ORGANIZATION

MANAGEMENT

Organizational Design
McKinsey 7-S Model
 Strategy
 Structure
 Systems
 Style
 Staff
 Skills
 Superordinate goals
McKinsey 7-S Model
 Strategy
The Hard S’s
 Structure The hard elements are factual
 Systems and easy to identify. They can
be found in strategy statements,
 Style corporate plans, organization
 Staff charts, and other documentation
 Skills
 Superordinate goals
McKinsey 7-S Model
 Strategy
 Structure
 Systems The Soft S’s
 Style The soft elements
are difficult to
 Staff describe since they
 Skills are continuously
developing and
 Superordinate goals
changing. They are
highly determined by
the people at work in
the organization.
  Strategy
 Structure

7-S Model – The Hard S’s 



Systems
Style
Staff
 Skills
 Superordinate goals

 Strategy
 Actions a company plans in response to or in anticipation of
changes in its external environment
 Structure
 Basis for specialization and coordination, influenced
primarily by strategy and by organization size and diversity
 Systems
 Formal and informal procedures that support the strategy
and structure (Systems are more powerful than they are
given credit)
  Strategy
 Structure

Organizational Structure 


Systems
Style
Staff
 Skills
 Superordinate goals

 Organization Chart
 formal reporting relationships
 levels in hierarchy
 spans of control
 departmentalization
 Systems to facilitate:
 coordination
 communication
 integration
Structural Designs
 Strategy
 Structure
 Systems
 Style
 Staff
 Functional Structure 

Skills
Superordinate goals

 Can adapt functional structure

with horizontal linkages
 Divisional Structure
 Geographical Structure
 Matrix Structure
 Horizontal Structure / C E O
Product Line Structure
V i c e P r e V s i ic d e e Pn t r e D s i i d r e e c n t
 Hybrid Structure F i a n a n cM e a n u f a H c tu u m r i n a g n

C h i e B f u d Pg e l a t M n t a i n T t e r a n i a Bn n i e n c n g
A c c o A u n n a S t a l uy n s p t t S e ru i n p t e S e r npi n d e tA eec d ni a mt d l
  Strategy

Other Organizational Forms

 Structure
 Systems
 Style
 Staff
 Skills

 Joint Ventures  Superordinate goals

 Licensing agreements
 Strategic Alliances
 Consortia
 Virtual organizations
 Global (transnational) Work Teams
  Strategy

Virtual Teams 


Structure
Systems
Style
 Staff
 Skills

 Virtual Teams are characterized by:  Superordinate goals

 Distributed locations of team members

 Use of information technology to accomplish tasks
 Effective when:
 Communication & collaboration skills are high.
 Trust among team members is high
 Organizations are increasing their use of
virtual teams
 Potential for improvement in virtual team
management is huge
  Strategy

Information Linkages 


Structure
Systems
Style
 Staff
 Skills

 Vertical Information Linkages Superordinate goals



 Hierarchy
 Rules and plans (i.e. budget)
 Horizontal Information Linkages
 Information systems
 Liaison role
 Task force
 Integrator role (i.e. Project manager)
 Cross-functional teams
 Ladder of Mechanisms for
Horizontal Linkage and
Coordination

H IGH Teams
Coordination Required

Full-time Integrators
Amount of Horizontal

Task Forces

Direct Contact

LOW Information Systems

LOW HIGH

Cost of Coordination in
Time and Human Resources
  Strategy

Systems – various elements

 Structure
 Systems
 Style
 Staff
 Skills
 Superordinate goals
 Communications practice and system
 Management reporting system
 Approval process
 Planning/budgeting system
 Rewards system including appraisal
 “Rules”
 Strategy

From Tasks to Structure


 Structure
 Systems
 Style
 Staff
 Skills

Tasks define jobs

 Superordinate goals

 Jobs define skills required
 Skills (and other considerations) define
staff
 Over time skills change as staff gains
knowledge and experience, and as
technology and corporate infrastructure
mature
 Collection of jobs basis for structure
Job design considerations
 Do they have the necessary skills and
knowledge to fulfill proposed / expanded
job requirements?
 What are the needs of the incumbent or
the rest of your workforce in general?
 Monetary
 Growth
 Socialization

 Strategy
 Structure
 Systems
 Style
 Staff
 Skills
 Superordinate goals
  Strategy

7-S Model – The Soft S’s - 1 



Structure
Systems
Style
Staff
Style / Culture

  Skills
 Superordinate goals
The culture of the organization, consisting of
 Organizational culture: the dominant values, beliefs and
norms which develop over time and become relatively
enduring features of organization life
 Management style: what managers do rather than what they
say (where they spend their time and attention, what they
allow, what they reward, etc)
 Staff
 Skills
 Shared values /
Superordinate goals
  Strategy

7-S Model – The Soft S’s - 2

 Structure
 Systems
 Style
 Staff
 Skills
 Style / Culture  Superordinate goals

 Staff
 The people/human resource management – ways of shaping
basic management values, processes used to develop
managers, ways of introducing new employees and
managing careers, socialization processes
 Skills
 Distinctive competencies – what the company does best,
ways of developing or shifting competencies
 Shared values / Superordinate goals
 Guiding concepts, fundamental ideas around which a
business is built – simple, usually stated at abstract level,
have great meaning inside the organization, although
outsiders may not see or understand them
  Strategy

Organizational Culture
 Structure
 Systems
 Style
 Staff
 Skills

 Culture is to organizations what Superordinate goals



personality is to individuals
 All companies have cultures
 Culture by default
 Culture by design – thoughtful choices
based on values and core beliefs
 How does a company consciously create
its culture?
From Gray & Larson “Project Management:
The Managerial Process”
Types of Organizational Cultures
 Strategy
 Control cultures – 

Structure
Systems

Drive for predictability and order 


Style
Staff
 Skills
 Collaboration cultures –  Superordinate goals

Pursue close relationship with customers

 Competence cultures –
Pursue excellence and innovation
 Cultivation cultures –
Pursue life enrichment for customers and employees
  Strategy

Organizational Culture
 Structure
 Systems
 Style
 Staff
 Skills
 Observable Evidence:  Superordinate goals

 Symbols
 Ceremonies
 Stories
 Behaviors
 Language
 Dress

 Underlying Roots:
 Values, Assumptions, Beliefs, Attitudes, Feelings
  Strategy

Culture in practice
 Structure
 Systems
 Style
 Staff

 Conflict management 

Skills
Superordinate goals

 Relationship or interpersonal conflict

 Task / process conflict
 Functional vs. dysfunctional conflict
 Factors: goal incompatibility, limited resources,
differences
 Power – the capacity to influence behavior
 Positional power: rewards/consequences, control
of resources, information and decision control
 Personal power: expert, referent (based on
identification and admiration)
 Politics – the use of power to influence decisions
Management vs. Leadership
Planning & vs. Setting the
budgeting direction
Organizing & vs. Aligning people
staffing
Controlling & vs. Motivating people
problem solving

Management is about coping with complexity

Leadership is about coping with change
Management vs. Leadership
 Some managers (but not all) are leaders
 Some leaders (but not all) are good managers
 A manager gets work done through the efforts
of other people
 Includes planning, organizing, motivating, and
controlling
 A leader creates and realizes a vision
 Communicates that vision and moves the
organization toward that vision 

Strategy
Structure
 Systems
 Style
 Staff
 Skills
 Superordinate goals
McKinsey 7-S Model

 Strategy Effective organizations

 Structure achieve a harmony
 Systems between these seven
 Style elements; if one
element changes, then
 Staff
this will affect all the
 Skills others
 Superordinate goals
McKinsey 7-S Model

 Strategy The 7-S Model can be a

 Structure valuable tool to initiate
change processes and
 Systems to give them direction;
 Style i.e. determine current
state and ideal state of
 Staff
each element, and
 Skills develop action plans to
 Superordinate goals close the gaps
McKinsey 7-S Model
In change processes,
 Strategy
many organizations
 Structure focus their efforts on
 Systems the hard S’s; however,
 Style the soft factors can
 Staff make or break a
successful change
 Skills
process. All factors
 Superordinate goals must be accounted for.
McKinsey 7-S Model

 Strategy  Interrelated
 Structure  Equilibrium
 Systems  Foundation of
 Style corporate culture
 Staff  Levers available to
 Skills management
 Superordinate goals
Executing Change –
Seven Key Considerations
 Strategic Intent
 Substance Style

 Scale Scope Substance

 Scope/Breadth
Strategic
 Speed Intent

 Sequence Speed Scale

 Style Sequence
 Strategic Intent Style

Scope Substance
Precise Broad
Strategic
Intent
 Substance Speed Scale

Soft S’s Hard S’s Sequence

 Scale
Small Large
 Scope/Breadth
Isolated Organization-wide

 Speed
Slow Fast
 Sequence
Hard – Soft Soft – Hard
 Style
Top Down Bottom Up
 Strategic Intent Style

Precise Broad Scope Substance

Obsolete Confusion Strategic
Intent
 Substance
Speed Scale
Soft S’s Hard S’s
Long term Quick Sequence

 Scale
Small Large
Low risk High risk

 Scope/Breadth Coherent
Isolated Organization-wide
Not absorbed Can distract
Robust
 Speed
Slow Fast
Low momentum Sustainable?

 Sequence
Hard – Soft Soft – Hard
Big bang Inflexible?

 StyleTop Down Bottom Up

Coercive Participation
Assignment
 Read BA 550 class packet:
 Turning Great Strategy into Great Performance
 Governance and Strategy Implementation
 Case brief – Americhem
Last names beginning with A – M
 Complete proposal on term project