SEMINAR REPORT

ON

MC KINSEY’S 7S FRAMEWORK

SUBMITTED TO

DR. P. MOHAN

PROFESSOR

DCMS

SUBMITTED BY

NEETHU BALAKRISHNAN

VIJILA P.J.

III SR. MCOM

DCMS

CONTENTS
 PAGE
SL.NO: PARTICULARS
NO:

1. ABSTRACT 1

2. INTRODUCTION 2

3. LITERATURE REVIEW 3

4. ANALYSIS & DISCUSSION 4

5. SUMMARY & SUGGESTIONS 11

6. REFERENCES 12

ABSTRACT
McKinsey's 7S Model was created by the consulting company McKinsey and

Company in the early 1980s. Since then it has been widely used by practitioners

and academics alike in analyzing hundreds of organizations. The paper explains

each of the seven components of the model and the links between them. It also

includes practical guidance and advice to analyze organizations using this model.

The McKinsey 7S model was named after a consulting company, McKinsey and

Company, which has conducted applied research in business. The McKinsey 7S

Framework was created as a recognizable and easily remembered model in

business. The seven variables, which the authors term "levers", all begin with the

letter "S".

INTRODUCTION
The McKinsey 7S model can be applied to elements of a team or a project as well.

The alignment issues apply, regardless of how you decide to define the scope of

the areas you study.

The 7S model can be used in a wide variety of situations where an alignment

perspective is useful, for example to help you:

 Improve the performance of a company.

 Examine the likely effects of future changes within a company.

 Align departments and processes during a merger or acquisition.

 Determine how best to implement a proposed strategy.

The 7 s model is useful for three purposes, firstly, as an expository device, it helps

managers and analysts understand the corporate culture in their organizations.

Secondly, as a comparative device, it helps strategists evaluate their organization

along each of the seven dimensions, thereby identifying organizations strength and

weaknesses. Thirdly, as tool of strategy implementation, the seven S models help

managers change the attributes of the corporate culture which they consider vital to

success and to do so in a systematic way.

LITERATURE REVIEW
Developed in the early 1980s by Tom Peters and Robert Waterman, two

consultants working at the McKinsey & Company consulting firm, 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. The model is based on the theory that,

for an organization to perform well, these seven elements need to be aligned and

mutually reinforcing. So, the model can be used to help identify what needs to be

realigned to improve performance, or to maintain alignment (and performance)

during other types of change.

Originally conceptualized in 1977, but publicized only in the 1980’s, the Mc

Kinsey’s 7S framework is a powerful addition to the arsenal of organizational;

strategies. Peters and Waterman (1982) call strategy and structure the “hardware”

of organization and suggest that the software, style, systems, staff, skills and

shared value are often ignored by the corporate strategists. Athos and Pascale

(1981) call structure, strategy and systems “the hard S “and staff, skill, style and

shared value the “soft S”.They argue that “the four soft” elements can no, longer

be regarded as frosting on the corporate cake. They are indispensable parts of any

corporate commitment to long time success.

ANALYSIS AND DISCUSSION

We can use the 7S model to help analyze the current situation (Point A), a

proposed future situation (Point B) and to identify gaps and inconsistencies

between them. It's then a question of adjusting and tuning the elements of the 7S

model to ensure that your organization works effectively and well once you reach

the desired endpoint. Whatever the type of change - restructuring, new processes,

organizational merger, new systems, change of leadership, and so on - the model

can be used to understand how the organizational elements are interrelated, and so

ensure that the wider impact of changes made in one area is taken into

consideration.

The Seven Elements

The McKinsey 7S model involves seven interdependent factors which are

categorized as either "hard" or "soft" elements:

Hard Elements Soft Elements

Strategy Shared Values

Structure Skills

Systems Style

Staff

"Hard" elements are easier to define or identify and management can directly

influence them: These are strategy statements; organization charts and reporting

lines; and formal processes and IT systems.

"Soft" elements, on the other hand, can be more difficult to describe, and are less

tangible and more influenced by culture. However, these soft elements are as

important as the hard elements if the organization is going to be successful.

The way the model is presented in Figure 1 below depicts the interdependency of

the elements and indicates how a change in one affects all the others.

6
Let's look at each of the elements specifically:

 Strategy:

Strategy is the plan of action an organization prepares in response to, or

anticipation of changes in its external environment. It’s the plan devised to

maintain and build competitive advantage over the competition Strategy is

differentiated by tactics or operational actions by its nature of being premeditated,

well thought through and often practically rehearsed. Thus, strategy is designed to

transform the firm from the present position to the new position described by

objectives, subject to constraints of the capabilities or the potential.

7
 Structure:

It’s the way the organization is structured and who reports to whom

Business needs to be organized in a specific form of shape that is generally

referred to as organizational structure. Organizations are structured in a

variety of ways, dependent on their objectives and culture. The structure of

the company often dictates the way it operates and performs. Traditionally,

the businesses have been structured in a hierarchical way with several

divisions and departments, each responsible for a specific task such as

human resources management, production or marketing. Many layers of

management controlled the operations, with each answerable to the upper

layer of management. Although this is still the most widely used

organizational structure, the recent trend is increasingly towards a flat

structure where the work is done in teams of specialists rather than fixed

departments. The idea is to make the organization more flexible and devolve

the power by empowering the employees and eliminate the middle

management layers.

 Systems:

It’s the daily activities and procedures that staff members engage in to get

the job done. Every organization has some systems or internal processes to

8
 Support and implement the strategy and run day-to-day affairs. For example,

a company may follow a particular process for recruitment. These processes

are normally strictly followed and are designed to achieve maximum

effectiveness. Traditionally the organizations 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 organizations are simplifying and modernizing

their process by innovation and use of new technology to make the decision-

making process quicker. Special emphasis is on the customers with the

intention to make the processes that involve customers as user friendly as

possible.

 Style/Culture:

It’s the style of leadership adopted All organizations have their own distinct

culture and management style. It includes the dominant values, beliefs and

norms which develop over time and become relatively enduring features of

the organizational life. It also entails the way managers interact with the

employees and the way they spend their time. The businesses have

9
 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. Culture remains an important consideration in

the implementation of any strategy in the organization.

 Staff:

It refers to the employees and their general capabilities.Organisations is

made up of humans and it's the people who make the real difference to the

success of the organization in the increasingly knowledge-based society. The

importance of human resources has thus got the central position in the

strategy of the organization, away from the traditional model of capital and

land. All leading organizations 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 organizations’

strategy and competitive advantage over their competitors. It is also

10
 important for the organization to instill confidence among the employees

about their future in the organization and future career growth as an

incentive for hard work .

 Shared Values/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. All members of the organization share some common fundamental

ideas or guiding concepts around which the business is built. This may be to

make money or to achieve excellence in a particular field. 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. The

organizations with weak values and common goals often find their

employees.

 Skills:

It refers to the actual skills and competencies of the employees working for

the company.

11
 SUMMARY AND SUGGESTION

The McKinsey 7Ss model is one that can be applied to almost any organizational

or team effectiveness issue. If something within your organization or team isn't

working, chances are there is inconsistency between some of the elements

identified by this classic model. Once these inconsistencies are revealed, you can

work to align the internal elements to make sure they are all contributing to the

shared goals and values.

The process of analyzing where you are right now in terms of these elements is

worthwhile in and of itself. But by taking this analysis to the next level and

determining the ultimate state for each of the factors, you can really move your

organization or team forward.

It is noted that the softer components of the model are difficult to change and are

the most challenging elements of any change-management strategy. Changing the

culture and overcoming the staff resistance to changes, especially the one that

alters the power structure in the organization and the inherent values of the

organization, is generally difficult to manage.

12
 REFERENCES

1. http://www.mindtools.com/pages/article/newSTR_91.htm

2. STRATEGIC MANAGEMENT , ARTHUR SHARPLIN ,MCGRAW HILL

PUBLICATIONS ,1985

3. http://www.valuebasedmanagement.net/methods_7S.html

4. http://university-essays.tripod.com/mckinsey_7s_framework.html

5. http://www.mckinseyquarterly.com/Enduring_ideas_The_7-

S_Framework_2123

6. http://en.wikipedia.org/wiki/McKinsey_7S_Framework