Friday, January 11, 2008

Strategy & McKinsey 7S Framework - An Intro

Strategy

In general, strategy can be termed as a plan for achieving success, the combination of decisions & activities to achieve the goals. Strategy is the path we choose. Strategy not only fits in organizations context but also to individuals. Everyone need to identify what they want to achieve and the how to make it possible in every aspects.


McKinsey 7S Framework

McKinsey 7S framework is considered as one of the major landmarks made in Strategic Management. The McKinsey 7S model was named after a consulting company, McKinsey &Co., which has conducted applied research in business and industry. (Pascale & Athos, 1981; Peters & Waterman, 1982).

All of the authors worked as consultants at McKinsey and Company; in the 1980s, they used the model to analyze more than 50 large organizations. The McKinsey 7S Framework was created as a recognizable and easily remembered model in business.


General Usage of Model

The 7S model can be used in a wide variety of situations where an alignment perspective is useful, for example:

  • Improve the performance of an organization
  • Examine the likely outcome of future changes within an organization
  • Align departments and processes during a merger or acquisition
  • Determine how best to implement a proposed strategy

7S model is so generic, which can be used to align project teams and issues related to departments also.


The Seven Elements of McKinsey Model

7smodel


The basic premise of the model is that there are seven interdependent internal aspects of an organization(which the authors term "levers") that need to be aligned if it is to be successful.

They are Structure, Strategy, Systems, Skills,

Style, Staff and Shared Values ( it is called as 7S as all begin with the letter "S")



These 7S are categorized as either “hard” or “soft” elements:


Hard Elements Soft Elements
Structure Shared Values
Strategy Skills
Systems Staff

Style

Hard” elements are feasible and easy to define or identify in an organization as they are normally well documented and seen in the form of tangible objects or reports such as strategy statements, corporate plans, organizational charts and other documents, & the management can directly influence them.

Soft” elements, on the other hand, can be more difficult to comprehend, 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.


Short Definitions

Structure is defined as the skeleton of the organization or the organizational chart.

Strategy describes the plan or course of action in allocating resources to achieve identified goals over time.

Systems are the routine processes and procedures followed within the organization.

Shared values aspect, originally termed superordinate goals, refers to the significant meanings or guiding concepts that organizational members share.

Staff are described in terms of personnel categories within the organization.

Skills refers to the capabilities of the staff within the organization as a whole.

Style is the way in which key managers behave in achieving organisational goals is considered; this aspect is thought to encompass the cultural style of the organisation.

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