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McKinsey 7-S Model
Strategy Structure Systems Style Staff Skills Superordinate goals
The hard elements are factual and easy to identify. They can be found in strategy statements, corporate plans, organization charts, and other documentation
The Hard S’s
McKinsey 7-S Model Strategy Structure Systems Style Staff Skills Superordinate goals
The soft elements are difficult to describe since they are continuously developing and changing. They are highly determined by the people at work in the organization.
The Soft S’s
7-S Model – The Hard S’s
Strategy Actions a company plans in response to or in anticipation of
changes in its external environment
Structure Basis for specialization and coordination, influenced
primarily by strategy and by organization size and diversity
Systems Formal and informal procedures that support the strategy
and structure (Systems are more powerful than they are given credit)
Strategy Structure Systems Style Staff Skills Superordinate goals
Organizational Structure
Organization Chartformal reporting relationships levels in hierarchyspans of controldepartmentalization
Systems to facilitate:coordinationcommunication integration
Strategy Structure Systems Style Staff Skills Superordinate goals
Structural Designs Functional Structure
Can adapt functional structure with horizontal linkages
Divisional Structure Geographical Structure Matrix Structure Horizontal Structure /
Product Line Structure Hybrid Structure
C h ie fA cco u nta n t
B u dg etA n a lyst
V ice P re sid e n tF ia na n ce
P la n tS u pe rin ten de nt
M a in te na n ceS u pe rin ten de nt
V ice P re sid e n tM a nu fa c tu ring
T ra in ingS p e c ia list
B e ne fitsA d m in is tra to r
D ire c to rH u m an R e so u rces
C E O
Strategy Structure Systems Style Staff Skills Superordinate goals
Other Organizational Forms Joint Ventures Licensing agreements Strategic Alliances Consortia Virtual organizations Global (transnational) Work Teams
Strategy Structure Systems Style Staff Skills Superordinate goals
Virtual Teams
Virtual Teams are characterized by: Distributed locations of team members Use of information technology to accomplish tasks Effective when:
Communication & collaboration skills are high. Trust among team members is high
Organizations are increasing their use of virtual teams
Potential for improvement in virtual team management is huge
Strategy Structure Systems Style Staff Skills Superordinate goals
Information Linkages
Vertical Information Linkages Hierarchy Rules and plans (i.e. budget)
Horizontal Information Linkages Information systems Liaison role Task force Integrator role (i.e. Project manager) Cross-functional teams
Strategy Structure Systems Style Staff Skills Superordinate goals
Ladder of Mechanisms for Horizontal Linkage and
Coordination
HIGH
LOW
LOW
Information Systems
Direct Contact
Task Forces
Full-time Integrators
Teams
Am
ount
of
Hori
zonta
lC
oord
inati
on R
equir
ed
Cost of Coordination in Time and Human Resources
H IGH
Systems – various elements
Communications practice and system Management reporting system Approval process Planning/budgeting system Rewards system including appraisal “Rules”
Strategy Structure Systems Style Staff Skills Superordinate goals
From Tasks to Structure
Tasks define jobs Jobs define skills required Skills (and other considerations) define
staff Over time skills change as staff gains
knowledge and experience, and as technology and corporate infrastructure mature
Collection of jobs basis for structure
Strategy Structure Systems Style Staff Skills Superordinate goals
Job design considerations Do they have the necessary skills and
knowledge to fulfill proposed / expanded job requirements?
What are the needs of the incumbent or the rest of your workforce in general? Monetary Growth Socialization
Strategy Structure Systems Style Staff Skills Superordinate goals
7-S Model – The Soft S’s - 1 Style / Culture
The culture of the organization, consisting of Organizational culture: the dominant values, beliefs and
norms which develop over time and become relatively enduring features of organization life
Management style: what managers do rather than what they say (where they spend their time and attention, what they allow, what they reward, etc)
Staff Skills Shared values /
Superordinate goals
Strategy Structure Systems Style Staff Skills Superordinate goals
7-S Model – The Soft S’s - 2 Style / Culture Staff
The people/human resource management – ways of shaping basic management values, processes used to develop managers, ways of introducing new employees and managing careers, socialization processes
Skills Distinctive competencies – what the company does best,
ways of developing or shifting competencies
Shared values / Superordinate goals Guiding concepts, fundamental ideas around which a
business is built – simple, usually stated at abstract level, have great meaning inside the organization, although outsiders may not see or understand them
Strategy Structure Systems Style Staff Skills Superordinate goals
Organizational Culture Culture is to organizations what
personality is to individuals
All companies have cultures Culture by default Culture by design – thoughtful choices
based on values and core beliefs
How does a company consciously create its culture?
Strategy Structure Systems Style Staff Skills Superordinate goals
Types of Organizational Cultures Control cultures –
Drive for predictability and order
Collaboration cultures – Pursue close relationship with customers
Competence cultures – Pursue excellence and innovation
Cultivation cultures – Pursue life enrichment for customers and employees
Strategy Structure Systems Style Staff Skills Superordinate goals
Organizational CultureOrganizational Culture Observable Evidence:
Symbols Ceremonies Stories Behaviors Language Dress
Underlying Roots: Values, Assumptions, Beliefs, Attitudes, Feelings
Strategy Structure Systems Style Staff Skills Superordinate goals
Culture in practice Conflict management
Relationship or interpersonal conflict Task / process conflict Functional vs. dysfunctional conflict Factors: goal incompatibility, limited resources,
differences
Power – the capacity to influence behavior Positional power: rewards/consequences, control
of resources, information and decision control Personal power: expert, referent (based on
identification and admiration)
Politics – the use of power to influence decisions
Strategy Structure Systems Style Staff Skills Superordinate goals
Planning & vs. Setting the budgeting direction
Organizing & vs. Aligning people staffing
Controlling & vs. Motivating people problem solving
Management vs. Leadership
Management is about coping with complexity Leadership is about coping with change
Management vs. Leadership Some managers (but not all) are leaders Some leaders (but not all) are good managers A manager gets work done through the efforts
of other people Includes planning, organizing, motivating, and
controlling
A leader creates and realizes a vision Communicates that vision and moves the
organization toward that vision Strategy Structure Systems Style Staff Skills Superordinate goals
McKinsey 7-S Model
Strategy Structure Systems Style Staff Skills Superordinate goals
Effective organizations achieve a harmony between these seven elements; if one element changes, then this will affect all the others
McKinsey 7-S Model
The 7-S Model can be a valuable tool to initiate change processes and to give them direction; i.e. determine current state and ideal state of each element, and develop action plans to close the gaps
Strategy Structure Systems Style Staff Skills Superordinate goals
McKinsey 7-S Model
In change processes, many organizations focus their efforts on the hard S’s; however, the soft factors can make or break a successful change process. All factors must be accounted for.
Strategy Structure Systems Style Staff Skills Superordinate goals
McKinsey 7-S Model
Interrelated Equilibrium Foundation of
corporate culture Levers available to
management
Strategy Structure Systems Style Staff Skills Superordinate goals
Executing Change – Seven Key Considerations
Strategic Intent Substance Scale Scope/Breadth Speed Sequence Style
Style
Scope Substance
Speed
Sequence
Scale
StrategicIntent
Strategic Intent
Substance
Scale
Scope/Breadth
Speed
Sequence
Style
Style
Scope Substance
Speed
Sequence
Scale
StrategicIntent
Precise Broad
Soft S’s Hard S’s
Small Large
Isolated Organization-wide
Slow Fast
Hard – Soft Soft – Hard
Top Down Bottom Up
Strategic Intent
Substance
Scale
Scope/Breadth
Speed
Sequence
Style
Style
Scope Substance
Speed
Sequence
Scale
StrategicIntent
Precise Broad
Soft S’s Hard S’s
Small Large
Isolated Organization-wide
Slow Fast
Hard – Soft Soft – Hard
Top Down Bottom Up
Obsolete Confusion
Long term Quick
Low risk High risk
Not absorbed Can distract
Low momentum Sustainable?
Big bang Inflexible?
Coercive Participation
Coherent
Robust
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