2MCKENSY’

S7SFRAMEWORK

Thi
spaperdi
scussesMcKi
nsey
's7SModel
thatwascr
eat
edbyt
heconsul
ti
ngcompany
McKi
nseyandCompanyi
ntheear
ly1980s.Si
ncet
heni
thasbeenwi
del
yusedby
pr
act
it
ioner
sandacademi
csal
i
kei
nanal
yzi
nghundr
edsofor
gani
zat
ions

The McKi
nsey7S modelwas named af
tera consul
ti
ng company
,McKi
nseyand
Company
,whi
chhasconduct
edappl
i
edr
esear
chi
nbusi
nessandi
ndust
ry(
Pascal
e&
At
hos,1981;Pet
ers&Wat
erman,1982)
.Al
loft
heaut
hor
swor
kedasconsul
tant
sat
McKi
nseyandCompany
;int
he1980s,t
heyusedt
hemodelt
oanal
yzeov
er70l
arge
or
gani
zat
ions.TheMcKi
nsey7SFr
amewor
kwascr
eat
edasar
ecogni
zabl
eandeasi
l
y
r
emember
edmodel
inbusi
ness.Thesev
env
ari
abl
es,
whi
cht
heaut
hor
ster
m"l
ever
s",
all
begi
nwi
tht
hel
ett
er"
S":

Thesesev
env
ari
abl
esi
ncl
udest
ruct
ure,
str
ategy
,sy
stems,
ski
l
ls,
sty
le,
staf
fandshar
ed
v
alues.St
ruct
urei
sdef
inedast
heskel
etonoft
heor
gani
zat
ionort
heor
gani
zat
ional
char
t.Theaut
hor
sdescr
ibest
rat
egyast
hepl
anorcour
seofact
ioni
nal
l
ocat
ing
r
esour
cest
oachi
evei
dent
if
iedgoal
sov
ert
ime.Thesy
stemsar
ether
out
inepr
ocesses
and pr
ocedur
es f
oll
owed wi
thi
nthe or
gani
zat
ion.St
affar
e descr
ibed i
nter
ms of
per
sonnel
cat
egor
ieswi
thi
ntheor
gani
zat
ion(
e.g.engi
neer
s),
wher
east
heski
l
lsv
ari
abl
e
r
efer
stot
hecapabi
l
iti
esoft
hest
affwi
thi
ntheor
gani
zat
ionasawhol
e.Thewayi
n
whi
chkeymanager
sbehav
einachi
evi
ngor
gani
zat
ionalgoal
sisconsi
der
edt
obet
he
st
ylev
ari
abl
e;t
hisv
ari
abl
eist
houghtt
o encompass t
he cul
tur
alst
yle oft
he
or
gani
zat
ion.Theshar
edv
aluesv
ari
abl
e,or
igi
nal
l
yter
medsuperor
dinat
egoal
s,r
efer
s
t
othesi
gni
fi
cantmeani
ngsorgui
dingconcept
sthator
gani
zat
ionalmember
sshar
e
(
Pet
ersandWat
erman,
1982)
.

1.St
ruct
ure

Ev
eryor
gani
zat
ionno mat
terbi
g orsmal
lhasgoti
tsownor
gani
zat
ionst
ruct
ure.
Cr
eat
ingt
hest
ruct
urei
sadi
ff
icul
ttaskf
ort
het
opmanagement
.St
ruct
ureshoul
dbe
f
ormedi
nsuchamannert
hati
tsnei
thercompl
i
cat
edf
ort
heempl
oyeesnorf
ort
het
op
managementt
ocont
rol
it.

St
ruct
ureatmanagementl
evel
:

Chai
rman&Managi
ngDi
rect
or:
Mr.M.
V.Nai
r

Execut
iveDi
rect
ors:
Mr.
S.Raman
 Tabl
eno3.
1

Chai
rman & Managi
ng Ex
ecut
iveDi
rect
ors Boar
dOfDi
rect
ors
Di
rect
or:

:
Mr.M.
V.Nai
r Mr
.S.
Raman Mr
.K.
V.Eapen

Mr
.S.
C.Kal
i
a Mr
.K.
Siv
araman

Mr
s.Rani
Sat
ish

Mr
.B.
M.Shar
ma

Mr
.AshokSi
ngh

Mr
.N.
Shankar

Dr
.Gul
fam Muj
i
bi

Pr
of.
M.S.
Sri
ram

Mr
.Ar
unKumarNanda

Mr
.S.
Rav
i

St
ruct
ureatbr
anchl
evel
:Thebankcur
rent
lyoper
ates2868br
anchesandt
he
br
anchesar
eheadedbyt
hebr
anchmanagerandal
ltheempl
oyeesoft
hebr
anchar
e
account
abl
etot
hebr
anchmanager
,andhei
sal
sor
esponsi
blef
ort
hedayt
oday
oper
ati
onsoft
hebank.

2.
Ski
l
ls

Ski
l
lsr
efert
osetknowl
edgeandt
alentwhi
cht
heempl
oyeeneedt
ohav
einhi
mto
at
tendt
heor
gani
zat
iongoal
.Ski
l
lsar
epossessedbasedont
hequal
i
ficat
ionofan
i
ndi
vi
dualandt
hesoundknowl
edgeandexper
iencet
hatt
heempl
oyeewoul
dpossess
onhi
swor
k.TheUni
onBankofI
ndi
abel
i
evest
hatt
heski
l
lsar
ethei
ntegr
alpar
toft
he
bankandt
heempl
oyeesar
eappoi
ntedwi
tht
hespeci
fi
cski
l
lsr
equi
redt
oper
for
mit
s
oper
ati
ons.

3.
Sty
le

Al
lor
gani
zat
ionshav
ethei
rowndi
sti
nctcul
tur
eandmanagementst
yle.I
tincl
udest
he
domi
nantv
alues,bel
i
efsandnor
mswhi
chdev
elopov
ert
imeandbecomer
elat
ivel
y
endur
ingf
eat
uresoft
heor
gani
zat
ional
li
fe.Thebankhasdemocr
ati
cst
yleofl
eader
shi
p,
unl
i
keaut
ocr
ati
cleader
shi
pst
yle,i
tal
l
owsi
tsempl
oyeesi
ndeci
sionmaki
ngandt
hey
ar
efr
eet
ogi
vensuggest
ionsi
nint
erestoft
hebank.

4.St
rat
egy
:

St
rat
egymeansact
ionsacompanypl
ansi
nresponset
oori
nant
ici
pat
ionofchal
l
enges
i
ntheex
ter
nalenv
ironment
.Todayl
otsofchangesar
etaki
ngpl
acei
nthebanki
ng
env
ironmentofourcount
ry.TheUni
onBankofI
ndi
a,i
nor
dert
orespondt
othechanges,
hasf
ormedf
oll
owi
ngact
ionpl
answi
thspeci
fi
cref
erencet
opr
ici
ngandpeopl
e.

Act
ionpl
ans-Pr
ici
ng:

I
ncr
easi
ng emphasi
s on f
ee based,commi
ssi
on based act
ivi
ti
es such as sel
l
ing
i
nsur
ancepr
oduct
s,i
ntr
oduct
ionofmoneyt
ransf
er(
west
ernuni
onmoneyt
ransf
er)
,
col
l
ect
ionofut
il
it
ybi
l
lsandot
herf
eebasedser
vicesl
i
keMut
ual
Funddi
str
ibut
ionwhi
ch
hel
pst
heBankt
obemor
ecompet
it
ive.

Act
ionpl
ans-Peopl
eorEmpl
oyees:

-Tr
aini
ngempl
oyeesonmar
ket
ingofpr
oduct
sli
keschemat
icl
oans,
insur
ance,
money
t
ransf
eret
c.

-Gi
vi
ngi
ncent
ivest
oempl
oyeesf
orgr
oupper
for
mancei
nar
eassuchasl
i
kingot
her
i
ncome,cont
ri
but
iont
osubst
ant
ialr
ecov
eryofadv
ances,pr
ocur
ementofaddi
ti
onalSB
andcur
rentaccount
sanddeposi
tset
c.

5.Sy
stems

Ev
eryor
gani
zat
ionhassomesy
stemsori
nter
nalpr
ocessest
osuppor
tandi
mpl
ement
t
hest
rat
egyandr
unday
-to-
dayaf
fai
rs.Thesepr
ocessesar
enor
mal
l
yst
ri
ctl
yfol
l
owed
andar
edesi
gnedt
oachi
evemaxi
mum ef
fect
iveness.Theki
ndofsy
stemsusedbyt
he
bankar
e

 Comput
ersy
stems

Thebankhasgotal
lthebestf
aci
l
iti
est
omeett
her
equi
rement
soft
hei
rcust
omer
s,
keepi
ngi
nmi
ndt
heboomi
ngofbusi
nesssect
orandt
hev
erymuchur
geofmeet
ingt
he
f
astt
ransact
ions.t
hebankhasl
aunchedt
heCor
eBanki
ngSol
uti
ons(
CBS)byusi
ng
Fi
nacl
ewhi
chmakest
hecust
omerusi
nghi
saccountnotonl
yinhi
sbr
anchbutany
br
anchoft
hebank.

 Ri
skmanagementsy
stems:

I
tmeansmanagi
ngt
her
isk,
theobj
ect
iveoft
hebanki
stomaxi
mizei
tspr
ofi
tbymaki
ng
i
nvest
ment
sin pr
ofi
tabl
echannel
.Thusbymi
nimi
zi
ng t
her
iskbankt
ri
est
o gai
n
i
nvest
orsconf
idenceandenhancesi
tspr
ofi
tabi
l
ity
.

 Cont
rol
syst
em

Thebankhasv
erygood cont
rolsy
stemsi
n al
lar
easofi
tsoper
ati
ons,i
tsmake
cont
inuousr
evi
ewf
rom t
imet
oti
me,
Andhasadopt
edv
eryst
ri
ctmeasur
est
omai
ntai
n
i
tswor
kst
andar
ds,and t
hebankal
so under
goesaudi
tinspect
iont
o measur
eit
s
per
for
mancet
omeett
hecust
omercompl
aint
sandt
oset
tl
edownt
her
out
inepr
obl
ems.

6.St
aff
:

Theor
gani
zat
ioni
sbui
l
dupwi
tht
hepeopl
e,whoar
eter
medasst
affandt
heyar
ethe
oneswhodef
inet
heor
gani
zat
ionandbui
l
dit
sscopeandpr
ospect
s.Theempl
oyees
appoi
ntedf
ort
hej
obmustbewel
ltr
ained,pr
ovi
det
hem t
rai
ningwi
thnecessar
yski
l
ls
andknowl
edgesot
hatt
heycanper
for
mthei
rwor
kef
fect
ivel
yandef
fi
cient
ly.t
hebank
hasgotast
afft
rai
ningcol
l
egei
nBangal
ore,
wher
eitpr
ovi
dest
het
rai
ningt
othenewas
wel
lasexi
sti
ngent
rant
s.

7.Shar
edv
alues

Al
lmember
soft
heor
gani
zat
ionshar
esomecommonf
undament
ali
deasorgui
ding
concept
sar
oundwhi
cht
hebusi
nessi
sbui
l
t.Thi
smaybet
omakemoneyort
oachi
eve
excel
l
encei
napar
ti
cul
arf
iel
d.Thesev
aluesandcommongoal
skeept
heempl
oyees
wor
kingt
owar
dsacommondest
inat
ionasacoher
entt
eam andar
eimpor
tantt
okeep
t
het
eam spi
ri
tal
i
ve.

Thebanksv
aluesar
ebasedoni
tsunder
standi
ngt
owar
dsi
tscust
omer
sandempl
oyees
andachi
evi
ngt
hegoal
sont
imel
ybasi
s.

SWOTANALYSI
S
The bank woul
d know i
ts posi
ti
on onl
yident
if
ying i
ts St
rengt
hs,Weakness,and
Oppor
tuni
ti
es&Thr
eat
s.Thi
sisnecessar
ytomeett
heEnv
ironmentoppor
tuni
ti
esand
t
hreat
s.Thi
swi
l
lhel
ptheor
gani
zat
iont
obei
nthef
oref
rontoft
hecompet
it
ionand
makei
tssur
viv
al.

TheSWOTofUni
onBankOfI
ndi
aar
e

STRENGTH

 Uni
onBankofI
ndi
ai he5thl
st eadi
ngpubl
i
csect
orbanki
nthecount
ry.

 I
thasgotov
erseasbanki
ngoper
ati
ons

 I
tiscont
rol
l
edbyt
hegov
t

 Thebankhasgot100%CBSi
nal
li
tsbr
anches

 I
thas2838br
ancheswi
th2420At
m’sacr
osst
hecount
ry.
 Thebankopens400br
anchesev
eryy
ear
.

 Thebanki
sint
ooper
ati
onf
ormor
ethan90y
ear
s

 Thebankhasst
affof27772.acr
osst
hecount
ry

 Thebanksnetpr
ofi
thasi
ncr
easedf
rom r
s1726.
55cr
orest
ors2074.
92cr
ores.

 Mar
ketshar
eoft
otal
busi
nesshasi
ncr
easedf
rom 3.
39%t
o3.
44%.

 Thebanksst
affar
ever
ydedi
cat
edt
othei
rwor
k

 I
thasgotpr
oductl
i
kedebi
tcar
ds,
Onl
i
nebooki
ngofr
ail
ticket
sthr
oughe-
mai
l
 Thebankal
sohasmobi
l
ebanki
ngf
aci
l
ityf
ori
tscust
omer
s
 t
he bank i
s wel
lest
abl
i
shed,and has cr
eat
ed a good i
mpr
essi
on among i
ts
cust
omer
s.

WEAKNESS
 Thebankhadi
ntr
oducedt
hel
atestt
echnol
ogi
esi
nthepastf
ew y
ear
s,i
nwhi
ch
t
her
ewasheav
iercompet
it
iont
ofacef
ori
t
 Thebankneedst
oincr
easei
tspr
omot
ional
act
ivi
ti
es.

OPPORTUNI
TIES

 Ther
eisagr
eat
erscopef
ort
hebankt
ocar
ryoni
tsbusi
ness,becauseoft
he
gr
owi
ngbanki
ngsect
or.
 Becauseof100%CBSt
hebankcancr
eat
emor
ecust
omer
s.
 Expandi
ngbr
anchesoft
hebanki
sthesi
gnofgr
owt
h
 Bankcant
argett
hey
out
hespeci
all
ythest
udent
sforopeni
ngaccount
sandpr
ovi
de
v
ari
ousf
aci
l
iti
est
othem
 Thebankcanest
abl
i
shbr
anchesi
nrur
alar
east
oincr
easei
tsbusi
ness.
 Thepr
ogr
ammeoff
inanci
ali
ncl
usi
onshoul
dimpl
ement
edi
nal
lthev
il
lages.
 Thebankcanpr
ovi
desessi
ont
oit
scust
omer
stomaket
hebestuseofI
nter
net
banki
ng.
 Thebankhasv
ari
ousat
tract
ive,
l
endi
nganddeposi
tschemesf
ori
tscust
omer
s.
 Thegr
owt
hinr
etai
ll
endi
ngi
sexpect
edt
ocont
inueatmuchhi
gherr
atesi
nthet
ime
t
ocomeast
her
etai
lloanst
oGDPar
est
il
llesst
han5% whi
chi
slowert
han t
he
ot
herdev
elopedcount
ri
es.

THREATS

 Thebanki
sfaci
ngcompet
it
ionf
rom t
heot
herpubl
i
csect
orbanks.
 Ri
sks:Banksar
eexposedt
ovar
ioust
ypesofr
isksuchascr
edi
tri
sk,
mar
ketr
iskand
oper
ati
onal
risk.Ef
fect
iver
iskmanagementi
scr
it
ical
tot
hesuccessoft
hebanks.
 Compet
it
ionf
rom f
orei
gnbanksandt
hei
rinnov
ati
vef
inanci
alpr
oduct
sandnew
t
echnol
ogy
. Banks l
i
ke anyot
heri
ndust
ryar
e exposed t
o cr
edi
t,mar
ketand
oper
ati
onal
risksi
nthedayt
odayoper
ati
on