. the all-pervasive value is customer service. At 3Mand H-P it is new product development. although the authors do acknowledge that other variables exist and that they depict only the most crucial variables in the model. The external environment is not mentioned in the McKinsey 7S Framework. skills. At all these companies. and cleanliness and value. [4] 6 . structure.

Autumn83. Thus. subject to constraints of the capabilities or the potential (Ansoff. Structure: Business needs to be organised in a specific form of shape that is generally referred to as organisational structure. or anticipation of.Article Name:.Craig M Watson Source:. changes in its external environment.McKinsey Quarterly. 1965). Strategy is differentiated by tactics or operational actions by its nature of being premeditated. strategy is designed to transform the firm from the present position to the new position described by objectives. Organisations are structured in a variety of ways.Note:. 2) where the organisation wants to be in a particular length of time and 3) how to get there.[4] . 7 . well thought through and often practically rehearsed. management. and the seven keys Author:. p47 Description of 7 Ss Strategy: Strategy is the plan of action an organisation prepares in response to. It deals with essentially three questions (as shown in figure 2): 1) where the organisation is at this moment in time. Issue 3.Leadership.

The structure of the company often dictates the way it operates and performs (Waterman et al. For example. beliefs and norms which develop over time and become 8 . the organisations are simplifying and modernising their process by innovation and use of new technology to make the decision-making process quicker.dependent on their objectives and culture. the recent trend is increasingly towards a flat structure where the work is done in teams of specialists rather than fixed departments. with each answerable to the upper layer of management. Traditionally. The idea is to make the organisation more flexible and devolve the power by empowering the employees and eliminate the middle management layers (Boyle. 2007). 2005). 1980). the businesses have been structured in a hierarchical way with several divisions and departments. production or marketing.. These processes are normally strictly followed and are designed to achieve maximum effectiveness.g. It includes the dominant values. Although this is still the most widely used organisational structure. a company may follow a particular process for recruitment. 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. Increasingly. each responsible for a specific task such as human resources management. procurement of daily use goods) to be taken. Special emphasis is on the customers with the intention to make the processes that involve customers as user friendly as possible (Lynch. Many layers of management controlled the operations. Style/Culture: All organisations have their own distinct culture and management style. Systems: Every organisation has some systems or internal processes to support and implement the strategy and run day-to-day affairs.

Cisco. This may be to make money or to achieve excellence in a particular field.relatively enduring features of the organisational life. and pushing their staff to limits in achieving professional excellence. etc put extraordinary emphasis on hiring the best staff. 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 (Martins and Terblanche. and this forms the basis of these organisations' strategy and competitive advantage over their competitors. Microsoft. 9 . However. These values and common goals keep the employees working towards a common destination as a coherent team and are important to keep the team spirit alive. It is also important for the organisation to instil confidence among the employees about their future in the organisation and future career growth as an incentive for hard work (Purcell and Boxal. providing them with rigorous training and mentoring support. innovative and friendly environment with fewer hierarchies and smaller chain of command. All leading organisations such as IBM. there have been extensive efforts in the past couple of decades to change to culture to a more open. Shared Values/Superordinate Goals: All members of the organisation share some common fundamental ideas or guiding concepts around which the business is built. Staff: Organisations are made up of humans and it's the people who make the real difference to the success of the organisation in the increasingly knowledge-based society. 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. 2003). 2003). Culture remains an important consideration in the implementation of any strategy in the organisation (Martins and Terblanche. away from the traditional model of capital and land. It also entails the way managers interact with the employees and the way they spend their time. 2003). The importance of human resources has thus got the central position in the strategy of the organisation.

Third. management. Second. the Japanese are. First. Issue 3.[5] . It is therefore highly important to gather as much information about the organisation as possible from all available sources such as organisational reports. Culture certainly plays a part. and the seven keys Author:. What is crucial is the presence of the soft and the hard instruments in balance. for example. good management does not depend on the presence of leadership.Article Name:.g.than are Western managers whose culture stresses different values. The hard components are the strategy. news and press releases although primary research. e.McKinsey Quarterly. managerial performance Is multivariate. The researcher also needs to consider a variety of facts about the 7S model. although in many cases it is enhanced by leadership qualities. The seven components described above are normally categorised as soft and hard components. This is because the model covers almost all aspects of the business and all major parts of the organisation. apparently. but what is more significant is that excellent performance in organizations in Japan or in the West depends on achieving harmony among all seven keys to organization. [5] Note:.Craig M Watson Source:.On the issue of culture and its impact (whether Japan. structure and systems which are normally feasible and easy to identify in an organisation as they are normally well documented and seen in the form of tangible objects or reports such as strategy 10 . using interviews along with literature review is more suited. p51 Using the 7S Model to Analyze an Organization A detailed case study or comprehensive material on the organisation under study is required to analyse it using the 7S model. more inclined to use the soft tests of management -as an extension of their cultural norms . the 7-S framework offers important insights. Autumn83. is more likely to produce leaders than the West).Leadership.

flexible and dynamic culture in the organisation where the employees are valued and innovation encouraged. 11 . Over the last few years. The capabilities. for example. normally through observations and/or through conducting interviews.statements. For example. Some linkages. This is. can be made between the hard and soft components. The remaining four Ss. Changing the culture and overcoming the staff resistance to changes. not easy to achieve where the traditional culture is been dominant for decades and therefore many organisations are in a state of flux in managing this change. however. It is also noted that the softer components of the model are difficult to change and are the most challenging elements of any change-management strategy. however. however. especially the one that alters the power structure in the organisation and the inherent values of the organisation. they can have a great impact on the structure. However. values and elements of corporate culture. it is seen that a rigid. if these factors are altered. corporate plans. there has been a trend to have a more open. are continuously developing and are altered by the people at work in the organisation. organisational charts and other documents. strategies and the systems of the organisation. hierarchical organisational structure normally leads to a bureaucratic organisational culture where the power is centralised at the higher management level. are more difficult to comprehend. It is therefore only possible to understand these aspects by studying the organisation very closely. What compounds their problems is their focus on only the hard components and neglecting the softer issues identified in the model which is without doubt a recipe for failure. is generally difficult to manage.

HP in fact integrates customer focused thinking in each and every aspect of the business to ensure an improvement in their strategies. An important internal strategy of HP is its focus on diversity and inclusion where it feels that all the employees put out their differences in the world. HP follows an ISO 9001:2000 quality policy to ensure that there is no sacrifice in terms of quality from the company.MCKINSEY’S 7S MODEL FOR HEWLETT-PACKARD STRATEGY:- The premium strategy followed by HP is to ensure customer satisfaction through the provision of high quality goods and services to earn their respect and loyalty. its major focused strategy is that behaviors and actions which 12 . Moreover. it will result in personal leadership from everyone in the company.

Another strategy of HP is that their EMEA Business Management System is run in a centralized functional manner to ensure smooth operations of the business throughout the world. The process architecture is designed to meet customer expectations and provide leadership and support. A web-based tool delivers easy access and helps the process owner provide input and maintain information with minimum administrational effort. responsibilities and performance metrics. The 13 . The HP Business Management System in EMEA is a framework for process-based business management. compensation and benefits and workforce management programmes. The HP management team empowers management representatives within each business function to lead the deployment of their total customer experience and quality strategy and to administer the Business Management System to best meet their customers’ changing business needs. organization design. The HR system is guided and operated to carry out recruitment and selection. they evaluate internal and external processes and use these findings to drive continuous improvements in the system. with special emphasis placed on simplicity. The HR and Financial Systems in the company also are quite advanced. All business-relevant processes are documented. It defines the key processes that create value for their customers. EMEA stands for Europe. clarity and disclosure of mandatory information such as links to other processes.support diversity and inclusion come from the conviction of employees which will make diversity and inclusion a conscious part of how they run the business throughout the world. employee and industrial relations. SYSTEM:- HP follows a unique and custom-designed system based on their area of operations which is known as the EMEA Business Management System. Document and data accuracy are automatically controlled by the system. Middle-East and Africa. training and development. In line with their overall strategy.

Learning at HP is flexible. There is a lot of diversity to be handled yet HP`s vision towards it has made its strategy to handle this diversity very successful. inclusion as a conscious part of them. it’s only natural that we also provide our global team with advanced e-learning tools.” Given our legacy. HP stresses on its employees not only to be well versed in their respective hardware fields but also to be able to groom their interpersonal skills to ensure that the strategy of diversity acceptance and customer satisfaction are achieved at higher levels. In the words of Senior Vice President and Managing Director. technology and systems to achieve high levels of automation and flexibility. In the case of the job skills required HP looks not only for educational qualifications but also for fair amount of work experience. It believes that the overall development of an employee is through fabricating diversion. HP EMEA and Technology Solutions Group who mentioned that. SKILLS:- The skills required by HP employees are of technical as well as interpersonal in nature. HP encourages employees to plan and create their own development path.” STAFF:- HP has a staff of more than one hundred thousand people coming from more than 170 countries around the world. with the support you need to grow and win. fast and rewarding. However there 14 .Finance section follows a system of tracking and consolidating actual results to review performances and make business decisions with accuracy. and a learner site that makes it easy to pick and choose training courses based on your needs and interests. Its key focus is to improve processes. Being known for providing a good workplace among multinationals its employees undergo several personality development workshops to improve their interpersonal skills. The staff of HP is trained in all dimensions so that they ultimately achieve their goal of earning the respect and loyalty from customers in the form of customer satisfaction.

They put their customers before everything they do.’ At HP.A culture of inclusion is created which is built on trust.has been a bit of downsizing during the period 2005-2007 where employee size has reduced by 20%. Results through teamwork: . Achievement and Contribution: . dignity and respect for all.Strive for Excellence. managers are expected to get out of their executive cabins and discuss the site work with the line workers. integrity and framework in the 15 . Uncompromising integrity: . adaptable and achieve results faster than their competitors.They are resourceful.Producing the useful and significant is their motto. Meaningful Innovation: . Speed and Agility: . SHARED VALUES:- The shared values of HP are:• • • • • • • Passion for customers: . Each person’s contribution in the organization is key to their success. STYLE:- The management style followed at HP is known as ‘THE HP WAY’ which according to David Packard means ‘managing by walking around.Honesty is the best policy along with due fairness and directness in their dealings. Managers need to build a framework of trust.Collaboration is essential to efficiently serve the customers. Corporate objectives are laid down to ensure the proper functioning of The HP way. Trust and respect for individuals: .

Switzerland Asia Pacific Hong Kong 16 . HP thinks ‘Belief in one another’ is the best way to manage the diversity in the organization. Africa Geneva. Middle East. The adoption of this style and its traditional acceptance by the company has made it one of the best places to work in the world.organization. STRUCTURE:The organization structure of HP can be seen from two viewpoints:On the basis of area of activity:- Hewlett Packard Americas Houston. The HP way has been a reason for many employees to continue for a long period of time at HP. Moreover. Hewlett and Packard themselves went to sites and discussed with the employees. everything regarding important decisions made bust be made transparent to the employees by mangers at HP. Texas Europe. This leadership style which was adopted in 1957 is still in the roots although little modifications have been made to survive in the competitive environment of the Notebook world.

HP Services ("HPS"). The three business segments ESS. and Corporate Investments. Imaging and Printing Group ("IPG"). Personal Systems Group ("PSG"). • • • • • • • Enterprise Storage and Servers ("ESS"). HPS and HP Software are structured beneath the broader Technology Solutions Group (TSG) in order to capitalize on up-selling and cross-selling opportunities.On the basis of product there are seven business segments. HP Software. and given the solution sale approach across the HP enterprise offerings 17 . HP Financial Services ("HPFS").

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19 .COMPARITIVE MCKINSEY 7S MODEL FOR HP. Dell follows a management system based on customer leverage to build upon its direct customer relationships network. Acer on the other hand has technical based expert programmes and the skills system is also a little orthodox.200 employees who aim at customer satisfaction. Finally. SYSTEM:The EMEA business management system followed at HP mainly is a very advanced system designed to bring about continuous improvement in the entire organization. Acer. Moreover. Dell uses more of mentoring techniques to develop a variety of skills in the employees. Moreover Dell’s strategy is to maximize flexibility and minimize the costs through proper operational expansion. Acer on the other hand has a smaller labor force of 5300 employees in more than 100 countries to provide maximum efficiency. follows a very strict product standardization system and a very sustainable environmental management system. HP has one lakh people coming from 170 countries who strive to expertise in all the dimensions of the field while Dell has 65. HP also requires work experience and technical skills to ensure diversity and inclusion. While HP`s strategy is mainly in two halves. SKILLS:A common trend seen in the skills required by the employees of the three companies is that of interpersonal skills and the companies also provide extensive training to their employees at different levels and in various fields of expertise. The human resources system and the financial systems in all the three companies are very advanced. STAFF:The staff of all the companies are directed towards the company goals and objectives and also come from diverse backgrounds. DELL AND ACER STRATEGY: The three companies have very vibrant and strong fundamental strategies. Acer’s strategy is brand management and brand diversification where it has gone for rapid and vast expansion through the optimum utilization of its resources. on the other hand. firstly it is customer oriented which is achieved through the provision of high quality goods and services and employee oriented which is seen through the incorporation of diversity and inclusion in the company objectives.

HP also follows an organization structure based o its products while Dell also follows a departmental organization structure. achievement. Middle East and Australia. 20 .SHARED VALUES:The shared values of all the three companies are very core to the companies’ antecedents and their values. Dell has on the other a mix of participatory and democratic style of managing. employees and its shareholders. STRUCTURE:All the three companies follow the organization structure based on the area of activity or geographic activity mainly divided into Asia. HP believes in teamwork. Dell’s shared values are that of integrity and ethical behavior. Acer on the other hand a very flexible style of managing to ensure participation and development. Acer’s values are purely based on the well-being of its customers. HP follows the HP way which indicates ‘managing by walking around’. STYLE:The style followed by the three companies is very different from each other. innovation. North America. contribution and passion for its customers. It also believes that work is worship and to work wisely and accordingly. Yet the main motto of all the companies behind the adoption of their respective styles is the progress of the company as well as the stakeholders of the company. Europe.

g. (1980) refer to "those actions that a company plans in response to or anticipation of changes in its external environment − its customers. its successful execution lies in other dimensions of the 7S framework. The first level that can justifiably be said dealing with strategy is Stratum III. 2010 By "strategy". Strategy is an organization's way of creating unique value and improving its position vis-à-vis competition. a sales office or retail outlet.RECENT NEWS Anatomy of Agile Enterprise Stratification Underlies Agility. As the direct actions are seeking stability and rejecting change. there is no strategy at Stratum I. The diagnostic accumulation at Stratum II is also reactive in nature and does not call for much planning ahead. and has a defined scope. Korhonen on May 31. Operations Strategy at this level is specific to an operating unit. 21 . Waterman et al. e. Part 3: Strategy By Janne J. While strategy is a critical variable in organization design. Stratum III Stratum III is about making trade-offs between carrying out the known work load with a completion date of three to six months later and predicting the changing requirements of the as-yet-unknown but probable work load for an additional year by extrapolating from current trends. Changes are incremental and strategies based on experience. its competitors". The major emphasis is on cost-effectiveness and on maximizing resource productivity. Operations Strategy contributes to the functional strategy of Stratum IV. leveraging any synergies and distinctive competencies that the business has.

on the distinctive competencies to pursue. The strategic issues are related to business processes and the value chain. on positioning the business vis-à-vis product/service life-cycles. on scope of the business. and strategies are based on observable opportunities. Functional Strategy at this level is about efficient and effective development and coordination of resources within the key functional areas. Discontinuous changes are unpredictable and call for creative strategies that change the very business model of the business. Work above this level is increasingly about creating the future rather than predicting it. It focuses on the business model. considering whether known alternative systems exist that might allow the work to be done better. Stratum V Stratum V seeks novel change. changes are discontinuous. Related change is sought through pairwise comparison of Stratum III systems. Business Unit Strategy at this level is developed within a single-business company or a business unit of a multi-business corporation. 22 . and on the integration of functional strategies. It cannot be predictably forecast what the future holds and how to plan for it.Stratum IV At Stratum IV. Functional Strategy provides Business Unit and Corporate Strategies with information on resources and capabilities and translates higher-level strategic plans to actionable departmental plans. but predictable.

inter-organizational strategies such as joint ventures and alliances have not been seen as integral to the organization's strategic framework. only their businesses do. where individual companies are concentrating on their core competencies while relying on external parties to provide complementary skills. However. customers.Stratum VI Ascending to Stratum VI denotes a major transition to the next order of complexity: from the relatively stable. Corporate Strategy at this level focuses on how multi-business organizations develop their existing business units. acquire or create new ones. Diversified companies do not compete in individual markets. and associations. The focus of strategy is on value innovation. open and interdependent "system of systems" of networked organizations. suppliers. competitors. Inter-organizational Strategy at this level is concerned with the relationships between the organization and its partners. Corporate Strategy must focus on the success of each of its Stratum V business units. virtual organizations. Stratum VII Stratum VII is about developing and pursuing alternative worldwide strategic plans to provide society with new concepts and ideas. in the face of intensifying competition and globalization. 23 . co-creation and dynamics of the business ecosystem. This calls for a new perspective to strategy. closed and controllable system of a self-sufficient business or business unit to the relatively fluid. are becoming the unit of competition. Most notably. Typically. and retreat from businesses to ensure sustainable corporate viability. inter-enterprise networking has grown in importance and deserves dedicated attention. Thereby.

political. Enterprise Strategy at this level addresses the organization's role in society. and it is considered how the enterprise serves them. at least implicitly. The mission and purpose of the enterprise is defined. legal. including all aspects of its environment: economic. Stakeholders are identified. Answers to fundamental questions such as "How do we fit in?" and "What do we stand for?" provide the guidelines to more specific strategies at lower strata.Stratum VIII Stratum VIII is about setting the corporate mission and vision. and technological. social. 24 .

Infosys. Issue 3. I would like to conclude that the challenges of the future can be efficiently tapped by the usage of such efficient frameworks and maximum achievement of the set strategic goals and objectives would be possible Note:. as we have used the terms. Autumn83. Mckinsey 7 S framework has been used by more than 70 companies to make a fruitful gain out of it. The entire framework created is for the overall development of the individual and the organization and the achievement of the integrated goals of the organization and individual.[6].McKinsey Quarterly. p 52 25 . Therefore. and the seven keys Author:.Leadership. [6] As per my learning. Outstanding companies are distinguished not by the leaders who head them or by the managers who run them.CONCLUSION The awareness created by the 7-S approach to organizational effectiveness should benefit organizations run by either leaders or traditional managers. the Mckinsey 7 S framework is one of the most advanced techniques for analyzing the organizational environment and today it is used by many companies such as IBM. but rather by the manner in which leadership and management are harmonized to create a climate in which work is both uncommonly meaningful and unusually effective.Article Name:. management. Oracle to understand their organization and make effective changes so as to make the environment conducive.Craig M Watson Source:.

csu.BIBLIOGRAPHY Books:Management Concepts by S.gif 26 .ebizq. Issue No.A Sherlekar Himalaya Publishing House Edition:.net/blogs/agile_enterprise/2010/05/stratification-underlies-agilitypart-3-strategy.ebscohost. Pg 42-56 Websites: http://search.com/mckinsey_7s_framework. VI.htm http://www.html http://www.com/login.tripod.com/login.ebscohost.php http://hsc. Vol No.aspx?direct=true&db=buh&AN=6753733&site=ehostlive" "http://search.com/pages/article/newSTR_91.au/ind_tech/ind_study/organisation/figure2.edu.aspx? direct=true&db=buh&AN=25505911&site=ehost-live" http://university-essays. 4.2004 Pages – 80-81 Journals:The Icfai Journal on Business Strategy.mindtools.