Mckinsey 7s

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  • Topic: Strategic management, Management, Strategy
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Chapter 12

McKinsey 7S

Ch12. McKinsey 7S
• • • • • • • • Short Description Background Strategic Rationale & Implications Strengths & Advantages Weaknesses & Limitations Process for Applying Technique Case Study: Kenya Airways FAROUT Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

FT Press 2007. All Rights Reserved.

Ch12.2

Ch12. McKinsey 7S
Short Description • The McKinsey 7S model is a diagnostic management tool used to test the strength of the strategic degree of fit between a firm’s current and proposed strategies. • It is a management tool designed to facilitate the process of strategy implementation within the context of organizational change.

FT Press 2007. All Rights Reserved.

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch12.3

Ch12. McKinsey 7S
Background • Idea that structure will follow strategy had been a prominent concept in modern strategy theory. • Consultants at McKinsey & Co. recognized a circular problem central to their client’s failure to effectively implement strategy, and co-developed the McKinsey model. • Successful implementation of strategy requires management of the interrelationships between seven elements.

FT Press 2007. All Rights Reserved.

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch12.4

Ch12. McKinsey 7S
Background • Seven elements are: 1. Structure 2. Strategy 3. Systems 4. Style 5. Staff 6. Skills 7. Shared values

FT Press 2007. All Rights Reserved.

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch12.5

Ch12. McKinsey 7S
Background: Schematic of the McKinsey 7S Framework.
Strategy

Systems

Structure

Shared Values / Subordinate Goals

Staff

Skills

Style FT Press 2007. All Rights Reserved. Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch12.6

Ch12. McKinsey 7S
Background • There are four key insights which can be derived from this model:

– Five other elements comprise organizational effectiveness in addition to the traditional strategy and structure. – The lines connecting each element identify the mutual dependency between each element. – Strategic failure may be attributable to inattention to one or a combination of seven elements. – The circularity of the model focuses the analyst’s attention on the absence of hierarchical dominance.

FT Press 2007. All Rights Reserved.

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch12.7

Ch12. McKinsey 7S
Strengths and Advantages • Emphasis on a firm’s strategy implementation. • Organizational effectiveness was not dependent on just strategy and structure. • Comprehensive because the analyst must consider each of the seven constructs, and how they interact. • First model to meld the “hard” and “soft” aspects of the enterprise. • Emphasizes coordination of key tasks. • Model was also one of the first to help connect academic research with managerial practice. FT Press 2007. All Rights Reserved. Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch12.8

Ch12. McKinsey 7S
Weaknesses and Limitations • May miss some fine-grained areas in which gaps in strategy conception or execution can arise. • Little empirical support for the model or of its originator’s conclusions. • Remains difficult to properly assess the degree of fit. • Difficult for analysts to explain what should be done for implementation using the model. • The 7S is mostly a static model.

FT Press 2007. All Rights Reserved.

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch12.9

Ch12. McKinsey 7S
Process for Applying the Technique • The first step is to closely examine each ‘S’. • The key success factors for each element need to be identified. • Can create a 7 X 2 matrix with the top row containing critical features of each ‘S’ that the company does extremely well. • The bottom row would contain the elements of each ‘S’...
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