Part 3 - McKinsey 7S's model

Question 1

There are three ‘hard’ elements of business behaviour:

Answer 1

• STRUCTURE. The organisation structure refers to the formal division of tasks in the organisation and the hierarchy of authority from the most senior to junior.
• STRATEGY. How the organisation plans to outperform its competitors, or how it intends to achieve its objectives. This is linked to shared values.
• SYSTEMS. These include the technical systems of accounting, personnel, management information and so forth. These are linked to the skills of the staff.

Question 2

‘Soft’ elements are equally important.

Answer 2

• STYLE refers to the corporate culture that is the shared assumptions, ways of working, attitudes and beliefs. It is the way the organisation presents itself to the outside world.
• SHARED VALUES are the guiding beliefs of people in the organisation as to why it exists. (For example, people in a hospital seek to save lives.)
• STAFF are the people in the organisation.
• SKILLS refer to those things that the organisation does well. For example, the UK telecommunications company BT is good at providing a telephone service but, even if its phone network is eventually used as a transmission medium for TV or films, BT is unlikely to make those programmes itself