Selection And Application Of A Diagnostic Model For Companie ✓ Solved

Selection and Application of a Diagnostic Model for Company Change

For an overview of this part of the course project please watch the following video. Select a diagnostic model (see Chapter 4) that you and your team can utilize to review aspects of change activities and actions that have been taken by the companies chosen. For this analysis, we are looking at the parts of the companies as well as their strategies, as surmised by your earlier research. It is acknowledged that this information will not be complete as you are looking at these companies as an outsider, but a thoroughly researched paper will give enough data to allow some well-defended assumptions on your part. Here’s what to do.

1. Select one diagnostic model (i.e., 6-box, 7S, congruence, or one of the others) to apply to the two chosen companies. Choose the model that you and your team feel best identifies and measures the relevant aspects of the organization's performance.

2. Apply the data obtained in your research through an analysis of the appropriate chosen model. This will allow you and your team to create a diagnosis of where each company is today (as per the criteria of the model).

3. Create a SWOT analysis for each of the two chosen companies' change plans/programs, utilizing information obtained in the diagnosis (strengths, weaknesses, opportunities, threats).

4. As a team, compare the two company analyses to each other and offer your perspective (value judgment) of the effectiveness of the changes made to date in each case.

5. Identify potential areas of resistance that may occur and at least one strategy to respond to each. (This will most likely come from your weaknesses/threats section of your SWOT. If not, take another look at your SWOT.)

6. Make recommendations for further actions within the organizations and the rationale chosen for these recommendations.

7. Write your team paper, including each of the above sections and analyses.

Paper For Above Instructions

In this project, our team has selected the 7S Framework, developed by McKinsey & Company, as the diagnostic model to analyze Microsoft and Tesla, two innovative leaders in their respective industries. This model comprises seven interconnected elements—Strategy, Structure, Systems, Shared Values, Skills, Style, and Staff—that collectively influence organizational effectiveness. By applying this framework, we aim to diagnose the current state of each company’s change initiatives, identify strengths and weaknesses, and formulate strategic recommendations for future transformations.

Understanding the 7S Framework

The 7S Model was introduced by Tom Peters and Robert Waterman in the early 1980s, during their work on organizational effectiveness. Its core premise is that all seven components must be aligned for an organization to achieve its goals effectively. The elements are categorized into 'hard' elements (Strategy, Structure, Systems) and 'soft' elements (Shared Values, Skills, Style, Staff). The model facilitates a comprehensive diagnosis by examining these dimensions holistically.

Rationale for Model Selection

We selected the 7S framework because of its versatility in assessing both strategic and cultural aspects of organizational change. Given the rapid technological advancements and competitive pressures faced by Microsoft and Tesla, understanding how their internal elements align and support their change initiatives is crucial. This model enables us to analyze not only tangible aspects such as structure and systems but also intangible factors like shared values and leadership style, which are critical during transformation processes.

Company Analyses

Microsoft

Microsoft has undergone significant strategic shifts, especially focusing on cloud computing and AI technologies. Our diagnosis indicates that internally, the company has aligned its structure with its digital transformation goals. Its systems, especially in cloud services like Azure, are robust, and its technological capabilities are advanced. However, there are cultural challenges, including resistance to change from legacy divisions, and the need for enhanced leadership styles that foster innovation and agility. The shared values have evolved to emphasize agility, collaboration, and customer-centricity, aligning with its strategic ambitions.

Tesla

Tesla epitomizes innovation and disruptive technology, with its strategy centered on sustainable energy and autonomous vehicles. The organizational structure is relatively flat, promoting rapid decision-making. Systems related to manufacturing and R&D are highly integrated but face issues related to scalability and supply chain complexities. The shared values emphasize innovation, sustainability, and risk-taking, which permeate Tesla's corporate culture. Leadership style is highly hands-on, with Elon Musk visibly influencing company direction. Skills across the organization are aligned with technological innovation but require further development in supply chain management and scale operations.

SWOT Analysis

Microsoft

  • Strengths: Strong brand reputation, diversified portfolio, leading cloud services, high R&D investment.
  • Weaknesses: Cultural resistance in legacy divisions, slower decision-making processes.
  • Opportunities: Expansion in AI and cloud services, strategic partnerships, growing enterprise market.
  • Threats: Intense competition from Amazon, Google, and other cloud providers, cybersecurity risks.

Tesla

  • Strengths: Innovative products, strong brand appeal, leadership in EV market.
  • Weaknesses: Production scalability issues, high operational costs, supply chain vulnerabilities.
  • Opportunities: Growth in renewable energy markets, autonomous vehicle advances, international expansion.
  • Threats: Intense competition, regulatory challenges, economic fluctuations affecting consumer demand.

Comparison and Effectiveness of Change

Both companies have made strategic advances aligned with their innovation goals. Microsoft’s shift towards cloud computing has been effective, evidenced by increased revenue streams and cultural adaptation towards agility. Tesla’s focus on disruptive innovation continues to propel its market leadership, though scalability remains a challenge. Our assessment suggests that Microsoft's organizational realignment has been more aligned and sustainable, whereas Tesla’s rapid innovation approach introduces higher risks of operational inefficiencies.

Potential Resistance and Strategies

Microsoft might face resistance from traditional divisions hesitant to adopt new digital strategies. To address this, leveraging change champions and clear communication of benefits can facilitate transition. Tesla could encounter resistance in scaling production, with strategies such as incremental scaling and supplier diversification to mitigate this threat.

Recommendations for Further Action

  • Microsoft: Foster a culture that continuously embraces agility, invest in leadership development, and strengthen cross-divisional collaboration to sustain innovation momentum.
  • Tesla: Improve supply chain management, invest in scalable manufacturing systems, and develop strategic partnerships to enhance operational efficiency and reduce costs.

These recommendations aim to capitalize on strengths and address weaknesses identified through the 7S analysis, ensuring both companies remain competitive and adaptable in their evolving markets.

Conclusion

The application of the 7S Framework provided insightful diagnoses of Microsoft and Tesla’s current change initiatives, highlighting alignment and areas for improvement. Both organizations serve as exemplary cases of strategic innovation but require tailored approaches to address their unique challenges. Ongoing assessments and strategic realignments rooted in comprehensive diagnostic models like the 7S framework are vital for sustained success.

References

  • Waterman, R. H., Peters, T. J., & Phillips, J. R. (1980). Structure is not organization. Business Horizons, 23(3), 14-26.
  • Peters, T. J., & Waterman, R. H. (1982). In Search of Excellence: Lessons from America's Best-Run Companies. Harper & Row.
  • Kaplan, R. S., & Norton, D. P. (1996). The Balanced Scorecard: Translating Strategy into Action. Harvard Business School Press.
  • Burns, T., & Stalker, G. M. (1961). The Management of Innovation. Tavistock Publications.
  • Johnson, G., Scholes, K., & Whittington, R. (2008). Exploring Corporate Strategy. Pearson Education.
  • Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2015). Strategic Management: Concepts and Cases. Cengage Learning.
  • Weber, M. (1947). The Theory of Social and Economic Organization. Free Press.
  • McKinsey & Company. (1980). Structure is not organization. McKinsey Quarterly.
  • Collins, J., & Porras, J. (1994). Built to Last: Successful Habits of Visionary Companies. HarperBusiness.
  • Johnson, G., & Scholes, K. (2002). Exploring Corporate Strategy. Prentice Hall.

Related Assignments