subhayan 7s model

8/14/2019 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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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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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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Expand consensus

Larger group refines tentative scorecard

Finishing touches

Consensus on vision, objectives,measures, targets, implementationprogram, etc.


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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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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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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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THANK YOUTHANK YOU

subhayan 7s model

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