What Is The Mckinseys 7s Model Commerce Essay

The McKinseys 7S Model was created by the consulting company McKinsey and Company in the early 1980s and subsequently has become the de facto standard used by practitioners and academics alike in analysing the performance of an organization. (Pascale & Athos, 1981; Peters & Waterman, 1982). There are seven variables in the model which include structure, strategy, systems, skills, style, staff and shared values. All beginning with ‘s’, justifying why it was termed as the 7S model. This treatise evaluates each of the seven components of the model and the links between them with respect to the Big I of Enterprise Integration using a case study approach.

The model is as shown in figure 1 above, showing the interdependency of the variables. This is illustrated by the model also being termed as the “Managerial Molecule”.

It was found that several organisations using the model pay more attention to those variables they consider changeable (e.g. structure, strategy and systems) rather than the other variables (e.g. skills, style, staff and shared values) considered to be “soft” variables.

For long-term benefit, they feel that the variables should be changed to become more congruent as a system.

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 thought-out, well-structured and often practically rehearsed and is differentiated from tactics or operational actions. It sought to answer three questions; where the organisation is at this moment in time, where the organisation wants to be in a particular length of time and 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: This refers to some systems or internal processes to support and implement the strategy and run day-to-day affairs. Different systems exist in companies for procurement, recruitment, promotion and so on. The traditional approach is bureaucratic which are intended to achieve maximum effectiveness but however creating bottle neck. The emerging trends in organisations are to simplify and modernize organizational processes by innovation and use of new technology to quicken decision-making process, especially those involving customers with the intention to make the processes that involve customers more user friendly(Lynch, 2005).

Style/Culture: refers to distinct culture and management style in organizations. It generally includes the dominant values, beliefs and norms which develop over time and become relatively peculiar to the organisation. It consists of the way company’s top management interact the employees. Traditional approach has been largely military style of management and culture where strict adherence to top-down management, concentrating power at the centre, thereby creating bottlenecks which invariably leads to time wastage and ineffienciecy. Recent efforts have sought to change 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. In order to ensure quality staff, organisations put considerable efforts into 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).

CASE STUDY

Rescuing Troubled Software Projects by Team Transformation: A Case Study with an ERP Project, Kim Man Lui and Keith C. C. Chan

Strategy.

This company’s direction and scope over the long term is to be market-leading international beverage brand. This is one of the main motivations necessitating SAP R/3, an ERP system to replace the existing IBM A/S400 owing to growing competitions.

Structure.

The hierarchical team structure is adopted though a change in the composition and communication flow was effected to ensure success of project team. Functional areas of expertise was key to inclusion in the project team.

Systems.

In the case study, Accelerated SAP (ASAP) was adopted to implement the new ERP system. ASAP is comprised of five phases. The phases are project preparation, Business blueprint, realization, final preparation and Go Live and support.

Skills.

There are some issues in the staffing and learning process of the staff in the company. There are some weakness in the staffing and there is no clear cut way of training and assessing the competence of an individual staff in the project team. There is lack of adequate knowledge in the staff included for implementation of the project. The two programmers in the project team are not well experienced in ASAP.

Shared values.

The core value and belief of this organization is to become the leading international beverage brand. This is the motivation behind the approaches and efforts of all staff involved with the project.

Staff.

Staffing and training has not been properly developed. Obviously, inclusion of inexperienced programmers is a pointer to the shortcoming. This would definitely impact the success of the enterprise integration project.

Style.

There is a sign of leadership maturity in the company. The company was rescued majorly because there was a transformation of the team.

In spite of the fact that there were a number of issues as mentioned above, the approach adopted to rescue the team was to transforming the project team.