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McKinseys 7-S Framework

Figure 1 McKinsey's 7-S Framework


Source: www.mckinsey.com To analyze the different aspects of the organization, McKinsey has proposed the above shown framework. The combination of these 7-S provide effective framework for analyzing the organization and its activities. The 3Ss across the top of the model are described as 'Hard Ss': Strategy: The direction and scope of the company over the long term. Structure: The basic organization of the company, its departments, reporting lines, areas of expertise, and responsibility (and how they interrelate). Systems: Formal and informal procedures that govern everyday activity, covering everything from management information systems, through to the systems at the point of contact with the customer (retail systems, call centre systems, online systems, etc). The 4Ss across the bottom of the model are less tangible, more cultural in nature, and were termed 'Soft Ss' by McKinsey: Skills: The capabilities and competencies that exist within the company. Shared values: The values and beliefs of the company which guide employees towards 'valued' behaviour. Staff: The Companys people resources and how they are developed, trained, and motivated. Style: The leadership approach of top management and the company's overall operating approach.

Analysis of Reliance Industries Ltd. based on McKinseys 7-S Framework Strategy:


Reliance believes in sustainable development. It has made this as

their cornerstone of their business strategy to achieve sustainable and profitable growth. Following issues form a corner-stone of the Reliance strategy: Energy Security Growth through Innovation Health & Safety Environment Product Responsibility Social Institution Building

Structure:

The Board has established the following Committees to assist the Board in discharging its responsibilities: Audit Committee Remuneration Committee Shareholders'/Investors' Grievance Committee Finance Committee Health, Safety and Environment Committee Corporate Governance and Stakeholders' Interface Committee Employees Stock Compensation Committee

The Board has adopted charters setting forth the roles and responsibilities of each of the above Committees as well as qualifications for Committee membership, procedures for Committee members' appointment and removal, Committee structure and operations and reporting to the Board. The Board may constitute new Committees or dissolve any existing Committee, as it deems necessary for the discharge of its responsibilities. The corporate structure of Reliance Industries is followed in the following manner: Constitution of a Board of Directors of appropriate composition, size, varied expertise and commitment to discharge its responsibilities and duties.

Ensuring timely flow of information to the Board and its Committees to enable them to discharge their functions effectively. Independent verification and Companys financial reporting. safeguarding integrity of the

A sound system of risk management and internal control. Timely and balanced disclosure of all material concerning the Company to all stakeholders. Transparency and accountability. Compliance with all the applicable rules and regulations. Fair and equitable treatment of all its stakeholders including employees, customers, shareholders and investors information

Systems:

Company has strong system in place to carry out technical

activities. State of the art technologies are deployed which includes GPS, GIS, Satellite imaging, Vehicle tracking, GSM integration, Automatic meter reading etc. Reliance has MIS for reporting to and for internal data sharing, HR systems like Performance Management System and various other operational systems and policies. Apart from that, there are certain systems in place specifically keeping in mind the kind of business they are in. Risk Management and Internal Control System Reliance has a well defined risk management system. All risks are identified at department level and are collated in the risk register for review and discussion by the Executive Management. After discussion and review, risk ratings and mitigation plans are finalized and documented. For each key risk, responsibility is assigned to the concerned manager. In addition to the internal audit control programme being conducted in house, process reviews of key business activities are also carried out. Health, Safety, Security and Environment (HSSE) Reliance has a formal HSSE policy and systems in place which is an integral part of the design, project, operation and maintenance aspects and reflects best industry practices. Reliances HSSE policy and systems are designed to adopt the highest standards. At Reliance, HSSE is everyones responsibility and each employee has a duty to intervene to prevent unsafe actions and to reinforce good behaviour.

Safety First Safety First means considering safety matters related to all activities on top most priority or as the prime aspect and ensuring that all hazards associated are correctly identified, precautions are taken to avert any situation leading to unsafe act or condition. At Reliance, it is the way of working and should be furthered as way of living by practicing it not only at work related matters, task, activities but also to all off the job activities and tasks.

Skills:

Reliance has a good mix of employees having diverse skill sets suitable

for the job. The focus has shifted from diploma graduates to more professional employees having higher education and interpersonal skills. Company gives enough emphasis on training the staff regarding technological changes and migration to computerized work culture. Although known for its over-exertion of the employees, Reliance is amongst the most preferred recruiters.

Shared Values:

According to the official statement of RIL, its vision and

mission is to create value for its stakeholders, the nation and of course itself in a nutshell. The company follows the corporate governance ethics as mentioned earlier and hence shares value with others.

Staff:

The Company strives to convert its human resource from mere

workforce to intellectual capital, social capital and emotional capital. The recruitment policy of the company lays special stress on educational qualification and age of the new recruits. There has been a notable increase in intake of professional graduates. It targets the world market for talent, provides global perspectives and has a large number of expatriates on its rolls. Reliance endeavours to create a workplace where every person can reach his or her full potential.

Style:

Reliance is a professional organization the major credit of which goes to

the style of working of Shri. Dhirubhai Ambani. They are very particular about the rules laid down on safety and risk assessment. They believe in following ethical practices in all their undertakings and have constantly proved that through their actions. Broadly, the decision-making and leadership style of Reliance can be

said to be participative as employees are involved in operational decisions. However, the top management controls strategic decision making. World class practices on Health, Safety and Environment is unique feature of its style of operation. It has won many awards nationally as well as internationally.

References:
Solely Reliance web-site