Q1. How is the McKinsey 7S model used for carrying out strategic planning and implementation?

Ans1:
The 7S model is a strategic model that can be used for any of the following purposes:

 Organizational alignment or performance improvement

 Understanding the core and most influential factors in an organization’s strategy
 Determining how best to realign an organization to a new strategy or other organization design
 Examining the current workings and relations an organization exhibits

The model and its usage-

Here is the 7S model that portrays seven elements of an organization.

McKinsey 7S model
 Strategy – This is the organization’s alignment of resources and capabilities to “win” in its market.
 Structure – This describes how the organization is organized. This includes roles, responsibilities and
accountability relationships.
 Systems – This is the business and technical infrastructure that employees use on a day to day basis to
accomplish their aims and goals.
 Shared Values – This is a set of traits, behaviors, and characteristics that the organization believes in. This would
include the organization’s mission and vision.
 Style – This is the behavioral elements the organizational leadership uses and culture of interaction.
 Staff – This is the employee base, staffing plans and talent management.
 Skills – This is the ability to do the organization’s work. It reflects in the performance of the organization.

How to Use the Model

The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and
mutually reinforcing. So, the model can be used to help identify what needs to be realigned to improve performance, or
to maintain alignment (and performance) during other types of change.

To assess each of these elements, here are some questions to ask, Once the questions are answered, the data should be
examined. The analysis should look for the following aspects:

 Consistency
 Alignment
 Conflicts
  Gaps
 Support
 Strengths
 Weaknesses

The uses of the model can be as a static picture to determine how effectively the organization is implementing its
strategy. Also, it can be used two-fold with a current state and an intended future state. By comparing the current and
future states, gaps can be assessed, which lead to improvement and action plans. That latter case makes enables the
model to be used for large scale change.

Q2. Explain the different categories of costs of quality.

Ans2:
Quality, like finance, has various “buckets” or categories for the costs associated with the good and bad products that
are created. Most often we hear about the Cost of Poor Quality, but the cost of poor quality only reflects a portion of the
total quality costs.

Examples of four types of quality cost are given below:

COQ
Typical Descriptions Examples
Category
off-cuts, equipment breakdowns,
Internal Costs associated with internal losses
spills, scrap, yield, productivity
The process being analyzed.  These costs are usually discovered by, or
affect third parties.  Some External costs may have originated from customer complaints, latent
External within, or been caused, created by, or made worse by the process defects found by the customer,
being analyzed.  They are defined as External because of where they warranty
were discovered, or who is primarily or initially affected.
Costs associated with the prevention of future losses:   (eg. unplanned planning, mistake-proofing,
Preventive or undesired problems, losses, lost opportunities, breakdowns, work scheduled maintenance, quality
stoppages, waste, etc.) assurance
KPI's, inspection, quality check,
dock audits, third party audits,
Appraisal Costs associated with measurement and assessment of the process. measuring devices, reporting
systems, data collection systems,
forms

Quality Costs Categories

1. Prevention Costs-

The costs of all activities specifically designed to prevent poor quality in products or services.

Examples:

New product review

Quality planning
Supplier capability surveys
Quality improvement team meetings
Quality improvement projects
Quality education and training
 2. Appraisal Costs-

The costs associated with measuring, evaluating or auditing products or services to assure conformance to quality
standards and performance requirements.

Examples:

Incoming and source inspection/test of purchased material

In-process and final inspection/test
Product, process or service audits
Calibration of measuring and test equipment
Associated supplies and materials

3. Failure Costs-

The costs, resulting from products or services not conforming to requirements or users needs. Failure costs are divided
into internal and external failure categories.

A. Internal Failure Costs

B. External Failure Costs

Failure costs occurring after delivery or shipment of the product and during or after furnishing of a service to the
customer.
Examples:

 Processing customer complaints

 Customer returns
 Warranty claims
 Product recalls

4. Total Quality Costs-

The sum of the above costs, this represents the difference between the actual cost of a product or service and what the
reduced cost would be if there were no possibility of substandard service, failure of products or defects in their
manufacture.

Q3. Why productivity is important?

Ans3:
Productivity, therefore, refers to the amount of products and services produced with the resources used. For a given
time period, productivity is measured as follows:

Importance of Productivity

According to Alan Grenspan, “the threat of rising costs in tight labourmarkets has imparted a substantial impetus to
efforts to take advantages of possible enhancement of productivity.” Higher productivity is also desired by the
governments of respective nations. At a national level, productivity helps in maintaining a delicate balance between
economic growth and inflation. Productivity is important for the following stakeholders:

 Management
  Workers
 Customers
 Government

Management:

Productivity of an organization is particularly sought after by its management. The management benefits from higher
productivity because:

 Productivity has a direct bearing on its profits.

 Productivity helps in paying off loans acquired from different sources.
 Productivity enhances its market share by providing goods at a lower cost.
 Productivity facilitates in evaluating and monitoring the performance of an organization.
 Productivity measures are associated with competitiveness

Workers:

Generally, it is believed that workers are on the receiving end because of the emphasis on productivity. This is far from
the truth. Workers gain much with the increase in productivity. Some of the gains are:

 Workers are given higher real wages.

 Workers are able to attain higher living standards.
 Workers enjoy better working conditions so very essential to promote productivity.
 Productivity enhances job security and satisfaction for workers. This is because a firm having higher productivity
has better chances of long-term survival.

Customers:

Customers seek higher productivity because it is advantageous to them in many ways. These advantages include:

 Customers are required to pay lower prices because prices are reduced due to higher productivity.
 Productivity has been found to have a positive relationship with quality. Customers, therefore, enjoy better
quality of products with higher productivity.
 Productivity also helps customers enjoy better standards of living.

Governments:

Governments all over the world seek higher productivity for the following reasons:

 It strengthens the economic foundation of human well-being.

 Higher productivity has a positive impact on trade deficit with other countries.
 Higher exports through better productivity enables a government to seek import of items essential for the
survival and well-being of its people.

Q4. Write a note on control charts.

Ans4:
A statistical tool used to distinguish between process variation resulting from common causes and variation resulting
from special causes.

The control chart is a graph used to study how a process changes over time. Data are plotted in time order. A control
chart always has a central line for the average, an upper line for the upper control limit and a lower line for the lower
control limit. These lines are determined from historical data. By comparing current data to these lines, you can draw
conclusions about whether the process variation is consistent or is unpredictable.
Control charts for variable data are used in pairs. The top chart monitors the average, or the centering of the distribution
of data from the process. The bottom chart monitors the range, or the width of the distribution.

The control chart is a widely used Statistical Process Control (SPC) tool. Control charts are used to detect variances in the
process. By detecting and recording the number of variances, control charts help control a given process. A control chart
consists of two control limits - Upper Control Limit (UCL) and Lower Control Limit (LCL). Control limits are used to specify
the acceptable range of variations. Control limits are set in three standard deviations above and below the average.

When to Use a Control Chart

 When controlling ongoing processes by finding and correcting problems as they occur.
 When predicting the expected range of outcomes from a process.
 When determining whether a process is stable (in statistical control).
 When analyzing patterns of process variation from special causes or common causes.
 When determining whether your quality improvement project should aim to prevent specific problems or to
make fundamental changes to the process.

Types of control charts

The following are two types of control charts used commonly:

1) The Mean chart (chart) is used to measure the central tendency of the data.
2) The Range chart (R chart) is used to measure the dispersion of data.

A process is said to be in control if both the mean and range charts are within their limits i.e., there are no data points
crossing the upper and lower limits. In other words, all the data points lie within the specified limits.

Q5. Discuss the Quality Management Principles.

Ans:

The ISO 9001:2008 standard is based on eight quality management principles. These principles define the quality
management system and provide specific focus areas where organizations should channel their resources, such as
understanding customer requirements, initiating continuous improvement programs, instituting leadership within the
organization, implementing participative management, involving the employees.

Quality management is becoming increasingly important to the leadership and management of all organizations. It is
necessary to identify Quality Management as a distinct discipline of management and lay down universally understood
and accepted rules for this discipline.

The ISO technical committee working on the ISO9000 standards had published a document detailing the quality
management principles and application guidelines. (This article is based on the said document). The latest revision
(version 2008) of ISO9000 standards are based on these principles.

8 QM Principles
Organizations depend on their customers and therefore should
Customer focused
1 understand current and future customer needs, should meet
organization
customer requirements and strive to exceed customer expectations
 Leaders establish unity of purpose and direction. They should create
2 Leadership and maintain the internal environment in which people can become
fully involved in achieving the organization's objectives
People at all levels are the essence of an organization and their full
3 Involvement of people involvement enables their abilities to be used for the organization's
benefit.
A desired result is achieved more efficiently when activities and
4 Process approach
related resources are managed as a process.
Identifying, understanding and managing a system of interrelated
System approach to
5 processes as a system contributes to the organisation's effectiveness
management
and efficiency in achieving its objectives. 
Continual improvement of the organization's overall performance
6 Continual improvement
should be a permanent objective of the organization.
Factual approach to Effective decisions are based on the analysis of data and
7
decision making information. 
Mutually beneficial An organization and its suppliers are interdependent and a mutually
8
supplier relationships beneficial relationship enhances the ability of both to create value. 

Q6. Write a note on theories of Motivation.

Ans6.

Theories of Motivation

Maslow’s hierarchy of needs

Maslow advanced the following propositions about human behavior:

 Man is a wanting being.

 A satisfied need is not a motivator of behavior, only unsatisfied needs motivate.
 Man’s needs are arranged in a series of levels - a hierarchy of importance.

Remember the assumptions of Maslow’s hierarchy:

 individuals have multiple needs

 needs are ordered into levels, creating a ‘hierarchy’
 a need, once satisfied, is no longer a need

Herzberg’s theory of motivation

The major finding of the study was that the events that led to satisfaction were, not surprisingly, of a quite different kind
from those that led to dissatisfaction.
They are called ‘hygiene’ factors and include such elements as:

 company policies and administration

 supervision
 working conditions
 interpersonal relations
 money, status and security
The other set of factors are those which, if present, serve to motivate the individual to superior effort and performance.
These factors are related to the job content of work. They are ‘motivators’ or growth factors. Motivation factors include:

 achievement
 increased responsibility
 challenging work
 recognition for achievements
 growth and development

David McClelland

David McClelland identified three basic types of motivating needs present in people. He shows that all three needs can
be present in a person but the weight attached to each can vary. The three needs are:

(a) Need for achievement

(b) Need for affiliation
(c) Need for power

Adams’ equity theory

When people sense inequities in their work they will be aroused to remove the discomfort and restore a state of felt
equity to the situation by:

 changing work inputs

 changing rewards received
 leaving the situation
 changing the comparison points
 psychologically distorting the comparisons

Expectancy theory

The common themes in expectancy theories are:

 conscious decisions by individuals to behave in certain ways

 individual values with regard to choosing desired outcomes
 individual expectations concerning the amount of effort required to achieve a specific outcome
 individual expectations concerning the probability of being rewarded for achieving a desired outcome.

Motivation is a function of the relationship between:

 effort expended and perceived level of performance

 The expectation that rewards (desired outcomes) will be related to performance.
This process may be illustrated in the following way:

Effort Required Outcome

Performance eg, Promotion

Force = Valence × Expectancy