Modern Management Thoughts & McKinsey's 7-S Framework

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What is Modern Management?

Modern management thought has evolved from older theories of management and years of management experience. Additionally, supporting and conflicting theories have been offered over the years leading to more confusion. Thus, from the "Management Theory Jungle" (Koontz), has emerged the thought of modern management. The two important theories of the modern management thought are:

The Systems Approach:

This approach is applicable to a broad spectrum of business issues. It is based on the fact that businesses are open systems with limited but perforating boundaries, enabling the business to interact with external factors. This business approach is based upon interactions inside a business at the managerial level, namely, interactions between planning, organizing, and controlling.

Contingency or Situational Approach:

This approach is more dynamic in nature, meaning, it offers immediate solutions to emerging business problems. This theory is evolved from the fact that business issues are interlinked in nature, thus, their solutions should also be dynamic; that is, taking into account various factors that could affect the business. There is no hard-and-fast solution to all business problems, but each business solution must be customized for each specific problem.

McKinsey's 7-S Framework:


The direction and scope of the company over the long term.


The basic organization of the company, its departments, reporting lines, areas of expertise, and responsibility (and how they inter-relate).


Formal and informal procedures that govern everyday activity, covering everything from management information systems, through to the systems at the point of contact with the customer (retail systems, call centre systems, online systems, etc).


The leadership approach of top management and the company's overall operating approach.


The company's people resources and how they are developed, trained, and motivated.

Shared values:

The values and beliefs of the company. Ultimately they guide employees towards 'valued' behavior.


The capabilities and competencies that exist within the company. What it does best.

Additional Readings:

1. Functions of a Business Manager
2. Henry Fayol and Modern Management Theory
3. Modern Management Thoughts and McKinsey's 7-S framework
4. Industrial Planning
5. Management and Setting of Objectives
6. Principals of Organization
7. Matrix Organizations
8. Functions of the Human Resources and Accounting within an Organization
9. Differentiation between Motivation and Satisfaction
10. Barriers to Good Communication
11. Requirements of Effective Controls
12. Formal and Informal Organizations
13. Bonded Rationality

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