ORGANIZATION
MANAGEMENT
Organizational Design
McKinsey 7-S Model
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
McKinsey 7-S Model
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Strategy
The Hard S’s
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
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
The Soft S’s
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.
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7-S Model – The Hard S’s
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Strategy
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Actions a company plans in response to or in anticipation of
changes in its external environment
Structure
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
Basis for specialization and coordination, influenced
primarily by strategy and by organization size and diversity
Systems
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Formal and informal procedures that support the strategy
and structure (Systems are more powerful than they are
given credit)
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Organizational Structure
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Organization Chart
 formal
reporting relationships
 levels in hierarchy
 spans of control
 departmentalization
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Systems to facilitate:
 coordination
 communication
 integration
Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
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Structural Designs
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Functional Structure
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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
Chief
Accountant
Budget
Analyst
Vice President
Manufacturing
Plant
Maintenance
Superintendent Superintendent
Director
Human Resources
Training
Specialist
Benefits
Administrator
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Other Organizational Forms
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Joint Ventures
Licensing agreements
Strategic Alliances
Consortia
Virtual organizations
Global (transnational) Work Teams
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
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Virtual Teams
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Virtual Teams are characterized by:
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
 Distributed
locations of team members
 Use of information technology to accomplish tasks
 Effective when:
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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
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Information Linkages
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Vertical Information Linkages
 Hierarchy
 Rules
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and plans (i.e. budget)
Horizontal Information Linkages
 Information
 Liaison
systems
role
 Task force
 Integrator role (i.e. Project manager)
 Cross-functional teams
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
Ladder of Mechanisms for
Horizontal Linkage and Coordination
Teams
Amount of Horizontal
Coordination Required
H IGH
Full-time Integrators
Task Forces
Direct Contact
LOW
Information Systems
LOW
HIGH
Cost of Coordination in
Time and Human Resources
Systems – various elements
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
Communications practice and system
Management reporting system
Approval process
Planning/budgeting system
Rewards system including appraisal
“Rules”
From Tasks to Structure
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Strategy
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
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Collection of jobs basis for structure
Job design considerations
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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?
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Monetary
Growth
Socialization
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
7-S Model – The Soft S’s - 1
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Style / Culture
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Strategy
Structure
Systems
Style
Staff
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)
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Staff
Skills
Shared values /
Superordinate goals
7-S Model – The Soft S’s - 2
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Style / Culture
Staff
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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
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
Distinctive competencies – what the company does best,
ways of developing or shifting competencies
Shared values / Superordinate goals
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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
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Organizational Culture
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Culture is to organizations what
personality is to individuals
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All companies have cultures
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
 Culture
by default
 Culture by design – thoughtful choices
based on values and core beliefs
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How does a company consciously create
its culture?
From Gray & Larson “Project Management:
The Managerial Process”
Types of Organizational Cultures
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Control cultures –
Drive for predictability and order
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Collaboration cultures –
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
Pursue close relationship with customers
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Competence cultures –
Pursue excellence and innovation
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Cultivation cultures –
Pursue life enrichment for customers and employees
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Organizational Culture
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Observable Evidence:
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
 Symbols
 Ceremonies
 Stories
 Behaviors
 Language
 Dress
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Underlying Roots:
 Values,
Assumptions, Beliefs, Attitudes, Feelings
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Culture in practice
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Conflict management
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
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Relationship or interpersonal conflict
 Task / process conflict
 Functional vs. dysfunctional conflict
 Factors: goal incompatibility, limited resources,
differences
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Power – the capacity to influence behavior
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Positional power: rewards/consequences, control
of resources, information and decision control
 Personal power: expert, referent (based on
identification and admiration)
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Politics – the use of power to influence decisions
Management vs. Leadership
Planning &
budgeting
vs.
Setting the
direction
Organizing &
staffing
vs.
Aligning people
Controlling &
problem solving
vs.
Motivating people
Management is about coping with complexity
Leadership is about coping with change
Management vs. Leadership
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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
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A leader creates and realizes a vision
 Communicates
that vision and moves the
organization toward that vision
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
McKinsey 7-S Model
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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
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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
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
In change processes,
many organizations
focus their efforts on
the hard S’s; however,
the soft factors can
make or break a
successful change
process. All factors
must be accounted for.
McKinsey 7-S Model
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Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
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Interrelated
Equilibrium
Foundation of
corporate culture
Levers available to
management
Executing Change –
Seven Key Considerations
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Strategic Intent
Substance
Scale
Scope/Breadth
Speed
Sequence
Style
Style
Scope
Substance
Strategic
Intent
Speed
Scale
Sequence
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Strategic Intent
Precise
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Large
Organization-wide
Fast
Sequence
Hard – Soft
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Hard S’s
Speed
Slow
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Speed
Scope/Breadth
Isolated
Soft – Hard
Style
Top Down
Substance
Scope
Strategic
Intent
Scale
Small
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Broad
Substance
Soft S’s
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Style
Bottom Up
Scale
Sequence
Assignment
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Read BA 550 class packet:
 Turning
Great Strategy into Great Performance
 Governance and Strategy Implementation
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Case brief – Americhem
Last names beginning with A – M
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Complete proposal on term project