PROJECT

MANAGEMENT

Organizational Design-7-S
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
Systems and easy to identify. They can be
found in strategy statements,
Style corporate plans, organization
Staff charts, and other documentation
Skills
Superordinate goals
McKinsey 7-S Model
Strategy
Structure
Systems The Soft Ss
Style The soft elements
are difficult to
Staff describe since they
Skills are continuously
developing and
Superordinate goals
changing. They are
highly determined by
the people at work in
the organization.
 Strategy

7-S Model The Hard Ss

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)
 Strategy
Structure

Organizational 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
 Strategy

Structural Designs


Structure
Systems
Style
Staff
Functional Structure

Skills
Superordinate goals

Can adapt functional structure

with horizontal linkages
Divisional Structure
Geographical Structure
Matrix Structure
Horizontal Structure / CEO
Product Line Structure
Vice President Vice President Director
Hybrid Structure Fianance Manufacturing Human Resources

Chief Budget Plant Maintenance Training Benefits

Accountant Analyst Superintendent Superintendent Specialist Administrator
 Strategy

Other Organizational Forms

Structure
Systems
Style
Staff
Skills

Joint Ventures Superordinate goals

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

Virtual Teams


Structure
Systems
Style
Staff
Skills

Virtual Teams are characterized by: Superordinate goals

Distributed 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
 Strategy

Information Linkages


Structure
Systems
Style
Staff
Skills

Vertical Information Linkages Superordinate goals

Hierarchy
Rules and plans (i.e. budget)
Horizontal Information Linkages
Information systems
Liaison role
Task force
Integrator role (i.e. Project manager)
Cross-functional teams
 Ladder of Mechanisms for
Horizontal Linkage and Coordination

H IGH Teams
Coordination Required

Full-time Integrators
Amount of Horizontal

Task Forces

Direct Contact

LOW Information Systems

LOW HIGH

Cost of Coordination in
Time and Human Resources
 Strategy

Systems various elements

Structure
Systems
Style
Staff
Skills
Superordinate goals

Communications practice and system

Management reporting system
Approval process
Planning/budgeting system
Rewards system including appraisal
Rules
 Strategy

From Tasks to Structure

Structure
Systems
Style
Staff
Skills
Superordinate goals
Tasks define jobs
Jobs define skills required
Skills (and other considerations) define
staff
Over 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
 Strategy

7-S Model The Soft Ss - 1

Structure
Systems
Style
Staff
Style / Culture

Skills
Superordinate goals
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)
Staff
Skills
Shared values /
Superordinate goals
 Strategy

7-S Model The Soft Ss - 2

Structure
Systems
Style
Staff
Skills

Style / Culture Superordinate goals

Staff
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
Skills
Distinctive competencies what the company does best,
ways of developing or shifting competencies
Shared values / Superordinate goals
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
 Strategy
Structure

Organizational Culture


Systems
Style
Staff
Skills

Culture is to organizations what Superordinate goals

personality is to individuals
All companies have cultures
Culture 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
Strategy

Control cultures

Structure
Systems

Drive for predictability and order

Style
Staff
Skills

Collaboration cultures Superordinate goals

Pursue close relationship with customers

Competence cultures
Pursue excellence and innovation

Cultivation cultures
Pursue life enrichment for customers and employees
 Strategy

Organizational Culture


Structure
Systems
Style
Staff
Skills
Observable Evidence: Superordinate goals

Symbols
Ceremonies
Stories
Behaviors
Language
Dress

Underlying Roots:
Values, Assumptions, Beliefs, Attitudes, Feelings
 Strategy
Structure

Culture in practice


Systems
Style
Staff

Conflict management

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

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
A leader creates and realizes a vision
Communicates that vision and moves the
organization toward that vision

Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
McKinsey 7-S Model

Strategy Effective organizations

Structure achieve a harmony
Systems between these seven
Style elements; if one
element changes, then
Staff
this will affect all the
Skills others
Superordinate goals
McKinsey 7-S Model

Strategy The 7-S Model can be a

Structure valuable tool to initiate
change processes and
Systems to give them direction;
Style i.e. determine current
Staff state and ideal state of
each element, and
Skills develop action plans to
Superordinate goals close the gaps
McKinsey 7-S Model
In change processes,
Strategy
many organizations
Structure focus their efforts on
Systems the hard Ss; however,
Style the soft factors can
Staff make or break a
successful change
Skills
process. All factors
Superordinate goals must be accounted for.
McKinsey 7-S Model

Strategy
Interrelated
Structure
Equilibrium
Systems
Foundation of
Style corporate culture
Staff Levers available to
Skills management
Superordinate goals