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7-S Framework McKinsey
The McKinsey 7-S framework is a popular model used in organizations to analyse theenvironment to investigate if the company is achieving its intended objectives. The name of theMcKinsey 7-S framework model can be explained by the fact that the model was developed byTom Peters & Robert Waterman, consultants at the McKinsey & Company consulting firm.
Importance of McKinsey 7-S Framework
The McKinsey 7-S Framework model proposes 7 interdependent factors – 3 hard ‘S’ i.e.strategy, structure, systems; and 4 soft ‘S’ i.e. shared values, skills, style and staff.
The hard ‘S’ are more tangible, easily to define and easy to influence than the soft ‘S’.
1. Strategy – It refers to the intended sequence of actions taken by a company to achieve itsgoals and objectives. It deals with resource allocation and includes competition, customers andthe environment.
2. Structure – It refers to how the various business units are structured and how theycommunicate with each other. A company’s structure may be centralized or decentralized ormay take many other forms depending on the company’s culture and values.
3. Systems – This includes a host of systems within an organization that define its processesand routines. It includes performance appraisal system, financial systems, IT systems etc.
4. Shared values – These are the core values of the company that connect all the other 6factors. These are the fundamental ideas or guiding principles that lay the foundation ofbusinesses.
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7-S Framework McKinsey
5. Skills – These define the core competencies of the employees. Some basic skills whichemployees must have are leadership , communication management, time management , team managementetc.
6. Style – This spans the core beliefs, norms and management style in the organization.
7. Staff – It refers to the number and type of employees in the organization. It is very importantfor an organization to manage its human capital to create competitive advantage.
The above diagram shows the McKinsey 7-S Framework components.
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