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Module 7 - Drive

The document discusses McKinsey's 7S Framework, a model for analyzing organizational design through seven key elements: Structure, Strategy, Systems, Skills, Style, Staff, and Shared Values. It emphasizes the importance of aligning functional strategies across various departments to achieve overall business objectives, detailing specific plans and policies for finance, marketing, operations, personnel, and information management. The framework aims to enhance organizational effectiveness by illustrating the interactions among these elements.

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2 views

Module 7 - Drive

The document discusses McKinsey's 7S Framework, a model for analyzing organizational design through seven key elements: Structure, Strategy, Systems, Skills, Style, Staff, and Shared Values. It emphasizes the importance of aligning functional strategies across various departments to achieve overall business objectives, detailing specific plans and policies for finance, marketing, operations, personnel, and information management. The framework aims to enhance organizational effectiveness by illustrating the interactions among these elements.

Uploaded by

rahh954
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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MODULE 7

STRATEGIC
IMPLEMENTATION
MC-KINSEY’S 7S FRAMEWORK
• The Model was published in 1982 by Tom Peters and Robert Waterman in their
book , ‘In Search for Excellence’.

• The authors were consultants at McKinsey at that time and were strongly influenced
by Japanese organizations.
• The McKinsey 7S Model refers to a tool that analyzes a company’s “organizational
design.” The goal of the model is to depict how effectiveness can be achieved in an
organization through the interactions of seven key elements – Structure, Strategy,
Skill, System, Shared Values, Style, and Staff.
HARD ELEMENTS

1. Structure

• Structure is the way in which a company is organized – the chain of command (knowing who takes
instructions from whom) and accountability relationships that form its organizational chart.

2. Strategy

• Strategy refers to a well-curated business plan that allows the company to formulate a plan of action
to achieve a sustainable competitive advantage, reinforced by the company’s mission and values.

3. Systems

• Systems entail the business and technical infrastructure of the company that establishes workflows
and the chain of decision-making. (processes and procedures that conducts a
business’s daily activities.)
SOFT ELEMENTS
4. Skills
• Skills form the capabilities and competencies of a company that enables its employees to
achieve its objectives.
5. Style
• The attitude of senior employees in a company establishes a code of conduct through their ways
of interactions and symbolic decision-making, which forms the management style of its leaders.
6. Staff
• Staff involves talent management and all human resources related to company decisions, such
as training, recruiting, and rewards systems
7. Shared Values
• The mission, objectives, and values form the foundation of every organization and play an
important role in aligning all key elements to maintain an effective organizational design.
(norms and behaviour that are expected from all)
FUNCTIONAL PLANS AND
POLICIES
• Functional strategy refers to a business strategy that focuses on the action plans
by a particular functional area in order to achieve the set business objectives. It
aims at improving the effectiveness of a firm's operations across various
functional units or departments. It helps align the strategies of all these
operating departments with the overall business strategy.

• For example, if the overall goal is to increase market share, the marketing
department's functional strategy might be to create a new marketing campaign.
Conti…
FUNCTIONAL STRATEGY DEVELOPMENT
• Functional strategies are developed to support the operational strategy and business
goals. They detail the specific actions and activities that need to be carried out in each
area of the business. Functional strategies address how a business will produce its
products or services, market them, finance them, and organize its operations.
• Deals with a relatively restricted plan designed to achieve objectives in a specific
functional area, allocation of resources among different operations within that
functional area and coordination among different functional areas for optimal
contribution to the achievement of the business and corporate level objectives.
STRATEGY LEVELS &
FUNCTIONAL PLANS
Conti…
1. FINANCIAL PLANS AND POLICIES
i. Sources of Funds:
Capital structure, procurement of capital and working capital borrowings, reserves and
surplus, relationship with lenders, banks and financial institutions.
ii. Usage of Funds:
Capital investment, fixed asset acquisition, current assets, loan and advances, dividend
decisions etc.
iii. Management of Funds:
The system of finance, accounting and budgeting, cash, credit and risk management, cost
control and reduction etc.
Conti…

2. MARKETING PLANS AND POLICIES


i. Product:
Quality, features, choice of models ,brand names, packaging etc.
ii. Pricing:
Discount, mode of payment, allowances, payment period, credit terms etc.
iii. Place:
Channels to be used, transportation, logistics and inventory storage management and coverage of
markets etc.
iv. Promotion:
Advertising, personal selling, sales promotion and publicity.
Conti…

3. OPERATIONS PLANS AND POLICIES


i. Production System
Capacity, location, layout, product or service design, work systems, degree of
automation, extent of vertical integration.
ii. Operations Planning and Control
Aggregate production planning; materials supply; inventory, cost and quality
management; and maintenance of plant and equipment.
iii. Research and Development
Product development, personnel and facilities, level of technology used, technology
transfer and absorption, technological collaboration and support.
Conti…
4. PERSONNEL PLANS AND POLICIES
i. Personnel System
Manpower planning, selection, development, compensation, communication and appraisal.
ii. Organizational and Employee Characteristics
Corporate image, quality of managers, staff and workers, perception about and image of
the organization as an employer, availability of development opportunities for employees,
working conditions.
iii. Industrial Relations
Union-management relationship, collective bargaining, safety, welfare and security,
employee satisfaction and morale.
Conti…
5. INFORMATION MANAGEMENT PLANS AND POLICIES
i. Acquisition and Retention of Information
Sources, quantity, quality and timeliness of information, retention capacity and security of
information.
ii. Processing and Synthesis of Information
Database management, computer systems, software capability and the ability to synthesize
information.
iii. Integrative, Systemic and Supportive Factors
Availability of IT infrastructure, its relevance and compatibility to organizational needs,
upgradation of facilities, willingness to invest in state-of-the-art systems, availability of
computer professionals and top management support.

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