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MCKINSEY 7s Model

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McKinsey 7 S Model

McKinsey 7-S framework or model is one of those few models that have managed to persist even when others came in and went out of trend. It was developed by consultants working for McKinsey & Company in the 1980s and features seven steps or stages for managing change.

StagesImage result for McKinsey 7 S Model

  • Strategy – Strategy is the plan created to get past the competition and reach the goals. This is the first stage of change according to McKinsey’s 7-S framework and involves the development of a step-by-step procedure or plan.
  • Structure – Structure is the stage or attribute of this model that relates to how the organization is divided or the structure it follows.
  • Systems – To get a task done, how the day-to-day activities are performed is what this stage is related to.
  • Shared values – Shared values refer to the core or main values of an organization according to which it runs or works.
  • Style – How the changes and leadership are adopted or implemented is known as ‘style’.
  • Staff – The staff refers to the workforce or employees and their working capabilities.
  • Skills – The competencies as well as other skills possessed by the employees working in the organization.

Benefits of this model

  • This model offers ways and methods to understand an organization and get a deep insight into the way it works.
  • This model integrates both the emotional as well as the practical components of change that is important to create ways to enable employees to deal with transition easily.
  • This model considers all parts to be important and equally worth addressing and thus does not leave out some aspects that may be of importance.
  • This model also offers a directional factor to organizational change.

Disadvantages of this model

  • Since all the factors are interrelated and interdependent on one another, the failure of one part means failing of all and this is the greatest disadvantage of this model.
  • This model is complex as compared to the others and differences are not focused upon in it.
  • Organizations that have used this model have experienced more cases of failure, and this too can be considered as one negative associated with it.

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Syllabus BHM308

01 Organizational Strategy

  1. Mission
    1. Mission Statement Elements and its importance
  2. Objectives
    1. The necessity of formal objectives
    2. Objective Vs Goal
  3. Strategy
    1. Developing Strategies
      1. Adaptive Search
      2. Intuition search
      3. Strategic factors
      4. Picking Niches
      5. Entrepreneurial Approach

02 Environmental and Internal Resource Analysis

  1. Need For Environmental Analysis
  2. Key Environmental Variable Factors<
  3. Opportunities and Threats
    1. Internal resource analysis
  4. Functional Areas Resource Development Matrix
  5. Strengths and Weaknesses
    1. Marketing
    2. Finance
    3. Production
    4. Personnel
    5. Organization

03 Strategy Formulation

  1. Strategy (general) Alternatives
    1. Stability Strategies
    2. Expansion Strategies
    3. Retrench Strategies
    4. Combination Strategies
  2. Combination Strategies
    1. Forward integration
    2. Backward integration
    3. Horizontal integration
    4. Market penetration
    5. Market development
    6. Product development
    7. Concentric diversification
    8. Conglomerate diversification
    9. Horizontal diversification
    10. Joint Venture
    11. Retrenchment
    12. Divestiture
    13. Liquidation
    14. Combination

04 Strategic Analysis and Choice (allocation of Resources)

  1. Factors Influencing Choice
    1. Strategy formulation
  2. Input Stage
    1. Internal factor evaluation matrix
    2. External factor evaluation matrix
    3. Competitive profile matrix
  3. Matching Stage
    1. Threats opportunities – weaknesses – strengths matrix (TOWS)
    2. Strategic position and action evaluation matrix (SPACE)
    3. Boston consulting group matrix (BCGM)
    4. Internal – External matrix
    5. Grand Strategy matrix
  4. Decision Stage
    1. Quantitative Strategic Planning Matrix (QSPM)

05 Policies in Functional Areas

  1. Policy
  2. Product Policies
  3. Personnel Policies
  4. Financial Policies
  5. Marketing Policies
  6. Public Relation Policies

06 Strategic Implementation Review and Evaluation

  1. McKinsey 7S Framework
  2. Leadership And Management Style
  3. Strategy Review And Evaluation
    1. Review the underlying bases of Strategy
    2. Measure Organisational Performance
    3. Take corrective actions