McKinsey 7S Framework of Nestle ltd.

McKinsey 7S Framework is a tool that analyzes firm’s organizational design by looking at 7 key internal
elements: strategy, structure, systems, shared values, style, staff and skills, in order to identify if they
are effectively aligned and allow organization to achieve its objectives. McKinsey 7s model was
developed in 1980s by McKinsey consultants Tom Peters, Robert Waterman and Julien Philips with a
help from Richard Pascale and Anthony G. Athos. Since the introduction, the model has been widely
used by academics and practitioners and remains one of the most popular strategic planning tools. It
sought to present an emphasis on human resources (Soft S), rather than the traditional mass production
tangibles of capital, infrastructure and equipment, as a key to higher organizational performance. The
goal of the model was to show how 7 elements of the company: Structure, Strategy, Skills, Staff, Style,
Systems, and Shared values, can be aligned together to achieve effectiveness in a company. The key
point of the model is that all the seven areas are interconnected and a change in one area requires
change in the rest of a firm for it to function effectively. The model can be applied to many situations
and is a valuable tool when organizational design is at question. The most common uses of the
framework are:  To facilitate organizational change.  To help implement new strategy.  To identify
how each area may change in a future.  To facilitate the merger of organizations. 32 The McKinsey 7S
Framework includes the following: Strategy is a plan developed by a firm to achieve sustained
competitive advantage and successfully compete in the market. What does a well-aligned strategy mean
in 7s McKinsey model? In general, a sound strategy is the one that’s clearly articulated, is long-term,
helps to achieve competitive advantage and is reinforced by strong vision, mission and values. But it’s
hard to tell if such strategy is wellaligned with other elements when analyzed alone. So the key in 7s
model is not to look at your company to find the great strategy, structure, systems and etc. but to look if
its aligned with other elements. For example, short-term strategy is usually a poor choice for a company
but if it’s aligned with other 6 elements, and then it may provide strong results. Structure represents the
way business divisions and units are organized and include the information of who is accountable to
whom. In other words, structure is the organizational chart of the firm. It is also one of the most visible
and easy to change elements of the framework. The structure of the organization is made up of its
corporate hierarchy, chain of command, and divisional makeup that outline how the operations function
and interconnect. In effect, it details the management configuration and responsibilities of workers. The
structure of the company is its departments, reporting lines, areas of expertise, and responsibility.
Structure is a system that outlines how certain activities are directed to achieve goals of an organization.
Structure also determines how information flows one level to another level in an organization.
Centralized structure allows each manager to have authority over wide range of employees,
departments and business function. Whereas decentralized structure allows managers to make
decisions on a smaller scale and is responsible for fewer job functions. 33 Systems are the processes and
procedures of the company, which reveal business’ daily activities and how decisions are made. Systems
are the area of the firm that determines how business is done and it should be the main focus for
managers during organizational change. Main systems that run GCPL include information system, HR
system, financial system, quality management system and others. The management attempts to achieve
a close integration between individual systems within the organization in order to increase the overall
effectiveness of the company. System are the processes and procedures laid down for conduct of
activities and a direction for all staff members to follow in order to achieve the targets. GCPL has a world
class manufacturing facility, research and development centre for processed foods. The system is
running smoothly. The company provides centralized software for the employees for field assist. Skills
are the abilities that firm’s employees perform very well. They also include capabilities and
competences. During organizational change, the question often arises of what skills the company will
really need to reinforce its new strategy or new structure. The skill refers to the capabilities of the staff
within the organization as a whole. The company has the skill needed to carry out the company’s
strategy like: -Good and specialized knowledge about the products. -High level of specialization in
communication -Ability to convert people into customer Staff element is concerned with what type and
how many employees an organization will need and how they will be recruited, trained, motivated and
rewarded.The term staff refers to the way organization introduce young recruits in to the mainstream of
their activities and the manner in which they manage their careers in the new interns develop
employees and shape basic value. The 34 employees in all the departments are given training for 6
months where they will be given all the necessary skill that is needed for their respective jobs. The
efficiency of the existing employees is also measured to know the growth and their relative position in
the organization. There are 1600 employees all over the country .Style represents the way the company
is managed by top-level managers, how they interact, what actions do they take and their symbolic
value. In other words, it is the management style of company’s leaders. 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. Democratic style has been followed in Godrej
Consumer Products Limited which allows individual department to take necessary decisions. The style of
operation that is followed towards the customer is much focused and it is aimed to give utmost
attention to the customer. Personalized care is taken to satisfy with any of the problems faced by the
clients. Shared Values are at the core of McKinsey 7s model. They are the norms and standards that
guide employee behavior and company actions and thus, are the foundation of every organization. The
shared values, originally termed as super ordinate goals, refer to the significant meanings or guiding
concepts that organizational members share. Shared values are considered to be the foundation of
ethics, community and culture. When people’s values are met and matched, they feel a sense of
satisfaction, harmony, or rapport. When their values are not met or matched, people often feel
dissatisfied, incongruent, or violated -Customer -personalized attention is the key. -Integrity - highest
ethical standards are used in all the transactions -Mutual Respect – trust in working relationship