subhayan 7s model
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MC KINSEY 7S
Model in
By: Subhayan BasuBy: Subhayan Basu
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By: Subhayan BasuBy: Subhayan Basu
Organisation Structure ofHow 7 S strategy can beproperly
Agenda.
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HALDIA PERTOCHEMICALS
Haldia Petrochemicals Ltd (HPL) is acompetitive modern naphtha basedPetrochemical Complex located 125 kmsfrom Kolkata, at Haldia, West Bengal, India.
HPL is the second largest petrochemicalindustry in India with a total capacityequivalent to 5, 20,000 TPA of ethylene.Process technologies for variousmanufacturing plants have been selectedfrom internationally renowned vendors withan aim to produce world class products withexcellent safety and environmentconsiderations. Notable process technology
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MC KINSEY 7-S MODEL
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McKinsey 7-S Model
Strategy
Structure
Systems
Style
Staff
Skills
Superordinate goals
The hard elements are factual andeasy to identify. They can befound in strategy statements,corporate plans, organization
The Hard Ss
The soft elements are difficultto describe since they arecontinuously developing andchanging. They are highly
determined by the people at
The Soft Ss
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PROCUREMENTRabin Mukhopadhyay
MARKETING &SALES Head - Ujjal
De
MDSwapan Kr Bhowmik
MANUFACTURINGHead- Ashoke kr Ghosh
FINANCEHead- J.Chatterjee
ManagerMarketing Finance
ManagerTaxation
ManagerPayroll& Fund
GM- FINANCE
DGM- FINANCE
Chief Manager-FINANCE
ManagerTreasury
ManagerCorporateAccounts
Manager Plant Finance &
Accounts
OFFICER- Taxation
PURCHASE STORES LOGISTICS
PROJECTSHead - Gaur Hari Guchhait
The hierarchy that has been shown for the finance department is same for all the other SBUs.
Organizational Structure of
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Organizational Structure In
Organization Chart1. formal reporting relationships - High
2. levels in hierarchy - High
3. spans of control - High4. Departmentalization- High
Systems tofacilitate: Coordination
Communication
Functional Structure - functionalstructure with
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Systems
Formal and informal procedures thatsupport the strategy and structure(Systems are more powerful than they are
Communications practice andsystemManagement reporting systemApproval processPlanning/budgeting systemRewards system includinga raisal
Various Elements inSystems
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Structure
For proper utilization of theStructure the following steps can be
Tasks define jobs
Jobs define skills required Skills (and other considerations) define
staff
Over time skills change as staff gainsknowledge and experience, and astechnology and corporate infrastructuremature
Collection of jobs basis for structure
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Skills
Distinctive competencies what thecompany does best, ways ofdeveloping or shifting competencies
In case of HPL while Job Design it isto be considered whether theexisting employees have the
necessary skills and knowledge tofulfill proposed / expanded jobrequirements?
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Human Resource Development at HPL has been anintegral part of the Company since its inception. Ithas had a significant strategic role in theCompany's growth process and continues to do so.
It is a function that has contributed to the bottomline of the Company and has built the HPL family.HPL today boasts of a strong online competencyprofiling system for its employees.
It is to be kept in mind that the people of HPL areways of shaping their basic management values
Proper HR management processes should be usedto develop new managers who can lead theorganisation.
Importance should be given to the ways ofintroducin new em lo ees and mana in careers
Staff
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Style / Culture
The culture of the organization, consisting of Organizational culture: the dominant values, beliefsand norms which develop over time and becomerelatively enduring features of organization life
Management style:The precise way in which thecontrol system influences the behavior depends on the
style of functioning of the manager (i.e where theyspend their time and attention, what they allow, whatthe reward, etc)
HPL basically follows an External Control System wheredecision making authority rests with the top management Centralized in practical operations
2. Respect for Individual3. Customer Satisfaction4. Dedication to Excellence
Regarding organisation culture , HPLfollows 3 following rulesthose are reflected from their Vision statement.
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Culture at HPL
HPL may consider the following points for furtherbetterment of their organisation culture
Customer Delight: A commitment to surpassing thecustomer expectations. (and not only fulfilling)
Leadership by Example: A commitment to set standardsin the business and transactions and be an exemplar for theindustry and their own teams.
Integrity and Transparency: A commitment to beethical, sincere and open in their dealings.
Fairness: A commitment to be objective and transaction-oriented, thereby earning trust and respect.
Pursuit of Excellence: A commitment to striverelentlessly, to constantly improve themselves, their teams,their services and products so as to become the best.
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Source:- From Gray & Larson Project Management: The Managerial Process
How a compan can consciousl creat
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Culture in practice
Conflict management
HPL is a public sector unit as a result bureaucracyand power distance and conflict is prevalent there. Wecan observe the following types of conflict there in HPL
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
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Planning & + Settingthe
budgetingdirection
Organizing & + Aligning
peoplestaffing
Controlling & +
Solution:- there should be a
Management is about coping with
complexity Leadership is about coping with
Management +
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Implementation of McKinsey-
Effective organizations achieve aharmony between these sevenelements; if one element changes, thenthis will affect all the others
The 7-S Model can be a valuable tool toinitiate change processes in HPL and togive them direction; i.e. determinecurrent state and ideal state of each
element, and develop action plans toclose the gaps
In change processes, many
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Strategy Maximising
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The Basic Issue
9 of 10Companies Failto ExecuteStrategy
Only 5% of thework force
understands thestrategy
60% of
organization dontlink budgets to
strategy
85% of executive
teams spend lessthan one hour permonth discussion
strategy
Only 25% ofmanagers haveincentives linked to
strategy
One Cant Manage Strategy With a System Designed for Tactics
Source: CFO Magazine
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Objective for HPL
Motivate all managers andemployees to successfully implementthe business units strategy
Companies who incorporate theirstrategy and measurement systembetter able to execute their strategy
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Why is it Important for HPL?
The model describes thorganisations vision of the future tothe entire organization. It also
creates shared understanding. Its a complete model that enables
employees to see their contributionsto success.
This model focuses change efforts. Ifthe right objectives and measuresare identified, successful
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Mission What we do
Vision What we aspire tobe
Strategies How HPL
accomplish their goals
To be The Strategy FocusedTo be The Strategy FocusedOrganizationOrganization
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Outcomes and PerformanceOutcomes and PerformanceDriversDrivers
Performance Drivers are the leadindicators.
They reflect strategy. The 7S model should have (or consider) a
mix of outcome measures andperformance drivers.
The mix should be customized to theparticular business units strategy.
The Model must retain a strong emphasison outcomes, especially financial ones. Change in an organization should not be
an end in itself but a driver to reach
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While strategy implementation thefollowing two this are to be kept in mind
Balance between Measures of current performance
Long-range competitive abilities
Four aspects of firm performance Financial
Internal business
Customer
Innovation and learning
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Financial Perspective for
How do we look to stockholders?
Does the company exhibit the ability tosurvive, succeed, and prosper?
May include traditional externalmeasures Net income
Cash flow
Market share
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Internal Business
At what must HPL excel currently?
Manufacturing/service excellence
New product/service introduction
Quality
Cycle time
Backlogs
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Customer Perspective
How do our customers (and otherexternal stakeholders) see us? (w.r.t.
the following parameters) New products
Responsiveness
Quality
Service
Reputation
Here HPL has to consider the following
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Innovation and Learning
Can HPL continue to improve andcreate value?
Technological leadershipTime to market
Employee training and satisfaction
Research and development measures Investments in new technologies
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Perspectives are
Emphasizes the synergies,relationships existing within thecompany and with its externalconstituencies Innovation pleases customers which are
necessary for good financial results
Good financial results make financingimprovements possible
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Overall Concepts
Not a quick process
Implementation requiresThought
Analysis Data-gathering
Time
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Implementation Steps
Initiative must start at the top (giventhat HPL is a PSU.)
Only senior management has grasp of
overall strategy Authority to make strategic decisions
Doomed without commitment from thetop Likely to be ignored if senior management
does not actively promote the process andresulting scorecard
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Implementation Steps
Requires teamwork, collaboration
Different perspectives, expertiserequired
No single person has complete view of theorganization
Greater participation produces greaterbuy-in
Employees feel a sense of ownership
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Implementation Steps
Interview senior managers
Input on strategic objectives
Input on critical success factors
Input on possible measures
Conduct individual and groupinterviews
Work toward consensus
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Implementation Steps
Expand consensus
Larger group refines tentative scorecard
Finishing touches
Consensus on vision, objectives,measures, targets, implementationprogram, etc.
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Implementation Steps
Selection of metrics
Must relate to strategic goals
Both leading and lagging
May not be exact
May come from external sources
Not too many, not too few
Focus on critical measures, not interestingones
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Implementation Steps
Roll-out Link to data bases and information system
Modify information system as necessary tocollect and report scorecard measures
Communicate to employees What is being measured
Why it is being measured
Their roles
Develop scorecards for lower levels
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Implementation Steps
Periodic reviews Has strategy changed?
Are the objectives valid?
Are the activities valid? Are the measures valid?
The scorecard evolves with theorganization
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THE LAST SENTENCE
The best 7S Model will tell thestory of the strategy so well thatthe strategy can be inferred bythe collection of objectives andmeasures and the linkagesamong them.
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