Management Science

Lesson 15
Business Strategy Models

Learning Objectives
A. Explain the following Business Strategy Models
1. Porter’s 5 forces Model-To analyze industries
2. Business Model Canvas – To analyze their business
3. BCG Growth-Share Matrix- To analyze Product Portfolios
4. Porters Diamond Model- To analyze locations
5. McKinsey 7 S Model-To analyze teams

Discussion

E. McKinsey 7 S Model - To analyze teams

What is McKinsey 7S Model?

The 7S Model specifies seven elements that are classified as "hard" or "soft." Soft elements are fuzzier,
more intangible, and influenced by corporate culture, whereas hard elements are easily identified and
influenced by management.

The following are the hard elements:

 1. Strategy
2. Structure
3. Systems

The soft elements are as follows:

4. Shared values
5. Skills
6. Style
7. Staff

Organizations use the framework as a strategic planning tool to demonstrate how seemingly disparate
aspects of a company are, in fact, interconnected and reliant on one another to achieve overall success.

Explaination of the 7 S's

A. Hard Elements
1. A strategy is a plan implemented by an organization to remain competitive in its industry and
market. Establishing a long-term strategy that aligns with the other elements of the model and clearly
communicates the organization's objectives and goals is an ideal approach.

2. The structure of the organization is made up of its corporate hierarchy, chain of command, and
divisional makeup, which outline how the operations function and interconnect. In essence, it
specifies the management structure and worker responsibilities.

3. The company's systems are the daily procedures, workflow, and decisions that comprise the
organization's standard operations.

B. Soft Elements

4. Shared values are the company's widely accepted standards and norms that influence and temper
the behavior of the entire staff and management. This could be outlined in company guidelines
distributed to employees. In practice, shared values are related to accepted workplace behavior.

5. Skills include the talents and capabilities of the organization's staff and management, which can
influence the types of accomplishments and work that can be accomplished. There may come a time
when a company evaluates its available skills and determines that changes are required to achieve the
goals outlined in its strategy.

6. Style refers to management's example and approach to leading the company, as well as how this
affects performance, productivity, and corporate culture.
7. Staff refers to the company's personnel, the size of the workforce, where their motivations reside, and
how they are trained and prepared to complete the tasks assigned to them.

The McKinsey 7-S Model is useful in a wide range of situations where it is important to understand how
the various parts of an organization interact with one another. It can be used to make future corporate
strategy decisions.

The framework can also be used to assess the likely consequences of future organizational changes or to
align departments and processes during a merger or acquisition. McKinsey Model 7 elements can also be
applied to individual teams or projects.