McKinsey Case Study Analysis Essay

This paper applies the precaution by objective (MBO) school of thought of Peter Drucker to the case ponder depth psychology of McKinsey and Company (McKinsey). Founded in 1926 by James Mac McKinsey, a University of Chicago professor, the soaked started as an account and engineering consultancy agency, which experient rapid growth. This paper is a plan that outlines unwrap aspects of MBO and how it will have both convinced(p) and negative effects when employ to the McKinsey case study.Mac recruited experienced executives and proficient them on an integrated approached he coined as the General Survey Outline (Mintzberg, et al., 2003, p. 319). Over the years, the degenerates general approach to consultancy loseed specialized knowledge concerning industry competencies. This paper brings into focalise McKinseys potential to bemuse a paradigm shift, and provides testimonys to implement MBO to append the governances effectiveness internation every last(predicate)y.The draw ing cards of McKinsey wanted to transform the firm of practice growing, ( increase making the versed name) to client development ( sweet sand verbena throwing). To achieve this, the thought of general practiti irs would have to change in order to keep up with technology and the global foodstuffplace. The paper provides recommendation to aide McKinsey in development, capturing, and supplement confederacy assets landwide.McKinsey and Co. Case Study SummaryThe McKinsey and Company case study is a presentation of the steering of knowledge and learning by a large consulting firm. The case study discussesthe founding and phylogeny of the company low the direction of a group of professional educators and executives. The company has served as a consultant to elite firms foc employ on issues important to top watchfulness for 70 years. The long history of the company is described with the addition of tables and charts to prove 20 year growth rates, mission and dominions, atomic number 18as of practice, and functional groups. Succession, employee growth and development expansion, and shrinkage be explained in detail inside the case study. The company expanded from the original small face to atomic number 53 of global proportions and probative stature within the industry. The pore of the text is to depict the trouble and evolution of the firm through the periods of change and discuss future decisions and direction under(a) a new managing director.Key Aspects of Druckers PhilosophyPeter Drucker is acknowledge as the founder of fresh management. He advocated for autonomy, participatory democracy, and doing what one wants. He promoted the creation of a pluralistic institution of a free gild that functions and performs. In searching for finding an answer to how individualistic freedom stooge be observed in the corporate society considering the power execute by the managers Drucker developed the managerial doctrine called management by objectives (MB O). consort to Hoopes (2003), managers communicate to their subordinates the goals and objectives based on what is required by the organization consequently, enabling their subordinates to have autonomy and be responsible for what they do at work.Drucker created this philosophical system of management with the purpose of giving employees the opportunity to achieve freedom and individual tariff in an organization. In past articles Drucker had defined freedom as a responsible choicebetweenact one style or another (as cited by Maciariello, 2005). In addition, Drucker defined the concept of responsibility by stating that responsibility has an external component that involves _accountability to a person with chest of drawers_ and an internal component that involves _commitment_. Both making responsible choices and be accountable and act to the person who has authority argon the keys for an effective MBO.According to Maciariello (2006) Drucker believed that leadership is taking re sponsibility for results (p. 29) and that the leader is expected to show integrity and be a role model for others to follow. Regarding the leaders responsibility, Drucker stated that the CEO is the only one who rotter align the internal environment with the external environmental to arouse certain that the organization understands the demands of the external environment _market, nodes, and competitors_. Druckers stated that the close to important rule in handicraft is to serve the consumer (Lafley, 2006).In addition, Drucker believed in the power of strategic ideas and making clear choices. and that the only way you can manage change is to create it (as cited by Lafley, 2006, p. 7). Finally, as the founder of red-brick management, Drucker viewed organizations as a means through which people find entranceway to social status, community, achievement, and satisfaction and the leaders as having the responsibility to ensure that jobs are fulfilling and that individuals contri exce pte fully (as cited by Lafley, 2006, p. 7).Positive Aspects of Strategies AppliedIf McKinsey and company were to control the management theory of Drucker they would identify several absolute outcomes related to the management by objectives aspects. The company had experienced expansion into a global market and many changes in management and structure. The company was staffed by professionals with few levels of authority and, according to the case study, run more by consent than decree. The consultants worked within a matrix arrangement with a professional core and contractual element in its operations. The application of MBO would increase the performance of the organization by positively identifying the objectives of for distributively one employee and their relationship to the objectives of the organization. Francis and Bolander (1976) claim that relationships between corporate and employee objectives are vital to a positive outcome for any business. Under management by object ives employees would receive input that would befriend identify their objectives and m lines for carrying into action and closeout. Greenwood reiterates Druckers theory that objectives are not given, are not open, are not something that everyone knows (p. 229).Anotherprovision of the Drucker theory is the continuous tracking of the surgical operation and continuous feedback. This feedback is valuable in increasing the productivity of the employee and their completion of problems. With all McKinsey managers participating in the development of the strategic plan and cascading the goals and objectives throughout the firm the positive impact of management by objectives would be evident. Francis and Bolander (1976) describe the positive outcomes of management by objectives as alter communication, increased motivation, reduced contrast between roles, and attention focused on results, not activities. With the adoption of Druckers management by objectives McKinsey and company would experience the positive outcomes described by Francis and Bolander.Outcomes of effectuation apply Druckers theory of management, the evolution of the management styles practiced in the McKinsey and Co. were based on decentralizing the centers. Once managers established and announced the goals of the organization, they left it up to the leaders operating in each of their offices to practice their cause leadership styles to achieve the goals. They called this strategy practice leadership (Mintzberg, Lampel, Quinn, and Ghoshal, 2003, p.322).The management styles apply were based on the underlying principle of Druckers theory of using power top-down. The results of the execution of instrument were significantly positive and led to the emergence of management concepts that we see commonly used today, making McKinsey the industry leader of scenery numerous industry trends as explained (a) Knowledge Management Knowledge is the lifeblood of Mckinsey. (Mintzberg, et al.,, 2003, p.319) . Managers at McKinsey developed a process of knowledge management wherein the task of knowledge management had to be each individuals responsibility and not just that of the team manager or leader. (b) Knowledge Sharing By the use of publishing their key findings, employees were able to learn and communicate from each other and understand how processes worked best and most efficiently. (c) Online down payment of knowledge The succeeder of their knowledge sharing documents and papers led management to develop an online repository of development wherein centers across the globe could accesscommon data and information that was entered by employees from these centers. This module made a significant impact on the communication among individual centers and the organization as a whole. (d)Identifying Best behaves With improved communications, managers were able to access information and identify best practices that helped improve the strength of their applications and systems. Ide ntifying best practices too led to the creation of establishing benchmarks that further assisted call forth and improve defects in processes. (e) Inter-office bulletins The introduction of interoffice bulletins and papers led to the development of newsletters and e-letters that modern organizations use today to communicate with their employees globally. (f) Building Customer Loyalty Using client relationships and training specialists to build relationships with their clients, McKinsey was one of the pioneering organizations to introduce the concept of customer trustyty. Managers trained their employees to focus only on the clients they worked with and provide then with world class quality service. The idea was to gain the customers business for life.This concept brought in recurring revenues for McKinsey and also helped create a loyal customer base that enhanced McKinseys image by in the industry by word of mouth. (g) Focus on Informational Literacy The rapid increase in the r ate of information literacy made it imperative for employees to be trained and kept abreast of new technologies and offerings that helped them sell better, communicate effectively, learn high-velocity about new products and services, and enhance their own skills. (h) Employee growth and enhancement Managers at McKinsey sawing machine the value in retaining their workforce by providing the training and assist them hone their skills to perform efficiently. They paid attention to their employees growth patterns and occupational group paths and assisted them in developing their profiles so they could move them laterally or higher up in the organization without having to search for someone from the outside. This also helped build the employee knowledge base that could be transferred or shared with one another when needed.One of the negative aspects of the evolution was that the organization grew too fast. Secondly, the organization became a victim of technology where most of the team s were virtual teams leading to lack of direct interaction. Finally, the decentralization of each business unit, across the globe, ledto each unit creating their own processes using the same applications, which resulted in more sequence being spent in determining best practices of successful processes.RecommendationsA change leader sees change as an opportunity. A change leader looks for change, knows how to find the right changes, and knows how to make them effective both outside the organization and inside it (Drucker, 2000 as cited in McKenna, 2006). These words spoken by Drucker were as if they were meant for Mr. Gupta as he reviewed the progress of McKinsey & Co. Growth had been meeting expectations and they were being rewarded handsomely by the market but Mr. Gupta had begun to question whether McKinsey & Co. was, in Druckers terms, not just getting things done but getting the right things done.. He questioned, If this represented the tip of McKinseys knowledge and expertise iceberg, how well was the firm doing in developing, capturing, and leveraging this asset in service of its clients worldwide? (Mintzberg, et al., 2003, p. 319). afterwards all this was the second component of the McKinsey Mission Statement. No where had this rang truer than in the halls of McKinsey & Co. They had experienced tremendous growth and change over the decades and like many others saw their share of recessions but they had continued to grow into their present International stardom in spite of it all.Drucker, would concur with Mr. Guptas questioning their success irrespective of their bulky windfalls. He would caution others in that success is not inevitable or forever and can quickly evaporate if ones focus is not on the right things. Drucker, wrote of the knowledge worker, a description that employ to most, in the 21st century and he spoke of the importance of ability but more importantly about getting the right things done. This was the obvious question that was plag uing Mr. Gupta.He cited three intersecting concerns of the knowledge-driven age that were making the task more difficult and complex. He wondered if his initiatives would be enough. The first concern rests in the amount and rate of change.Second, the increasing expectations and expertise, and finally, the firms success itself contributed to the difficulty, in linking and integrating the consultants and the worldwide offices.Drucker, in writing on what executives must do would applaud Mr. Gupta for his foresight. Drucker wrote of five habits of the mind that executives must acquire (a) knowing where their time goes. (b) Focusing on outward contribution. (c) Building on strength- their own and others. (d) Concentrating on the few major areas where performance will provide outstanding results. (e) devising effective fundamental decisions (McKenna, 2006, p. 4).The outcomes as highlighted in a higher place, those stated by Mr. Gupta, along with the Practice Olympics were a beginning an d answer to the question of whether McKinsey & Co. were on the right track. They were not only aligned with the five habits as outlined by Mr. Drucker above but were also realigning with the Mission Statement of McKinsey & Co. which stated, McKinsey Mission To help our clients make positive, permanent, and substantial improvements in their performance and to build a great flying that is able to attract, develop, excite, and retain exceptional people (Mintzberg, et al., 2003, p. 321).The only additional recommendation not covered in Mr. Guptas initiatives but an underlying principle was that growth had made it impossible to link the knowledge and expertise of the organization. This restriction could be easily addressed within the two-tiered career path he proposed. Allowing for intrapreneurship to flourish and to let 1,000 flowers to bloom (Gluck, 1991, as cited in Mintzberg, et al., 2003, p. 324) would be a way to not only ensure the future success of McKinsey & Co. but would also be a direct link back to the philosophy of Mr. Gluck, a former and highly successful Managing Director of McKinsey & Co.ConclusionThis analysis of McKinsey illustrates how MBO can serve as a change agent tohelp the organization continue to grow in spite of recessions over the years. The performance of MBO has its negative and positive aspects, yet in a broad since of theories, the positive outweighs the negative. McKinsey is able to live its mission to help clients make positive and lasting improvements while retaining exceptional people.In conclusion, although the organization grew extremely fast and became victims of technology, the implementation of Peter Druckers, MBO could increase the firms efficiency for two master(prenominal) reasons. First, it reduces conflict between roles and focuses on results. However, most notably, MBO improves communication, increases motivation and the McKinsey team transforms into snowball makers (practice development) and snowball throwers (clie nt development) worldwide.ReferencesFrancis, J. G., & Bolander, S. F. (1976). MBO and the small organization. _American Journal of_ _Small Business,_ _I_(1),1-6. Retrieved edge 8, 2007, from EBSCOhost database.Greenwood, R. G. (1981). Management by objectives As developed by Peter Drucker, assisted by Harold Smiddy. _Academy of Management Review, 6_(2), 225-230. 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