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3.

McKinseys 7S Framework with special reference to the


organization under study
According to Waterman, organization change is not simply a matter of structure,
although structure is significant variable in the management of change. Again it is also not a
simple relationship between strategy and structure, although strategy is also a critical aspect. In
their view effective organizational change may be understood to be a complex relationship
between strategy, structure, system, style, skills & shared values. The first three elementsstrategy, structure &system are considered the hardware of success. The next four style
skills, staff, and shared values are called the software. The complex relationship is
diagrammatically presented below;

Origin of 7s framework

The 7s framework was first mentioned in The art of Japanese management by Richard
Pascale and Antony Athos in 1981. They had been investigating how Japanese industry had been
so successful. At around the same time that Tom-Peters and Robert Waterman were exploring
what made a company excellent. The 7s model was born at a meeting of these four authors in
1978. It appeared also in In search of excellence by Peters and Waterman and was taken up as
a basic tool by the global management consultancy company Mckinsey. Since then it is known as
their Mckinseys 7-s model.

Benefits of 7-s Model

Diagnostic tool for understanding organization those are ineffective.

Guides organizational change.

Combines rational and hard elements with emotional and soft elements.

Managers must act on all Ss in parallel and all Ss are interrelated.

Description:
The 7s framework of is a value based management (VBS) model that describes how one can
holistically and effectively organize a company. Together these factors determine the way in
which a corporation operates. Mckinsey 7-s model is one of the approaches of management
analysis. Mckinsey model consists of 7-s. They are:
Structure-(virtual organization).
Skill-(competencies)
Style-(culture and leadership)
Strategy-(corporate, business, product or market)
System-(process)
Staff-(empowerment)
Shared values-(mission and goals)
According to this model, there are seven basic dimensions, which represent the core of
managerial activities. These are the levels which executives use to influence complex and large

organizations; obviously there was a concerted effort on the part of the originators of the model
to coin the managerial variables with works beginning with the letters so as to increase the
communication power of the model.
"Hard" elements are easier to define or identify and management can directly influence them:
Theses 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 Figured 1 below
depicts the interdependent of the elements and indicates how a change in one affects all the
others.
Structure: the way the organization is structured and who reports to whom.
Skill: the actual skills and competencies of the employees working for the company.
Style: the style of leadership adopted
Strategy: the plan devised to maintain and build competitive advantage over the competition.
Systems: the daily activities and procedures that staff members engage in to get the job done.
Staff: the employees and their general capabilities.
Shared values: called "super ordinate 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.

STRUCTURE
It refers to the more durable organization arrangements and relationships, &
forms the skeleton of the edifice of the organization. It prescribes the formal relationships,
communication channels, roles to perform and rules and procedures.

Structure has 3 important functions

It reduces the external uncertainty by forecasting, research & planning process.

It reduces the internal uncertainty due to variable, unpredictable, random human behavior
by mechanisms.

It helps in coordination of the activities of the organization to enables it to have a focus by


departmentation, specialization, division of labour & delegation of authority
ORGANISATIONAL STRUCTURE

CHAIRMAN

BOARD OF DIRECTORS
MANAGING DIRECTORS
EXICUTIVE DIRECTOR

HUMAN RESOURCE DEPARTMENT


MARKETING DEPARTMENT
PRODUCTION DEPARTMENT
FINANCE DEPARTMENT
PURCHASE DEPARTMENT

SUPERVISOR

ACCOUNTANT

Channel of DistributionSales Promotion

OFFICE ASSISTANT

Advertisement Market Research

Skilled LaboursSemi Skilled Labours


Un Skilled Labours

SKILLS
The term skills includes those characteristics, which people use to describe a
company. Organization have strengths in a number of area but their key strengths are dominant
skills are few. These are developed over a period of time of the result of the interaction of a
number of factors performing certain tasks successfully over a period of time, the kind of people
in the organization, the top management style, structure, the management systems, the external
environmental influence etc. Hence when organization makes a strategic shift it becomes
necessary to consciously build new skills.
Classification of skill at VKC is as follows:
1. Top Management Skills:
Top management includes board of directors, secretaries and unit chief. Top
management skills includes balancing, integrating, setting, priorities, developing standards,
conceptualizing, leading, persuasive, and planning process.
2. Supervisory Management Skills:
It includes additional general manager, deputy general manager, senior manager
and manager. Every superior in the unit should have sound technical knowledge of his field to
provide proper instructions and guidance to operatives, accuracy in work, and communication
skill for interaction with the higher management.
3. Technical and Clerical Skills:
Technical skills are required from an individual as per the project requirements.
For technical skills employee should be engineer/diploma holder. For clerical work candidates
should be BCom/ BBM.
Candidates who have passed industrial training institute are engaged scheme under trade
apprentices for a year. Besides fulfilling the training requirements under the apprentices act.

STYLE
The company employees share a common way of thinking and behaving. Leaders
establish unity of purpose and direction of the organization. They create and maintain the internal
environment in which people became fully involved in achieving the organization policy.
Top down style
In VKC management follows the top down decision making at the time of taking
any decision relating to management.
Board of directors and chief executive of the company give decisions about the
management relating problems of the company. The decision taken is flow from top to down, (to
Middle Level and Lower Level Management) in VKC they follow the participative leadership in
case of recruitment.
Participative leadership:
The head of the department takes some decisions there may by consulting the
other employees. In this type of leadership all the level of management participate in taking
decisions. In case recruitment A.M personnel department consult the entire department head to
take decision regarding recruitment of new employees.

STAFF:
It refers to the people working in an organization the companys people resources and
how they are developed, trained and motivated. The process of staffing includes various
processes like recruitment and selection procedures, training etc. It refers to how the people
are developed, trained, socialized, integrated, motivated and how the employees career is
shaped in an organization.
Technical Staff:

These are the staffs they are responsible for the work related to technical
aspect. In this company they are appointing well qualified and experienced persons as
technical staff. So these staff will have good knowledge about the working environment.
Supervisory Staff:
These are the persons who are in charge with supervising the other employees in the
organization. In this company they are employing experienced staff as supervisor. so they can
observe the fellow workers and guide them as per the companies need. The experienced
supervisors are one of the key assets of this company.
Clerical staff:
Clerical staff required for clerical work, clerical work need for all organization for
clerical staff required B.com/BBM.

STRATEGY
Strategy is a choice of direction and action; the company adopts to achieve its objectives
in a competitive situation. Strategies formulated need to be implemented. Implementation of
strategies is often more difficult than their formulation. Strategic planning is about asking
questions, more than attempting to answer them. Strategy formulation entails a search for a
different frame of reference. It is the quest for a new business paradigm. There are two types of
paradigms that apply to management, namely the business and the organizational or managerial
paradigms. The business paradigms define a companys position in the market place with respect
to customers, technology and products.
Pricing of VKC:
The name VKC itself is the mark of quality for the customer. The company has across
different price terminologies/price strategies. They are as follows:
1. List price

2.
3.
4.
5.
6.
7.

Discount
Payment periods
Credit terms
Seasonal pricing
Area wise pricing
Pricing on demand

SYSTEM:
Identifying, understanding and managing process as a system contribution to the
organization effectiveness and efficiency in achieving its objectives.
A. Inventory Control System:
An effort to achieve and maintain an ecological balance between the cost incurred and cost
solved by holding material in stock is called inventory.
ABC analysis for stock control.
FIFO method for issuing materials
B. Accounting System:
Financial statements are prepared under the historical cost convention on an accrual
basis and comply with the accounting standards refer to sec 211 (3c) of the companies Act 1956.
C. Remuneration System:
1

Piece rate system is followed to employees.

SHARED VALUES:
Values refer to the institutional standards of behavior that strengthen commitment to the
vision, and guide strategy formulation and purposive action. The core values are shaped around
the belief that enterprises exist to serve society. In terms of this belief, profit is a means rather
than an end in itself a compensation to owners of capital linked to the effectiveness of
contribution to society and the essential ingredient to sustain such enlarged societal contribution.
1. Integrity among various department
Various departments in organization are working successfully. Coordination of
all the functional departmental area works together to achieve the stated object of the
company.

2. Team work among the employees


Every person or worker in the organization knows the objectives of the company.
With the proper communication network and corporation among the employees, synergy is
existing in the organization.
3. Customer satisfaction
The status of customer satisfaction is measured through two principles
interventions.
a. Customer satisfactory survey
The customer satisfaction is measured by sending structured
questionnaires to major customers and exacts their opinion about the product being
offered reported for internal reviews and also for reviews at higher level in the
organization. The results of these are used to update the quality management
system and procedures.

b. Customer complaint handling system


The calls and complaints from the customers are systematically processed for
timely response and solution right from the branch, maintenance centre or the site itself. The
complaints are continuously monitored and regularly reviewed by the unit chief to ensure speedy
redressal.