You are on page 1of 8

2MCKENSYS 7S FRAME WORK

This paper discusses McKinsey's 7S Model that was created by the consulting company McKinsey and Company in the early 1980s. Since then it has been widely used by practitioners and academics alike in analyzing hundreds of organizations The McKinsey 7S model was named after a consulting company, McKinsey and Company, which has conducted applied research in business and industry (Pascale & Athos, 1981; Peters & Waterman, 1982). All of the authors worked as consultants at McKinsey and Company; in the 1980s, they used the model to analyze over 70 large organizations. The McKinsey 7S Framework was created as a recognizable and easily remembered model in business. The seven variables, which the authors term "levers", all begin with the letter "S": These seven variables include structure, strategy, systems, skills, style, staff and shared values. Structure is defined as the skeleton of the organization or the organizational chart. The authors describe strategy as the plan or course of action in allocating resources to achieve identified goals over time. The systems are the routine processes and procedures followed within the organization. Staff are described in terms of personnel categories within the organization (e.g. engineers), whereas the skills variable refers to the capabilities of the staff within the organization as a whole. The way in which key managers behave in achieving organizational goals is considered to be the style variable; this variable is thought to encompass the cultural

style of the organization. The shared values variable, originally termed super ordinate goals, refers to the significant meanings or guiding concepts that organizational members share (Peters and Waterman, 1982). 1. Structure Every organization no matter big or small has got its own organization structure. Creating the structure is a difficult task for the top management. Structure should be formed in such a manner that its neither complicated for the employees nor for the top management to control it. Structure at management level: Chairman & Managing Director: Mr. M.V.Nair Executive Directors: Mr.S.Raman

Table no 3.1

Chairman Director:

&

Managing

Executive Directors

Board Of Directors

: Mr. M.V.Nair

Mr.S.Raman Mr.S.C.Kalia

Mr.K.V.Eapen Mr.K.Sivaraman Mrs.Rani Satish Mr.B.M.Sharma Mr.Ashok Singh Mr.N.Shankar Dr.Gulfam Mujibi Prof.M.S.Sriram Mr.Arun Kumar Nanda Mr.S.Ravi

Structure at branch level: The bank currently operates 2868 branches and the branches are
headed by the branch manager and all the employees of the branch are accountable to the branch manager, and he is also responsible for the day to day operations of the bank.

2.Skills
Skills refer to set knowledge and talent which the employee need to have in him to attend the organization goal. Skills are possessed based on the qualification of an individual and the sound knowledge and experience that the employee would possess on his work. The Union Bank of India believes that the skills are the integral part of the bank and the employees are appointed with the specific skills required to perform its operations.

3.Style
All organizations have their own distinct culture and management style. It includes the dominant values, beliefs and norms which develop over time and become relatively enduring features of the organizational life. The bank has democratic style of leadership, unlike autocratic leadership style, it allows its employees in decision making and they are free to given suggestions in interest of the bank.

4. Strategy:
Strategy means actions a company plans in response to or in anticipation of challenges in the external environment. Today lots of changes are taking place in the banking environment of our country. The Union Bank of India, in order to respond to the changes, has formed following action plans with specific reference to pricing and people. Action plans- Pricing: Increasing emphasis on fee based, commission based activities such as selling insurance products, introduction of money transfer (western union money transfer), collection of utility bills and other fee based services like Mutual Fund distribution which helps the Bank to be more competitive. Action plans- People or Employees: - Training employees on marketing of products like schematic loans, insurance, money transfer etc. - Giving incentives to employees for group performance in areas such as liking other income, contribution to substantial recovery of advances, procurement of additional SB and current accounts and deposits etc.

5. Systems
Every organization has some systems or internal processes to support and implement the strategy and run day-to-day affairs. These processes are normally strictly followed and are designed to achieve maximum effectiveness. The kind of systems used by the bank are

Computer systems
The bank has got all the best facilities to meet the requirements of their customers, keeping in mind the booming of business sector and the very much urge of meeting the fast transactions . the bank has launched the Core Banking Solutions(CBS) by using Finacle which makes the customer using his account not only in his branch but any branch of the bank.

Risk management systems:


It means managing the risk, the objective of the bank is to maximize its profit by making investments in profitable channel. Thus by minimizing the risk bank tries to gain investors confidence and enhances its profitability.

Control system
The bank has very good control systems in all areas of its operations, its make continuous review from time to time, And has adopted very strict measures to maintain its work standards, and the bank also undergoes audit inspection to measure its performance to meet the customer complaints and to settle down the routine problems.

6. Staff:
The organization is build up with the people , who are termed as staff and they are the ones who define the organization and build its scope and prospects. The employees appointed for the job must be well trained , provide them training with necessary skills and knowledge so that they can perform their work effectively and efficiently. the bank has got a staff training college in Bangalore, where it provides the training to the new as well as existing entrants.

7. Shared values
All members of the organization 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 banks values are based on its understanding towards its customers and employees and achieving the goals on timely basis.

SWOT ANALYSIS
The bank would know its position only identifying its Strengths, Weakness, and Opportunities & Threats. This is necessary to meet the Environment opportunities and threats. This will help the organization to be in the forefront of the competition and make its survival. The SWOT of Union Bank Of India are

STRENGTH
Union Bank of India is the 5th leading public sector bank in the country. It has got overseas banking operations It is controlled by the govt The bank has got 100% CBS in all its branches It has 2838 branches with 2420 Atms across the country. The bank opens 400 branches every year. The bank is into operation for more than 90 years The bank has staff of 27772 . across the country The banks net profit has increased from rs 1726.55 crores to rs 2074.92 crores. Market share of total business has increased from 3.39% to 3.44%. The banks staff are very dedicated to their work It has got product like debit cards, Online booking of rail tickets through e-mail The bank also has mobile banking facility for its customers

the bank is well established, and has created a good impression among its customers.

WEAKNESS
The bank had introduced the latest technologies in the past few years , in which there was heavier competition to face for it The bank needs to increase its promotional activities.

OPPORTUNITIES
There is a greater scope for the bank to carry on its business, because of the growing banking sector. Because of 100 % CBS the bank can create more customers. Expanding branches of the bank is the sign of growth Bank can target the youth especially the students for opening accounts and provide various facilities to them The bank can establish branches in rural areas to increase its business. The programme of financial inclusion should implemented in all the villages. The bank can provide session to its customers to make the best use of Internet banking. The bank has various attractive ,lending and deposit schemes for its customers. The growth in retail lending is expected to continue at much higher rates in the time to come as the retail loans to GDP are still less than 5% which is lower than the other developed countries.

THREATS
The bank is facing competition from the other public sector banks. Risks: Banks are exposed to various types of risk such as credit risk, market risk and operational risk. Effective risk management is critical to the success of the banks. Competition from foreign banks and their innovative financial products and new technology. Banks like any other industry are exposed to credit, market and operational risks in the day today operation