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MANAGEMENT
ASSIGNMENT-1
Submitted by:Mohammed.H.T
08d1634
V BBA B
INDEX
S NO.
TOPIC
PAGE NO.
3 to 6
Description of 7-S
7 to 11
12 to 17
18 to 19
20 to 23
Conclusion
24
Bibliography
25
Note:-
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.
In terms of the McKinsey 7-S model, the typical manager is seen as over relying on the
"hard" Ss (strategy, structure and systems), while the leader's mastery of the "soft"
elements (style, skills, staff and shared values) helps to galvanize his organization into
superior long-term performance. [3]
Note:- [3] - Article Name:- Leadership, management, and the seven key Author:- Craig M Watson
Source:- McKinsey Quarterly; Autumn83, Issue 3, p44
For long-term benefit, they feel that the variables should be changed to become more
congruent as a system. The external environment is not mentioned in the McKinsey 7S
Framework, although the authors do acknowledge that other variables exist and that they
depict only the most crucial variables in the model. While alluded to in their discussion of
the model, the notion of performance or effectiveness is not made explicit in the model.
The operating principle at well-managed companies is to do one thing well," states
Thomas Peters. "At IBM, the all-pervasive value is customer service. At Dana it is
productivity improvement. At 3Mand H-P it is new product development. At P&G it is
product quality. At McDonald's it is customer service, quality, and cleanliness
and value. At all these companies, the values are pursued with an almost religious zeal.
[4]
Note:- [4] -
Description of 7 Ss
Strategy: Strategy is the plan of action an organisation prepares in response to, or
anticipation of, changes in its external environment. Strategy is differentiated by tactics
or operational actions by its nature of being premeditated, well thought through and often
practically rehearsed. It deals with essentially three questions (as shown in figure 2): 1)
where the organisation is at this moment in time, 2) where the organisation wants to be in
a particular length of time and 3) how to get there. 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 (Ansoff, 1965).
Structure: Business needs to be organised in a specific form of shape that is generally
referred to as organisational structure. Organisations 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 (Waterman et al., 1980). 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
organisational 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
organisation more flexible and devolve the power by empowering the employees and
eliminate the middle management layers (Boyle, 2007).
Systems: Every organisation has some systems or internal processes to 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 organisations 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
organisations are simplifying and modernising 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 (Lynch, 2005).
Style/Culture: All organisations 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 organisational life. It also entails the way managers
interact with the employees and the way they spend their time. The businesses have
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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 organisation (Martins and Terblanche, 2003).
Staff: Organisations are made up of humans and it's the people who make the real
difference to the success of the organisation in the increasingly knowledge-based society.
The importance of human resources has thus got the central position in the strategy of the
organisation, away from the traditional model of capital and land. All leading
organisations 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
organisations' strategy and competitive advantage over their competitors. It is also
important for the organisation to instil confidence among the employees about their
future in the organisation and future career growth as an incentive for hard work (Purcell
and Boxal, 2003).
Shared Values/Superordinate Goals: All members of the organisation 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 organisations with weak values
and common goals often find their employees following their own personal goals that
may be different or even in conflict with those of the organisation or their fellow
colleagues (Martins and Terblanche, 2003).
On the issue of culture and its impact (whether Japan, for example, is more likely to
produce leaders than the West), the 7-S framework offers important insights. First, good
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management does not depend on the presence of leadership, although in many cases it is
enhanced by leadership qualities. What is crucial is the presence of the soft and the hard
instruments in balance. Second, the Japanese are, apparently, more inclined to use the soft
tests of management -as an extension of their cultural norms - than are Western managers
whose culture stresses different values. Third, managerial performance
Is multivariate. Culture certainly plays a part, but what is more significant is that
excellent performance in organizations in Japan or in the West depends on achieving
harmony among all seven keys to organization. [5]
Note:- [5] - Article Name:- Leadership, management, and the seven keys
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of corporate culture, for example, are continuously developing and are altered by the
people at work in the organisation. It is therefore only possible to understand these
aspects by studying the organisation very closely, normally through observations and/or
through conducting interviews. Some linkages, however, can be made between the hard
and soft components. For example, it is seen that a rigid, hierarchical organisational
structure normally leads to a bureaucratic organisational culture where the power is
centralised at the higher management level.
It is also 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 organisation and the inherent values of the organisation, is generally
difficult to manage. However, if these factors are altered, they can have a great impact on
the structure, strategies and the systems of the organisation. Over the last few years, there
has been a trend to have a more open, flexible and dynamic culture in the organisation
where the employees are valued and innovation encouraged. This is, however, not easy to
achieve where the traditional culture is been dominant for decades and therefore many
organisations are in a state of flux in managing this change. What compounds their
problems is their focus on only the hard components and neglecting the softer issues
identified in the model which is without doubt a recipe for failure.
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12
SYSTEM:-
HP follows a unique and custom-designed system based on their area of operations which
is known as the EMEA Business Management System. EMEA stands for Europe, MiddleEast and Africa. The HP Business Management System in EMEA is a framework for
process-based business management. It defines the key processes that create value for
their customers. The process architecture is designed to meet customer expectations and
provide leadership and support. All business-relevant processes are documented, with
special emphasis placed on simplicity, clarity and disclosure of mandatory information
such as links to other processes, responsibilities and performance metrics. A web-based
tool delivers easy access and helps the process owner provide input and maintain
information with minimum administrational effort. Document and data accuracy are
automatically controlled by the system. In line with their overall strategy, they evaluate
internal and external processes and use these findings to drive continuous improvements
in the system. The HP management team empowers management representatives within
each business function to lead the deployment of their total customer experience and
quality strategy and to administer the Business Management System to best meet their
customers changing business needs. The HR and Financial Systems in the company also
are quite advanced. The HR system is guided and operated to carry out recruitment and
selection, training and development, organization design, employee and industrial
relations, compensation and benefits and workforce management programmes. The
Finance section follows a system of tracking and consolidating actual results to review
performances and make business decisions with accuracy. Its key focus is to improve
processes, technology and systems to achieve high levels of automation and flexibility.
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SKILLS:-
STAFF:-
HP has a staff of more than one hundred thousand people coming from more than 170
countries around the world. There is a lot of diversity to be handled yet HP`s vision
towards it has made its strategy to handle this diversity very successful. The staff of HP is
trained in all dimensions so that they ultimately achieve their goal of earning the respect
and loyalty from customers in the form of customer satisfaction. However there has been
a bit of downsizing during the period 2005-2007 where employee size has reduced by
20%.
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SHARED VALUES:-
Passion for customers: - They put their customers before everything they do.
Trust and respect for individuals: - A culture of inclusion is created which is built
on trust, dignity and respect for all.
Speed and Agility: - They are resourceful, adaptable and achieve results faster
than their competitors.
Uncompromising integrity: - Honesty is the best policy along with due fairness
and directness in their dealings.
STYLE:-
STRUCTURE:The organization structure of HP can be seen from two viewpoints:On the basis of area of activity:-
Hewlett Packard
Americas
Houston, Texas
Asia Pacific
Hong Kong
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HP Services ("HPS"),
HP Software,
Corporate Investments.
The three business segments ESS, HPS and HP Software are structured beneath the
broader Technology Solutions Group (TSG) in order to capitalize on up-selling and
cross-selling opportunities, and given the solution sale approach across the HP
enterprise offerings
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SHARED VALUES:The shared values of all the three companies are very core to the companies antecedents
and their values. HP believes in teamwork, innovation, achievement, contribution and
passion for its customers. Dells shared values are that of integrity and ethical behavior.
Acers values are purely based on the well-being of its customers, employees and its
shareholders. It also believes that work is worship and to work wisely and accordingly.
STYLE:The style followed by the three companies is very different from each other. HP follows
the HP way which indicates managing by walking around. Dell has on the other a mix
of participatory and democratic style of managing. Acer on the other hand a very flexible
style of managing to ensure participation and development. Yet the main motto of all the
companies behind the adoption of their respective styles is the progress of the company
as well as the stakeholders of the company.
STRUCTURE:All the three companies follow the organization structure based on the area of activity or
geographic activity mainly divided into Asia, Europe, North America, Middle East and
Australia. HP also follows an organization structure based o its products while Dell also
follows a departmental organization structure.
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RECENT NEWS
Anatomy of Agile Enterprise
Stratification Underlies Agility, Part 3: Strategy
By Janne J. Korhonen on May 31, 2010
By "strategy", Waterman et al. (1980) refer to "those actions that a company plans in
response to or anticipation of changes in its external environment its customers, its
competitors". Strategy is an organization's way of creating unique value and improving
its position vis--vis competition. While strategy is a critical variable in organization
design, its successful execution lies in other dimensions of the 7S framework.
As the direct actions are seeking stability and rejecting change, there is no strategy at
Stratum I. The diagnostic accumulation at Stratum II is also reactive in nature and does
not call for much planning ahead. The first level that can justifiably be said dealing with
strategy is Stratum III.
Stratum III
Stratum III is about making trade-offs between carrying out the known work load with a
completion date of three to six months later and predicting the changing requirements of
the as-yet-unknown but probable work load for an additional year by extrapolating from
current trends. Changes are incremental and strategies based on experience.
Operations Strategy at this level is specific to an operating unit, e.g. a sales office or retail
outlet, and has a defined scope. The major emphasis is on cost-effectiveness and on
maximizing resource productivity, leveraging any synergies and distinctive competencies
that the business has. Operations Strategy contributes to the functional strategy of
Stratum IV.
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Stratum IV
At Stratum IV, changes are discontinuous, but predictable, and strategies are based on
observable opportunities. Related change is sought through pairwise comparison of
Stratum III systems, considering whether known alternative systems exist that might
allow the work to be done better.
Functional Strategy at this level is about efficient and effective development and
coordination of resources within the key functional areas. The strategic issues are related
to business processes and the value chain. Functional Strategy provides Business Unit
and Corporate Strategies with information on resources and capabilities and translates
higher-level strategic plans to actionable departmental plans.
Stratum V
Stratum V seeks novel change. It cannot be predictably forecast what the future holds and
how to plan for it. Discontinuous changes are unpredictable and call for creative
strategies that change the very business model of the business. Work above this level is
increasingly about creating the future rather than predicting it.
Business Unit Strategy at this level is developed within a single-business company or a
business unit of a multi-business corporation. It focuses on the business model, on
positioning the business vis--vis product/service life-cycles, on the distinctive
competencies to pursue, on scope of the business, and on the integration of functional
strategies.
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Stratum VI
Ascending to Stratum VI denotes a major transition to the next order of complexity: from
the relatively stable, closed and controllable system of a self-sufficient business or
business unit to the relatively fluid, open and interdependent "system of systems" of
networked organizations. The focus of strategy is on value innovation, co-creation and
dynamics of the business ecosystem.
Inter-organizational Strategy at this level is concerned with the relationships between the
organization and its partners, competitors, suppliers, customers, and associations.
Typically, inter-organizational strategies such as joint ventures and alliances have not
been seen as integral to the organization's strategic framework. However, in the face of
intensifying competition and globalization, inter-enterprise networking has grown in
importance and deserves dedicated attention. Most notably, virtual organizations, where
individual companies are concentrating on their core competencies while relying on
external parties to provide complementary skills, are becoming the unit of competition.
This calls for a new perspective to strategy.
Stratum VII
Stratum VII is about developing and pursuing alternative worldwide strategic plans to
provide society with new concepts and ideas.
Corporate Strategy at this level focuses on how multi-business organizations develop
their existing business units, acquire or create new ones, and retreat from businesses to
ensure sustainable corporate viability. Diversified companies do not compete in
individual markets; only their businesses do. Thereby, Corporate Strategy must focus on
the success of each of its Stratum V business units.
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Stratum VIII
Stratum VIII is about setting the corporate mission and vision.
Enterprise Strategy at this level addresses the organization's role in society, including all
aspects of its environment: economic, social, political, legal, and technological.
Stakeholders are identified, at least implicitly, and it is considered how the enterprise
serves them. The mission and purpose of the enterprise is defined. Answers to
fundamental questions such as "How do we fit in?" and "What do we stand for?" provide
the guidelines to more specific strategies at lower strata.
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CONCLUSION
The awareness created by the 7-S approach to organizational effectiveness should benefit
organizations run by either leaders or traditional managers, as we have used the terms.
Outstanding companies are distinguished not by the leaders who head them or by
the managers who run them, but rather by the manner in which leadership and
management are harmonized to create a climate in which work is both uncommonly
meaningful and unusually effective. [6]
As per my learning, the Mckinsey 7 S framework is one of the most advanced techniques
for analyzing the organizational environment and today it is used by many companies
such as IBM, Infosys, Oracle to understand their organization and make effective changes
so as to make the environment conducive.
Mckinsey 7 S framework has been used by more than 70 companies to make a fruitful
gain out of it. The entire framework created is for the overall development of the
individual and the organization and the achievement of the integrated goals of the
organization and individual.
Therefore, I would like to conclude that the challenges of the future can be efficiently
tapped by the usage of such efficient frameworks and maximum achievement of the set
strategic goals and objectives would be possible
Note:- [6]- Article Name:- Leadership, management, and the seven keys
Author:- Craig M Watson
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BIBLIOGRAPHY
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