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Seven-S Framework

The Seven-S (7S) framework is a managerial tool for analyzing and diagnosing organizational performance and effectiveness. The framework was jointly developed by Tom Peters, Robert Waterman, Richard Pascale, and Anthony Athos in the late 1970s. Tom Peters and Robert Waterman were both management consultants at McKinsey & Company, a well-known consultancy firm whose management consulting activities were based on applied research in business and industry. The 7S framework was adopted as a main analysis tool by McKinsey; hence, the framework became known as McKinsey’s 7S framework. The framework consists of seven key organizational and managerial variables/elements categorized as either soft or hard variables. Soft variables are staff, styles, skills, and shared values, and hard variables are strategy, structure, and systems. The framework is based on the assumption that to achieve organizational effectiveness, focusing merely on the rational aspects of organizations such as structure and strategy are not enough. Organizations are complex unities, and to deal with the complexity in any organizational improvement project or program, all seven variables have to be considered simultaneously because they are interdependent and mutually reinforcing. Since the framework was introduced, it has been widely adopted by practitioners as well as by academics for multiple purposes, such as an analytical framework of organizations, as a diagnostic framework of organizational effectiveness and efficiency, as a strategic improvement tool, and so on. Hundreds of organizations have been analyzed using the framework, which remains still popular. The framework’s simplicity and memo-rability/recognizability are also contributing factors to its popularity. This entry reviews the contents of each variable of the framework as well as its historical background and concludes with descriptions of the relevance and importance with some managerial applications.

Fundamentals

As described earlier, the seven variables are considered key organizational factors that are interdependent. These factors interact, dynamically influence each other, and determine the way organizations perform. The factors’ interdependency is well illustrated in the way the model is designed.

The shared values variable is considered to be the interconnecting center of all other variables. Shared values were originally called superordinate goals of organizations. Shared values refer to the guiding concepts and meaning or the purpose of organizations’ existence that are shared among all organizational members; hence, shared values provide the foundation of the corporate culture. Normally, shared values do not include “materialistic” and measurable goals such as financial results or return on investments. Rather they refer to “spiritual”/ethical elements that can touch peoples’ hearts deeply and can provide a deeper meaning for their work.

Structure is defined as the main skeleton of the organizational chart. Structure is the way in which work tasks are organized and the way various organizational units are linked to each other. Organizations can be structured in a variety of ways—for example, in a hierarchical way, as a matrix, a network, centralized, decentralized, an adhocracy, a hub, a chain, and so forth.

Strategy refers to plans or course of action for allocating scarce resources to achieve the identified goals over time. Strategic decisions are about the long-term as well as the short-term direction of an organization to achieve competitive advantage over competitors. It is about the way to transform an organization from the present position to the desired position described by its goals. Hence, strategy affects the tactical and operational activities of an organization.

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