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ORGANIZATION MANAGEMENT

Organizational Design

McKinsey 7-S Model

Strategy Structure Systems Style Staff Skills Superordinate goals

McKinsey 7-S Model


Strategy The Hard Ss Structure The hard elements are factual and easy to identify. They can be Systems found in strategy statements, Style corporate plans, organization charts, and other documentation Staff Skills Superordinate goals

McKinsey 7-S Model

Strategy Structure Systems Style Staff Skills Superordinate goals

The Soft Ss
The soft elements are difficult to describe since they are continuously developing and changing. They are highly determined by the people at work in the organization.

7-S Model The Hard Ss

Strategy Structure Systems Style Staff Skills Superordinate goals

Strategy

Actions a company plans in response to or in anticipation of changes in its external environment

Structure

Basis for specialization and coordination, influenced primarily by strategy and by organization size and diversity

Systems

Formal and informal procedures that support the strategy and structure (Systems are more powerful than they are given credit)

Organizational Structure

Strategy Structure Systems Style Staff Skills Superordinate goals

Organization Chart
formal

reporting relationships levels in hierarchy spans of control departmentalization

Systems to facilitate:
coordination
communication integration

Structural Designs

Functional Structure

Strategy Structure Systems Style Staff Skills Superordinate goals

Can adapt functional structure with horizontal linkages

Divisional Structure Geographical Structure Matrix Structure Horizontal Structure / Product Line Structure Hybrid Structure

CEO

Vice President Fianance

Vice President Manufacturing

Director Human Resources

Chief Accountant

Budget Analyst

Plant Maintenance Superintendent Superintendent

Training Specialist

Benefits Administrator

Other Organizational Forms

Joint Ventures Licensing agreements Strategic Alliances Consortia Virtual organizations Global (transnational) Work Teams

Strategy Structure Systems Style Staff Skills Superordinate goals

Virtual Teams

Virtual Teams are characterized by:


Distributed

Strategy Structure Systems Style Staff Skills Superordinate goals

locations of team members Use of information technology to accomplish tasks Effective when:

Communication & collaboration skills are high. Trust among team members is high

Organizations are increasing their use of virtual teams Potential for improvement in virtual team management is huge

Information Linkages

Vertical Information Linkages


Hierarchy
Rules

Strategy Structure Systems Style Staff Skills Superordinate goals

and plans (i.e. budget)

Horizontal Information Linkages


Information
Liaison

systems

role Task force Integrator role (i.e. Project manager) Cross-functional teams

Ladder of Mechanisms for Horizontal Linkage and Coordination


H IGH

Teams Full-time Integrators

Amount of Horizontal Coordination Required

Task Forces
Direct Contact
LOW

Information Systems

LOW

HIGH

Cost of Coordination in Time and Human Resources

Systems various elements


Communications practice and system Management reporting system Approval process Planning/budgeting system Rewards system including appraisal Rules

Strategy Structure Systems Style Staff Skills Superordinate goals

From Tasks to Structure


Tasks define jobs Jobs define skills required Skills (and other considerations) define staff
Over

Strategy Structure Systems Style Staff Skills Superordinate goals

time skills change as staff gains knowledge and experience, and as technology and corporate infrastructure mature

Collection of jobs basis for structure

Job design considerations

Do they have the necessary skills and knowledge to fulfill proposed / expanded job requirements? What are the needs of the incumbent or the rest of your workforce in general?

Monetary Growth Socialization


Strategy Structure Systems Style Staff Skills Superordinate goals

7-S Model The Soft Ss - 1

Style / Culture

The culture of the organization, consisting of Organizational culture: the dominant values, beliefs and norms which develop over time and become relatively enduring features of organization life Management style: what managers do rather than what they say (where they spend their time and attention, what they allow, what they reward, etc)

Strategy Structure Systems Style Staff Skills Superordinate goals

Staff Skills Shared values / Superordinate goals

7-S Model The Soft Ss - 2

Style / Culture Staff

Strategy Structure Systems Style Staff Skills Superordinate goals

The people/human resource management ways of shaping basic management values, processes used to develop managers, ways of introducing new employees and managing careers, socialization processes Distinctive competencies what the company does best, ways of developing or shifting competencies Guiding concepts, fundamental ideas around which a business is built simple, usually stated at abstract level, have great meaning inside the organization, although outsiders may not see or understand them

Skills

Shared values / Superordinate goals

Organizational Culture

Culture is to organizations what personality is to individuals All companies have cultures


Culture

Strategy Structure Systems Style Staff Skills Superordinate goals

by default Culture by design thoughtful choices based on values and core beliefs

How does a company consciously create its culture?

From Gray & Larson Project Management: The Managerial Process

Types of Organizational Cultures

Control cultures
Drive for predictability and order

Collaboration cultures
Pursue close relationship with customers

Strategy Structure Systems Style Staff Skills Superordinate goals

Competence cultures
Pursue excellence and innovation

Cultivation cultures
Pursue life enrichment for customers and employees

Organizational Culture

Observable Evidence:
Symbols Ceremonies Stories Behaviors Language Dress

Strategy Structure Systems Style Staff Skills Superordinate goals

Underlying Roots:
Values,

Assumptions, Beliefs, Attitudes, Feelings

Culture in practice

Conflict management

Strategy Structure Systems Style Staff Skills Superordinate goals

Relationship or interpersonal conflict Task / process conflict Functional vs. dysfunctional conflict Factors: goal incompatibility, limited resources, differences

Power the capacity to influence behavior

Positional power: rewards/consequences, control of resources, information and decision control Personal power: expert, referent (based on identification and admiration)

Politics the use of power to influence decisions

Management vs. Leadership


Planning & budgeting Organizing & staffing Controlling & problem solving vs. vs. vs. Setting the direction Aligning people Motivating people

Management is about coping with complexity Leadership is about coping with change

Management vs. Leadership

Some managers (but not all) are leaders Some leaders (but not all) are good managers A manager gets work done through the efforts of other people
Includes

planning, organizing, motivating, and controlling


that vision and moves the organization toward that vision

A leader creates and realizes a vision


Communicates

Strategy Structure Systems Style Staff Skills Superordinate goals

McKinsey 7-S Model

Strategy Structure Systems Style Staff Skills Superordinate goals

Effective organizations achieve a harmony between these seven elements; if one element changes, then this will affect all the others

McKinsey 7-S Model

Strategy Structure Systems Style Staff Skills Superordinate goals

The 7-S Model can be a valuable tool to initiate change processes and to give them direction; i.e. determine current state and ideal state of each element, and develop action plans to close the gaps

McKinsey 7-S Model

Strategy Structure Systems Style Staff Skills Superordinate goals

In change processes, many organizations focus their efforts on the hard Ss; however, the soft factors can make or break a successful change process. All factors must be accounted for.

McKinsey 7-S Model

Strategy Structure Systems Style Staff Skills Superordinate goals

Interrelated Equilibrium Foundation of corporate culture Levers available to management

Executing Change
Seven Key Considerations

Strategic Intent Substance Scale Scope/Breadth Speed Sequence Style

Style

Scope

Substance

Strategic Intent Speed Scale

Sequence

Strategic Intent
Precise Broad
Scope

Style Substance Strategic Intent Speed Scale

Substance
Soft Ss Hard Ss

Sequence

Scale
Small Large

Scope/Breadth
Isolated Organization-wide

Speed
Slow Fast

Sequence
Hard Soft Soft Hard

Style
Top Down Bottom Up

Assignment

Read BA 550 class packet:


Turning

Great Strategy into Great Performance Governance and Strategy Implementation


Case brief Americhem Last names beginning with A M Complete proposal on term project